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Appeal No. 1726 of 1971.
(Appeal by Special Leave from the Judgment and Order dated 20 4 1971 of the Allahabad High Court in Misc.
Sales Tax Reference No. 137 of 1970).12 1234SCI/76 684 S.C. Manchanda, M.V. Goswami and O.P. Rana, for the Appellants.
The Judgment of the Court was delivered by KHANNA, J.
This is an appeal by special leave against the judgment of Allahabad High Court whereby the High Court answered the following question referred to it under section 11 ( 3 ) of the UP Sales Tax Act (hereinafter referred to as the Act) in favour of the dealer respondent and against the revenue: "Whether the time taken by the dealer in obtaining another copy of the impugned appellate order could be excluded for the purpose of limita tion for filing revision under section 10 (1 ) of the UP Sales Tax Act when one copy of the appellate order was served upon the dealer under the provi sions of the Act ?" The matter relates to the assessment year 1960 61.
An appeal filed by the respondent against the order of the Sales Tax Officer was disposed of by the Assistant Commis sioner (Judicial) Sales Tax, Bareilly.
The copy of the appellate order was served on the dealer respondent on August 2, 1965.
The respondent, it appears, lost the copy of the appellate order which had been served upon him.
On June 15, 1966 the respondent made an application for obtaining another copy of the above order.
The copy was ready on August 17, 1967 and was delivered to the respondent on the following day, i.e. August 18, 1967.
Revision under section 10 of the Act was thereafter filed by the respondent before the Judge (Revision) Sales Tax on September 9, 1967.
Sub section (3B) of section 10 of the Act prescribes the period of limitation for filing such a revision.
According to that sub section, such a revision application "shall be made within one year from the date of service of the order com plained of but the Revising authority may on proof of suffi cient cause entertain an application within a further period of six months.
" Question was then agitated before the Judge (Revision) as to whether the revision application was within time.
The respondent claimed that under section 12(2) of the , he was entitled to excluded in computing the period of limitation for filing the revision, the time spent for obtaining a copy of the appellate order.
This contention was accepted by the Judge (Revision).
He also observed that the fact that the said copy was not required to be filed along with the revision petition would not stand in the way of the respondent relying upon section 12(2) of the .
The Judge (Revision) thereafter dealt with the merits of the case and partly allowed the revision petition.
At the instance of the Commissioner of Sales Tax, the question reproduced above was referred to the High Court.
The High Court, as stated above, answered the ques tion in favour of the respondent and in doing so placed reliance upon the provision of section 12(2) of the Limita tion Act,1963 (Act 36 of 1963) which reads as under: "(2) In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained 685 of was pronounced and the time requisite for ob taining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.
" It may be stated that the language of section 12(2) of the Act of 1963 is in variance with that of section 12(2) of the Indian Limitation Act,1908 (Act 9 of 1908) so far as the applicability of section 12(2) is concerned in computing the period of limitation for filing revision application.
Section 12(2) of the Indian Limitation Act, 1908 read as under: "(2) In computing the period of limitation prescribed for an appeal, an application for leave to appeal and an application for a review of judg ment, the day on which the judgment complained of was pronounced, and the time requisite for obtain ing a copy of the decree, sentence or order ap pealed from or sought to be reviewed, shall be excluded.
" Bare perusal of sub section (2) of section 12 of the Act of 1908 would show that it did not deal with the period of limitation prescribed for an application for revision.
As against that, the language of sub section (2) of section 12 of .the
Act of 1963 makes it manifest that its provisions would also apply in computing the period of limita tion for application for revision.
There can, therefore, be no manner of doubt that in a case like the present which is governed by the Act of 1963, the provisions of sub section (2) of section 12 can be invoked for computing the period of limitation for the application for revision if the other necessary conditions are fulfilled.
It is, however, contended by Mr. Manchanda that the UP Sales Tax Act constitutes a complete code in itself and as that Act prescribes the period of limitation for filing of revision petition, the High Court was in error in relying upon the provi sions of sub section (2) of section 12 of the .
This contention, in our opinion, is wholly bereft of force.
Sub section (2) of section 29 of the reads as under: "(2) Where any special or local law pre scribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit; appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.
" There can be no manner of doubt that the UP Sales Tax Act answers to the description of a special or local law.
According to sub section (2) of section 29 of the , reproduced above, for the purpose of determining any period of limitation prescribed for any application by any special or local law, the provisions contained in section 686 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.
There is nothing in the U.P Sales Tax Act expressly excluding the application of section 12(2) of the for determining the period of limitation prescribed for revision application.
The conclusion would, therefore, follow that the provisions of section 12(2) of the of 1963 can be relied upon in computing the period of limitation prescribed for filing a revision petition under section 10 of the UP Sales Tax Act.
It has been argued by Mr. Manchanda that it was not essential for the dealer respondent to file a copy of the order of the Assistant Commissioner along with the revision petition.
As such, .according to the learned counsel, the dealer respondent could not exclude the time spent in ob taining the copy.
This contention is equally devoid of force.
There is nothing in the language of section 12(2) of the to justify the inference that the time spent for obtaining copy of the order sought to be revised can be excluded only if such a copy is required to be filed along with the revision application.
All that section 12(2) states in this connection is that in computing the period of limitation for a revision, the time requisite for obtaining a copy of the order sought to be revised shah be excluded.
It would be impermissible to read in section 12(2) a proviso that the time requisite for obtaining copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded only if such copy has to be filed alongwith the memorandum of appeal or application for leave to appeal or for revision or for review of judgment, when the legislature has not inserted such a proviso in section 12(2).
It is also plain that without procuring copy of the order of the Assistant Commissioner the respondent and his legal adviser would not have been in a position to decide as to whether revision petition should be filed against that order and if so, what grounds should be taken in the revi sion petition.
The matter indeed is not res integra.
In the case of J.N.Surty vs T.S. Chettyar(1), the Judicial Committee after .noticing the conflict in the decisions of the High Courts held that section 12(2) of the Indian Limitation Act, 1908 applies even when by a rule of the High Court a memo randum of appeal need not be accompanied by a copy of the decree, Lord Phillimore speaking on behalf of the Judicial Committee observed: "Their Lordships have now to return to the grammatical construction of the Act, and they find plain words directing that the time requisite for obtaining the two documents is to be excluded from computation.
12 makes no reference to the Code of Civil Procedure or to any other Act.
It does not say when the time is to be excluded, but simply enacts it as a positive direction.
If, indeed, it could be shown that in some particular class of cases there could be no object in obtaining the two documents, an argument might be offered that no time could (1) 55 I.A. 161.
687 be requisite for obtaining something not requisite.
But this, is not so.
The decree may be complicat ed, and it may be open to draw it up in two differ ent ways, and the practitioner may well want to see its form before attacking it by his memorandum of appeal.
As to the judgment, no doubt when the case does not come from up country, the practitioner will have heard it delivered, but he may not carry all the points of a long judgment in his memory, and as Sir John Edge says, the Legislature may not wish him to hurry to make a decision till he has well considered it.
" Following the above decision, it was held by a Full Bench consisting of five Judges of the Lahore High Court in the case of The Punjab Co operative Bank Ltd., Lahore vs The Official Liquidators, The Punjab Cotton Press Co. Ltd. C) that even though under the Rules and Orders of the High Court no copy of the judgment is required to be filed along with the memorandum of appeal preferred under section 202 of the Indian Companies Act from an order of a single Judge, the provisions of section 12 of the Indian Limitation Act would be attracted.
The provisions of section 12 were also held to govern an appeal under Letters Patent.
A Full Bench of the Patna High Court in the case of Mt. Lalitkuari vs Mahaprasad N. Singh(2) also held that the provisions of section 12 of the Limitation Act were applica ble to Letters Patent appeals under clause 10 of the Letters Patent.
The above decision of the Judicial Committee was followed by this Court in the case of Additional Collector of Customs, Calcutta & Anr.
vs M/s. Best & Co.(3) Similar view was expressed by this Court in the case of section A. Gaffoor vs Ayesha Beghum & Ors.(4) It is plain that since 1928 when the Judicial Commit tee decided the case of Surty (supra), the view which has been consistently taken by the Courts in India is that the: provisions of section 12(2) of the Limitation Act would apply even though the copy mentioned in that subsection is not required to be filed along with the memorandum of ap peal.
The same position should hold good in case of revision petitions ever since Limitation Act of '1963 came into force.
Lastly, it has been argued that the copy of the order of the Assistant Commissioner was served upon the respond ent, and as such,; was not necessary for the respondent to apply for copy of the said order.
In this respect we find that the copy which was served upon the respondent was lost by him.
The loss of that copy necessitated the filing of an application for obtaining another copy of the order of the Assistant Commissioner.
(1) Lahore Series 191.
(2) Patna Series 157.
; (4) CA No. 2406 of 1969 decided on August 18, 1970.
( See Unreported judgements of Supreme Court.
2. page 784).
688 In the case of State of Uttar Pradesh vs Maharaj Narain & Ors.(1) the appellant obtained three copies of the order appealed against by applying on three different dates for the copy.
The appellant filed along with the memorandum of appeal that copy which had taken the maximum time for its preparation and sought to exclude such maximum time in computing the period of limitation for filing the appeal, This Court, while holding the appeal to be within time, observed that the expression time requisite in section 12(2) of the Limitation Act cannot be understood as the time absolutely necessary for obtaining the copy of the order and that what is deductible under section 12(2) is not the minimum time within which a copy of the order appealed against could have been obtained.
If that be the position of law in a case where there was no allegation of the loss of any copy, a fortiori it would follow that where as in the present ease 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 revision petition, the time spent in obtaining that copy would necessarily have to be excluded under section 12(2) of the .
The High Court, in our opinion, correctly answered the question referred to it in favour of the dealer respondent and against the revenue.
The appeal fails and is dismissed.
As no one appeared on behalf of the respondent, we make no order as to costs.
M.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] |
ivil Appeal No. 830 of 1988.
275 From the Judgment and Order Dated 7.12.1987 of the Allahabad High Court in Civil Misc.
No. Nil 1987.
A.K. Ganguli and Sunil Kumar Jain for the Appellant.
Gopal Subramanium and Ashok K. Srivastava for the Re spondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The petitioner is a concern engaged in the business of manufacture of electric motors, pump sets and their parts.
It applied for exemption from sales tax in respect of the goods manufactured by it in terms of a noti fication issued by the State Government on 30.9.1982 under section 4A of the Uttar Pradesh Sales Tax Act, 1948 (herein after called the 'Act ').
This application was rejected by a Division Level Committee by an order dated 9.2.
1987 and a further review application was also dismissed on 27.10.1987.
Thereupon the appellant filed a writ petition which was also rejected by the High Court by a short order dated 7.12.1987.
Aggrieved by this denial of the exemption, which it claims it is entitled to, the appellant has preferred this appeal.
Section 4A of the Act reads as under: "4 A. Exemption from sales tax of certain goods for specified period (1) Notwithstanding anything co tained in section 3 or section 3 A, where the State Government is of the opinion that it is necessary so to do for increasing the produc tion of any goods or for promoting the devel opment of in any districts or parts of dis tricts in particular, it may on application or otherwise, by notification, declare that the turnover of sales in respect of such goods by the manufacturer thereof shall, during such period not exceeding seven years from the date of starting production by such manufacturer, and subject to such conditions as may be specified, be exempt from sales tax or be liable to tax at such reduced rate as it may fix.
(2)It shall be lawful for the State Government to specify in the notification under sub section (1) that the 276 exemption from, or reduction in, the rate of tax shall be admissible (a) generally in respect of all such goods manufactured subsequent to the date of such notification; or (b) in respect of such of those goods only as are manufactured in a new unit, the date of starting production whereof fails on or after the first day of October, 1982; or (c) only if the manufacturer had not discon tinued production of such goods for a period exceeding six months at a stretch in any assessment year.
Explanation For the purposes of this section (i) 'new unit ' means a factory or workshop using machinery, accessories or components not already used or acquired for use in any other factory or workshop in India but does not include any factory or workshop established on the site of an existing factory or workshop manufacturing the same goods or any addition to or extension of an existing factory or workshop; and (ii) 'date of starting production ' means the date on which any raw material required for use in the manufacture or packing of the specified goods is purchased for the first time or the date of installation of power connection, where needed, whichever is later.
In pursuance of the above section, the State Government published a scheme for the grant of exemption from sales tax to certain industrial units in the State.
The scheme, ac cording to its introduction, had been introduced "in order to encourage capital investment and establishment of new industrial units in the State".
It granted exemption to the industrial units established in certain areas of the State during the period from 1.10.1982 to 31.3.1985 and producing certain categories of goods.
It is not necessary to refer in detail to the provisions of the scheme or other conditions of exemption.
It is sufficient to say that this exemption was conferred only on units established on or after 1.10.1982 but before 31.3.1985.
The scheme also makes it clear that though it referred to units "established" this really is a reference to the date of commencement of produc tion by the industrial 277 unit.
This is also in accord with the terms of the statute and in particular sub section (2) of 4A.
The appellant 's claim to exemption has been rejected on a very short ground, namely, that it had not commenced production after 1.10.1982.
In the application filed by the appellant for exemption the appellant had mentioned that the date of actual com mencement of use of electricity for production was the 4th of December, 1982, which was also the actual date of com mencement of production.
The appellant also claimed that upto 30.9.1984 it had produced and sold electric motor parts for Rs.2,70,590.
The General Managers of the District Indus trial Centers at Deoband and Saharanpur and the Assistant Engineer of the Industrial State of Roorkee endorsed the following recommendation on the application: " . .
I have checked with the use of power and other sources that the unit started actual production from 4.12.1982 and the production made is self manufactured and is within the prescribed production capacity.
1 am fully satisfied with the facts produced by the Unit and I recommend that this unit is eligible to get exemption from sales tax/inter state sales tax . with effect from date of production commencement for 5 6 7 years under section 4 A of the Sales Tax Act vide G.O. No. 8244 Bha/18 11 231(A)Bha/39, dated 30.9.82.
" The difficulty in the appellant 's way appears to have been created by a certificate which had been produced by it before the Division Level Committee along with its applica tion.
This purported to be a certificate by a firm known as Krishna Trading Co. (in which the proprietor of the appel lant was a partner).
This certificate dated 4.12.
1981 reads as follows: "It is certified that the Trial Production of Kupla Bhatti was made today is 4.12.1981 expenses for which were incurred by our compa ny by purchasing raw material for its own ex penses under the agreement dated 15.5.1981 entered into.
M/s Janta Machine Tools was assured by the company to supply very soon all the remaining machines and installing them and making its trial production at its own ex penses.
" The Division Level Committee, while rejecting the applica tion 278 dated 9.2.1987, essentially gave only one reason for the rejection.
It was stated that the date of the alleged trial production was really the date of commencement of production and this fell prior to 1.10.1982.
As stated earlier the assessee preferred a review appli cation pointing out that the trial production could not be treated as commencement of actual production.
This review application was disposed of on 27.10.1987.
In its order the Committee observed: "On joint inquiry into the reality of your unit being conducted by the General Manager and sales tax officer of Deoband Industries Department they have reported that Shri Suresh Datt Sharma the proprietor of M/s Janta Ma chine Tools is partner of one third share in M/s Krishna Trading Company also.
No purchase of raw material was declared by M/s Krishna Trading Company in the year 198 1 82, and therefore, the certificate of trial production issued by M/s Krishna Trading Company on 4.12.
1981 is baseless and untrue.
In joint inquiry report it is also clear that your unit has purchased from M/s Krishna Trading Company Kupla etc.
of Rs.69,000 on 21.5.81, whereas M/s Krishna Trading Company have declared sale of Rs. 13,035 only in 198 1 82 as per file of the Sales Tax Department.
In the joint inquiry Report it is also mentioned that your unit got electricity on 21.11.1982 and on inquiry the unit informed that the trial production was done with the help of a generator.
Your unit could not give any certificate for purchasing or hiring a generator and now it has declared to have hired the generator for 4 5 hours from M/s Mitra Industries Deoband.
In the inquiry report it is also made clear that a unit cannot use a generator of other unit without prior permission of the electricity depart ment.
xx xx xx On the above discussion it is concluded that the unit in question wants to (get) illegal benefit of exemption from sales tax by produc ing wrong facts.
The trial production done by M/s. Krishna Trading Company on 4.12.
1981 is proved to have been done by the unit in ques tion itself and not by them.
Thus, the unit was established before l. 10.82.
The unit established before 1.10.82 is therefore not entitled to exemption from sales tax.
" 279 In our opinion, the rejection of the assessee 's applica tion proceeds on a total misconception of the facts.
The conclusion of the Division Level Committee is that produc tion was commenced by the appellant on 4.12.81 but this conclusion is based on no evidence.
It is true that the appellant produced a certificate showing that some produc tion was done on 4.12.
1981 but the appellant 's case was that this was merely a trial production.
It is not quite clear whether the District Level Committee completely doubts any trial production having taken place at all, or whether its conclusion is that there was a trial production, on 4.12.1981.
If its conclusion is the former one, it does not affect the appellant 's claim.
Assuming that the Committee has come to the conclusion that the production on 4.12.81 was conducted not by M/s Krishna Trading Company but by the appellant itself, the fact still remains that what had happened on that date was only trial production.
The mere fact that a certificate by M/s Krishna Trading is disbe lieved cannot lead to the conclusion that the assessee had produced goods on 4.12.81.
If one is to go by the definition contained in the explanation to section 4A for determining when the production started, one has to concentrate on the date of purchase of raw materials or on the date on which the electricity was brought into use for commercial produc tion.
The appellant 's claim that it had manufactured goods by 30.9.1984 is not denied.
Production had, therefore, commenced before 31.3.
There is no suggestion by the Department or the Committee, and there is no material to show that the appellant had purchased raw materials suffi cient to carry out normal commercial production at any time prior to 1.10.82.
It is an admitted fact that the assessee was able to obtain electricity for use for commercial pro duction only in November 1982.
This lends support to the appellant 's contention that the production could not have been effected by the assessee prior to that date.
In fact, this is a point on which emphasis is laid in the order dated 27.10.1987.
That being so, there is no iota of evidence or material on the basis of which the appellant 's claim that it had started production in December 1982 could have been rejected.
On the other hand, the recommendation and endorse ment of the General Manager, District Industries Centre, which has been extracted earlier, also supports the appel lant 's contention that it had started production on 4.12.1982 and this report was given after verifying the actual position on the spot.
For the reasons above mentioned we are of the opinion that the denial of the exemption to the appellant under the notification dated 30.9.82 was not justified.
The rejection of the appellant 's application in this regard is quashed and the appellant is declared entitled to the 280 exemption in terms of the notification.
We should not be understood, however, to have expressed any opinion as to the amount of exemption available to the appellant under the notification.
That will be a matter for consideration of the authorities in respect of each of the years concerned in respect of which the claim is made for exemption.
The appeal stands allowed, but in the circumstances, we make no order as to costs.
G.N. Appeal allowed. | The State Government in pursuance of Section 4A of the Act formulated and published a scheme for grant of exemption from Sales Tax, to encourage capital investment and estab lishment of new industrial units which were established during the period from 1.10.1982 to 31.3.1985 and producing certain categories of goods.
Though the scheme referred to units established, it actually referred to the date of commencement of production.
The appellant, a concern engaged in the business of electric motors, pump sets and their parts, applied for the exemption.
The appellant claimed that the date of actual commencement of use of electricity for production was 4th December, 1982 and that was the actual date of commencement of production.
The same was endorsed by the General Manag ers, District Industrial Centers and the Assistant Engineer concerned, while recommending the application.
But the difficulty had arisen on account of a certificate attached to the application for exemption.
It was given by a firm which had entered into an agreement with the appellant for supply of machines and installation.
According to the cer tificate, trial production commenced on 4.12.1981.
The Division Level Committee, before which the application was filed, rejected it, saying that the date of trial production was really the date of commencement of production and it fell prior to 1.10.1982.
The appellant preferred a review claiming that trial production could not be treated as commencement of actual production.
The review application was also dismissed and it was held that the unit was estab lished before 1.10.1982 and, therefore, was not entitled to the exemption.
Thereafter, the appellant filed a writ peti tion before the High Court.
It was rejected.
274 Claiming that it is entitled to the exemption, the appellant has preferred this appeal, by special leave.
Allowing the appeal, HELD: 1.1 The appellant is entitled to the exemption, in terms of the notification dated 30.9.1982.
The rejection of the application for exemption proceeds on a total misconcep tion of facts.
The conclusion that production was commenced on 4.12.1981 is not based on any evidence.
It does not affect the appellant 's claim even if there was any doubt about the trial production having taken place at all.
Wheth er trial was conducted by the other firm or the appellant itself, the fact remains that only trial production took place on 4.12.1981.
The mere fact that the certificate is disbelieved cannot lead to the conclusion that the appellant had produced the goods on 4.12.1981.
[279A D] 1.2 To go by Section 4A of the Act to determine the date of commencement of production, the date of purchase of raw material or the date on which electricity was brought into use would be relevant.
The appellant 's claim that it had manufactured goods by 30.9.1984 is not denied.
Production had, therefore, commenced before 31.3.1985.
There is no suggestion by the Department or the Committee, and there is no material to show that the appellant had purchased raw materials sufficient to carry out normal commercial produc tion at any time prior to 1.10.1982.
It is an admitted fact that the assessee was able to obtain electricity for use for commercial production only in November 1982.
This lends support to the appellant 's contention that the production could not have been effected by the assessee prior to that date.
In fact, this is a point on which emphasis is laid.
That being so, there is no iota of evidence or material on the basis of which the appellant 's claim that it had started production in December 1982 could have been rejected.
On the other hand, the recommendation and endorsement of the Gener al Manager, District Industries Centre also supports the appellant 's contention that it had started production on 4.12.1982 and this report was given after verifying the actual position on the spot.
[279D G] 2.
As regards the amount of exemption available to the appellant, it is a matter for consideration of the authori ties in respect of each of the years concerned in respect of which the claim is made for exemption.
[280B] |
Civil Appeal No. 1773 of 1971.
(From the Judgment and order dated 20 2 1970 of the Allahabad High Court in Civil Misc.
Writ Petition No. 2943/69) S.C. Manchanda and O.P. Rana, for the Appellants.
V.S. Desai, P.B. Agarwala and B.R. Agarwala, for the Respondents.
838 The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal by certificate which is directed against the judgment and order dated February 20, 1970, passed by the High Court of Judicature at Allahabad in writ petition No. 2943 of 1969 raises two interesting ques tions viz. ( 1 ) whether carbon paper is paper falling within the purview of the word 'paper ' as used in serial No. 2 of Notification Ng.
ST 3124/X 1012(4) 1964 dated July 1, 1966, issued by the Governor of Uttar Pradesh in exercise of the power vested in him under section 3 A of the U.P. Sales 'Fax Act, 1948 (U.P. Act No. XV of 1948) so as to be liable to sales tax at the point and at the rate specified in the Schedule to the Notification and (2) whether ribbon is an accessory or a part of the typewriter.
It appears that the respondent which is a company incor porated under the Indian Companies Act dealing in carbon paper, typewriter, ribbon, stepler machines and stepler pins, despatches the said goods from its head office at Bombay to its branch office at Kanpur wherefrom sales there of are effected in the State of Uttar Pradesh.
During the course of the assessment proceedings for the assessment year 1956 57, the respondent claimed that carbon paper not being paper falling within the ambit of Entry No. 2 of the Schedule to the aforesaid Notification but a specialised article used for copying purposes, its turnover had to be assessed at the rate of 2 per cent prescribed for unclassi fied goods and not at the rate of 6 paise per rupee i.e. 6% prescribed in the aforesaid Notification.
The respondent further claimed that ribbon being an accessory anti not a part of the typewriter, its turnover could not be subjected to sales tax at the rate of 10% prescribed inter alia for typewriters and parts thereof by Notification No. ST 1738/X I012 1963 dated June 1, 1963.
The Sales Tax Officer, (Section IV), Kanpur, did not accede to the conten tions of the respondent and holding that carbon paper re mained paper even after going through certain chemical processes and that ribbon was a part of the typewriter, taxed the turnover of carbon paper for the period commencing from July 1, 1966, to the end of March, 1967 at 6% and that of ribbon at 10%.
He, however, taxed the turnover of carbon paper for the period April 1, 1966 to June 30, 1966 at 2%.
The validity and correctness of this order in so far as it related to the levy of tax on carbon paper at 6% and ribbon at 10% was challenged by the respondent by means of the aforesaid writ petition before the High Court at Allahabad which by its aforesaid judgment and order allowed the same and quashed the levy.
Hence this appeal.
Appearing in support of the appeal, Mr. Manchanda has assailed the reasoning and approach of the High Court and has vehemently urged that carbon paper does not lose its character as paper even after being subjected to chemical processes and that ribbon is not an accessory but an essen tial part of the typewriter.
We have carefully considered the submission made by Mr. Manchanda but find ourselves unable to accept the same.
839 It is well settled that a word which is not defined in an enactment has to be understood in its popular and commer cial sense with reference to the context in which it occurs.
In Attorney General vs Winstanley (1), Lord Tenterden started as follows: "Now, when we look at the words of an Act of Parliament, which are not applied to any particular science or art, we are to construe them as they are understood in common language.
" In Grenfell vs Commissioners of Inland Revenue (2) Pollock, J, pointed out: "As to tile construction of the Stamp Act, I think it was very properly urged that the statute is not to be construed according to the strict or technical meaning of the language contained in it, but that it is to be construed in its popular sense, meaning, of course, by the words 'popular sense ' that sense which people conversant with the sub ject matter with which the statute is dealing would attribute to it." The word 'paper ' admittedly not having been defined either in the U.P. Sales Tax Act, 1948 or the Rules made thereunder, it has tO be understood according to the afore said well established canon of construction in the sense in which persons dealing in and using the article understand it.
It is, therefore, necessary to know what is paper as commonly or generally understood.
The said word which is derived from the name of reedy plant papyrus and grows abundantly along the Nile river in Egypt is explained in 'The Shorter Oxford English Dictionary (Volume 2) (Third Edition) as "a substance composed of fibres interlaced into a compact web, made from linen and cotton rags, straw, wood, certain grasses, etc., which are macrated into a pulp, dried and pressed; it is used for writing.
printing, or drawing on, for wrapping things in, for covering the interior of wails, etc.
" In 'Encyclopaedia Britannica ', (Volume 13), (15th Edition), 'paper ' has been defined as the basic material used for written communication and the dissemination of information.
" In the Unabridged Edition of "The Randon House Dicition ary of the English Language", the word 'paper ' has been defined as "a substance made from rags, straw wood ' or other fibrous material, usually in thin sheets, used to bear writing or printing or for wrapping things, decorating walls etc.
" From the above definitions, it is clear that in popular parlance, the word 'paper ' is understood as meaning a sub stance which is used for bearing, writing, or printing, or for packing, or for drawing on, or for decorating, or cover ing the walls.
Now carbon paper which is manu (1) [1831] 2 Dow & Clark 302=(1901) ; (2) at 248.
840 factured by coating the tissue paper with a thermo setting ink (made to a liquid consistency) based mainly on wax, non drying oils, pigments and dyes by means of a suitable coat ing roller and equalising rod and then passing it through chilled rolls cannot be used for the aforesaid purposes but is used.
according to 'The Randon House Dictionary of the English Language ' between two sheets of plain paper in order to reproduce on the lower sheet that which is written or typed on the upper sheet i.e. making replicas or carbon copies cannot properly be described as paper.
It will be well at this stage to refer to a few deci sions which confirm our view.
In Kilburn & Co. Ltd. vs Commissioner of Sales Tax U.P., Lucknow(I) a Bench of Allahabad High Court while examining the very same entry in the Notification with which we are concerned in the instant case and holding that "Ammonia paper and ferro paper used for obtaining prints and sketches of site plans are not paper us understood generally and, therefore, will not come within the expression 'paper other than hand made paper ' as used in Notification No. ST 3124/X 1012(4) dated 1st July, 1966, issued under section 3 A of the U.P. Sales Tax Act, 1948" observed : "The word 'paper ' has not been defined in the Act or the Rules, and, as such, it has to be given the meaning which it has in 'ordinary parlance.
Paper, as understood in common parlance, is the paper which is used for printing.
writing and packing purposes.
" In Sree Rama Trading Company vs State of Kerala(2) the High Court of Kerala after a good deal of research held that cellophane is not paper coming within entry 42 in the First Schedule to the Kerala General Sales Tax Act, 1963, as it stood at the time relevant to the year 1966 67.
In State of Orissa vs Gestetner Duplicators (P) Ltd.(3) the HIgh Court of Orissa held that stencil paper was not paper within the meaning of serial No. 7 A of the Schedule to the Notification issued by the State Government under the first proviso to section 5(1) 'of the Orissa Sales Tax Act, 1947 and that sale of stencil paper was, therefore, not taxable at the rate of 7 per cent but is exigible to tax at the rate of 5 per cent.
In Commissioner of Sates Tax, U.P, vs
S.N. Brothers(1) this Court while upholding the decision of the Allahabad High Court which held that 'food colours ' and 'syrup es sences ' arc .edible goods while 'dyes and colours and compo sitions thereof and 'scents and perfume ' did not seem prima facie to connote that they are edible goods observed: (1) 31 S.T.C. 625.
(2) 28 S.T.C. 469.
(3) 33 S.T.C. 333.
(4) 31 S.T.C. 302. 841 "The words 'dyes and.
colours ' used in entry No. 10 and the words: scents and perfumes ' used in entry No. 37 have to be construed in their own context and in the sense, as ordinarily understood and attribut ed to these words by people usually conver sant with and dealing in such goods.
Simi larly, the words "food colours" and "syrup essences", which are descriptive of the class of goods the sales of which are to be taxed under the Act, have to be construed in the sense in which they are popularly understood by those who deal in them and who purchase and use them.
" Bearing in mind the ratio of the above mentioned decisions, it is quite clear that the mere fact that the word 'paper ' forms part of the denomination of a specialised article is not decisive of the question whether the article is paper as generally understood. 'the word 'paper ' in the common parlance or in the comercial sense means paper which is used for printing, writing or packing pur poses.
We are, therefore, clear of opinion that Carbon paper is not paper as envisaged by entry 2 of the aforesaid Notification.
Regarding ribbon also to which the above mentioned rule construction equally applies, we have no manner of doubt that it an accessory and not a part of the typewriter (unlike spool) though it may not be possible to use the latter without the former.
Just as aviation petrol is not a part of the aero plane nor diesel is a part of a bus in the same way, ribbon is not a part of the type writer though it may not be possible to type out any matter without it.
The very same question with which we are here confronted came up for decision before the High Court of Mysore in State of Mysore vs Kores (India)Ltd.
(1) where it was held: "Whether a typewriter ribbon is a part of a typewriter is to be considered in the light of what is meant by a typewriter in the commer cial sense.
Typewriters are being sold in the market without the typewriter ribbons and therefore typewriter ribbon is not an essen tial part of a typewriter so as to attract tax as per entry 18 of the Second Schedule to the Mysore Sales Tax Act, 1957.
" For the foregoing reasons, we do not find any force in this appeal which is dismissed but in the circumstances of the case without any order as to costs.
M.R. Appeal dismissed (1) 26 S.T.C. 87. | The Governor of U.P. issued a Notification under Section 3 A of the U.P. Sales Tax Act, 1948, and the Sales Tax Officer (Section IV) Kanpur, ordered the respondent company to pay tax on the turnover of ' carbon paper at 6%, and that of ribbon at 10%, as per entry 2 of the Notification.
The respondent challenged the order in a writ petition before the High Court.
contending that carbon paper was not 'paper ' with the meaning of entry 2 and its turnover was therefore to be assessed at the rate of 2% prescribed for unclassified goods, and that 'ribbon ' being an accessory and not a part of the typewriter, could only be taxed at the rate of 6% and not 10%.
The High Court allowed the writ and quashed the levy.
The appellant contended that carbon paper does not lose its character as paper in spite of being subjected to chemi cal processes, and that ribbon is not an accessory but an essential part of the typewriter.
Dismissing the appeal the Court, HELD :(1) A word which is not defined in an enactment has to be understood in its popular and commercial sense with reference to the context in which it occurs.
It has to be understood according to the well established canon of construction in the sense in which persons dealing in and using the article understand it.
[839 A B] Attorney General vs Winstanley (1831) 2 Dow & Clark 302:(1901) ; , and Grenfell vs Commissioner of Inland Revenue (1876)1 exhibit D. 242 at p. 248 applied.
(2) The word 'paper ' is understood as meaning a sub stance which is used for bearing writing or printing, or for packing.
or for drawing on.
or for decorating, or covering the wails.
Carbon paper cannot be used for these purposes but is used for making replicas or carbon copies, and cannot properly be described as paper.
[839 G, 840 A B] K. Kilburn & Co. Ltd. vs Commissioner of Sales Tax, U.P. Lucknow (31 S.T.C. 625), Sree Rama Trading Company vs State of Kerala (28 S.T.C. 469).
state of Orissa vs Gestetner Duplicators (P) Ltd. (33 S.T.C. 333 ) Commissioner of Sales Tax, U.P.v.
S.N. Brothers (31 S.T.C. 302) applied.
(3) The above mentioned rule of construction equally applies to ribbon.
an accessory and not a part of the typewriter, though it may not be possible type out any matter without it.
[841 D E] State of Mysore vs Kores (India) Ltd. (26 S.T.C. 87) ap proved. |
Civil Appeal Nos. 416 of 1973 and 572 of 1974.
(From the Judgment and Decree dated 22 12 1972 of the Allahabad High Court in F.A. No. 465/54 connected with F.A. 65/55).
A. K. Kirty, Yogeshwar Prasad, S.K. Bagga, Mrs. section Bagga Miss Rani Arora for the Appellant (in CA.Facts No. 416/73 and Respondent No. 1 in CA. No. 572/_74).
G.B. Pal, R.K. Mehta, Pramod Swarup and Miss Uma Mehta for the Appellants (in CA 572/74 and Respondents 1 3 in CA.No. 415/73).
B. Sen, S.M. Jain, Indra Makwana and Sushil Kumar Jain for Respondents 5/2, 5/3 and 6 (in CA.No. 416/73).
S.T. Desai, Rajinder Singh and S.K. Dhingra for Respond ents 7 & 8 (in CA.No. 416/73).
The Judgment of the Court was delivered by JASWANT SINGH, J.
These two appeals by certificates granted under Article 133 of the Constitution which are directed against the common judgment and decree dated Decem ber 22, 1972 of the High Court at Allahabad in two connected Civil First Appeals Nos. 465 of 1954 and 65 of 1955 pre ferred against the judgment and preliminary decree of the Second Additional Civil & Sessions Judge, Agra, dated April 5, 1954, in suit No. 76 of 1949 shah be disposed of by this judgment.
The facts material for the purpose of these appeals are: The appellant in Appeal No. 416 of 1973 and respondent No. 1 in appeal No. 572 of 1974, Seth Loonkaran Sethiya, (hereinafter referred to for convenience as 'the plain tiff ') is a financier living and carrying on business in Agra.
Respondents Nos. 1 to 3 in the first appeal and appellants Nos. 1 to 3 in the second appeal viz. Ivan E. John, Maurice L. John and Doris Marzano, grandsons and grand daughter of one A John, are partners of the regis tered, firm called 'John & Co. '.
There are three spinning mills and one flour mill at Jeoni Mandi, Agra, which are compendiously described as 'John Mills '.
Originally, the members of the John family were the exclu sive owners of all these mills which have been in existence since the beginning of the current century.
In course of time, some strangers acquired interest therein and by the time the present lis commenced, the following became the joint owners thereof to the extent noted against their names : 1.Ivan E. John, Maurice L. John and Doris Marzano, appellants Nos. 1 to 3 in Appeal No. 572 of 1974 and respondents Nos. 1 to 3 in .Appeal No. 416 of 1973 Partners of the firm 'John & Co. ', appellant No. 4 in Appeal No.572 of 1974 and respondent No. 4 in Appeal No. 416 of 1973:11/40th share.
2. Seth .Munilal Mehrs (respondent No. 6 in appeal No. 416 of 1973 and respondent No. 9 in Appeal No, 572 of 1974).and Hiralal Patni (respondent No. 5 in Appeal No. 416 of 197.
3, 'deceased 'and now represented by respondents Nos, 5/1 to 5/7 i3 the 'said appeal and represented by respondents Nos. 2 to 8 in Appeal No. 572 of 1974):19/40th share 3.Gambhirmal Pandya (P) Ltd. part ner in M/s. John Jain Mehra & Co,: 8/40th share .
4.Ivan E. John: 2/40th share Having run into financial difficulties, M/s John & Co. were driven to tap various sources for raising loans for their business and other requirements.
By virtue of the deed of agreement (Exn. 1321 ) dated June 14, 1947, they entered into a financial agreement with Sethira & Co., a partnership firm of the plaintiff and Seth Suganchand.
Under this agreement which was originally meant to last for five months but which was allowed to remain in force even after 'the expiry of that period Sethiya & Co. undertook to advance to M/s John & Co. funds to the extent of Rs. 8,00,000/ on the security of yarn and to act as sole selling agents of the latter.
On January 29, 1948, the Collector, Agra, attached moveable and immoveable properties of the mills pursuant to a certificate issued for reali zation of income tax dues for the years 1943 to 1945 out standing against M/s John &Co. which exceeded Rs. 20 lakhs.
On February 5, 1948, the Collector, Agra, appoint ed Ivan E. John, Maurice L. John and Doris Marzano as custo dians for running the mills.
On February 9, 1948, the aforesaid agreement (Exh. 1321) dated June 14, 1947, with Sethiya & Co. which continued to remain in operation beyond its original term was renewed upto the end of April, 1948, by agreement (Exh. 1320).
This agreement gave an option to the partners of Sethiya & Co. to allow it to continue in force until their dues were 857 paid in full by M/s John & Co. These financial agreements with Sethiya & Co. did not prove adequate to meet the mone tary requirements of M/s John & Co. Accordingly on the same day i.e. on February 9, 1948, they entered into another agreement (Exh. 1319) with the proprietory concern of the plaintiff carrying on business under the name and style of 'M/s. Tejkaran Sidkaran ' whereby the latter agreed to advance certain amounts to them against mortgage of cotton, its products and bye products which might be in their stock from time to time during the continuance of the agreement.
By this agreement, M/s John & Co. also undertook to pay to M/s Tejkaran Sidkaran a sum of Rs. 2,09,245 9 10 which, on going into the accounts, was found to be due to the latter in respect of the supply of cotton.
Nearly five months thereafter i.e. on July 6, 1948 the aforesaid partners of M/S. John & Co. succeeded in obtaining another financial accommodation from Sethiya & Co. vide agreement Exhibit 168: Exhibit A 1.
By this deed, the financiers agreed, for the efficient working of the mills, to advance loan, as and when required, upto the limit of Rs. 25 1/2 lakhs to the partners of M/s John & Co. on condition that they i.e. the financiers would have a floating and prior charge for all monies due to them for the time being including the amount due to them on the date of the agreement and all monies which they might choose to advance under the agreement, on all business assets including stores, coal, oil process etc of the aforesaid three spinning mills.
Describing himself as the sole proprietor of the firm 'Sethiya & Co.; and 'M/s. Tejkaran Sidkaran '.
Seth Loonkaran Sethiya flied in the Court of the Civil Judge, Agra on April 18, 1949 an original suit, being suit No. 76 of 1949 against M/s. John & Co. ' and its aforesaid partners (hereinafter referred to as 'the defendants first set ') as also against Munnilal Mehra, Hiralal Patm and Gambhirmal Pandya and M/s John.
Jain Mehra & Co., (hereinafter referred to as 'the defendants second set ') for recovery of Rs. 21,11,500/ with costs and pendente lite and future interest by sale o.f .the assets of M/s John & Co. and for permanent injunction re straining the defendants first set from committing any branch of the aforesaid agreement dated July 6, 1948 as also for declaration that he had a prior and floating charge on all the business assets of M/s John.& Co.
The suit was later on amended by the plaintiff with the permission of the trial Court.
By his amended petition of plaint, the plain tiff sought a decree against the defendants first set as also against the defendants second set.
The case of the plaintiff was that Mr. Ivan E. John, Mr. Maurice L. John and Doris Marzano who were part owners of the aforesaid three spinning mills and a flour mill as also certain other properties and had been carrying on their business and running the mills under the name and style of John & Co. being heavily indebted and in urgent need of money to pay arrears of income tax as well as other dues and to carry on day to day business of the milks approached him time and again for finances, loans etc.for the aforesaid purposes, that he 'lent considerable sums of money under various agreements executed by the defendants first set in his favour and in favour of the firm 'M/s Tejkaran Sidkaran of which he was the sole owner and in that of Sethiya & Co.; that on or about July 6, 1948 all accounts between his 858 firm 'Sethiya & Co. ' and defendants first set were gone into and after a full scrutiny thereof, a settled amount of Rs. 12,72,000/ was found to be due to Sethla & Co. from the defendants first set upto June 30, 1948; that this amount as admitted and accepted by the defendants first set and was as such debited in their account books and was also acknowl edged by them in the subsequent agreement entered into by them with him; that the aforesaid settlement, the de fendants first set solicited further financial help from him to run the mills and to meet their pressing liabilities which was acceded to by him on the terms and conditions set out in the agreement dated July 6, 1948 (Exh. 168); that by this agreement, he agreed inter alia to advance requisite funds to the defendants first set (for carrying on the business of the mills 'and payment of the claims of Raja Ram Bhawani Das and to meet other liabilities) up to the limit of Rs. 20 lakhs inclusive of the aforesaid amount admittedly found due to him from the defendants first set on the date of the agreement and to make a further advance of a sum of Rs. 5,50,000/ on the security of business assets and stocks other than bales of yarn and cotton; that it was also stipu lated that he would have a floating and prior charge for the entire amount due to him on the date of the agreement on all the business assets including stores, coal, oil process etc of all the three spinning mills of the defendants first set and that he would be paid interest at the rate 6 per cent per annum from date of including liability in respect of each individual item besides commission at the raw of 1 per cent on all sales of products of the three spinning mills whether sold directly or otherwise during the currency of the agreement and a luther commission at the rate of 12 per cent on value of all the purchases of cotton required for consumption of the three spinning mills and godown rent as might be agreed.
The plaintiff further averred that it was specifically agreed between him and the defendants first set that the agreement would be in operation for the minimum period of one year and would also continue to be in force thereafter until the entire amount due to him from the defendants first set was fully paid up.
The plaintiff further averred that the accounts of business done by him under the name of M/s Tejkaran Sidkaran with the defendants first set were gone into and finally the defendants first set admitted that a sum of Rs. 17,79,100/ was due from them to his firm 'M/s Tejkaran Sidkaran ' and that under their written authority, he transferred the above liability to his firm 'Sethiya & Co. ' and thus all accounts of the defendants first set with him were amalgamated in one account i.e. of Sethiya & Co. and the account of his firm 'M/s Tejkaran Sidkaran ' with the defendants first set was squared up and closed.
The plaintiff further averred that the defendants second set including Hiralal Patni, the ex financier of the John Mills who had not despite best efforts succeeded in securing possession of the mills as co proprietor thereof entered into partnership with the defendants first set under the name and style of M/s John Jain Mehra & Co. and mali ciously induced them to commit breaches of the agreement dated July 6, 1948 by forcibly turning out his representa tives who used to remain incharge of the stocks, stores, coal, waste etc of the mills and making them enter into a finance agreement contrary to the terms of the agreement with his firm.
The plaintiff also alleged that the defendants first set had at the instigation of the defendants second set unjustifiably closed the business of John & Co. 859 and were colluding with the latter who were guilty of misap propriation and conversion of the goods over which he had a prior and floating charge.
The plaintiff also averred that on April 4, 1949, accounts were again gone into between him and the defendants first set and a sum of Rs. 47,23,738/4/9 were found due to him from them; that agreement dated July 6, 1948 between him and the defendants first set still subsisted and would continue to subsist till July 6, 1949 and thereafter at his option till all his dues were paid up; and that a sum of Rs. 21,11,500/ was due to him from the defendants first set as per Schedule A of the plaint which both sets of the defendants were liable to pay.
The statement of account as contained in Schedule A annexed to the plaint was as follows: Rs. a. p. "1.
Settled balance on 4th April, 1949 according to accounts books of the def endants.
(The accounts upto 4th April, 1949 were fully gone through and se ttled by both the parties and confirmed by the defendants by making nec essary entries in their books 45,74,980 10 1 2.
Plaintiff 's charges of commission, interest, godown rent etc., according to the terms of the agreement and duly checked by the defendant 's accountant and chief Account officer as detailed below: From 13th October to 31st October, 1948 14,516 13 6 From 1st November to 12th December 33,783 4 3 From 13th December to 12th January 1949 34,100 3 3 From 13th January to 12th February, 1949 38,716 12 3 From 13th February to 12th March, 1949 27,632 9 2 Total 1,48,749 10 8 9th April, 1949 paid to Mahalaxmi Oil Mills through Kirpa Narayan advocate and others .
8,708 5 0 10th April 1949 paid to Bishambar Nath & Co. (for Cotton supplied to John & Co.) 1,57,005 3 0 Charges from 13th March to 12th April, 1949 62,804 12 3 Total 49,52,2489 0 9th April, 1949: Proceeds by sale of 5731 bales of yarn sold by defendants as per their authorities 28,40,748 9 0 Balance 21,11,500 0 0 Twenty one lacs, eleven thousand five hundred only.
5 /338SCI/76 860 The suit was contested by both sets of defendants on various grounds.
Defendants first set inter alia pleaded that there was no 'settlement of accounts between them and the plaintiff as alleged by the latter; that 'the accounts were liable to be reopened as they were tainted with fraud, obvious mistakes etc., and that on a true and correct ac counting a large sum of money would be found due to them; that though the plaintiff and Seth Sugan Chand (who owned Indra Spinning and Weaving Mills and had a covetous eye on John Mills) had obtained various documents, agreements, vouchers, receipts etc.at various times from them, the same were of no legal value as they were secured by the former by practising undue influence, fraud, coercion and misrepresentation.
It was further pleaded by the defendants that :the plaintiff had illegally and contrary to the agreement dated July 6, 1948 debited them with huge amounts which were not really due to them.
It was further pleaded by the said defendants that the cotton supplied to them by the aforesaid financiers was of inferior quality and the amounts charged by them in respect thereof were exorbitant and far in excess of the prevailing market rates.
The said defendants further pleaded that though under the terms of the agreement dated February 9, 1948 no commission on sales and purchases had been agreed to be paid by them to the financiers still they had been debited with huge amounts on that account and likewise though simple interest had been stipulated in the said agreement compound interest with monthly rests had been debited to their account which was not at all justified.
The said defendants also disputed their liability to pay certain items of expenditure like demurrage, wharfage etc.which had been debited to their account.
It was also pleaded by the said defendants that the plaintiff had no floating or prior charge on any of their stocks, stores etc.nor could any such charge be claimed by him in law; that the suit was barred by the provisions of Section 69 of the Part nershlp Act and that the agreement dated July 6, 1948 which was insufficiently stamped could not form the basis of the suit.
In the written statement filed by them the defendants second set denied the allegations and insinuations made against them by the plaintiff and raised a number of techni cal and other pleas.
They also pleaded that the plaintiff alone .was not entitled to file the suit concerning the firm M/s. Sethiya as it did not belong to his joint Hindu family but was a partnership firm.
The trial court framed as many as 21 issues and on a consideration of the evidence adduced by the parties it held inter alia that the suit as brought by the plaintiff was maintainable; that though the plaintiff had failed to prove that the dissolution of the partnership between him and Seth Sugan Chand took place on June 30, 1948, and no alternate date of dissolution subsequent to June, 30, 1948, had been set up by him, it was evident from the record that the dissolution took place some time after July 30, 1948, and before the institution of the suit; that the suit being one for recovery of the assets due to a dissolved partnership firm from a third party was not barred by Section 69 of the Partnership Act; that Seth Sugan Chand was not a necessary party to the suit; that agreement dated July 6, 1948, was duly stamped and that no undue influence etc.was exercised by the 861 plaintiff on the defendants first set in relation to the execution of the agreements between Sethiya & Company and the defendants first set.
The ,trial court also held that there was no accounting on April 4, 1949, as alleged by the plaintiff and that both the plaintiff and the defendants first set committed a breach .of agreement dated July 6, 1948.
The breach committed by the defendants first set according to the trial court lay in their unjustifiably handing over possession to M/s. John Jain Mehra & Co. of the goods on which the plaintiff held a charge thereby furnish ing him with a cause of action against both sets of defend ants.
The trial court also held that under clause 13 of the agreement dated July 6, 1948, a charge in favour of the plaintiff was created in respect of the entire business assets including stock in trade, stores, coal, oil etc.lying inside the three spinning mills which were being run by John & Company; that defendants first set utilised con sumed and otherwise dealt with the goods which were burdened with the floating charge from July 6, 1948, to April 13, 1949, when John & Co. ceased to be a going concern and there was a final rupture between the plaintiff and the defendants I st set and the plaintiff 's floating charge got fixed or crystalised.
It also found that defendants second set were not entitled to prior charge on the properties of John & Co. existing on April 13, 1948, and were liable to satisfy the plaintiff 's claim as despite notice of his floating charge they consumed, converted and misappropriated stocks and stores and other business assets of the defendants first set.
Finally, the trial court held the plaintiff to be entitled to a decree for Rs. 18,00,152/ against both sets of defendants but rejected his claim for specific perform ance and injunction.
It accordingly passed a preliminary decree against both the sets of defendants on April 5, 1954 directing them to deposit the said amount in Court within the prescribed time and in default, gave the plaintiff a right to apply for a final decree for the sale of all the business assets, goods, stocks, stores etc.of the three spinning mills as mentioned in the operative portion of its judgment.
The decree also gave a right to the plaintiff to apply for a personal decree against the defendants first set and the defendants second set for the balance of his claim in case the net sale proceeds of the said property were found insufficient to discharge his claim.
Aggrieved by the said judgment and decree of the trial court, the plain tiff preferred an appeal, 'being first appeal No. 465 of 1954, before the High Court at Allahabad claiming the following reliefs : "(a) A decree for a further sum of Rs. 64,082/3/5 by which amount his claim was reduced by the trial (b) Such rate of interest as he might be entitled to on the aforesaid sum of Rs. 64,082/3/5 under the agreement dated July 6, 1948; (c) Interest on the sum already decreed at the rate agreed to under the agreement dated July 6, 1948; (d) Injunction in terms of para 47(b) of the plaint and specific performance of the agreement dated July 6, 1948; 862 (e) Costs of the appeal and costs which the lower court wrongly disallowed or deducted and also interest on the costs already award ed; (f) A decree for sale of the shares of the defendants in the machinery over which he had a charge.
" M/s John Jain Mehra & Co., of which the defendants first set too were partners, also preferred an appeal against the aforesaid judgment and decree of the trial court, being first appeal No. 65 of1955, praying that the decree passed by the trial court in favour of the plaintiff be set aside and the suit dismissed with costs throughout.
The High Court allowed both the appeals No. 465 of 1954 and No. 65 of 1955 partially by its aforesaid judgment dated December 22,1972, holding inter alia that no fraud, undue influence, coercion or misrepresentation was prac tised by the plaintiff on the defendants first set in con nection with the execution of agreement dated February 9,1948, or agreement dated July 6,1948 (which is the basis of the suit); that the agreement dated July 6,1948, was neither insufficiently stamped nor did it require registra tion; that though it appeared that the deed of dissolution dated July 22, 1948, was prepared for the purpose of the case, there was sufficient evidence on the record to indi cate that Seth Suganchand had withdrawn from the partnership carried on under the name of Sethiya & Co. with effect from June 30, 1948, and had nothing to do with the transaction evidenced by the agreement dated July 6,1948, which was entered into by the plaintiff as the sole proprietor of Sethiya & Co., that the entire rights and liabilities flowing from the agreement dated July 6, 1948 having become the rights and liabilities of the plaintiff alone and the suit not being one for recovery of dues of a dissolved partnership firm arising out of a cause of action which accrued before the dissolution of the firm, neither Seth Suganchand was a necessary party to the suit, nor was the suit barred under section 69 of the Partnership Act; that the alterations in the deed of agreement dated July 6, 1948 pointed out by the defendants were not material alterations and did not render the agreement void; that the plaintiff had a floating charge over the business assets of John & Co., that it was the defendants first .set and not the plaintiff who committed breach of the agreement by wrongful ly delivering possession of the charged goods on or after April 13, 1949 i.e. after ceasing to be a going concern to M/s. John Jain Mehra & Co. a partnership firm of which the defendants first set became a constituent part by virtue of agreement dated April 11, 1949 that despite the knowledge of the aforesaid prior charge, M/s John Jain Mehra & Co. illegally intermeddled with the charge goods and used them for their own business; that the plaintiff 's floating charge on the assets of the defendants first set valuing Rs. 13,25,000/ became crystallised on April 13,1949 when on default of the defendants first set, he intervened by bring ing the suit to recover all his out standings by sale of the charged properties; that the charge of the plaintiff having become crystallised, as indicated above, the defendants first and second set held the properties as trustees and were liable to make them 863 available to the plaintiff for recovery of his dues; that keeping in view the legal position as well as the nature of the transactions involved, the practice of courts and the fact that the litigation between the parties had been suffi ciently protracted, it would be reasonable to award pendente lite as well as future simple interest from the date of the decree to the date of actual payment or realization at the rate of 4 per cent per annum on the principal sum adjudged; that though keeping in view the facts that no balance was struck on April 4, 1949 in the Rokar (Exh. 179) of Sethiya & Co. and the auditor 's report which showed that no specific figure was mutually agreed upon on accounting on that date, it could not be said that accounts were finally settled between the parties on April 4, 1949, the defendants first set had failed to point out which entry in the charts (Exh. 6103 to 6112) produced by the plaintiff was wrong; that Rs. 49,35,925/5/7 were advanced by Sethiya & Co. to the defend ants first set under the agreement dated July 6, 1948, from the date of its execution to the date of the suit; that a sum of Rs. 11,17,000/ was due to old Sethiya & Co. from the defendants first set upto June 30, 1948 under the agreements dated June 14, 1947 and February 9, 1948; that Rs. 1,55,000/were advanced by Sethiya & Co. on July 3, 1948 to the defendants first set for purchase of the share of Beni Madho; that in accordance with the obligation undertaken by it under para 1 (8) of the agreement dated July 6, 1948, Sethiya & Co. paid, on the basis of transfer voucher (Exh. 3039) dated February 28, 1949, drawn by the defendants first set, a sum of Rs. 17,79,100/ to Tejkaran Sidkaran in full satisfaction of the amount due to the latter under the agreement dated February 9, 1948; that whereas the aggregate of the debit items came to Rs. 82,47,380/15/4, the aggre gate of the credit items came to Rs. 71,13, 712/6/6 leaving a balance of Rs. 11,33,668 and paise 55 which the defend ants first set were liable to pay to the plaintiff; that since the receivers appointed by the court at the instance of the plaintiff after the institution of the suit were able to secure possession of the charged properties that existed prior to April .11, 1949 and it had not been estab lished that there was a removal from the mills ' premises of the said properties or dissipation thereof because of the aforesaid conversion and detention, the plaintiff was not entitled to the decree for money against the defendants second set; that the plaintiff could, no doubt, proceed against the charged goods which were in the custody of the receivers for recovery of his dues but as No. property on which he held a charge or on which his floating charge crystallised had remained in the custody of the defendants second set after the appointment of the receivers, no li ability for his dues could be fastened on them nor could he obtain a decree for specific performance against them.
In the result, in modification of the decree passed by the trial Court, the High Court passed a preliminary decree for Rs. 11,33,668.55 with proportionate costs and pendente lite and future interest from the date of the decree to the date of the actual payment or realisation at the rate of 4 per cent per annum on the principal sum of Rs. 10,87,674.05 in favour Of the plaintiff and against the defendants first set but dismissed the suit with costs as against the defendants second set.
The High Court made it obligatory for the defendants 864 first set to pay or deposit in Court the aforesaid sum of Rs. 11,33,668.55 together with interest within six mouths of the passing of the decree failing which it held the plaintiff entitled to apply for a final decree for sale of all the business assets, goods, movables, stocks, stores etc.mentioned in the inventory of Shri P.N. Raina, Commissioner, and the receivers ' inventories.
The High Court further directed that if the net sale proceeds of the said property were found insufficient to satisfy the plaintiff 's aforesaid amount, he would get a personal decree against defendants 1 to 3 for the balance of his claim remaining due after scale.
The High Court also directed that a sum of Rs. 28, 662/9/ . the sale proceeds of cotton waste over which the plaintiff had charge and which was in deposit with the Bank in the Court 's ac count would also be utilised towards the satisfaction of the aforesaid amount decreed in the plaintiff 's favour.
It is against this judgment and preliminary decree that the present appeals are directed.
We have heard counsel for the parties at length and gone through the entire record relevant for the purpose of the appeals before us.
As per contentions of the counsel, the following main questions arise for our determination : (1) Whether the first 'sethiya & Co. ' (of which the plaintiff and Seth Suganchand were partners) was dissolved with effect from June 30, 1948, as claimed by the plaintiff ?
(2) Whether the agreement dated July 6, 1948, was entered into by the plaintiff with the defendants first set as a sole proprietor of Sethiya & Co. or was it entered into by his as a partner of Sethiya & Co. '?
(3) Whether the suit is barred by section 69 of the Partnership Act ?
(4) Whether Seth Suganehand was a necessary party to the suit ?
(5) Whether any material alterations were made in the aforesaid agreement dated July 6, 1948, which rendered it void ?
(6) Whether the suit which was based upon accounts stated or settled could be dealt with in the manner in which it has been done ?
(7) Whether in addition to the imposition of burden on the charged business assets etc.of John & Co. for satisfaction of the decretal amount, the defendants second set could be saddled with any liability in that behalf ?
We shall take up these question seriatim.
Questions Nos. 1 & 2.
: As these two questions are inextricably linked up, they have to be dealt with together.
865 According to the plaintiff, the firm Sethiya & CO., which was formed by him in partnership with Seth Sugan chand for the specific purpose of providing money against pledge of goods to the defendants first set and to act as their sole selling agents and which consequently entered into financial agreements with the said defendants vide exhibits 1321 and 1320 on June 14, 1947, and February 9, 1948, respectively was dissolved with effect from June 30, 1948, and thereafter he alone carried on dealings with the said defendants in the name: of Sethiya & Co. and M/s Tejkaran Sidkaran as their sole proprietor and as such, the agreement (Exh. 168) dated July 6, 1948, was entered into by him with the said defendants as the sole proprietor of Sathiya & Co. On the contrary, the defendants assert that the firm 'Sethiya & Co. ' was in existence on July 6, 1948, and thereafter as well.
Let us examine the material on the record and see which of these contentions is correct.
While the plaintiff relied in support of his contention upon the deed of agreement (Exh. 168) dated July 6, 1948 and the deed of dissolution dated July 22, 1948 produced by him, the defendants strongly relied upon Exhibit A 1 and cer tain other documents.
A close scrutiny of these documents and other evidence adduced in the case clearly negatives the contention of the plaintiff and goes a long way to support the assertion of the defendants.
It would be noted that in the preamble of Exh.A 1 which is admittedly a counter part of Exh. 168, the word 'partner ' occurs after the word 'Sethiya ' and before the word 'of ' and in conso nance with its preamble, Exh.A 1 has been signed by the plaintiff, Seth Loonkaran Sethiya, as a partner of M/s Sethiya & Co. Now though the word 'partner ' occurring in the preamble of Exh.has been scored out, it has not been initialled either by the plaintiff or by any one of the partners of John & Co. It is also significant that while affixing his signatures on Exh. 168 and its counterpart Exh.A 1 the plaintiff described himself as a partner of M/s Sethiya & Co, The contention of the plaintiff that his partnership with Seth Suganchand came to an end with effect from June 30, 1948, and the agreement dated July 6, 1948 was entered into by him with the defendants first set as the sole proprietor of Sethiya & Co. is further falsified by the dissolution deed dated July 22, 1948, itself produced by him before the trial Court on December 13, 1949 which would have passed muster if the defendants had not been vigilant.
It seems that on seeing this deed written partly on an impressed stamp paper of Rs. 10/ which was not in use in July, 1948, the suspicion of the defendants about the spurious character of the deed was aroused and they hastened to make an application requesting the trial court that in view of the fact that the deed appeared to have been 'anti dated and manufactured for the purpose of the case ', the stamp papers on which it was written be sent to the officer in charge, India Security Press, Nasik, for examina tion and report as to when the said stamp papers were issued for sale from the press.
The reaction of the plaintiff to this application and his subsequent conduct in relation to the investigation sought to be made to get at the truth regarding the date of issue of the aforesaid impressed stamp Paper and consequently regarding the alleged dissolution of the firm 'Sethiya & Co. ' is revealing.
It is amazing that the 866 simple request made by the defendants which should have been readily agreed to by the plaintiff if he had been innocent was stoutly opposed by him.
The circumstances in which the so called deed of dissolution of partnership dated July 22, 1948, and the report dated February 27, 1950, of the Assistant Master, India Security Press, Nasik disclosing that 'the first high value (Rs. 10/ ) impressed stamp in the type of water marked paper as used in the document dated July 22, 1948,was printed in his Press on November 23, 1948, and as such couldnot have been, existence on July 22, 1948 the alleged date of execution of the document disap peared is very intriguing It is also remarkable that when during the cross examination of the plaintiff on March 29, 1950, in connection with the issue relating to the bar of section 69 of the Partnership Act the defendants wanted to make use of the aforesaid report from the India Security Press, Nasik, and it came to light that the report and the original deed of dissolution set up by the plaintiff were missing, the plaintiff came forward with an amusing applica tion stating therein that "in the interest of the early disposal of the case, he undertakes not to rely on that document in the suit and to argue the case without that.
The manner in which the plaintiff behaved when the defend ants attempted to have the duplicate copy of the aforesaid report of the Assistant Master,India Security Press obtained by the Court proved is no less interesting.
A reference to the minutes of proceedings of the trial Court shows that after the Court had, at the request of the de fendants and with the consent of the plaintiff 's counsel, passed the order on May 21, 1950, for issuing a commission to Nasik for examination of the said officer of the Press in respect of the aforesaid report about the impressed stamp paper, the plaintiff made an application for stay of that order and on Jully 4, 1950, his counsel, Shri Walter Dutt, made the following statement : ,lm15 "The court may for the purpose of deciding the issue under section 69, Partnership Act take into consideration the fact that the "document purporting to be a dissolution deed executed between the partners of Sethiya & Co. is not genuine although this fact is not admitted by the plaintiff and the court may therefore, discard such portions of the oral evidence of both plaintiff and Seth Suganchand as it considers would be rendered unreliable if the view be taken that the document in question was a fabricated one and the court may presume that the document was not executed on the date on which it purports to be executed.
" On a consideration therefore of the totality of the tell tale facts and circumstances especially the aforesaid description of the plaintiff as partner of Sethiya & Co. in the preamble and at the food of Exh.A 1 and Exh. 168, the clumsy attempt made to obliterate the aforesaid description in the preamble of Exh. 168.the execution of a part of the so called deed of dissolution of partnership dated July 22, 1948 on the aforesaid non judicial impressed stamp Paper of the denomination of Rs. 10/ which was not in existence on July 22, 1948, the 867 resistence offered by the plaintiff to the defendants ' application requesting the Court to call for a report from the India Security Press, Nasik, about the data of issue of the said stamp Paper, the aforesaid report No. 780/26 dated February 27, 1950 of the India Security Press, Nasik, that Rs. 10/ non judicial impressed stamp paper which had been used for part execution of the aforesaid deed of dissolution had not been printed before November 23, 1948, the disappearance of the said deed of dissolution of partnership of Sethiya & Co. set up by the plaintiff and the report of the Assistant Master of the India Security Press, Nasik, the defendants ' endeavour to ' have the dupli cate copy of the aforesaid report of the India Security Press, Nasik about the impressed stamp paper of the denomi nation of Rs. 10/obtained by the Court proved and the plain tiff 's frentic efforts to thwart the attempt firstly by making an application stating therein that he would not rely on the aforesaid deed of dissolution dated July 22, 1948, secondly, by making an application for stay of the order passed by the trial Court regarding issue of a commission to Nasik for formally proving the report of the India Security Press and thirdly, by asking his counsel, Shri Waiter Dutt to make the above quoted statement strongly incline us to think in agreement with the subdued findings of the trial Court that the aforesaid deed of dissolution was fabricated by the plaintiff with the dishonest intention of playing a fraud on the Court and gaining an undue advantage over the defendants.
In addition to the facts and circumstances set out above, the debit of items of Rs. 1,55,000/ and Rs. 1, 68, 552/12/6 to the account of the partnership firm 'Sethiya & Co. ' on July 3, 1948, and July 10, 1949, respectively and issue by the plaintiff of cheques No. BL 003628 dated July 16, 1948 (Exh.B 11)for Rs. 1,55,000/ , No. BL 003634 dated July 16, 1948 (Exh. B 12) for Rs. 25,000/, No. BL 004636 dated July 20, 1948 (Exh. B 13) for Rs. 73,000/, No. BL 003630 dated July 9, 1948 (Exh. B 14) for Rs. 10,000/ , No. BL 003635 dated July 17, 1948 (Exh. B 15) for Rs. 16,500/ , No. 'BL 003632 dated July 10, 1948 (Exh. B 16) for Rs. 1,30,000/ , and No. BL 003633 dated July 10, 1948 (Exh. B 17) for Rs. 1,68,552.14/6 as partner of Sethiya & Co. also go to demolish the theory of dissolution of the firm ' 'S ethiya & Co. ' on June 30, 1948 which the plaintiff sought to build up on sandy foundations and furnish as eloquent proof of the fact that the firm was very much in existence when the agreement (Exh. 168) dated July 6, 1948, came into being.
It has also to be borne in mind that service by post or advertisement in some paper of notice about the retire ment of a partner from a partnership firm on persons who are in know of the existence of the firm and have been carrying on dealings with it is of utmost importance to prevent them from assuming that the partnership continues.
In the in stant case, it is manifest from the evidence educed by the plaintiff himself that neither he nor Seth Suganchand gave notice in writing to the defendants first set that the latter had retired from Sethiya & Co. with effect from June 30, 1948.
The evidence also makes it clear that the con cerned persons and the general public were 868 not informed about the retirement of seth Suganchand from the partnership firm 'Sethiya & Co. ' by publication of a notice in some paper.
The absence of these notices further belie the plea of the plaintiff regarding dissolution of the partnership firm 'Sethiya & Co. ' on June 30, 1948.
That the plaintiff 's story regarding dissolution of the firm 'Sethiya & Co. ' is a complete myth also receives strong support from the fact that although approximately Rs.1,1 0,000/ are admitted by Seth Suganchand to be due to him from the partnership not a farthing appears to have been paid to him nor any document acknowledging the liability appears to have been passed on to him.
The letter (Exh. 21) addressed to the Manger, Bank of Bikaner Ltd., Agra, intimating to him that Seth Suganchand had withdrawn from the partnership of Sethiya & Co. on which strong reliance is placed on behalf of the plaintiff is not helpful to him as it was not sent to the Bank before July 20, 1948.
The alleged dissolution of the partnership between Seth Suganchand and the plaintiff not having been established, it can be safely presumed in view of the above circumstances that the partnership between them continued to subsist at least upto July 20, 1948.
We are accordingly of the opin ion that the firm 'Sethiya & Co. ' was not dissolved with effect from June 30, 1948, as claimed by the plaintiff, and that the agreement dated July 6, 1948, was entered into by the plaintiff with the defendants first set not as the sole surviving proprietor of Sethiya & Co. but as a partner of the firm 'Sethiya & Co. ' Question No. 3: For a proper determination of this question, it is necessary to refer to section 69 of the Partnership Act, 1932, the relevant portion whereof is reproduced below for ready reference : "69."(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of of Firms as partners in the firm.
(3) The provisions of sub sectiOns (1) and (2) shall apply also to a claim of set off or other proceeding to enforce a right arising from a contract, but shall not effect (a) the enforcement of any fight to sue for dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or . " 869 A bare glance at the section is enough to show that it mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a partner of an unregistered firm whether existing or dissolved, void.
In other words, a partner of a erstwhile unregistered part nership firm cannot bring a suit to enforce a right arising out of a contract falling within the ambit of section 69 of the Partnership Act.
In the instant case, Seth Suganchand had to admit in unmistakable terms that the firm 'Sethiya & Co. ' was not registered under the Indian Partnership Act.
It cannot also be denied that the suit out of which the appeals have arisen was for enforcement of the agreement entered into by the plaintiff as partner of Sethiya & Co. which was an unregistered firm.
That being so, the suit is undoubtedly a suit for the benefit and interest of the firm and consequently a suit on behalf of the firm.
It is also to be borne in mind that it was never pleaded by the plain tiff, not even in the replication, that he was suing to recover the outstandings of a dissolved firm.
Thus the suit was clearly hit by section 69 of the Partnership Act and was not maintainable.
Question No. 4: It would be noticed that the present suit has been brought by the plaintiff alone and in spite of the objection raised on behalf of the defendants, he did not care to implead Seth Suganchand who was a necessary party to the suit.
Assuming without holding therefore, that section 69 of the Partnership Act did not apply to the present case, the plaintiff could not in any event maintain the suit for recovery of the aforesaid amount (which was made up of items, some of which were admittedly due to the old Sethiya & Co.) without impleading Seth Suganchand.
Question No. 5 : Before proceeding to determine this question it would be well to advert to the legal position bearing on the matter As aptly stated in paragraph 1378 of Volume 12 of Halsbury 's Law: of England (Fourth ' Edition) "if an alteration (by erasure, interli neation, or other wise) is made in a material part of a deed, after it execu tion, by or with the consent of any party to or person entitle, under it, but without the consent of the party or parties liable under it, but without the consent of the party or parties liable under it, the deed is rendered void from the time of the alteration so as to prefer the person who ' has made or authorised the alteration, and those claim ing under him, from putting the deed in suit to enforce against an party bound by it, who did not consent to the alteration, any obligation, covenant, or promise thereby undertaken or made.
A material alteration, according to this authoritative work, is on which varies the rights, liabilities, or legal position of the parties a ascertained by the deed in its original state, or otherwise varies the legal effect of the instrument as originally expressed, or reduces to certainty some provision which was originally unascertained and a such void, or which may otherwise prejudice the party bound by the deed as originally executed.
870 The effect of making such an alteration without the consent of the party bound is exactly the same as that of cancelling the deed.
" To the same effect are the observations made by the Privy Council on Nahtu Lal & Ors.vs Musarnat Gomti and Ors.(1).
Now a comparison of Exh.A I (produced by the defendants first et) with Exh. 168 (produced by the plaintiff)would show that besides the obliteration of the word 'partner ' from the preamble as stated above, the plaintiff made two other alterations in Exh.
Originally, the second proviso to sub clause (8) of clause 1 of the agreement stood as given in Exh.A 1 ran thus: "The payment for purchase of cotton will be made on the first (underlining is ours) day of its receipt in the mills of the partners.
" In Exh 168, however, the word 'first ' has been changed into 'tenth ' thus making it read as "the payment for pur chase of cotton will be made on the tenth (underlining is ours) day of its receipt in the mills of the partners.
" The third alteration is no less important.
As would be evident from Exh.A 1, sub clause (3) of clause 12 of the agreement as actually drawn up between the parties read as follows : "A commission of Rupee one percent on value of all sales of products of the above three spinning mills, viz. yarn, and newar, whether sold directly by the partners or otherwise but delivered and produced during the currency of this agreement." After the alteration, the clause has been made to read as follows on Exh.168 : "A commission of Rupee one percent on value of all sales of products of the above three spinning mills, viz. yarn, and newar, whether sold directly by the partners or otherwise but delivered or produced during the currency of this agreement.
" As a result of the last change, the word 'and ' has been substituted by the word 'or '.
As the above mentioned alterations sub stantially vary the rights and liabilities as also the legal position of the parties, they cannot be held to be anything but material alterations and since they have been made without the consent of the defendants first set, they have the effect of cancelling the deed.
Question No. 5 is, therefore, answered in the affirmative.
(1) A.I.R. 1940 P.C. 160.
871 Question No. 6 The plaintiff 's suit, as already indi cated, was for a specific and ascertained sum of money on the basis of settled account.
The courts below have con currently found that there was no settlement of account on April 4, 1949, as alleged by the plaintiff.
After this finding, it was not open to them to make out a new case for the plaintiff which he never pleaded and go into the ac counts and pass a decree for the amount which they consid ered was due from the defendants first set to the plaintiff.
They should have, in the: circumstances, either dismissed the suit or passed a preliminary decree fox accounts di recting that the books of account be examined item by item and an opportunity allowed to the defendants first set to impeach and falsify either wholly or in part the accounts on the ground of fraud; mistakes, inaccuracies or omissions for it is well settled that in case of fraud or mistake, the whole account is affected and in surcharging and satisfying the accounts, errors of law as well as errors of fact can be set right.
By adopting the latter course indicated by us, the defendants first set would have got a fair and adequate opportunity of scrutinizing the accounts and showing whether they were tained with fraud, mistake, inaccuracy or omission or of showing that any item claimed by the plaintiff was in fact not due to him.
Question No. 7 : The High Court has for cogent reasons held that the goods on which the burden of charge lay being available for the satisfaction of the liabilities, if any, under the agreement dated July 6, 1948, the defendants second set could not be held personally liable for payment of the decretal amount.
The opinion expressed by the High Court is correct and we see no warrant or justification to interfere with the same.
In view of the foregoing, we have no hesitation in holding that as material alterations have been made by the plaintiff in the agreement dated July 6, 1948 (which is the basis of the suit) rendering it void and as the bar of section 69 of the Partnership Act clearly applies to the case, the suit is clearly untenable and has to be dismissed.
the result, Appeal No. 572 of 1974 is allowed and the suit out of which it arose is dismissed.
Consequently, Appeal No. 416 of 1973 fails and is dismissed.
In the circumstances of the case, parties are left to Pay and bear their own costs of these appeals.
C.A. 572/74 allowed.
P.H.P. C.A. 416/73 dismissed. | Messrs.John & Co. were in financial difficulties and, therefore, entered into a financial agreement with Sethia & Co. a partnership firm of the plaintiff and Seth Sugan Chand.
On 6th July, 1948 Messrs. John & Co. obtained anoth er financial accommodation from Sethia & Co. Messrs. Tejka ran Sidhkaran had also given some advances to Messrs. John & Co. The liability to the firm of Messrs. Tejkaran Sidhkaran was transferred to Sethia & Co. Seth Loonkaran Serbia filed a suit against John & Co. and his partners (defendants first set) as well as Messrs. John, Jain, Mehra & Co. and its partners.
(defendants second set) for recovery of Rs. 21,11,500/ with costs and future interest and for a declaration that the plaintiff had a prior and floating charge on all the business assets of Messrs. John & Co. It was alleged by the plaintiff that the defendants (second set) entered into partnership with the defendants (first set ) under the name and style of Messrs. John Jain, Mehra & Co and maliciously induced them to commit breach of the agreement dated 6 7 1948 by forcibly turning out his representatives who used to remain in charge of the stocks, stores.
coal, waste, etc., of the mills and making them enter into a financial agreement contrary to the terms of the agreement with his firm.
The plaintiff also alleged that accounts were again settled on 4 4 1949 and a sum of Rs. 47,23,738/ was found due to him from the defend ants.
The defendants (first set) contended that there was no settlement of accounts; that the accounts were tainted with fraud and obvious mistakes and that on a true and correct accounting a large sum of money would be found due to them; that the plaintiff and said Sugan Chand obtained various documents, agreements, vouchers, receipts etc., and that the same were of no legal value as they were secured by the former by practising undue influence, fraud, coercion and misrepresentation; that the plaintiff had illegally and contrary to the agreement dated 6 7 1948 debited them with huge amounts which were not really due to them; that the cotton supplied by the plaintiff was of inferior quality and that the rates charged were exorbitant.
It was also denied that the plaintiff had floating or prior charge on any of their stocks, stores, etc; that the suit was barred by the provisions Of section 69 of the Partnership Act and that the agreement dated 6 71948 which was insufficiently stamped could not form the basis of the suit.
The defendants.
(second set) also denied the claim of the plaintiff.
The Trial Court held that the suit was maintainable; that the firm of Messrs. Sethia & Co. was dissolved before the institution of the suit; that the suit being one for the recovery of the assets due to a. dissolved partnership firm from a third party, was not barred by section 69 of the Partnership Act: that Seth Sugan Chand was not a necessary party to the suit; that the agreement dated 6 7 1948 was duly stamped and that no undue influence etc., was exercised by the plaintiff on the defendants; that there was no ac counting on 4 4 1949 as alleged by the plaintiff and that both the plaintiff and the defendants (first set) committed a breach of the agreement dated 6 7 1948.
The Trial Court also held that a charge was created in favour of the plain tiff in respect of the entire business assets and that the defendants (second set) were liable to satisfy the plain tiff 's claim.
The Trial Court decreed the plaintiff 's suit to the extent of Rs. 18,00,152 but rejected his claim for specific performance and injunction.
The Trial Court accord ingly passed a preliminary decree against both the sets of defendants directing them to deposit 854 the said amount in the court within the prescribed time and in default gave the plaintiff a right to apply for a final decree for the sale of all the business assets, goods, stocks, stores, etc.
The decree also gave a right to the plaintiff to apply for a personal decree against the defend ants for the balance of his claim in case the net sale proceeds of the property of the firm were found insufficient to discharge his claim.
The plaintiff filed an appeal in the High Court of Allahabad and the defendants also filed an appeal against the judgment of the Trial Court.
The High Court allowed both the appeals partially holding that no fraud, undue influence, coercion or misrepresentation was practised by the plaintiff; that the agreement dated 6 7 1948 was neither insufficiently stamped nor did it require registration; that the deed of dissolution dated 22 7 1948 was prepared for the purpose of the case but there was sufficient evidence on the record to indicate that said Sugan Chand had withdrawn from the partnership carried on in the name of Serbia & Co. with effect from 30 6 1948; that Seth Sugan Chand was not a necessary party to the suit; that the suit was not barred.
by section 69 of the Partnership Act; that the alterations in the deed dated 6 7 1948 were not material alterations and did not render the agreement void; that the plaintiff had a floating charge over the business assets of John & Co.; that it was defendants (first set) and not the plaintiff who committed breach of the ' agreement.
The High Court, there fore, passed a preliminary decree for Rs. 11,33,668/ in favour of the plaintiff and against the defendants (first set) but dismissed the suit with costs as against the de fendants (second set).
The High Court granted certificate under Article 133 in both the appeals.
Dismissing the plaintiff 's appeal and allowing the appeal of the defendants (first set) held: (1) Section 69 of the Partnership Act is mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a partner of an unregistered firm, whether existing or dissolved, void.
[869 A] (2) A partner of an erstwhile unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract failing within the ambit of section 69 of the Partnership Act.
The suit out of which the appeals arise was for enforcement of the agreement entered into by the plaintiff as partner of Serbia & Co. It was never pleaded by the plaintiff not even in his replication that he was suing to recover the outstanding of a dissolved firm.
Thus the suit was clearly hit by section 69 ' and was not main tainable.
[869 B C] (3) A close scrutiny of the document and other evidence clearly negatives the plaintiff 's claim that the firm was dissolved with effect from 30th June 1948.
[865 C] (a) The agreement dated 6th July 1948 itself is signed by the plaintiff as a partner and the, expression partner also appears in the body of the agreement.
[865 D] (b) The alleged deed of dissolution dated 22nd July 1948 between the plaintiff and Seth Sugan Chand was prepared on a stamp paper printed in the Government Press in November, 1948.
The said Dissolution Deed was, therefore, clearly fabricated by the plaintiff.
The plaintiff signed various cheques in July, 1948 as the partner of Sethia & Co. [865 F H; 866 A C; 867 F] (c) No service by post or advertisement in the newspaper about the dissolution was given either by the plaintiff or by Seth Sugan Chand.
[867 F] (4) Seth Sugan Chand was a necessary party to the suit and in spite of the objections raised on behalf of the defendants the plaintiff did not care to implead ' Seth Sugan Chand.
The suit was bound to fail on that ground also.
[869 D E] (5) A material alteration in a document without the consent of a party to, it has the effect of cancelling the deed.
[870 A] Volume 12 of Halsburys Laws of England (Fourth Edition) referred to.
855 Nathu Lal & Ors.
vs Musammat Gomti & Ors.
(A.I.R. relied on.
In the present case there were many material alterations of the document.
The material alterations, therefore have the effect of cancelling the deed in question.
[870 B D] (6) The plaintiff 's suit was for a specific and ascer tained sum of money on the basis of settled account.
The Courts below found concurrently that there was no settlement of account as alleged by the plaintiff on 4th April 1949.
After that it was not open to the courts below to make out a new case for the plaintiff which he never pleaded.
The courts be.low could have either dismissed the suit or passed a preliminary decree for accounts directing that the books of account be examined item by item and an opportunity allowed to defendants to impeach and falsify the accounts.
[871 A C] |
Appeal No. 1360 of 1975.
(From the Judgment and Order dated 12 3 1975 of the Punjab & Haryana High Court in Regular First Appeal No. 315/64).
V.M. Tarkunde, E.C. Agrawala and Miss N. Tarkunde for the, appellant.
Bishan Narain, and Mrs. Urmila Sirur for respondent No. 1.
Hardev Singh and R.S. Sodhi, for Respondent No. 2.
The Judgment of the Court was delivered by CHANDRACHUD, J.
Sardar Gobinder Singh Sibia who was possessed of a large estate died on December 15, 1954 at the age of about 70. 927 He had taken two wives, Gulab Kaur and Dalip Kaur.
The story of his life follows the familiar pattern the pretext of a disagreement with the unwanted wife, special favours for the favourite and jealous rivalries between the children born of the two.
The following pedigree will facilitate a better under standing of the issues involved in me case : Tara Singh Sibia : Ratan Singh : : Gulab Kaur Gobinder Singh Dalip Kaur (Plaintiff) (Died 15 12 1954) pre deceased her husband) (Died 1959) : : : : : Jaswant Kaur . . . . (Appellant) Guraprakash Kaur Gurbachan Sin gh pre deceased his fat her) Joginder Kaur (Died 1971 ) : : Arrit Kaur = Surjit Inder Singh Palvinder Kaur (Respondent1) (Defendant) (Respondent 5) (Died 1968) : : : Gobinder Singh Surinder Singh Gopal Inder Singh (Respondent 2) (Respondent 3) (Respondent 4) After the birth of the appellant Jaswant Kaur, Gulab Kaur started living or as the story goes, was compelled to live with her parents.
Dalip Kaur had given birth to a daughter Guraprakash Kaur and a son Gurbachana Singh.
Gurbachan died during the life time of his father Gobinder Singh, leaving behind his widow Joginder Kaur who died in 1971.
Gurbachan Singh and Joginder Kaur gave birth to two children, a son Surjit Inder Singh and a daughter Palvinder Kaur.
Surjit Inder Singh died in 1968 leaving behind a widow Amrit Kaur and three sons.
On May 22, 1956 which was about a year and a half after the death of Sardar Gobinder Singh, his widow Gulab Kaur filed a suit in forma pauperis claiming maintenance @ Rs. 1000/ per month or in the alternative a one half share in the properties left by her husband.
Her co wife 's grandson Surjit Inder Singh was the defendant to the suit.
He filed his written statement on January 5, 1957 contending that the plaintiff had deserted her husband and that she was neither entitled to maintenance nor to any share in his estate.
On these pleadings the trial court struck issues in the suit on February 1, 1957.
At the end of her evidence on August 17, 1957 the plaintiff gave up her claim for maintenance and stated that she wanted a one half share in her husband 's estate.
The hearing of the suit was adjourned by the learned trial Judge to August 24, for recording defendant 's evi dence.
928 In the meanwhile, on.
August 20, the defendant filed an application asking for permission to produce a will stated to have been made by Sardar Gobinder Singh, on November 26, 1945.
The learned District Judge, Sangrur, who was then seized of the suit rejected that application and refused to allow the defendant to amend his written statement.
That order was, however, set aside in revision by the Punjab.
High Court which directed the trial court to allow the defendant to amend Iris written statement and to produce his father 's alleged will.
On March 8, 1958 the defendant amended his written statement contending that by the will, his father had left almost the entire property to him and that the plaintiff Gulab Kaur was not entitled to any share in the property under the will.
In June, 1958 the plaintiff filed a formal application seeking leave to amend her plaint giving up her claim for maintenance and asking for a one half share in the properties of her deceased husband.
Fresh issues were thereafter framed on the basis of the amended pleadings.
On March 10, 1959 the plaintiff died and her daughter, Jaswant Kaur, who is the appellant before us, was brought on the record as her legal representative.
The suit was tried eventually by the learned Senior Sub Judge, Sangrur, who by his judgment dated June 29, 1964 decreed it.
The learned Judge held that the defendant who set up the will had failed to prove that it was the last will and testament of his grand father Gobinder Singh and alternatively, that even on the assumption that the will was proved, it must be deemed to have been revoked on account of certain dispositions made by the testator after the making of the will.
This alternative conclusion that the will stood revoked by implication is clearly unsupportable and the appellant, who disputes the will, did not urge that consideration before us.
The revocation of an unpriviledged will is an act only a little less solemn than the making of the will itself and has to comply with statutory require ments contained in section 70 of the Succession Act.
Holding that the defendant had failed to discharge his onus of proving the will, the trial court granted to the plaintiff a decree for a one half share in the properties of her husband.
In doing this, the Court relied on "overwhelm ing documentary evidence" showing that according to the custom by .which the parties were governed, a sonless widow was entitled to a one half share in the estate of her hus band, as an equal sharer with the male progeny born of a co wife.
That the parties were governed in this matter by customary law was "openly conceded" in the trial court, the point of dispute being restricted on this point to 'the question as to what in fact was the custom.
It was common ground before us that if the will goes, the plaintiff will be entitled to a half share in the estate of her husband Gobinder Singh.
Aggrieved by the judgment of the trial court, the de fendant Surjit Inder Singh filed First Appeal No. 315 of 1964 in the High Court of Punjab and Haryana.
During the pendency of the appeal, the defendant died on October 22, 1968 and his widow Amrit Kaur, her three sons, and his sister Palvinder Kaur were brought on the record as his legal representatives.
They are respondents 1 to 5 to this appeal.
By its judgment dated March 12, 1975 the High Court set aside the judgment 929 the trial court, allowed the appeal and dismissed the plaintiff 's suit.
The High Court has held, or appears to have held, that the will was duly established.
Since the will excludes the plaintiff as a sharer in the testator 's estate, the suit had to fail, custom or no custom.
This appeal by special leave is directed against the judgment of the High Court.
The defendant who is the principal legatee and for all practical purposes the sole legatee under the will, is also the propounder of the will.
It is he who set up the will in answer to the plaintiff 's claim in the suit for a one half share in her husband 's estate.
Leaving aside the rules as to the burden of proof which are peculiar to the proof of testamentary instruments, the normal rule which governs any legal proceeding is that the burden of proving a fact in issue lies on him who asserts it, not on him who denies it.
In other words, the burden lies on the party which would fail in the suit if no evidence were led on the fact alleged by him.
Accordingly, the defendant ought to have led satis factory evidence to prove the due execution of the will by his grand father Sardar Gobinder Singh.
In cases where the execution of a will is shouded in suspicion, its proof ceases to be a simple lis between the plaintiff and the defendant.
What, generally, is an adver sary proceeding becomes in such cases a matter of the court 's conscience and then the true question which arises for consideration is whether the evidence led by the pro pounder of the will is such as to satisfy the conscience of the court that the will was duly executed by the testator.
It is impossible to reach such satisfication unless the party which sets up the will .offers a 'cogent and convinc ing explanation of the suspicious circumstances surrounding the making of the will.
There is a long line of decisions bearing on the nature and standard of evidence required to prove a will.
Those decisions have been reviewed in an elaborate judgment of this Court in R. Venkatachala Iyengar vs
B.N. Thirnmajamma & Others.
(1) The Court, speaking through Gajendragadkar J., laid down in that case the following positions : 1.
Stated generally, a will has to be proved like any other document, the test to be applied being the usual test of the satisfaction of the prudent mind in such matters.
As in the ease of proof of other documents, so in the case of proof of wills, one cannot insist on proof with mathematical certainty.
Since section 63 of the Succession Act requires a will to be attested, it cannot be used as evidence until, as required by section 63 of the Evidence Act, one attesting witness at least has .been called for the purpose of proving its execution, if there be an attesting witness alive and subject to the process of the court and capable of giving evidence.
Unlike other documents, the will speaks from the death o[ the testator and therefore the maker of the will is never available for deposing as to the circumstances in which the will came to be executed.
(1) [1959] Supp.
I S.C.R. 426.
930 This aspect introduces an element of solemnity in the deci sion of the question whether the document propounded is proved to be the last will and testament of the testator.
Normally, the onus which lies on the propounder can be taken to be discharged on proof of the essential facts which go into the making of the will.
Cases in which the execution of the will is surround ed by suspicious circumstances stand on a different footing.
A shaky signature, a feeble mind, an unfair and unjust disposition of property, the propounder himself taking a leading part in the making of the will under which he re ceives a substantial benefit and such other circumstances raise suspicion about the execution of the will.
That suspicion cannot be removed by the mere assertion of the propounder that the will bears the signature of the testator or that the testator was in a sound and disposing state of mind and memory at the time when the will was made, or that those like the wife and children of the testator who would normally receive their due share in his estate were disin herited because the testator might have had his own reasons for excluding them.
The presence of suspicious circumstances makes the initial onus heavier and therefore, in cases where the circumstances attendant upon the execution of the will excite the suspicion of the court, the propounder must remove all legitimate suspicions before the document can be accepted as the last will of the testator.
It is in connection with wills, the execution of which is surrounded by suspicious circumstance that the test of satisfaction of the judicial conscience has been evolved.
That test emphasises that in determining the question as to whether an instrument produced before the court is the last will of the testator, the court is called upon to decide a solemn question and by reason of suspicious circumstances the court has to be satisfied fully that the will has been validly executed by the testator.
If a caveator alleges fraud, undue influence, coer cion etc.
in regard to the execution of the will, such pleas have to be proved by him, but even in the absence of such pleas, the very circumstances surrounding the execu tion ' of the will may raise a doubt as to whether the testa tor was acting of his own free will.
And then it is a part of the initial onus of the propounder to remove all reasona ble doubts in the matter.
We will now set out briefly the provisions of the will which is dated November 26,1945.
The will consists of 9 paragraphs, by the first of which the testator appointed Sardar Kesho Ram, a Judge of the High Court of Patiala, and Sardar Bahadur Ranjit Singh a contractor of Delhi, as execu tors.
By paragraph 2 the testator bequeathed the whole of his property, movable and immovable, to his grandson Surjit Inder Singh who is the defendant in the present suit.
By paragraph 3 the testator gave to his wife Dalip Kaur a life interest in a house at Simla, called Kenilworth.
The testator provided by paragraph 4 that if the house was later acquired by the Government or was sold by himself Dalip Kaur would be entitled to receive from his estate a sum equal to the compensation fixed in the acquisition proceedings or equal 931 to the sale price.
The amount was to be deposited in ap proved securities, Dalip Kaur being entitled only to the interest thereon.
On her demise, the house or the amount in deposit was to vest absolutely in the defendant.
Para graph 5gave to Dalip Kaur the right of residence in a part of the house.
at Sangrur, paragraph 6 gave to her the right to use during her life time the jewellery and orna ments and paragraph 7 states expressly that she will have no right to alienate any of the properties in which she was given a life interest.
Paragraph 8 provides that Dalip Kaur had the right to live jointly with the defendant but in case there were differences between them, she would be entitled to receive from him an annual sum.
of Rs. 5,000 for her maintenance.
This amount was to constitute a charge on a land at Karmsar, District Lyallpur.
Paragraph 9 of the will recites that the plaintiff Gulab Kaur had given birth to a daughter Jaswant Kaur in 1898, that Jaswant Kaur was married happily in 1913 to Sardar Gurbax Singh Mansahia, that after Jaswant Kaur 's marriage Gulab Kaur started misbehaving and left for her parents ' house, taking jewellery worth about Rs. 50,000 with her.
It is further stated .in paragraph 9 that Gulab Kaur was "leading her life in a way which would not bear mention here" and that therefore she did not de serve to get any allowance at all from the testator 's property.
The defendant was however directed to pay to her a monthly sum of Rs. 50 for her maintenance provided that she lived in a part of the house at Sangrur and her conduct remained worthy of the Sibia family.
Paragraph 9 expressly mentions that Gulab Kaur would have no right to any share in the testator 's property.
The testator, Sardar Gobinder Singh, was a man of property and occupied a high position in society.
By a modest estimate, the property which he disposed of by his will was of the value of rupees ten to fifteen lakhs.
A registered power of attorney (EX. D/2) which he had executed seven months before the will on April 6.
1945 shows that he owned extensive movable and immovable properties, had a bank account in several banks and that various legal pro ceedings to which he was a party were pending in "all the States of British India".
Gobinder Singh describes himself in the power of attorney as a "big biswedar" and says that he had "a large business to attend to".
The evi dence of Kartar Singh, Gurcharan Singh and Teja Singh (P.Ws. 4, 5 and 6) shows that Sardar Gobinder Singh owned over 15000 bighas of land, several houses and several cars in cluding a Rolls Royce.
sardar Ratan Singh, the father of Gobinder Singh, was the President of the Council of Regency .in the erstwhile State of Jind, while Gobinder Singh himself held "distinguished and responsible posts" in Jind such as the Nazim, the Private Secretary to the Mahara ja and a Minister in his government.
It is the will of a man of such affluence and social status which has to be judged in this case.
It is not as if the burden of proof varies with the riches and social pres tige of the testator but habits of life arc prone to vary with the means of the man and the privileged few who happen to occupy a high place in the social hierarchy have easy access to competent legal advice.
Normally therefore, a genuine will of a propertied man.
well positioned in society too.
does not suffer from 932 the loopholes and infirmities which may understandably beset an humbler testamentary instrument.
Circumstances are too numerous to mention which throw a cloud of suspicion on the making of the will by Gobinder Singh.
The will is alleged to have been made on November 26, 1945 but it did not see the light of day till August 20, 1957.
Being an ambulatory document, it may be granted that there may be no occasion for anyone to know of its existence until the death of the testator on December 15, 1954.
But it is ununderstandable that a document by which property worth lakhs of rupees was disposed of should have remained a closely guarded secret from the whole world of intimate friends and relatives, nay, from the sole legatee himself, for over 21/2 years after the testator 's death.
The testa tor had left behind him a large property and along with it a large amount of litigation which makes it impossible to believe that upon his death in December 1954, no one both ered to go through his papers which would reflect the state and extent of his property.
The explanation of the defend ant that he hit upon the will by chance while going through some papers of his grand father is therefore patently lame and unacceptable.
There is an ominous significance in the date on which the defendant applied for production of the will in the present suit.
By her suit which was filed on May 22, 1956 the plaintiff Gulab Kaur had originally asked for mainte nance ' and in the alternative for a one half share in the estate of her husband.
Under the Punjab customary law by which the parties were governed, the plaintiff, being a sonless widow.
was entitled to an equal share in the proper ty of her husband.
along with the male progeny born from a co wife.
But the customary .law gave to the sonless widow only a limited and not an absolute interest in the estate of her husband.
The , 30 of 1956.came into force on June 17, 1956 which explains why the plaintiff at the end of her evidence on August 17, 1957 expressly gave up her claim for maintenance and restricted her demand in the suit to a one half share in her husband 's estate.
So long as the plaintiff was entitled only to maintenance or to a limited interest in her husband 's property, the defend ant was content to meet that claim by raising pleas like desertion and misconduct The passing of the Hindu Succes sion Act changed the entire complexion of the suit, raising at least a reasonable apprehension ' that on account of the provisions of that Act the plaintiff would become an abso lute owner of a part of her husband 's estate.
By section 8 of the Act, the widow becomes an heir to the husband 's estate on intestate succession, along with other heirs mentioned in Class I of the Schedule.
And by section 14(1), any property possessed by a female Hindu whether acquired before or after the Act becomes her absolute property subject to the provisions of sub section (2) which would have no application in the instant case.
By reason of section 14, the provisions of the Act have generally an overriding effect on custom and usage.
On August 17, 1957 the plaintiff 's evidence was over and the suit was ad journed to August 24 for defendant 's evidence.
In the meanwhile, on August 20, the defendant filed an application stating 933 that he had accidentally discovered a will made by the plaintiffs husband Gobinder Singh and asking for permission to produce that will.
The defendant has not stated why he suddenly thought of examining his grand father 's papers in between the conclusion of the plaintiff 's evidence on the 17th and the 20th of August.
His case is one of a purely providential discovery and neither in the application for production of the will nor in his evidence did he give the haziest details of the discovery.
We are surprised that the High Court should have so readily accepted the story that the defendant stumbled across the will.
The will has been typed out on both sides of a single foolscap paper and is obviously drafted by a lawyer.
No evidence at all has been led as to who drafted the will and who typed it out.
The will uses some trite legal jargon but it does not show where it was executed and contains no description whatsoever of any of the extensive properties bequeathed to the defendant.
The will has been attested by two persons called Dinshaw H.M. Framjee and Pali Ram.
It is intriguing that a person in the position of Sardar Gobinder Singh should choose these two strangers as attesting witnesses to a very solemn and important document.
Dinshaw Framjee was a trader in Simla and Pali Ram was his servant.
Framjee has stated in his evidence that he did not remember where Gobinder Singh used to stay in Simla, that he did not know for how long he was staying in Simla before the attestation of the will, that he was unable to state whether he had met Gobinder Singh after the attestation of the will and that he was unable to give the approximate time of the day when the will was attested forenoon, afternoon or evening.
Framjee was sure about one thing only, that he had not attested the will at night.
He attempted to say that he was on friendly terms with the testator 's family but he was unable to give even the approximate ages of the testator 's son and daughter.
Under the stress of cross examination, he had to admit eventually that he knew nothing about the testator,s family or family affairs.
Pali Ram, the other attesting witness, did ' not remember the date or the year of the execution of the will but said that it was probably executed in 1945.
He did not know the testator and was a total stranger to him.
Whereas Framjee stated that the will was attested in 'his business premises which were on the ground floor, Pali Ram says that Framjee sent for him from the business premises to his residence, which was on the upper floor.
The utter improbability of the testator accosting these two strangers for getting his will attested and the funda mental contradictions in their evidence render it impossible to hold that they attested the will at the instance of the testator as alleged.
A man of importance that the testator was, he could not ever have left the validity of his will to depend on the unpredictable attitude of unknown elements like Framjee and Pali Ram.
Pali Ram claims to have read the will before attesting it.
It iS not known why.
if he knew that the property 934 was bequeathed to the defendent, he did not, at least after the testator 's death, inform the defendant of the existence of the will.
By the will the testator appointed Sardar Kesho Ram, a Judge of the High Court of Patiala and one Sardar Bahadur Ranjit Singh as executors.
Both of these persons were fortunately available for giving evidence but neither of them was examined in the case.
Normally, executors are not appointed without their consent or at least without a prior consultation with them.
Respondent 1, the defendant 's widow, is the daughter of the executor Ranjit Singh.
The marriage was performed during the testator 's life time and we find it hard to believe that he would not disclose even to Ranjit Singh that he had made a will appointing him as one of the executors and that Ranjit Singh 's son in law, that is to say the testator 's grandson, was the sole legatee under that will.
The will is unnatural and unfair in more than one re spect.
At the time that the will is alleged to have been made, the testator had a daughter Guraprakash Kaur who was born of Dalip Kaur and a daughter in law Joginder Kaur, being the widow of the testator 's predeceased son Gurbachan Singh who was also born of Dalip Kaur.
Gurbachan Singh and Joginder Kaur gave birth to the defendant Surjit Inder Singh and to a daughter Palvinder Kaur.
The will contains not even a fleeting reference either to the testator 's daughter or the widowed daughter in law or to the grand daughter Palvinder Kaur.
It is urged that all of these persons were happily placed in life and it was therefore needless for the testator to provide for them.
If that be so, it was usually unnecessary to refer to the appellant Jaswant Kaur who also, it is common ground, has been married happily.
The plaintiff Gulab Kaur has been wholly excluded as an heir of the testator for the supposed reason; that She had brought disgrace to the Sibia family and that her behaviour was such as would not even 'bear mention in the will.
Not only that no evidence was led to show any misconduct on the part of Gulab Kaur but the evidence of Jaswant Kaur (P.W.2) shows that for about 7 or 8 years prior to 1956 Gulab Kaur had lost her eyesight.
One of the issues in the suit namely, issue No. 2, arising from the original pleadings was whether the plaintiff was disentitled to maintenance for the reason that she had deserted her husband.
The judgment of the trial court shows that the defendant led no evidence in support of that issue and that during the course of arguments, the defendant 's counsel did not press the partic ular issue.
The plaintiff on the other hand led evidence in rebuttal and accepting that evidence the trial court rejected the contention that she had deserted her husband.
it seems to us difficult to believe that a person in the position of section Gobinder Singh who was possessed of a large estate, would disinherit so many of his near rela tives including his wife Gulab Kaur and shower his bounty on the grandson, to the exclusion of everyone else.
935 Quite a few other circumstances can be mentioned which raise a grave suspicion as regards the making of the will but the circumstances enumerated above are, tin our opinion, sufficient to discard the will.
The defendant in his evidence has offered no explanation of any of these.
cir cumstances.
He has totally failed to discharge the heavy onus which lay on him of explaining the suspicious circum stance surrounding the execution of the will and of estab lishing that the document which he propounded was the last will and testament of his grand father Gobiner Singh.
Learned counsel for ' the respondents contends that the defendant did not offer any explanation of these suspi cious circumstances because the will was not challenged in the trial court on the ground that its execution was shroud ed in suspicion.
It is impossible to accept this conten tion because even the learned District Judge who had reject ed the defendant 's application for production of the will and the consequent amendment of the written statement had observed in his order dated September 13, 1957 that it was inconceivable that the defendant did not know about the will and that the possibility of :its being forged cannot be excluded.
This itself was sufficient notice to the defendant as to the nature of the burden which he had to discharge.
Counsel for the defendant also contended that the testator must have kept the will a closely guarded secret because if the will was published, Gulab Kaur and her daughter would have created some trouble.
This argument, in the context of the various facts adverted to above, has to be rejected.
The testator might have wished to keep the will a secret from Gulab Kaur and her daughter but it is impossible to appreciate that he would frustrate the very object of making the will by suppressing it from the defend ant and from the executors, one of whom was highly placed and the other of whom is the defendant 's father in law.
Frankly, though with respect, it surprises us that the High Court should have accepted the will as genuine.
It observes: "It is evident from the above evidence that there are no suspicious circumstances about the execution or the contents of the will.
" We could have understood if the High Court were to say that the defendant had given a valid explanation of the suspicious circumstances surrounding the execution of the will.
But to say that there is nothing in the case to excite the court 's suspicion and to accept the will as genuine on that premise is wholly ununderstandable.
The High Court does not refer to a single circumstance out of the many that we have discussed and the operative part of the judgment just recites a few facts mechanically as if there could possibly be no answer to the validity of the will.
The High Court has not referred in its judgment even in passing to the rule as to the burden of proof which applies to testamentary proceedings.
If only it had taken the trouble of looking at the decision of this Court in Iyengar 's case, which is copiously extracted in the judg ment of the Trial Court, it would have realized what its true duty was in the case.
936 For these reasons we allow the appeal, set aside the judgment of the High Court and restore that of the trial court.
The appellant will be entitled to recover from the respondents the costs of this Court and of the High Court.
P.H.P. Appeal allowed. | section Gobinder Singh Sibia was possessed of a large estate valued at about Rs.15 lacs at the time of his death in the year 1954.
He had two wives Gulab Kaur and Dalip Kaur.
Dalip Kaur predeceased him leaving a son and a grandson named Surjit.
After the death of section Gobinder Singh, Gulab Kaur filed a suit for maintenance, claiming alternatively a one half share in the estate left by her husband.
Surjit contested the said suit.
After the institu tion of the suit, the , came into force on June 17, 1956 upon the plaintiff giving up her claim for maintenance and restricting her suit to a half share in her husband 's estate, the defendant made an appli cation for amending his written statement and pleaded that section Gobinder Singh had executed a will in the year 1945 bequeathing practically the entire estate in his favour and leaving a small life interest in favour of the plaintiff.
The amendment application was flied in March, 1958, after the plaintiff 's evidence was over.
The Trial Court decreed the plaintiffs suit and .held that the plaintiff was enti tled to a half share in the estate left by Gobinder Singh and that the defendant had failed to prove the will.
In an appeal flied by the defendant the High Court set aside the Judgment of the Trial Court and dismissed the plaintiff 's suit.
The High Court held that will was duly established.
Allowing the appeal, Held: (a) In cases where the execution.of a will is shrouded i.n.
suspicion its proof ceases to be a simple lis between the plain tiff and the defendant.
What generally is an adversary proceeding becomes in such cases a matter of the court 's conscience.
The presence of suspicious circumstances makes the initial onus heavier and, therefore, in cases where the circumstances attendant upon the execution of the will excite the suspicion of the court the propounder must remove all legitimate suspicions before the document can he accepted as the last will of the testator.
[929 C F, 930 C D] (b) A will has to be proved like any other document by applying the usual test of the satisfaction of the prudent mind.
[929 F] (c) Since section 63 of the Succession Act requires a will to be attested it cannot be used as an evidence until at least one of the attesting witnesses is examined, if available.
[929 G] (d) Unlike other documents the will speaks from the death of the testator and, therefore, the maker of the will is never available for deposing as to the circumstances in which the will was executed.
That circumstance intro duces a certain amount of solemnity in proof of testamentany instruments.
[929 H, 930 A] R. Venkatachala lyengar vs
B.N. Thimrnajamma & Others [1959] Supp. 1 S.C.R. 426, followed.
The testator was a man of property and occupied a high position in society.
A genuine will of such a person is not likely to suffer from the loop holes and infirmities which may beset an humbler testamentany instrument.
[931 D, H,932 A] 3.
The following circumstances throw a cloud of suspi cion on the making of the will by Gobinder Singh: 926 (i) The will is alleged to have been made in 1945 but it did not see the light of the day till 1957.
It is unacceptable that a document by which property worth lacs of rupees was disposed of could have remained a closely guarded secret from intimate friends and relatives and from the sole legatee him self for over 21/2 years after the testator 's death.
[932 A B] (ii) The testator had left behind him a large property and along with it large amount of litigation which makes it impossible to believe that upon his death no one bothered to go through his papers.
The explanation of the defendant that he stumbled upon the will by chance while going through some papers of his grandfather is patently lame and unacceptable.
[932 B D] (iii) The defendant came out with the theory of will after the of 1956 came into force as a result of which the plaintiff would become an absolute owner of the property that would fall to her share as the heir of her husband.[932 G H, 933 A B] (iv) The will was typed Out on both sides of a single foolscap.paper and was obviously drafted by a lawyer.
No evidence was led as to who drafted the will and who typed it out.
[933 B C] (v) The will was attested by two persons, both of whom were strangers to the testator 's family and neither of whom could give a proper account of the execution of the will.
In fact they contradicted each other.
[933 C H] (vi) The two persons who are alleged to have been appointed executors were not exam ined, though available.
Normally, the execu tors are not appointed without their consent or consultation.
[934 A C] (vii) The will is unnatural and unfair.
[934 C] (viii) The will does not make mention of many of the near relations and descendants of the testator.
[934 D F] (ix) The plaintiff was excluded as an heir of the testator for the supposed reasons that she had brought disgrace to the Sibia family and that her behaviour was such as would not even bear a mention in the will.
No evidence was led on the misconduct of the plaintiff.
[934 F G] (x) The defendant in his evidence did not offer any explanation any of the suspicious circumstances.
[934 G] 4.
The High Court merely recited a few facts mechanical ly and without going into the suspicious circumstance accepted the will as genuine.
The High Court did not apply the rule as to the burden of proof which governs the testa mentary proceedings, as set out in the decision of this Court in lyengar 's case to which reference was made in the Trial Court 's Judgment.
[838 F H] |
ivil Appeal Nos.
248 251 of 1976.
(Appeals by Special Leave from the Judgment and Order dated 28 11 1975 of the Andhra Pradesh High Court in Writ Petitions Nos.
1195 1198/75).
CIVIL APPEALS Nos.
934 936 of 1976.
(Appeals by Special Leave from the Judgment and Order dated 28 11 1975 of the Andhra Pradesh High Court in Writ Petitions Nos.
3931, 3944 and 4029/75).
CIVIL APPEALS No. 693 of 1976.
(Appeal by Special Leave from the Judgment and Order dated 28 11 1975 of the Andhra Pradesh High Court in Writ Petition No. 6790/74).
Soli Sorabji and K.J. John for the Appellant (CAs 248 251/76).
A. Subba Rao for the Appellant (CAs.
934 936/76).
Babul Reddy and K.J. John for the Appellant (CA.
693/76).
Niren De, Attorney General for India, P.P. Rao, D.V. Sastry and T.V.S.N. Chari for the Respondents (in CAs.
248 251/76 and CAs.
934 936/76).
T.V.S.N. Chari for the Respondent (In CA No. 693/76).
The Judgment of the Court was delivered by JASWANT SINGH, J.
This batch of appeals by special leave which are directed against three separate judgments of the High Court of Andhra Pradesh at Hyderabad dismissing three sets of writ petitions Nos.
1195 to 1198 of 1975,3931, 3944 and 4929 of 1975 and 6790 of 1974 filed by the.
appel lants to challenge certain orders of the sales tax authori ties made in respect of re determination of their ' turnover for certain years under the Andhra Pradesh General Sales Tax Act, 916 1957 (hereinafter referred to as 'the Act ') shah be disposed of by this judgment, as they raise a common question as to whether the excise duty deposited directly in a State treas ury or a sub treasury by the purchasers of the Indian made foreign liquor called 'Indian liquor ' before removing the said liquor from a distillery and the countervailing duty remitted directly to a State Treasury or a sub treasury by the purchasers of the aforesaid specie of liquor before removing it from a bonded warehouse can properly be said to form part of the turnover of .he manufacturer and of the owner of the bonded warehouse respectively and as such liable to sales tax under the Act.
The circumstances which have given rise to these appeals lie in a short compass and may be briefly stated: The appel lants in the first two sets of Appeals Nos. 248 to 251 of 1976 and 934 to 936 of 1976 carry on the business of manu facture of 'Indian liquors ' in their distilleries estab lished in Andhra Pradesh under licences issued to them by the Commissioner of Excise under the Andhra Pradesh Excise Act, 1968 (Act 17 of 1968) and the rules made thereunder and sell their finished products to the wholesale dealers who in turn sell them to retail dealers.
Under Rule 76 of the Andhra Pradesh Distillery Rules, 1970 removal of any liquor manufactured or stored without prepayment of the excise duty specified in rule 6 is forbidden.
Rule 77 of the Rules prohibits issue of any liquor until its quantity and strength have been duly verified by the distillery officer.
Rule 579 of the Rules authorises the distillery officer on payment of excise duty to grant a distillery pass for remov al of the liquor fit for human consumption to the persons specified in the said rule including a person holding a licence for sale of liquor by wholesale or retail.
Under Rule 81 of the Rules, every application for a distillery pass for removal of liquor has to be addressed in writing to the distillery officer and has to be accompanied by a challan in original for payment of excise duty therefor and a general or special permit for the purpose of removal of the liquor.
Rule 82 of the Rules enjoins the distillery officer upon tender of cash payment of excise duty by the applicant to fill up the challan for presentation with the cash at a treasury or sub treasury of the district in which the distillery is situate, and the applicant for distillery pass to present the treasury receipt in token of his having made payment of the duty where after the distillery officer has to affix the said receipt to the counterfoil of form D 6.
Rule 83 of the Rules casts responsibility upon an applicant for a distillery pass to, make a correct calcula tion and full payment of the excise duty upon the liquor desired to be removed.
Rule 84 of the Rules requires, the distillery officer to issue the liquor under a pass in form D 6 sending a duplicate ' thereof to the Excise Superintend ent of the district of destination on being satisfied that the applicant is entitled under the Rules to remove the liquor and has made payment of the requisite excise duty.
Accordingly every buyer of the Indian liquor from either of the 'appellants ' distilleries during the years in ques tion obtained the distillery pass for release of the liquor after making payment of the excise duty and presented the same at the concerned distillery whereupon bill of sale or invoice was prepared by the distillery showing the price of the liquor.
The said bill did not include 917 the excise duty paid by the buyer.
The appellants ' books of accounts also did not contain any reference regarding the excise duty paid by the purchasers in the manner stated above.
The appellants paid the sales tax in full as per final assessments made by the sales tax authorities under the Act.
it appears that after the completion of the assessments of the sales tax under the Act for the years in question, the Commercial Tax Officer felt that there had been a failure to include the excise duty paid on the aforesaid liquors vended by the appellants in their taxable turnover.
Accordingly, acting under the provisions of section 14(1) of the Act, the Commercial Tax Officer issued notices in February, 1975 to the appellants in the afore said first two sets of appeals to show cause why the assess ments be not reopened.
Aggrieved by the said action of the Commercial Tax Officer, the appellants filed writ petitions Nos.
1195 to 1198 of 1975 and 3931, 3944 and 4929 of 1975 in the High Court of Andhra Pradesh challenging the said notices which, as already stated, were dismissed by the High Court.
The appellant in Appeal No. 693 of 1976 is a firm which is a licensed wholesale dealer in liquors and owner of a bonded warehouse under the Andhra Pradesh Indian Liquor (Storage in bond) Rules, 1969 where it stores or deposits Indian Liquors such as whisky, brandy.
gin etc.
imported by it from various States outside the State of Andhra Pradesh without prepayment of countervailing duty or other fee and issues the same according to the rules to its customers.
The modus operandi of the appellant is that it makes a bill for the value of the liquor required by an intending purchaser, who thereafter pays the requisite countervailing duty in his own name and the Excise Officer incharge of the bonded warehouse grants him a pass entitling him to remove the liquor from the warehouse.
According to the appellant, it gets only the price of the liquor from its buyers.
For the assessment year 1971 72, the Commercial Tax Officer, Hydera bad III by its order dated August 16, 1972 included the amount representing the countervailing duty paid by the purchasers in respect of the Indian liquors in bond which was not included in the bills of sale issued by the appel lant.
On appeal, the Assistant Commissioner by its order dated March 26, 1973 deleted from the turnover of the appel lant the item pertaining to the excise duty paid directly by the purchasers holding that the excise duty so paid by the purchasers did not, in the circumstances, form part of the turnover of the appellant.
Sometime thereafter, the Sales Tax Appellate Tribunal by its order dated August 5, 1974 passed in T.A. Nos. 331 of 1973 and 5 of 1974 upheld the assessment made under similar circumstances by the Commer cial Tax Officer, Vijayawada, on the turnover of M/s Shaw Wallace & Co. Thereupon the Deputy Commissioner, Commer cial Taxes, Hyderabad by virtue of the power vested in him under section 20 of the Act issued the impugned notice dated October 9, 1974.
to the appellant calling upon it to show cause why the order passed by the Assistant Commissioner, Commercial Taxes on March 26, 1973 should not be set aside and the original assessment order of the Commercial Tax Officer dated August 16, 1972 restored.
The appellant was also required to file objections and adduce evidence in support thereof within 7 days from the date of receipt of the impugned notice, 918 Aggrieved by the notice, the appellant flied a petition being petition No. 6790 of 1974 before the High Court of Andhra Pradesh.
seeking issue of an appropriate writ, order or direction declaring that the appellant was not liable to pay sales tax on excise duty paid by the purchasers in their own names and restraining the Deputy Commissioner, Commercial Taxes, Hyderabad, respondent in the appeal from taking further proceedings in pursuance Of the said notice.
The said petition having been dismissed, the appellant has, as already stated, come up in appeal to this Court.
At the hearing of these appeals, Mr. Sorabji and the other counsel appearing on behalf of the appellants have assailed the aforesaid Judgments and orders of the High Court by urging in the first instance that the view taken by the High Court about the nature and character of excise duty and countervailing duty is not correct.
They have also after trying in vain to argue for considerable length of time that on the true construction of the Andhra Pradesh Excise Act, 1968, the Andhra Pradesh Distillery Rules, 1970, the Andhra Pradesh Foreign and Indian Liquor Rules, 1970 and the Andhra Pradesh Indian Liquor (Storage in bond) Rules, 1969, a manufacturer of Indian liquors and an owner of a bonded warehouse are not primarily responsible for payment of the excise duty or countervailing duty, as the case may be, contended that a manufacturer and owner of the bonded ware house are not solely responsible for payment of the said duties and a purchaser of the liquor who obtains a distill ery pass or a werehouse pass and transport permit is also legally responsible for payment therefor and if he does pay the duty, it is something which he does in discharge his own statutory liability and not something which he does for or on behalf or for the benefit of the manufacturer or the owner of the bonded warehouse.
They have alternative ly contended that on a true construction of the expression 'turnover ' as defined in section 2(1) (s) of the Act, the determinative factor is the total amount set out in the bill of sale as consideration for the sale of the liquor and since the excise duty or the countervailing duty was direct ly paid by the purchasers to the excise authorities and did not at all form part of the consideration for the sale of the said liquor as set out in the bills of sale, it was not permissible for the sales tax authorities to assess the turnover by roping therein something which was not set out in the bills of sale as consideration for the sales.
They have lastly contended that in any event as the excise duty or the countervailing duty was at no time charged by the appellants for anything done in respect of the liquors sold but was charged by the excise authorities before removal of the liquors under the Andhra Pradesh Excise Act, 1968 and the rules made thereunder, it could not constitute a part of the turnover and taxed under the Act.
Although some controversy was sought to be raised by counsel for the appellants regarding the nature and charac ter of the excise duty and countervailing duty but as rightly pointed out by the learned Attorney General, the matter has been put beyond doubt by the decisions of this Court.
In R.C. Jail vs Union of India(I) after a review of the authorities bearing on the matter, it was held by this Court as follows : (1) [1962] supp.
3 S.C.R. 436.
918 'The excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country.
Subject always to the legislative competence of the taxing authority, the said tax can be levied at a convenient stage so long as the character of the impost is not lost.
The method of collection does not affect the essence of the duty but only relates to the machinery of collection for administrative convenience.
" Again In re Sea Customs Act(1) it was ob served: "The question with respect to excise duties was considered by this Court in the case of Amalgamated Coal fields Ltd. vs Union of India (A.I.R.
After considering the previous decisions of the Federal Court In re.
The Central Provinces and Berar Sales of Motor and Lubricant Taxation Act (1939 F.C.R. 18); The Province of Madras vs M/s Boddu Paidanna and of the Judicial Committee of the Privy Council in Governor General in Council vs Province of Madras , this Court observed as follows at p. 1287: "With great respect, we accept the principles laid down by the said three deci sions in the matter of levy of an excise duty and the machinery for collection thereof.
Excise duty is primarily a duty on the produc tion or manufacture of goods produced or manufactured within the. country.
It is an indirect .duty which the manufacturer or producer passes on to the ultimate consumer, that is, ultimate incidence will always be on the customer.
Therefore, subject always to the legislative competence of the taxing authority, the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture or production, is not lost.
The method of collection does not affect the essence of the duty, but only relates to the machinery of collection for administrative convenience.
" This will show that the taxable event in the case of duties of excise is the manufacture of goods and the duty is not directly on the goods but on the manufacture thereof.
We may in this connection contrast sales tax which is also imposed with reference to goods sold, where the taxable event, is the act of sale.
Therefore, though both excise duty and sales tax are levied with reference to goods, the two are very different imposes; in one case the imposition is on the act of manufacture or production while in the other it is on the act of sale.
In neither case therefore can it be said that the excise duty or sales tax is a tax directly on the goods for in that event they will really become the same tax.
It would thus appear 'that duties of excise partake of the nature of indirect taxes as known to standard works on economics and are to be distinguished from direct taxes like taxes on property and income." (1) ; 919 It is, therefore, clear that excise duty is a duty on the production or manufacture of goods produced or manufac tured within the country though as observed by one of us (Khanna, J.) in A.B. Abdul Kadir & Ors.
vs State of Kerala(1) laws are to be found which impose a duty of excise at stages subsequent to the manufacture or production.
The position with regard to the nature and character of countervailing duty has equally been made clear in a number of decisions of this Court.
In Kalyani Stores vs The State of Orissa & Ors.(2) which was followed in M/s Mohan Meakin Breweries Ltd. vs Excise & Taxation Commissioner, Chandigarh & Ors.
(2), Shah, J. (as he then was) observed: "This brings us to the consideration of the meaning of the expression "countervailing duties" as used in Entry 51, List 1I of the Seventh Schedule to the Constitution.
The expression "countervailing duties" has not been defined in the Constitution or the Bihar & Orissa Act 2 of 1915.
We have, therefore, to depend upon its etymological sense and the context in which it has been used in Entry 51.
In its etymological sense, it means to coun ter balance; to avail against with equal force or virtue; to compensate for something or serve as an equivalent of or substitute for: see Black 's Law Dictionary, 4th Edn.
This would suggest that a countervailing duty is imposed for the purpose of counterbalancing or to avail against something with equal force or to compensate for something as an equiva lent.
Entry 51 in List II of the Seventh Schedule to the Constitution gives power to the State Legislature to impose duties of excise on alcoholic liquors for human consump tion where the goods are manufactured or produced in the State.
If also gives power to levy countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India.
The fact that countervailing duties may be imposed at the same or lower rates suggests that they are meant to counterbalance the duties of excise imposed on goods manufactured in the State.
They may be imposed at the same rate as excise duties or at "a lower rate, presumably to equalise the burden after taking into account the cost of transport from the place of manu facture to the taxing State.
It seems, therefore, that countervailing duties are meant to equalise the burden on alcoholic liquors imported from outside the State and the burden placed by excise duties on alcohol ic liquors manufactured or produced in the State.
If no alcoholic liquors similar to those imported into the State are produced or manufactured, the right to impose counter balancing duties of excise levied on the goods manufactured in the State will not arise.
It may, therefore, be accepted that countervail ing duties can only be levied if similar goods are actually produced or manufactured in the State on which excise duties are being levied.
" (1) [1976] 3 s.c.c. 219.
(2) ; (3) ; 921 Having seen that a provision can be inserted in the excise law for collection of the excise duty at a stage subsequent to the manufacture or production of the excisable article, we shall now proceed to examine the main contentions raised by counsel for the appellants.
We have first to see as to how far the contention of counsel for the appellants that apart from a manufacturer of Indian liquors and an owner of a bonded warehouse (who in our opinion cannot but be regard ed as primarily responsible for payment of excise duty and countervailing duty respectively in view of sections 21, 28 & 65 of the Andhra Pradesh Excise Act, 1968, and rules 3, 4, 5, 6, 67 & 76 of the Andhra Pradesh Distillery Rules, 1970, and condition No. 9 of the Distillery Licence granted under rule 5 of these Rules; rules 5 & 10 of the Andhra Pradesh Indian Liquor (Storage.
in bond) Rules, 1969, conditions Nos. 7 & 10 of the licence granted in form B.W. 1 under rule 5(2).
the phraseology of the application for receipt of liquor into the bounded warehouse prescribed by rule 9(2) and the terms of the counterpart agreement required to be executed by a licensee of an Indian liquor bonded warehouse under rules 3(2) and 5(2) of these Rules) the buyers of the said liquors are also liable under the law for payment of the aforesaid duties can be sustained.
For a proper deter mination of this question, it is necessary to recall the provisions of the Andhra Pradesh Distillery Rules, 1970 which have been set out in the earlier part of this judg ment.
The said rules particularly rules 79, 81, 82, 83 and 84 lend a good deal of support, in our opinion, to the contention of counsel for the appellants and make every intending buyer of the Indian liquor liable for payment of the excise duty before obtaining the distillery pass and lifting the quantity mentioned therein from 1he distillery.
Accordingly agreeing with counsel for the appellants we hold that intending purchasers of the Indian liquors who seek to obtain distillery passes are also legally responsible for payment of the excise duty which is collected from them by the authorities of the Excise Department.
The position in regard to the countervailing duty is not,however dear though rule 10(1) of the Andhra Pradesh Indian Liquor (Storage in bond) Rules, 1969 and rules 5(2) and 17 of the Andhra Pradesh Foreign and Indian Liquor Rules, 1970 enable the intending buyers of Indian liquors to remove the same from a bonded warehouse on payment of the said duty, to the excise authorities.
This is not, however, sufficient to dispose of the matter.
The real and pivotal question that requires to be determined is whether the excise duty or the countervailing duty, as the case may be.
paid directly to the excise authorities of the State or deposited directly in the State exchequer in respect of the Indian liquor by the buyers thereof before removing it from any of the aforesaid dis tilleries or the warehouse can be said to form part of the taxable turnover of the appellants as according to section 5 of the Act which is the charging section sales tax is required to be paid by the appellants on their turnover of the year.
It will be useful at this stage to advert to the definitions of the words 'turnover ' and 'sale ' as given in clauses (s) and (n) of sub section (1) of section 2 of the Act.
Shorn of unnecessary details, these definitions run as under: 922 "turnover" means the total amount set out in the bill of sale (or if there is no bill of sale, the total amount charg ed) as the consideration for the sale or purchase of goods (whether such consideration be cash, deferred payment or any other thing or value) including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer, whatever be the description,name or object thereof . .
. . . . "sale" with all its grammatical varia tions 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 for any other valuable consideration. .
In the instant case, it is not disputed that excise duty or countervailing duty paid directly to the excise authorities by the purchasers of Indian liquors before removal thereof from the distilleries or the bonded warehouse on the strength of the distillery and warehouse passes was not included in the bills of sale as the consideration for the sales, but 1hat alone, according to the Attor ney General, is not determinative of the matter.
He has invited our attention to the second part of the definition of the word 'turnover ' as set out above and has strenuous ly urged that as in addition to the price of the liquor set out in the bills of sale as consideration for the sales, other sums charged by the dealer at the time of or before the delivery of the goods also form part of turnover, and according to the well estab lished canon of construction, a taxing stat ute has to be interpreted reasonably so that there is no evasion of the tax, the phrase 'any sums charged by the dealer ' occurring in the aforesaid definition of the word 'tur nover ' must be 'construed as meaning any item of expense including the excise duty or the countervailing duty to which the buyers were put by the manufacturers of the liquors or the owner of the bonded warehouse.
We find our selves unable to accept the construction sought to be put by him as it is opposed to the plain meaning of the said phrase.
It will be advantageous here to refer to the decisions of this Court in.
A.V. Fernandez vs The State of Kerala(1) where Bhagwati, J. speaking for the Bench after quoting the observations made by Lord Russell of Killowen in Inland Revenue Commissioners vs Duke of Westminster(2) which were approved by the Privy Council in the Bank of Chettinad vs Income Tax Commissioner(3) observed: "It is no doubt true that in construing fiscal statutes and determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law.
If the Revenue satisfies the Court that the case fails strictly within the provi sions of the law, the subject can be taxed.
If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be (1) ; (2) [19361 A.C.I, 24.
(3) A.I.R. 1940 P.C. 183. 923 imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.
We must of necessi ty, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclu sion that the appellant was liable to assess ment as contended by the Sales Tax Authori ties.
" Bearing in mind the principle set out in A.V. Fernan dez 's case (supra) the phrase 'any sums charged by the dealer ' has to .be understood in its ordinary popular sense.
So construing the phrase, it means "what is demand ed and collected or received by the dealer." In the instant cases, the excise duty or the countervailing duty has, as already stated, not been charged or received by the dealer but has been charged by the excise authorities and deposited directly by the buyers of the liquor in the State exchequer.
It is, therefore, difficult to hold that excise duty or ' countervailing duty was charged by the appellants.
The reason for inclusion of tax or a duty in the turn over was explained in two decisions of this Court bearing the same cause title viz. Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors.
(12 S.T.C. 476) and (13 S.T.C. 98).
In the first of these cases, it was observed : "Under the definition of turnover the aggre gate amount for which goods are bought or sold is taxable.
This aggre gate amount includes the tax as part of the price paid by the buyer.
The amount goes into the common till of the dealer till he pays the tax.
It is money which he keeps using for his business till he pays it over to Government.
Indeed, he may turn it over again and again till he finally hands it to Government.
" In the other decision, Hidayatullah, J. (as he then was) said: "In laws dealing with sales tax, turn over has, in England and America also, been held to include the tax.
The reason for such inclusion is stated to be that the dealer who realises the tax does not hand it over forth with to Government but keeps it with him, and turns it over in his business before he parts with it.
Thus, the tax becomes,for the time being, a part of the circulating capital of the tradesman, and is turned over in his business.
Again, it was said that the price paid by the purchaser was not so much money for the article plus tax but a composite sum.
Therefore, in calculating the total turnover, there is nothing wrong in treating the tax as part of the turnover, because "turnover" means the amount of money which is turned .over in the business." In the instant cases, the excise and countervailing duties did not go into the common tills of the appellants and did not become a part of their circulating capital.
We are, therefore, of the view that the 9 1338SCI/76 924 Sales Tax authorities were not competent to include in the turnovers of the appellants the excise duty and the counter vailing duty which was not charged by them but was closed by and paid directly to the excise authorities by the buyers of the liquors as stated above.
The Full Bench decision of the High Court of Andhra Pradesh in The Government of Andhra (Now Andhra Pradesh) vs East India Commercial Co. Ltd.(1) relied upon by the Revenue is clearly distinguishable.
In that case, it was the actual collection of certain sums as dharamam or charity by the dealer from the purchasers on the occasion of the sales that made the learned Judges to hold that they constitute part of the turnover.
In Messrs George Oakes (Private) Ltd. 's case (supra) also, the tax in question was collected by the registered dealer.
We have, therefore, no hesitation in holding that the excise duty and the countervailing duty paid directly by the buyers of the Indian liquors as stated above did not consti tute a part of the turnovers of the appellants.
For the foregoing reasons, we allow the appeals and set aside the impugned judgments and orders.
In the circum stances of the case, we leave the parties to pay and bear their own costs of these appeals.
P.B.R. Appeals al lowed.
(1) 8 S.T.C. 114. | Section 2(1)(s) of the Andhra Pradesh General Sales Tax Act, defines 'turnover" to mean the total amount set out in the bill of Sale as the consideration for the sale or purchase of goods including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods.
The appellants in the first two sets of appeals are manufacturers of Indian liquors.
A buyer of Indian liquor from the distilleries pays, in the first instance, the excise duty in the Treasury and obtains a distillery pass for the release of liquor.
On presentation of the distill ery pass an invoice is prepared by the manufacturers showing the price of liquor.
Neither invoice.
nor the account books of the manufacturers show the excise duty paid by the purchasers.
Under the system in vogue in the second set of appeals, the appellant who is the owner of a bonded warehouse pre pares a bill for the liquor required by the purchaser who pays the countervailing duty in the Treasury in his own name and obtains a pass from the excise authorities for the removal of the liquor from the warehouse.
In both the, cases the Sales Tax Authorities included the excise duty in the taxable turnover of the appellants.
The High, Court dismissed the writ petition of the appel lants impugning the orders of the Sales Tax Officers.
Allowing the appeal, HELD: (1) Excise duty and countervailing duty paid directly by the buyers for the Indian liquors did not con stitute a part of the turnovers or, the appellants.
[924 C] (2) The phrase 'any sums charged by the dealer ' occur ring in the definition of 'turnover ' has to be understood in its ordinary popular sense.
So construed, it means what is demanded and collected or received by the dealer.
[923 B] In the instant case the excise duty or the countervail ing duty has not been charged or received by the dealer but has been charged by the excise authorities and deposited directly by the buyers of the liquor in the State exchequer.
It cannot be said that the excise duty or the countervailing duty was charged by the appellants.
In M/s. George Oakes (Private) Ltd. vs The State of Madras & Ors., this Court held in relation to the definition of turn over that the aggregate amount includes the tax as part of the price paid by the buyer; the amount goes into the common till of the dealer till 'he pays the tax; it is the money which he keeps using for his business till he pays the tax; it is the money which he keeps using for his busi ness till he pays it over to Government; it becomes a part of the circulating capital of the tradesman and is turned over in his business.
Secondly the price paid by the pur chaser was not so much money for the cause turnover means the amount of money which is turned over in the busi ness.
[923 E G] 915 In the instant case the excise and the countervailing duties did not go into the common tills of the appellants and did not become a part of their circulating capital.
The Sales tax authorities were not competent to include in the turn overs of the appellants the excise duty and the countervail ing duty which was not charged by them but was charged by and. paid directly to the excise authorities by the buyers of the liquors.
[924 A] A. V. Fernandez vs The State of Kerala ; followed.
R.C. Jail vs Union of India [1962] Supp.
3 S.C.R. 436, Sea Customs ACT ; , A B. Abdul Kadir & Ors.
vs State of Kerala , Kalyani Stores vs The State of Orissa & Ors. ; & M/s Mohan Megkin Brewaries Ltd. vs Excise & TaxatiOn Commisisoner, Chandigarh & Ors. ; referred to.
Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors.
(122 S.T.C. 476) and (13 S.T.C. 98) referred to and distinguished.
The Government of Andhra (now Andhra Pradesh) vs East India Commercial Co. Ltd. (8 S.T.C. 114) distinguished. |
Civil Appeals Nos. 185 to 187 of 1961.
Appeals by special leave from the judgment and order dated May 13, 1959, of the Patna High Court in Misc.
Judicial Case No. 352 of 1957.
WITH Petitions Nos. 163 to 165 of 1959.
Petitions Under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
M. C. Setalvad, Attorney General of India, Veda Vyasa and Naunit Lal, for the appellants/petitioners.
A. section R. Chari, D. P. Singh., M. K. Ramamurthi, R. K. Garg and section C. Agarwala, for the respondents.
500 1961.
November 20.
The Judgment of the Court was delivered by KAPUR, J.
The principal question raised in these appeals and petitions under article 32 of the Constitution is whether sugar cane falls within the term "green vegetables" and is therefore exempt from sales tax under the exemption given by the notification dated August 28, 1947, issued under section 6 of the Bihar Sales Tax Act 1947, (Bihar 19 of 1947), hereinafter called the 'Act '.
After hearing the arguments in these appeals and petitions we announced our decision dismissing them with costs and we now proceed to give our reasons for the same.
The three appeals by special leave are brought by the assessee and relate to assessment of sales tax for three years, 1950 51, 1951 52 and 1952 53 for which the amount of sales tax levied was Rs. 28,866, Rs. 23,383 and Rs. 23,298 respectively.
Besides the three appeals the assessee company has filed three petitions under article 32 challenging the constitutionality of the assessments.
In this judgment the appellant and the petitioner is a private limited company and it will be termed "appellant" and the State of Bihar which is respondent will be termed the "respondent".
The appellant took an objection to the assessment and filed appeals to the Deputy Commissioner of Commercial taxes and then a revision to the Board of Revenue and then at its instance the following question was referred by the Board of Revenue to the High Court for opinion: "Whether sugar cane is a green vegetable within the meaning of item 6 of notification No. 9884 FT dated 28 8 47 and as such exempt from taxation.
" The High Court answered the question against the appellant and held that "sugar cane" was not 501 included in the term "green vegetables" and it is the correctness of that answer which has been canvassed before us.
In the petitions under article 32 of the Constitution it was contended that the appellant being a producer of sugar cane was not a "dealer" within the meaning of the Act and therefore no tax was payable on sale of sugar cane by it.
The exemption under the Act is provided under section 6 of the Act which, at the relevant time, was as follows: section 6 "No tax shall be payable under this Act on the sale of any goods or class of goods specified in this behalf by the (State) Government by notification in the Official Gazette, subject to such conditions as may be mentioned in the notification: Provided no notification shall be issued under this section without giving in the Official Gazette such previous notice as the State Government may consider reasonable, of its intention to issue such notification.
" Under section 6 of the Act the notification relied upon was issued on August 28, 1947.
This was notification No. 9884 FT which was in the following terms: "In exercise of the powers conferred by section 6 of the Bihar Sales Tax Act, 1947 (Bihar Act XIX of 1947), and in supersession of the previous notifications on the subject the Governor of Bihar is pleased to direct that no tax shall be payable under the said Act on the sale of goods specified in the second column of the schedule hereto annexed subject to the exceptions, if any, set out in the corresponding entry in the third column thereof.
502 THE SCHEDULE Serial Description Exception subject to which the No. of goods.
exemption has been allowed.
1. . . . 2. . . . 3. . . . 4. . . . 5. . . . 6 Green vegetables Except when sold in sealed other than pota containers.
. . . . . . . . . . ." The question raised is that sugar cane falls within the term "green vegetables" in entry 6 of the Schedule and is therefore exempt from assessment to Sales tax.
In support of this contention counsel for the appellant relied upon a judgment of the for the appellant relied upon a judgment of the Bombay High Court, The State of Bombay vs R. section Phadtara (1) where it was held that sugar cane is "fresh vegetable" and is therefore exempt from sales tax under a similar notification issued under the Bombay Sales Tax Act.
Changla C. J., there observed at page 496 as follows: "In its plain and natural meaning a "vegetable" clearly is wide enough to cover "sugar cane"; but what is urged by the Advocate General is that we must not give it that wide meaning but must give it the popular meaning as under stood by people who deal in vegetables or eat vegetables, and it is urged that from that narrow and restricted point of view sugar cane is not vegetable.
This is a taxing statue and if in favour of that construction which gives relief to the subject.
That was exactly the 503 approch of the Sales Tax Tribunal and in our opinion that approach was a very proper one." This observation is not in accord with the opinion given by this Court in Ramaytar Badhriprasad vs Assistant Sales tax Officer, Akola (1) in which under an almost identical entry it was held that "betel leaves" is not included in the term "vegetables".
After quoting with approval a passage from the judgment of the Nagpur High Court, Madhya Pradesh pan Merchants Association vs State of Madhya Pradesh (2) this court said: "the word "vegetable" in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetables which are grown in a kitchen garden or in a farm and are used for the table.
" If that is the meaning of the word "vegetables" sugar cane cannot fail within entry 6 which relates to green vegetables.
In Webster 's dictionary "sugar cane" has been defined as "a grass extensively grown in tropical and warm regions for its sugar" and in Oxford dictionary it is defined as "a tall peronnial grass cultivated in tropical and sub tropical countries and forming the chief source of unmanufactured sugar".
Therefore it cannot be said that sugar cane falls within the definition of the words "green vegetables".
The second question which was raised before us and which arises in the petitions under article 32 is that the appellant company is not a "dealer" within the meaning of the word as defined in section 2(c) of the Act which is as follows: " "dealer" means any person who sells or supplies any goods (including goods sold or supplied in the execution of a contract) 504 whether for commission, remuneration or otherwise and includes any family or a Hindu joint family, the Government and any society club or association which sells or supplies goods to its members".
The words of this sub section are very wide and cover the case of the appellant and therefore this point is also without substance and must be rejected.
But it was argued that the definition of the word "dealer" in the Act which was amended by Bihar Annual Finance Act 1950 is applicable only for the financial year beginning April 1, 1950, and not for subsequent years and for that aid was sought from the preamble to the Bihar Annual Finance Act 1950.
That preamble is as follows: "whereas it is expedient to amend the Bihar Sales Tax Act, 1947, and the Bihar Agricultural Income Tax Act, 1948, to levy a tax on passengers and goods carried by public service vehicles and public carries and to lay down rates on Sales Tax payable under Bihar Sales Tax Act 1947 to fix limit of taxable agricultural income to lay down rates of agricultural Income Tax Act and Super Tax chargeable under Bihar Agricultural Income Tax Act, 1948 for the financial year beginning on the 1st day of April 1950 and to make further provisions in connection with the finance of this State of Bihar".
The preamble cannot limit or change the meaning of the plain words of s.2(c) of the Act which apply to the case of the appellant and therefore the amended section is applicable to the present case.
It is an erroneous approach to the question to say that because of the words "for the financial year beginning on the first of April 1950" in the particular context in the preamble, the definition of the word "dealer" was amended only for one year Nothing has been shown indicating that section 505 (2)(i) of Bihar Annual Finance Act intended to effect a temporary amendment in the previous definition of the word "dealer" in cl(c) of s.2 of the Act.
The contention is therefore repelled.
It was also submitted that the assent of the President was not given to the Bihar Annual Finance Act 1950.
In our opinion that submission is equally without force because tax on sale of goods is a matter entirely within entry 54 of the State List and the amendment made in the definition of the word "dealer" in the Act did not require the assent of the President.
In our opinion the appeals and the petitions under article 32 are without merit and are therefore dismissed with costs.
One hearing fee.
Appeals and writ petitions dismissed. | Under section 6 of the Bihar Sales Tax Act, 1947, the Government issued a notification exempting certain goods from the 499 payment of sales tax, including "green vegetables other than potatoes, except when sold in sealed containers".
The appellant who was a producer of sugar can was assessed to sales tax.
He contended that sugar cane was a green vegetables and was exempted from tax and that he was not a dealer as defined in section 2 (c) of the Act and could not be assessed to sales tax. ^ Held, that sugar cane was not a green vegetable and was not exempted under the notification.
The word "vegetables" in taxing statutes was to be understood as in common parlance i.e. denoting class of vegetables which were grown in a kitchen garden or in a farm and were used for the table.
The dictionaries defined sugar cane as a "grass." Ramavtar Budhaiprasad vs Assistant Sales Tax Officer, Akola, ; , followed.
The State of Bombay vs R. section Phadtare, [1956] 7 section T. C. 495, disapproved.
Held, further, that the appellant was a dealer within the definition in section 2(c).
Section 2(c) was amended by the Bihar Annual Finance Act, 1950.
The amended was not a temporary amendment for only one year; the amended section was applicable to the present case.
The amending Act did not require the assent of the President as the matter fell entirely within entry 54 of the State List. |
: Criminal Appeal No, 385 of 1976.
(From the Judgment and Order dated 22 12 1975 of the Gujarat High Court in Crl.
Appeal No. 180/74) N.N. Keswani & Ramesh N. Keswani for the appellant.
K.H. Kazi & M.N. Shroff for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal, by special leave, is directed against an order passed by the High Court of Gujarat setting aside the acquittal of the appellant and directing that he, along with other accused, be retried not only for the of fence of consumption of liquor of which he was acquitted but also for the offence of possession of liquor punishable under section 66(1)(b) of the Bombay Prohibition Act, 1949.
The question arising for determination is a short one, but in order to appreciate it, it is necessary to state the. facts giving rise to the appeal.
The appellant, original accused No. 2, was at all mate rial times working as District Health Officer in District Amreli in the State of Gujarat.
He was, according to the prosecution, found of liquor and whenever he used to go out of Amreli in connection with his duties, he used to partici pate in drinking parties.
On 3rd August, 1972, he visited Kodinar, a town situate in the District of Amreli and late in the evening of that day, he attended a drinking party which was arranged by accused No. 1 in his agricultural farm situate at a place called Ghantwad about 50 Kms.
away from Kodinar.
Besides accused Nos. 1 and 2, six other persons who were arraigned as accused Nos.
3 to 8 were also present at the drinking party.
On receiving information about the drinking party, the District Magistrate and the District Superintendent of Police along with other police officers and panch witnesses raided the agricultural farm where the drinking party was in progress.
The raid was carried out at about 00.30 hrs.
after midnight and on seeing the police, the appellant and the other accused tried to run away but they were apprehended.
The raiding party, also found five glasses and two empty bottles, all smelling of liquor, twelve empty soda water bottles and one full ' bottle con taining liquor and these articles were seized by the raiding party in the presence of the panch witnesses and the panch nama was prepared.
The appellant and the other accused were thereafter taken to the Amreli hospital where their blood was taken by the Civil Surgeon for the purpose of carrying out 874 the necessary test for determining the presence of alcohol.
The analysis of the blood revealed that, in the case of the appellant, the concentration of alcohol in the blood was more than 0.05 per cent weight in volume while in the case of the other accused, it was less than 0.05 per cent.
On these facts, the appellant and the other accused were charge sheeted before the Judicial Magistrate, Kodinar.
The charge against accused No. 1 was that he possessed as well as consumed liquor in contravention of the provisions of the Act and was, therefore, guilty of offences punishable under section 66(1)(b), while the charge against the other ac cused, including the appellant, was that they were guilty of consuming liquor in contravention of the provisions of the Act and were hence liable to be punished for the offence under section 66(1) (b) of the Act.
The learned Judicial Magistrate accepted the evidence in regard to the concentra tion of alcohol in the blood of the accused, but taking the view that breaches of certain rules in the Bombay Prohibi tion (Medical Examination and Blood Test) Rules, 1959 were committed in taking the blood of the accused, the learned Judicial Magistrate acquitted the accused including the appellant of the offence of consuming liquor under section 66 (1 ) (b).
The learned Judicial Magistrate also acquitted accused No. 1 of the offence of possessing liquor under section 66(1)(b) on the ground that it was not proved by the prosecution beyond reasonable doubt that he was in posses sion of liquor.
The State preferred two appeals against the order of acquittal passed by the learned Judicial Magistrate.
Both the appeals were heard by a Single Judge of the High Court any they were disposed of by a common judgment.
The High Court did not examine whether the order passed by the learned Judicial Magistrate acquitting the appellant and the other accused of the offence of consuming liquor was right or wrong nor did it consider whether the acquittal of ac cused No. 1 for the offence of possessing liquor was correct or incorrect.
But, taking the view that there was no dis tinction between the case of accused No. 1 on the one hand and that of the appellant and accused Nos. 3 to 8 on the other so far as the charge of possession of liquor is con cerned, the High Court held that, on the material on record, the learned Judicial Magistrate should have flamed a charge against the appellant and accused Nos.
3 to 8 not only for the offence of consuming liquor but also for the offence of possession of liquor as in the case of accused No. 1.
The High Court observed: "Whenever "Drinking Parties" are detect ed by the police, it is the imperative duty of the prosecution to allege that all the partic ipants of the same are charged with the "possession" of liquor in contravention of the provisions of law contained in Sec.
66(1 )(b) of the B 'bay Prohibition Act, 1949.
It may be emphasised that in such cases, "possession" of liquor does not only necessarily mean actual, physical or conscious possession of the owner or the occupant of the premises".
In such cases of "Drinking Parties", it is always open to a participant to stretch his hand and to take the liquor in question for his own use and consumption.
But, in all such cases of 875 "Drinking Parties", the Court must be satis fied that the attendant circumstances should clearly indicate that the accused persons are the participants in a "Drinking Party".
In the case before me, why should the accused persons, during the night hours, having gath ered together go to a distant farm house ? Why should they be found with the aforesaid articles ? Why should they create a situa tion as a result of which a constable had to jump over a wall ? Why should they try to run away when they Were apprehended by the respon sible officers for Amreli ? In such circumstances, it is the duty of the prosecution to see that all the partic ipants are charged with the commission of the offence viz. of possessing liquor in contra vention of the provisions contained in Sec.
66(1)(b) of the B 'bay Prohibition Act, 1949.
" The High Court, on this view, set aside the order of acquittal in 'its entirety without examining its correctness and remanded the case to the learned Judicial Magistrate with a direction to try the appellant and the other accused not only on the charge of consuming liquor but also on the further charge of possession of liquor.
Accused Nos. 1 and 3 to 8 did not challenge the correctness of this order made by the High Court, but the appellant impugned it by prefer ring the present appeal with special leave obtained from this Court.
The impugned Order made by the High Court consists of two parts.
One part set aside the order of acquittal and directed retrial of the appellant on the charge of consuming liquor while the other directed that the appellant and accused Nos.
3 to 8 'should also be tried on the further charge of possession of liquor.
The appellant attacked both parts of the Order and the contention urged by him in sup port of the appeal was a two fold one.
The first limb of the contention was that the order setting aside the acquit tal of the appellant for the offence of consuming liquor and directing retrial of the appellant for that offence was improper, since it was not competent to the High Court in appeal to set aside the order of acquittal and direct retri al, unless it_found that the acquittal was wrong.
Here in the present case, the High Court did not even consider whether the acquittal of the appellant was correct or not and without finding that the acquittal was erroneous, pro ceeded to set aside the acquittal and direct retrial.
This, according to the appellant, was impermissible for the High Court to 'do and it was said that the order setting aside the acquittal must, therefore, be reversed and the acquittal restored.
The second limb of the contention related to that part of the impugned order which directed that the appellant and accused Nos.
3 to 8 should be retried not only on the charge of consuming liquor but also on the further charge of possession of liquor.
The argument of the appellant under this head of contention was that in the appeal, the High Court was confined merely to a consideration of the question whether the acquittal of the appellant for the offence of consuming liquor was right or wrong and it was, not compe tent to the High Court 6 1338SCI/76 876 to frame a new charge for possession of liquor and direct trial of the appellant and the other accused on such now charge.
These were the twin grounds on which the order made by the High Court was challenged on behalf of the appellant.
Now, there can be no doubt that there is great force.
in the first part of ' the contention of the appellant.
The learned Judicial Magistrate acquitted the appellant of the offence of consuming liquor.
The State preferred an appeal against the acquittal and manifestly, in this appeal, the acquittal could not be set aside unless the High Court, on a consider ation of the evidence, came to the conclusion that the acquittal was wrong.
It was not competent to the High Court to set aside the acquittal without finding that it was erroneous.
The High Court, however, did not even care to examine whether the acquittal was right or wrong, but merely because it took the view that a further charge should have been framed against the appellant and accused Nos.
3 to 8, it set aside the acquittal and directed retrial of the appellant and the other accused.
This was plainly and indubitably wrong and the: order setting aside the acquittal must, therefore, be quashed.
But from that it does not necessarily follow that the acquittal must be restored.
The High Court having failed to consider the merits of the acquittal,.
the matter would have to go back to the High Court for the purpose of deciding whether on the evidence on record, the acquittal was justified or not.
The appeal being directed against the correctness of the acquittal, the High Court would have to determine whether on merits, the acquittal should be maintained or reversed.
We must, there fore, quash that part of the order of the High Court which set aside the acquittal of the appellant for the offence of consuming liquor and remand ' the case to the High Court for disposing of the appeal against the acquittal of the appel lant on merits.
That takes us to the second limb of the contention directed against the order of retrial on the further charge of possession of liquor.
It is true that originally when the case was tried before the learned Judicial Magistrate, there was no charge against the appellant and accused Nos.
3 to 8 for the offence of consuming liquor and the appeal of the State was also directed 'only against their acquittal for ,the offence of consuming liquor.
But there can be no doubt that if, while hearing the appeal, the High Court found that, on the material before .him, the learned Judicial Magistrate should have framed a further charge against the appellant and accused Nos.
3 to 8 but he failed to do so, the High Court could certainly direct the learned Judicial Magistrate to frame such further charge and try the appel lant and accused Nos. 3 to 8 on such further charge.
The High Court could legitimately in the exercise of its juris diction, set right the error committed by the learned Judi cial Magistrate in not flaming a proper charge.
Here, the High Court, on a consideration of the material which was before the learned Judicial Magistrate, came to the conclu sion that this material warranted the framing of a further charge against the appellant and accused Nos.
3 to 8 for possession of liquor and it, therefore, directed that the case should go back to the learned judicial Magistrate and he should try the appellant and accused Nos.
3 to 8 on 877 such further charge.
The High Court clearly had jurisdic tion to make such an order.
But then, the complaint made on behalf of the appellant was that the material before the learned Judicial Magistrate did not justify the framing of a charge against the appellant and accused Nos.
3 to 8 for possession of liquor and hence the order directing their trial on such further charge was not justified.
This is, however, a complaint on facts and we do not see any reason why we should, in the exercise of our extra ordinary juris diction under Article 136 of the Constitution, entertain such a complaint.
It is true that there are certain obser vations made by the High Court which are a little too wide but it cannot be gained that even a person who participates in a drinking party can in conceivable cases be guilty of the offence of possession of liquor.
Suppose a person is found at a drinking party and he has a glass with him with liquor in it at the time when the raid is carried out, would it not be correct to say that he was at the relevant time in possession of liquor ? The liquor in his glass would be liquor in his possession.
But at the same time it would not be correct to say that merely because a participant in a drinking party can stretch his hand and take liquor for his use and consumption, he can be held to be in possession of liquor.
The question is not whether a participant in a drinking party can place himself in possession of liquor by stretching his hand and taking it but whether he is actu ally in possession of it.
Possession again must be distin guished from custody and it must be conscious possession.
If, for example, a bottle liquor is kept by.
some one in the car or house of a person without his knowledge, he cannot be said to be in possession of the bottle of liquor.
It can not, therefore, be laid down as an absolute proposition that whoever is present at a drinking party must necessarily be guilty of the offence of possession of liquor and must be charged for such offence.
Whether an accused is in posses sion of liquor or not must depend on the facts and circum stances of each case.
Here in the present case, the prose cution will have to establish at the trial by leading satis factory evidence that the appellant and the other accused were in possession of liquor as else the prosecution on the charge of possession of liquor will fail.
The order direct ing trial of the appellant and the other accused for the offence of possession of liquor must, therefore, be main tained, but we think it would be desirable if this trial is taken up after the disposal of appeal by the High Court in regard to the acquittal of the appellant for the offence of consuming liquor.
We accordingly allow the appeal in part and reverse that part of the 'order of the High Court which set aside the acquittal of the appellant for the offence of consuming liquor and remand the case to the High Court for disposing of the appeal against the acquittal of the appellant on merits, but so far as the other part of the order directing trial of the appellant and the other accused on the charge of possession of liquor is concerned, we do not see any reason to interfere with the same and we accordingly reject the appeal in so far as it is directed against that part of the order.
S.R. Appeal partly allowed. | Section 66(1)(b) of the Bombay Prohibition Act 1949 makes any person liable for punishment on conviction for the offence of "consuming, using, possessing or transporting any intoxicant or hemp." Section 66(2)(b) prescribes a statutory limit of 0.05 percentage of alcohol in the veinous blood taken from the accused.
In summary case Nos. 798 and 799 of 1972 before the Judicial Magistrate 1st Class, Kodi nar, Gujarat State, the appellant/accused No. 2 along with six others was charged with consumption of liquor while accused No. 1, the owner of an agricultural farm, where a drinking party took place was charged with the offence of possessing liquor.
h spite of the fact that the percentage of alcohol present in the veinous blood taken from the body of accused No. 2 was more than the statutory limit, in view.
breaches of certain statutory rules, in Bombay Prohibi tion (Medical Examination and Blood Test) Rules, 1959, the appellant/accused No. 2 was acquitted along with accused 3 to 8 in whose cases the percentage was less than the statu tory limit.
Accused No. 1 was also acquitted for lack of evidence on the charge of possession of liquor.
In the State appeal, taking the view that in a drinking party there should always be a further charge of possession of liquor, the High Court without examining the correctness of the findings of fact leading to the acquittals, set aside the orders of acquittal in respect of all and 'ordered retrial.
On appeal by special leave, the Court, HELD: (i) In a State appeal against acquittal, the acquittal should not be set aside unless the High Court on a consideration of the evidence.
comes to the. conclusion that the acquittal was wrong.
In the instant case, the High Court did not even consider whether the acquittal of the appellant was correct or not and without finding that the acquittal was erroneous proceeded to set aside the.
acquit tal and direct retrial.
It 'was not competent to the High Court to set aside the acquittal without finding that it was erroneous.
Setting aside the acquittal order and ordering retrial merely because.
it took the view that a further charge should have been framed against the appellant and accused No. 3 to 8 was plainly and indubitably wrong.
[876 B D] (ii) If while hearing an appeal, the High Court, finds that, on the material before it, a further charge should be framed, the High Court can legitimately, the exercise of its jurisdiction set right the error committed by the trial court in not framing a proper charge.
[876 G H] 873 (iii) In the exercise of extra ordinary jurisdiction under Article 136 of the Constitution, the Supreme Court would not ordinarily entertain a complaint on facts.
[877 B] (iv) Possession is distinguishable from custody and it must be conscious possession.
Whether the accused is in possession of liquor or not must depend on the facts and circumstance of each case.
[877 D] |
Appeal No. 870 of 1968.
(From.the Judgment and Order dated 22.11.1967 of the Madhya Pradesh High Court in Second Appeal No. 436/64.
G.L. Sanghi and D.N. Misra for the appellant.
P.H. Parekh (amicus curiae) for the respondents.
The Judgment of the Court was delivered by KRANNA, J.
This appeal by special leave is against the judgment of the Madhya Pradesh High Court affirming on second appeal the decision of the trial court and the first appellate court whereby suit for possession of the land in dispute had been decreed in favour of the plaintiff re spondent against the defendant appellant.
Laxmi Dayal died in 1952 leaving the lands in dispute and some other properties.
He was succeeded by his two widows, Shantibai and Bindumati.
In 1954 Chandanbai, widow of brother of Laxmi Dayal, filed civil suit No. 34A of 1954 against Shantibai and Bindumati in respect of the property left by Laxmi Dayal.
During the pendency of that suit, a deed of partition was executed by Shantibai, Bindumati and Chandanbai, as a result of which each one of them was stated to have become full owner of the property which fell to her share.
The partition deed was got registered and necessary mutation entries were made in accordance with that deed.
On September 8, 1955, Shantibai made a will of the property which fell to her share as a result of partition,.
in favour of the plaintiff respondent.
The suit filed by Chandanbai was disposed of on February 18, 1956 in terms of partition deed dated January 13, 1955.
Shantibai died on May 29, 1956.
The respondent filed the present suit against Bindu mati defendant appellant for possession of the land in dispute on the allegation that he (the respondent) had taken possession of the land in dispute in pursuance of the will executed in his favour by Shantibai.
The appellant was stated to have relinquished her right of survivorship in the land which fell to the share of Shantibai.
The appellant, it was further pleaded, had taken forcible possession of the land in dispute.
The suit was resisted by the appellant on the ground that she had not relinquished her right of survivorship in the land which fell to the share of Shantibai.
Shantibai, it was further averred, had no right to dispose of the said land by will.
The trial court accepted the contention of the respondent and decreed his suit.
The decision of the trial court was affirmed on appeal by the first appellate court and by the High Court in second appeal.
The first question which arises for consideration in this appeal is whether the appellant relinquished her right of survivorship in the property which fell to the share of Shantibai as a result of the deed of partition dated January 13, 1955.
In this respect we find that each 990 of the three executants stated in that deed that none of them would have any right or claim over the property that fell to the share of other shareholders in partition.
it was further stated in the deed: "Every shareholder may get the property fallen to her share, mutated and may take possession thereof and thus may become abso lute owner thereof. 'Every shareholder may get her name separately mutated in Patwari 's papers.
She may sell it.
If other sharehold er claim it, it will be contrary to law . .
By taking our respective share from the entire property in the parti tion we become separate from the entire property.
" When she came into the witness box, the appellant admitted that their object in making the partition was that they would be able to dispose of their separate lands in any way they liked.
The appellant also stated that as a result of partition, each one of the executants of the deed of partition became exclusive owner of the property that fell to her share.
In the face of the recitals in the deed of partition and the admissions made by the appellant in the witness box, we find no reason whatsoever to disturb the finding of the courts below that the appellant had relin quished her right of survivorship in the property which fell to the share of Shantibai.
Sanghi on behalf of the appellant, however, contends that it is not permissible in Hindu law for a widow to give up her right of survivorship in the property which fails to the share of the co widow even as a result of an agreement.
This contention, in our opin ion, is devoid of force and runs counter to the decision of this Court in the: case of Karpagathachi & Ors.
vs Nagarathipathachi.(1) As observed in that case, "under the Hindu law as it stood in 1924, two widows inheriting their husband 's proper ties took together one estate as joint tenants with rights of survivorship and equal benefi cial enjoyment.
They were entitled to en force a partition of those properties so that each could separately possess and enjoy the portion allotted to her, see Dhuowan Deen Dobey vs Myna Baee(2), Gauri Nath Kakaji vs Gaya Kuar(3).
Neither of them could without the consent of the other enforce an absolute partition of the estate so as to destroy the right of survivorship, see Commissioner of Income tax vs Smt.
Indira Balakrishna(4).
But by mutual consent they could enter into any arrangement regarding their respective rights in the properties during the continuance of the widow 's estate, and could absolutely divide the properties, so as to preclude the right of survivorship of each of the portion allotted to the other see Ramakkal vs Ramasami Naichan (5),, Sudalai Ammal vs Gomathi Ammal(6).
Likewise, two daughters succeeding to their father 's estate as joint (1) ; (2) (3) (1928)L.R. 55 I.A. 299.
(4) ; ,517.
(5) Mad, 522, (6) , 991 tenants with rights of survivorship could enter into a similar arrangement, see Kailash Chandra Chuckerbutty vs Kashi Chandra Chuck erbutty (1), Subbammal vs Lakshmanu Iyer(2), Ammani Ammal vs Periasami Udavan.(a) Such an arrangement was not repugnant to section 6(a) of the .
The interest of each widow in the properties inherited by her was property, and this property together with the incidental right of survivorship could be lawfully trans ferred.
Section 6(a) of the prohibits the transfer of the bare chance of the surviving widow taking the entire estate as the next heir of her hus band on the death of the Co widow, but it does not prohibit the transfer by the widow of her present interest in the properties inher ited by her together with the incidental right of survivorship.
The widows were competent to partition the properties and allot separate portions to each, and inciden tal to such an allotment, each could agree relinquish her right of survivorship in the portion allotted to the other.
" There is nothing in the decision of Smt.
Indira Balakr ishna (supra) which stands in the way of any mutual arrange ment between the cowidows, the effect of which would be to preclude the right of survivorship of each to the portion allotted to the other.
The question which actually arose for decision in that case was whether the three widows of a deceased person could have the status of an association of persons within the meaning of section 3 of the Indian In come tax Act, 1922.
This question was answered in the negative.
While discussing this question, this Court observed that though the widows take as joint tenants, none of them has a right to enforce an absolute partition of the estate against the other so as to destory the right of survivorship.
The question as to whether the right of survivorship could be relinquished as a result of mutual agreement did not arise for consideration in that case.
This question was dealt with in the case of Karpagathachi (supra) and it was held after noticing the decision in Smt.
Indira Balakrishna 's case (supra) that such relinquishment of the right of survivorship was permissible as a result of mutual arrangement.
Lastly, it has been argued by Mr. Sanghi that even though Shantibai became entitled to dispose of during her life time the property which fell to her share as a result of the deed of partition, she could not bequeath the same by means of a will.
This submission too.
is devoid of force, and we agree with Mr. Parekh who argued the case amicus curiae that the power of Shantibai to make a will in respect of the property in dispute was co extensive with her power to transfer it inter vivos.
The question as to what effect the will would have on the right of the male rever sioner, if any, of Laxmi Dayal need not be gone into in this case.
So far as Bindumati appellant is concerned, we have no doubt that in the light of the arrangement contained in the deed of partition dated January 13, 1955 she cannot resist the (1) cal.
(2) , (3) (1923) 45 M.L.I. 1. 992 claim of the plaintiff respondent who is a legatee under the will of Shantibai.
To hold otherwise would be tantamount to permitting the appellant to assert her right of survivor ship in the property which fell as a result of partition to the share of Shantibai even though the appellant has relin quished such right of survivorship.
The appeal consequently fails and is dismissed.
As no one appeared on behalf of the respondent, we make no order as to the costs of the appeal.
P.H.P. Appeal dismissed. | One Lakshmi Dayal died in 1952 leaving behind two wid ows, appellant and Shantibai.
In 1954, Chandanbai widow of brother of Laxmi Dayal filed a suit against the appellant and Shantibai in respect of the. properties left by Lakshmi Dayal.
During the. pendency of the said suit, the appel lant, Shantibai and Chandanbai executed a partition deed alloting different properties to each one of the widows.
The partition deed was registered and necessary mutation entries were made.
The suit filed by Chandanbai was dis posed of in terms of the Partition Deed.
In September.
1955, Shantibai made a will in favour of the respondent and she died on 29 5 1956.
After her death, the appellant took forcible possession of the suit land from the respondent.
The respondent, therefore, filed a suit against the appel lant for possession of the land in dispute.
The Trial Court, the first Appellate, Court and the High Court in Second Appeal came to the conclusion that the appellant had relinquished her right of survivorship in lands which fell to the share of Shantibai and, therefore, decreed the respondefts suit.
In an appeal by Special Leave the appellant contended: 1.
The appellant did not relinquish her right of survivorship.
It is not permissible for a Hindu co widow.
to give up her right of survivorship even by an agreement.
Even if right of survivorship can be given up during the lifetime of the widows con cerned, the property could have been trans ferred inter vivos but could not have been disposed of by a will.
Dismissing the appeal, HELD: 1.
It is clear from the Partition Deed and the evidence of the appellant herself that she had relinquished her right of survivor ship.
The findings of all the courts below to the effect that the appellant relinquished her right of survivorship are correct.
[990 B C] 2.
It is permissible under Hindu Law for a co widow to relinquish by agreement her right of survivorship ' in the property which falls to the share of the other widow.
[990 G] Karpagathachi & Ors.
vs Nagarathipathachi ; followed.
Bhuowan Deen Doobey vs Myna Baee ; Gauri Nath Kakaji vs Gaya Kaur (1928) LR 55 IA 299 re ferred.
Commissioner of Income Tax vs Smt.
Indira Balakrishna ; , 517 distinguished.
Ramakkal vs Ramasami Naichan Mad.
522, Sudalai Ammal vs Comathi Ammal ; Kailash Chandra Chuckerbutty vs Kashi Chandra Chuckerbutty Cal.
339; Subbammal vs Lakshmana Iyer ; Ammani Ammal vs Perissemi Udayan re ferred to. 3.
The power of a co widoW to execute a will in respect of the property falling to her share in the partition with the other co widows is co extensive with her power to trans fer it inter vivos. 989 |
Appeal No. 1177 of 1975.
(From the judgment and order dated 10 10 1974 of the Kerala High Court in Civil Revision Petition No. 734/74).
K.T. Harindranath, and K.M.K. Nair, for the appellants.
T.C. Raghavan and P.K. Pillai, for the respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by special leave from the judg ment dated 10 October, 1974 of the High Court of Kerala.
The respondent in the High Court challenged the order of the Land Board directing him to surrender 8.78 acres of land.
The High Court declared on a revision petition that the respondent was not liable to surrender the lands speci fied in the order of the Land Board.
The respondent flied a statement under section 85(a) of the Kerala Land Reforms Act 2964 hereinafter called the Act and showed there that the statement related to the family consisting of himself, his wife and children.
Two of his children were minors on 1 January, 1970.
The ceiling area allowed under section 82(1) of the Act for a family consisting of two or more but not more than five members is 10 standard acres which should not be less than 12 and more than 15 ordinary acres in extent.
On this footing the respondent would be entitled to have not less than 12 acres on the notified date, namely, 1 January, 1970.
He was found to have a total area of 28.38 acres.
He alone was the owner of all the lands.
Out of 28.38 acres 3.87 acres were ex empted under section 81.
Excluding 3.87 acres and another 12 acres for the ceiling area the excess land was 12.51 acres.
A statement showing the determination was served on him and his wife.
They were asked to file objections.
Two of the respondent 's children a daughter and a son who were minors on 1 January 1970 attained majority in 1971 and 1973 respectively.
On 28 March, 1974 the respondent executed three deeds of gift transferring a total extent of 12.83 acres to his three children.
To the eldest of them a daughter, who was a major on 1 January, 1970 he transferred 3.84 acres.
To the second daughter who became a major in 1971 he transferred 3.85 acres and to his son who became a major in 1973 he transferred 5.14 acres.
The respondent flied an objection on 5 April, 1974 stating that he and his wife who were the remaining members of the statutory family did not hold more than the ceiling area available to the family and therefore he was not liable to surrender any excess land.
The Land Board recog nised the gift to the eldest daughter who was a major on 1 January 1970 and required the respondent to surrender 8.78 acres which was the subject matter of the other two deeds of gift.
The respondent 's contention which was accepted by the High Court was repeated here.
The contentions were these.
The donees were not minors on the date of the gift.
There fore, the son and the daughter would not constitute members of the family.
Section 82 of the Act only fixes the.
ceil ing area.
The ceiling is 5 acres for an unmarried person of a family consisting of one sole surviving member.
The ceiling is 6 acres for a family of two to five members, 12 acres for a family of more than 5 members, 10 acres in creased by one acre for each member in excess of 5 etc.
The respondent emphasises that the status or nature of the person or the family is relevant.
If a person is a single member family on the relevant date, he cannot claim a larger ceiling on the ground that he became a two member or five member family later.
Under section 83 of the Act the notified date is 1 January, 1970.
This notified date is relevant only for fixing such ceiling.
Section 83 does not say that the particular person or family loses its title to the excess land on that date.
Section 84 of the Act has two parts.
The first part contains body of the section.
The second part contains exceptions.
Therefore, it is said by the respon 963 dent that all voluntary transfers of excess land failing in the body of the section shall be deemed to be transfers calculated to defeat the provisions of the Act and shall be invalid.
The gifts in the present case are said by the respondent to fall under the last exception of section 84 of the Act and it is said that the transaction is saved by the last exception.
The respondent further contends that on 1 November, 1972 the Amendment 'Act 17 of 1972 deleted two exceptions in section 84 of the Act with effect from 16 August, 1968.
The two deleted exceptions were first a transfer on account of natural love and affection and second a transfer in favour of a religious charitable or educational institution.
The Amendment Act of 1972 added an exception with effect from 16 August 1968.
The exception is a transfer by way of gift in favour of his son or daughter, or the son or daughter of his predeceased 'son or daughter by any person owning or holding land in excess of the ceiling area.
The respondent contends that in the present case the two impugned gifts to a daughter and son respectively, and, therefore, they come directly under the newly added excep tion introduced by Act 17 of 1972 and the exception is deemed to be effective from 16 August, 1968.
The respond ent further contends that section 85 and section 85A of the Act lay down the procedure for surrendering the excess land.
Section 86 of the Act vests the excess land in the Government.
The vesting happens both on the determination of the extent and other particulars of the lands, the ownership or possession or both of which is or are to be surrendered.
The respondent contends that until then namely the vesting of the land the owner of the land i.e. the respondent in this case is the legal owner and his ownership or possession is not diverted.
He can therefore deal with the land in legal valid manner.
A gift under the last exception not being hit by the invalidity contemplated by section 84 of the Act is a valid gift, which the respondent was competent to make.
The respondent contends that it is incorrect to say that a gift coming within the last exception of section 84 is ineffective after 1 January, 1970 inasmuch as such a contention will make section 84 a dead letter after 1 Janu ary, 1970.
It is said that it could not have been the intention of the legislature which added the exception only on 1 November, 1972.
The exceptions introduced by the Amendment Act of 1972 to section 84 are three.
The first is partition.
The second is transfer to a person who has been a tenant from 27 July 1960 up to the date of transfer.
The third is a transfer to a son or a daughter or a grandson or grand daughter by a predeceased son or daughter.
The respondent submits that the intention of the legislature is that in all these cases a person can transfer until he is divested of his ownership under section 86.
The respondent further contends that the scheme of the Act and of the Amendment Act of 964 1972 regarding gift is this.
Until 16 August 1968 a gift to any person is valid if the gift was out of natural love and affection.
After that date namely the amendment Act of 1972 only gifts to sons daughters and grand children of prede ceased children are valid.
It is said that there is nothing in the Act which says that an owner like the respondent cannot deal with his land in a lawful and valid manner as long as he is the owner thereof or as long as ownership is vested in him.
Section 87 of the Act says that where any person acquires any land after the date notified under section 83 by gift, purchase, mortgage with possession, lease, surrender or any other kind or transfer inter vivos or by bequest or insistence or otherwise and in conse quence thereof the total extent of land owned or held by such person exceeds the ceiling area, such excess shall be surrendered to such authority as may be prescribed.
Section 87 according to the respondent indicates that after the notified date 1 January, 1970 valid gifts are possible, as such gifts are saved by exceptions to section 84.
The Kerala Land Reforms Act Of 1964 came into force on 1 April 1964.
On 1 January, 1970 the Kerala Land Reforms Act as amended by Act 35 of 1969 came into force.
The respond ent made gifts of his excess land on 28 March, 1974.
On 5 April, 1974 the Land Board served notice on the respondent saying that ' the gifts were invalid and directed the re spondent to surrender the excess Land in excess of the ceiling area as found on 1 January, 1970.
On behalf of the State it is contended that the view taken by the Single Judge in the present case has been over ruled by a Division Bench of the Kerala High Court in a decision reported in It is also said by the appel lant that the decision of the Division Bench is affirmed by the Full Bench of the Kerala High Court in the Judgment reported in Section 82 of the Act lays down the principles governing the fixation of the land ceiling area in respect of differ ent categories of persons.
Section 83 of the Act states that with effect from the notified date no person shall be entitled to own or hold or to possess under a mortgage lands in the aggregate in excess of the ceiling area.
Sec tion 84 of the Act provides that all voluntary transfers effected after the publication of the Kerala Land Reforms Bill 1963 in the Gazette, namely, 15 September 1963, other wise that in certain modes specified in section 84, shall be deemed to be transfers calculated to defeat the provisions of the Act and shall be invalid.
Section 85(1) lays down that if any person owns or holds land in excess of the ceiling area on the notified date, such excess shall be surrendered as provided in the section.
Section 86 lays down that on determination by the Land Board of the extent and other particulars of the lands to be surrendered by the person under section 85 the ownership or possession or both, as the case may be, of the lands shall vest in the Govern ment free from any encumbrance.
Section 87 deals with cases where persons have acquired lands after the notified date by transactions inter vivos, such as gift, purchase, mortgage with possession 965 lease, surrender or by bequest, or inheritance etc.
and in consequence thereof the total extent of land owned or held by such person exceeds the ceiling area, such excess lands should also be surrendered to the prescribed authority and that such land shall also vest in the Government under section 86.
These provisions in the Act establish the dominant legislative intent of the imposition of the ceiling on land holdings and the consequential obligation to surrender lands owned or held in excess of the ceiling area on the noti fied date, namely, 1 January 1970.
The legislature noticed the possibility that after the proposal to introduce the Kerala Land Reforms Bill 1963 published in the Gazette on 15 August, 1963, there might be transactions of transfers with a view to circumventing the provisions of the contem plated legislation.
It is to meet the said situation that.
section 84 of the Act lays down that all such voluntary transfers that have taken place subsequent to the date of publication of the Bill, namely, 15 August 1963, otherwise than in the limited modes specified in the said section, shall be deemed to be transfers calculated to.
defeat the provisions of the Act and shall be invalid.
It is apparent that section 84 was enacted with a view to making the provi sions of sections 83 and 85 effective.
For purposes of calculation of the ceiling area and the determination of the extent of the excess land to be surrendered by persons account will be taken not merely of the land actually owned and possessed by him on the notified date, namely, 1 January 1970, but also of land voluntarily transferred by him subsequent to the date of publication of the Bill in the Gazette on 15 August 1963 by transactions not falling within the certain categories mentioned in section 84.
Section 84 prohibits persons from transferring their excess lands after 15 August, 1963 except as provided in that section.
The effect of sections 83 and 85 has been noticed by this Court in the decision dated 20 August, 1976 in Civil Appeals No. 907 909 of 1974 and Civil Appeals No. 1354 and 1355 of 1975 (State of Kerala & Ors.
vs Philomina(1).
It has been held there that the prohibition against ceiling area under section 83 of the Act and the surrender of the excess land under section 85 of the Act are both to be determined with reference to the position as on the noti fied date under section 83 of the Act.
The crucial date for determining and surrendering the surplus land is 1 January 1970 and not any earlier date.
Transfers which have been effected between 15 August 1963 and 1 January 1970 will be treated as valid provided they come within the excepted categories enumerated in section 84 of the Act.
The lands covered by such valid transfers will be treated as properties belonging to.
the transferors on the notified date for purposes of determining a ceiling area and the extent of excess land to be surren dered by him.
In respect of transfers effected after 1 January 1970 the ceiling area applicable to a person and the extent of his liability to (1) ; 966 surrender, which became crystallised on 1 January 1970, will determine the excess land to be surrendered.
The obligation to surrender the excess land owned or possessed by person as on 1 January 1970 cannot be affected by voluntary transfers even of the excepted varieties mentioned in section 84 of the Act subsequent to the notified date.
The transferor will continue to be liable to surrender to the Government the full extent of the excess land that was in his posses sion as on 1 January 1970.
The High Court erred in holding that the respondent was not to surrender the land.
The appeal is accepted for the foregoing reasons and the judgment is set aside.
Parties will pay and bear their own costs.
P.H.P. Appeal allowed. | The respondent held 28.4 acres of land and, therefore, filed a return under Section 85(a) of the Kerala Land Re forms Act, 1964.
In the return, he showed his family as consisting of himself, his wife and 3 children.
Section 84 of the Act provided that all voluntary transfers effected after publication of the Kerala Land Reforms Bill, 1963, except certain transfers which were excepted shall be deemed to be transfers calculated to defeat the provisions of the Act and invalid.
The Act was amended by Act 35 of 1969 ' which came into force on 1 1 1970.
By virtue of the said amendment, 1 1 1970 was declared as the notified date.
Section 83 provides that with effect from the notified date no person shall be entitled to own, hold or to possess land in excess of certain acres of land.
Section 85(1) provides that any person holding land in excess on notified date shall surrender the excess.
Section 85 and 85A are the sections laying down the procedure for surrender of the excess land.
Section 86 provides that on determination of the excess land under section 85 the same will vest in the State.
On 1 1 1970, the respondent had one major child and two minor children.
One minor child attained the age: of majority in 1971 and another attained majority in 1973.
In March, 1973, 3 gift deeds were executed one in favour of each one of the children.
The respondent was called upon to hand over the excess land on.
the ground that the transfers executed after 1 1 1970 in favour of the children who were minor on 1 1 1970 will be ignored and the land will be treated as land owned by the respondent.
The respondent filed his objections and contended that he and his wife were the only members of the family and that if the transfers were excepted he did not hold land in excess of the ceiling.
The Land Board came to the conclusion that out of the 28.4 acres of land held by respondents 3.9 acres were exempted under section 81 and that the land measuring 3.8 acres gifted to the major child was a valid gift and in addition the respondent was entitled to hold 12 acres of land.
He came to the conclusion that the respondent was holding excess land to the extent of 8.78 acres.
The respondents filed a Revision Petition in the High Court which allowed the same.
In an appeal by Special Leave the respondent contended: (1) Section 83 is relevant only for fixing ceiling.
It does not say that a person or a family loses his title on the notified date.
(2) Donees were not minors on the date of gift.
That would not constitute the members of the family.
961 (3) Gifts in the present case are saved by the last exception to section 84 which permit ted gifts to any person out of natural love and affection or, at any rate, they are saved by Amendment Act 17 of 1972 by which the exception to Section 84 was made effective from 16 8 1968, in favour of transfers by way of gifts in favour of son or daughter or other near relations.
(4) Sections 85 & 85A lay down the proce dure ' for surrendering the excess land.
Section 86 vests the excess land in the State.
The vesting takes place after the procedure under sections 85 and 85A is over and till then the respondent was the legal owner and could have and in fact validly gifted the land in question.
The appellants contended: (1) The gifts made after 1 1 1970 were not saved by exception to section 84.
(2) The view taken by the Single Judge has been over ruled by a Division Bench and Full Bench of the same High Court.
Allowing the appeal, HELD: (1,) The provisions of the Act dearly establish the dominant legislative intent of the imposition of the ceiling on laud holdings and the consequential obligation to surrender laud owned or hold in excess of the ceiling area on the notified date, namely, 1 1 1970.
Section 84 was enacted because the Legislature anticipated transfers with a view to.
circum vent the provisions of law.
Transfers between 15 8 1963 and 1 1 1970 ' will be valid if within the exceptions provided by section 84.
Transfers made after 1 1 1970 even of the excepted varieties are to be ignored and obligation to surrender the excess land on 1 1 70 cannot be excepted by voluntary transfers made subsequent to.the notified date.
[964 G H, 965 C D] (2) Notified date is 1 1 1970.
That is the relevant date for fixing ceiling.
Subse quent changes in the constitution of family are irrelevant [965 H] |
Civil Appeal Nos.
1739 1740 of 1968.
(From the Judgment and Decree dated 14 2 1967 of the Delhi High Court in Regular First Appeal Nos.
5 D, and 54 D of 1958).
969 V. section Desai and Girish Chandra, for the Appellant.
Sachin Chaudhary, B.P. Maheshwar and Suresh Sethi, for the Respondent No. 1 in (CA.
1739/68) and for Respondent No. 2 in 1739/68) and Respondent No. 1 in (CA.
No. 1740/68).
A. K. Sen and D. Goburdhan, for Respondent No. 2 in (CA.
No. 1740/68).
The Judgment of the Court was delivered by SHINGHAL, J.
, These two appeals by certificate have been consolidated by an order of this Court dated April 15, 1969.
They are directed against a common judgment of the Delhi High Court dated February 14, 1967, in Regular First Appeals Nos.
5 D and 54 D of 1958, by which the judgment and decree of the trial court dated January 13, 1958 have been set aside with costs throughout.
As this has resulted in the dismissal of the suit raised by the Union of India, it has filed the present appeals.
The facts giving rise to the appeals are quite simple.
Harjas Rai Malhotra, defendant No. 3, is the father of Krishan Lal Malhotra, defendant No. 2.
The liability of defendant No. 3 to income tax and super tax for the as sessment year 1947 48, was fixed Rs. 1,25,090/11/ in March, 1952.
A demand was made for its payment, but he neglected to meet it and a certificate was issued on October 8, 1952 to the Collector of Delhi for its recovery as ar rears of land revenue.
The Collector was asked to attach house No. 15, Keeling Road and house No. 9, Hailey Road in New Delhi, of defendant No. 3.
Both the houses were attached on October 13, 1952.
Meanwhile, defendant No. 3 appealed against the order of assessment.
The Appellate Assistant Commissioner allowed the appeal on May 12, 1953, set aside the assessment and directed a fresh assessment.
The order of fresh assessment was made on November 30, 1953 and the incometax demand was reduced to Rs. 1,05,769.13.
The as sessments for 1944 45 and 1948 49 were completed on March 28 and 31, 1953, respectively, raising a tax demand for Rs. 1,94,738.15.
A recovery certificate was issued to the Collector for the same on May 4, 1953 and the house at No. 15, Keeling Road was again attached on August 6, 1953.
We are not concerned with the house at No. 9, Hailey Road, for the controversy before us relates to house No. 15, Keeling Road, hereinafter referred to as the house.
That house had been ostensibly purchased by defendant No. 2 in December, 1946 for Rs. 60,000/ .
He filed an application objecting to the attachment on the ground that the house belonged to him, but the Collector dismissed the objection holding that the house belonged to defendant No. 3.
Defend ant No. 2 did not appeal against that order and did not question it by a suit.
Thus far, the facts are not in dispute.
970 It was alleged in the plaint that the house was pur chased by defendant No. 3, "benami", in the name of his son defendant No. 2, out of his "own funds drawn from his bank account" and that 'the "full beneficial ownership, right, title and interest in the said property has always belonged and continues to this day to belong to the 3rd defendant.
" The plaintiff alleged further that during the pendency of his appeal to the Appellate Assistant Commissioner against the assessment which had been made in March 1952 for 1947 48 and the assessment proceedings for 1944 45 and 1948 49, defendant No. 3 "in collusion and conspiracy with the 2nd defendant and certain other persons, and with the view, intent and purpose of defeating and delaying his creditors including the plaintiff, had recourse to diverse ways and means" as detailed in the plaint.
He was thus alleged that, in February 1953, defendants Nos. 2 and 3 and five other persons purported to form a limited company known as Moksh Builders and Financiers Ltd., hereinafter referred to as the Company, which was arrayed as defendant No. 1 in the suit, with an authorised capital of Rs. 5,00,000/ divided into 5000 shares of Rs. 100/ each.
There were 7 subscribers to the Memorandum and the Articles of Association of the Compa ny and each of them took 10 shares, Soon after the Appel late Assistant Commissioner made his aforesaid order dated May 12, 1953 for fresh assessment of the income tax liabili ty of defendant No. 3, a sale deed dated May 25, 1953 was brought into existence whereby defendant No. 2 "purported to convey" the house to defendant No. 1 for Rs. 1,00,000/ of which Rs. 90,000/ were payable in the shape of shares in the Company, Rs. 8,000/ payable to Sunrise .Investors Ltd. and Rs. 2000/ in cash.
The plaintiff pleaded that "these transactions were all sham, colorable, and effected and entered into with the active aid, instigation and advice of the 3rd defendant and to subserve and carry out the object of placing his property, viz., No. 15, Keeling Road out of the reach of his creditors".
It was further urged as fol lows, "The consideration mentioned in the sale deed of 25th May, 1953 was illusory.
In effect and substances the 2nd defendant pur ported to sell a house to the I st defendant in which company in return was to become a holder of shares .
of controlling interest, the shares being the alleged price.
, Except for the legal fiction of the I st defendant Company being juristic person the 'sale was by the vendor to himself.
None of these de vices and subterfuges could divest the 3rd ', defendant of his ownership of the property in question.
The 1st defendant company by its_promoters directors and office bearers was fully aware of all the facts of the case, including the true state of the title to the property No. 15, Keeling Road, the highly embarrassed financial circumstances of the 3rd defendant the facts that he owed to the plain tiff" alone taxes to the amount of several lakhs of rupees etc.
The 1st defendant is not a purchaser in good faith for consideration of the said property or without notice of the title of the 3rd defendant.
On the other hand the sale deed dated 25th May, 1953 to the 1st defendant was executed by the name lender the 2nd defendant at the instance of the true owner of 971 the 3rd defendant with intent to defeat or delay the latter 's creditors, and is voidable at the option of any of such creditors includ ing the present plaintiff.
" Defendant No. 1 objected to the attachment of the house for the realisation of the arrears of income tax of defend ant No. 3.
The Additional Collector allowed the objection by a summary inquiry, and the Chief Commissioner dismissed the appeal on April 1, 1954.
Both those officers, according to the plaintiff, proceeded on "prima facie considerations" and left the parties to seek their redress in the civil court.
With these specific averments the,plaintiff raised its suit seeking leave to sue on behalf and for the benefit of itself and the other creditors, if any, of defendant No 3.
It prayed for a declaration that (i) the sale deed dated May 25, 1953 was void as against the plaintiff and all other creditors of defendant No. 3, and (ii) the house is and continued to be owned by defendant No. 3.
In the alterna tive, the plaintiff prayed for a declaration that the shares allotted to defendant No. 2 belonged to defendant No. 3.
It also prayed for a declaration that it was entitled to pro ceed against the "properties which may be declared to be of 3rd defendant 's" by attachment and sale to realise the tax arrears due from him.
A prayer was made for setting aside the orders of the Additional Collector and the Chief Commis sioner on the objection petition of defendant No. 2.
Defendant No. 3 did not appear to contest the suit in spite of personal service and the trial court made an order on April 15, 1955 to proceed against him ex parte.
Separate written statements were filed by the Company and defendant No. 2 The Company took the plea, inter alia, that it had been genuinely and properly formed and that it was a bona fide purchaser for value and the "transaction was quite real and genuine".
It denied that the sale deed dated May 25, 1953, was executed at the instance of defendant No. 3, or that it was intended to defeat or delay his creditors.
P was pleaded that defendant No. 2 was the rightful owner of the house which he had rightfully purchased with "his own money (Rupees 10,000/ ' by cheque No. 32920 dated 14.11.1946 on the New Bank of India Ltd., New Delhi drawn by his mother K. Rani and Rs. 50,000/ paid in cash before Sub Registrar)".
The Company also pleaded that the transaction of sale in its favour was without notice of any body else 's claim and was binding.
Defendant No. 2 filed a short written statement stating that he was the owner of the house having purchased it with "his own money".
He pleaded that he had paid Rs. 10,000/ by cheque on New Bank of India Ltd., New Delhi, and Rs. 50,000/ were paid before the SubRegistrar.
He pleaded further that he had no knowledge of the Collector 's order and that his order, if any, was ex parte.
As regards the Company, defendant No. 2 pleaded that it was a real and genuine Company and that out of his shares worth Rs. 90,000/ he had sold shares worth Rs. 74,000/ .
12 1338SCI/76 972 The trial court found that the house was purchased "benami" in the name of defendant No. 2, by defendant No. 3 with his own money and that the sale of the house to the Company by defendant No. 2, was "sham and was effected in order to defeat or to delay the creditor of defendant No. 3 and that defendant No. 1 had no real existence.
" The trial court therefore granted a decree declaring that the sale deed dated May 25, 1953 was void as against the plain tiff and all other creditors, if any, of defendant No. 3 and that the House" is and continues to be owned by the 3rd defendant and that the plaintiff is entitled to proceed against the said properties by way of attachment and sale to realise the tax arrears due from him.
" The trial court set aside the orders dated October 9, 1953 of the Additional Collector on the objection petition of defendant No. 2 and of the Chief Commissioner dated April 1, 1954.
As the High Court has set aside the judgment ' and decree of the trial court, the present appeals have been filed by the plaintiff as aforesaid.
We shall refer to the findings of the High Court as and when necessary.
The main point in controversy was whether the house was purchased by defendant No. 3 'benami ' in the name of defend ant No. 2? This was the subject matter of issue No. 1 in the trial court.
We have made a reference to the plaintiff 's plea that the purchase was "benami" and payment was made out of the funds of defendant No. 3, which were drawn by him from his own account.
As has been mentioned, defendant No. 3 did not care to appear and contest the suit even though he was served and knew the nature of the plaintiff 's claim and the basis thereof.
Defendant No. 2 appeared at the trial and pleaded that he purchased the property "with his own money".
The source of the money was within his special knowledge, but it will be recalled that he contended himself by pleading that Rs. 10,000/ were paid by him by a cheque and Rs. 50,000/ were paid before the Sub Registrar.
We have made a reference to the plea of the Company in this respect.
It is no body 's case that the sale of the house to defendant No. 2 was fictitious and that the title of the transferor was not intended to pass.
What we have to examine is whether the title, on sale of the house in Decem ber 1946, was transferred to defendant No. 3, who was.
the real purchaser, and not to defendant No. 2, who was only the ostensible transferee and was no more than a "benamidar".
It has been held in Gangadara Ayyar and others vs Subrarnania Sastrigal and others(1) that "in a ease where it is asserted that an assignment in the name 011 one person is in reality for the benefit of another, the real test is the source whence the consideration came" It is also necessary to examine in such eases who actually has enjoyed the benefits of the transfer.
Both these tests were applied by this Court in Meenakshi Mills, Madurai vs The Commissioner of IncomeTax Madras.(2) It is therefore necessary, in the present case, to (1) A I.R. (2) ; 973 find out the source of the consideration for the. transfer, as also to find out who has been in enjoyment of the bene fits of the transaction.
It is equally well settled that, although the onus of establishing that a transaction is 'benami ' is on the plaintiff, 'where it is not possible to obtain evidence which conclusively establishes or rebuts the allegation, the case must be dealt with on reasonable proba bilities and legal inferences arising from proved or admit ted facts.
" The burden of proof is, however not static, and may shift during the course of the evidence.
Thus while the burden initially rests on the party who would fail if no evidence is led at all after the evidence is recorded, it rests upon the party against whom judgment would be given if no further evidence were adduced by 'either side, i.e. on the evidence on record.
As has been held by this Court Kalwa Devadattam and others vs The Union of India and oth ers(1) that where evidence has been led by the contesting parties on the question in issue, abstract considerations of onus and out of place, and the truth or otherwise of the case must.
always be adjudged on the evidence led by the parties.
This will be so if the court finds that there is no difficulty in arriving at a definite, conclusion.
It is therefore necessary to weigh the evidence in this case and to decide whether, even if it were assumed that there was no conclusive evidence to establish or rebut the "benami" allegation, what would, on a careful assessment of the evi dence, be a reasonable probability and a legal inference from relevant and admissible evidence.
The sale in question was admittedly made in December 1946.
Defendant No. 2 had admitted in his statement date May 29, 1957 that he was born in 1928.
He was therefore 18 years old at that time.
His father (defendant No. 3) was also alive at that time, and it is not his case that he (defendant No. 2) had any money ' of his own, for he has stated that he got Rs. 10,000/ from his mother and Rs. 50,000/ from his grandfather to constitute the sum of Rs. 60,000/ for which he purchased the house.
It is however a significant fact that the defendant No. 2 did not disclose any such source of the money in his written state ment dated April 15, 1955.
It took ,him two years to come out with such a case.
He was given an opportunity, during the course of his cross examination, to explain the omission regarding the disclosure of the source of the sum of Rs. 50,000/ in his written statement, but he contented himself by saying that he could not give "any reason as to why he (I) omitted to mention in the written statement about receipt of Rs. 50,000/ from ' his (my) grandfather".
Similarly he failed to explain why he did not mention in his written statement that the cheque for Rs. 10,000/ was drawn by his mother.
It is true that there is a mention in document exhibit D1 that out of the sum of Rs. 60,000/ "a sum of Rs. 10,000/ has already been paid to the vendor by the vendee by cheque No. 32920 dated November 14, 1946, on the New Bank of India Ltd., New Delhi," but it is again signifi cant that while the document states that the payment of Rs. 10,000/ was made by (1) ; 974 the vendee (defendant No. 2) 'by the aforesaid cheque, he has stated in the trial court that the cheque for Rs. 10,000/ was issued by his mother, in favour of the vendor.
He was not able to explain the discrepancy: and merely stated that his written statement (which did not disclose the source and the name of the person who drew the cheque for Rs. 10,000/ ) was correct.
If it had been a fact that defendant No. 2 really obtained a cheque for Rs. 10,000/ from his mother, in the vendor 's name, and, if it was not really a cheque drawn by his father, there was nothing to prevent him from establishing that f. act with reference to the counter foil of his mother 's cheque book or her account with the bank.
The defendant has also not stated whether he repaid the money to his mother and, if so, when, or whether it was a gift to him and, if so, why, when she had another son also.
As it is, it cannot be said that defendant No. 2 has been able to establish that it was he who paid the sum of Rs. 10,000/ to the vendor.
According to the written statement of defendant No. 2, the balance of Rs. 50,000/ was paid before the Sub Regis trar.
He has stated that about 7 or 8 days before his death, his grandfather Sohna Mal (who died in October 1946) paid him Rs. 50,000/ ' after taking.
out the money which was "lying underneath his pillow.
" He could not however stand the test of cross examination, for he could not state where the money was kept by his grandfather and whether, he at all had a bank account.
The High Court did not care to examine the reliability of the defendant 's evidence regarding the source from which he received Rs. 60,000/ even though it was an important question and had been examined by the trial court with reference to all the other evidence on the record including the statement of Amar Nath Sharma D.W.3.
We find that there is no reason for us to disagree with the trial court 's view in the matter, based on the parol evi dence on the record.
In arriving at this conclusion, we have not relied on that part of the trial court 's judgment where it has made a reference to the admission of defendant No. 3, for we shall deal with them separately.
The reason able preponderance of probability therefore is that defendant No. 2 has failed to establish the source of the consideration of Rs. 60,000/ even though it was art impor tant fact within his special knowledge.
He could not therefore be said to be the real owner of the house.
It is also an important fact that defendant No. 2 has failed, to prove that he enjoyed the benefit of the sale.
He claimed that he had shown the rent of the house in his income tax returns, but he did not produce any rent note.
Even the tenant who was 9aid to be living in the house on the date of the sale, has not been examined.
While the trial court has examined this aspect of the controversy, the High Court has missed it altogether.
The High Court went by the view that statement exhibit P. 1 of defendant No. 3, the income tax return of defendant No. 3 showing the house as his property, his statement of account and the assessment order for the year 1948 49 showing the same, were not admissible 975 in evidence against defendant No. 2 and that there was no evidence either of the plaintiff or the defendants on which a finding as to the "benami" nature Of the transaction could be based.
That decision is obviously based on a misap preciation of the law relating to "benami" transactions for, as has been stated, it was necessary to find out whether it was defendant No. 3 who had enjoyed the benefit of the transaction.
Moreover, the finding of the High Court is against the evidence on the record, and must be set aside.
We have therefore no hesitation in holding that the purchase of the house was "benami" and that its ostensible owner defendant No. 2 was not the real owner but was a "benamidar.
" The ancillary question is as to who was the real owner of the house for whom defendant No. 2 was the "benamider"?.
We have not taken the admissions of defendant No. 3 into consideration so far, but they have a direct bearing on the question now before us.
lie recorded a state ment exhibit P. 1 dated August 12, 1950 before Puran Chand P.W. 1, Income tax Officer, which has been proved by the wit ness.
It has been stated there as follows, "I purchased 15 Keeling Road on 12.12.46 for Rs. 60,000/ in the name of my son (Major Krishan Lal).
This money was paid out of my bank accounts and I have shown the details and payments from my bank pass books.
" 0 Then there is document exhibit P. 6 which is a copy.
of the personal account of defendant No. 3.
It was filed in connection with the return of his income tax for 1947 48.
An attempt was made to argue that the document had not been proved or marked as an exhibit.
We have seen the original document and we have no doubt that the whole of it was tendered in evidence and was marked as exhibit P. 6.
The identity of the document has been established by the state ment of Puran Chand P.W. 1 that the scribbling on it was made by him.
The document has therefore been proved beyond doubt.
It shows that it was defendant No. 3 who spent Rs. 60,000/ on "property" in that assessment year.
Both exhib its P. 1 and P. 6 go to prove that the house was purchased by defendant No. 3 out of his own funds in the name of his son defendant No. 2 who, it will be recalled, was admittedly only 18 years old at that time and did not have any money of, his own.
Moreover defendant No. 3 showed the income accruing from the house as his own income in his return for the years 1947 48 and 1948 49.
Counsel for the respondents have urged for the exclusion of these admissions.
The main attack was that they were admissions of a co defendant and were not admissible against defendant No. 2.
As has been stated, we have not taken them into consideration as evi dence against that defendant.
There is however no force in the other argument that they are not admissible in evidence against defendant No. 3 as he was not confronted with them in the, trial court and they were not adverse to the inter est of their maker at the time when they were made.
It has 976 been held by this Court in Bharat Singh and another vs Bhagirath(1) that an admission is substantive evidence of the fact admitted, and that admissions duly proved are "admissible evidence irrespective of whether the party making them appeared in the witness box or not and whether that party when appearing as witness was confronted with those statements in case it made a statement contrary to those admissions.
" In taking.this view this Court has noticed the decision in Ajodhya Prasad Bhargava vs Bhawani Shanker Bhargava and another(2) also.
The point has been considered and answered as follows in Wigmore on Evidence, Volume IV, 1048 (at page 3), "The theory of the Hearsay rule is that an extra judicial assertion is excluded unless there has been sufficient opportunity to test the grounds of assertion and the credit of the witness, by cross examination by the party against whom it is offered (post, 1362); e.g. if Jones had said out of court.
"The party opponent Smith borrowed this fifty dollars", Smith is entitled to an opportunity to cross examine Jones upon that assertion.
But if it is ,Smith himself who said out of court, I borrowed this fifty.
dollars, cer tainly Smith cannot complain of lack of opportunity to cross examine himself before his assertion is admitted against him.
Such a request would be absurd.
Hence the objection of the Hearsay rule falls away, because the very basis of the rule is lacking, viz, the need and prudence of affording an opportunity of crossexamination.
" Moreover, the defendant No.3 had full opportunity,. to appear and defend himself, but he did not do so and the case proceeded against him ex parte.
The plaintiff even tried to examine him as his own witness, but his appearance could not be secured in spite of the prayer for the issue of summonses and a warrant.
There is therefore force in the argument to the contrary.
So also, there is no force in the argument that the aforesaid admissions or statements of defendant No. 3 could not be read against him as they were not adverse to his interest when made.
There is no such requirement of the Evidence Act and the argument is untenable as it unreasona bly restricts the opportunity to prove the true state of affairs on the party 's own showing and to demolish his subsequent claim as self contradictory.
This point has also been dealt with in Wigmore on Evidence, 1048 (at page 4) in this way, "It follows that the subject of an admission is not limited to facts against the party opponent 's interest at the time of making it.
No doubt the weight of credit to be given to such statements is increased when the fact stated is against the person 's interest at the time; but that circumstance has no bearing upon their admissibility.
On principle, it is plain that the probative reason why a party opponent 's utterance is sought to be used against him is ordinarily the reason noted above, in par.
(1)b,.
viz. that it exhibits (1) ; (2) A.I.R. 1957 All. 1. 977 an inconsistency with his present claim, thus tending to throw doubt upon it, whether he was.
at the time .speaking, apparently in his own favour or against his own interest. ' The contrary view, has been characterised by Wigmore as "a fallacy.
in the fullest sense.
" Another argument which has been advanced against the admissibility of the aforesaid admissions of defendant No. 3 is that they could be evidence only in terms of section 33 of the Evidence Act.
That argument is also quite untenable because section 33 deals with statements of persons who cannot be called as witnesses, and does not restrict or override the provisions relating to admissions in the Evidence Act.
The High Court also committed a similar error of law in its impugned judgment.
The aforesaid admis sions of defendant No. 3 are therefore satisfactory evidence to prove.that he himself was the owner of the house and his son, defendant No. 2 was merely a "benamidar" for him.
It would thus appear that the finding of the trial court on issue No. 1 which dealt with the question whether the house was purchased by defendant No. 3 "benami" in the name of defendant No. 2, was correct and should be restored as the High Court 's finding to the contrary has been viti ated by the substantial errors of law mentioned above.
The other important question is whether the sale of the house in favour of the Company (defendant No. 1 ) was a sham transaction and was effected to defeat and delay the creditors of defendant No. 3.
This was the subject matter of issue No. 2 and the trial court 's finding in affirmative has not even been examined by the High Court.
We find that the admitted facts of the case are by themselves sufficient to show that the finding of the trial court is justified and does not call for any interference.
Defendant No. 3 was assessed to income tax for a sum of Rs. 1,25,090/11/ for assessment year 1947 48 in March 1952.
Defendant No. 3 failed to pay that amount on demand and a recovery certificate was issued on October 8, 1952.
The house was therefore attached on October 13, 1952.
Defendant No. 2 raised an objection, and prayed for the release of the house.
The Collector rejected the objection on March 3,.
No appeal, or other remedy was sought against .that order.
The Appellate Assistant Commissioner however allowed the appeal of defendant No. 3 against the assessment of income tax and ordered a fresh attachment by his order dated May 12, 1953.
In the meantime, the Company was incorporated in February, 1953.
The assessment of incometax for the years 1944 45 and 1948 49 was completed in March 1953 raising the tax demand to Rs. 1,94,735.15, and a recovery certificate was issued on May 4, 1953.
It was in these circumstances that defendant No. 2, who had failed to obtain an order for the release of the house as aforesaid, has tened to sell it to the Company 22 on May 25, 1953.
As has been stated, a fresh recovery certificate was issued to the Collector on May 4, 1953 and the house was again attached on August 6, 1953.
These facts speak for themselves and are quite sufficient to justify the trial court 's finding that sale of the house to the Company was a sham transaction and arose out of the anxiety to save the house some how from sale for realisation of the income tax.
The Company was in fact dominated by defendant No. 2 and his close relations and did not even pay the sale price in cash.
It is also significant that the shares of the other 'relations were insignificant.
Moreover the.
Company could not lead evidence to show that it was able to transact any substantial business whatsoever.
We have therefore no reason to disagree with the trial court 's finding that the Company was formed just to transfer the house to it in an effort to save it from attachment and sale for realisation of the income tax arrears of defendant No. 3.
The finding of the trial court on the issue is quite correct and the High Court committed a serious error of law in not examining this aspect of the matter at all even though it had a great bearing on the controversy.
In the result, we are constrained to allow the appeals.
The impugned judgment and decree of the High Court dated February 14.
1967 are set aside and the decree of the trial court is restored with costs throughout one hearing fee.
V.P.S. Appeals allowed. | The appellant (plaintiff) filed a suit on behalf of and for the benefit of itself and of other creditors against the respondents (3 defendants) and prayed for a declaration that,, (1) the sale deed of the house in dispute by the 2nd defendant in favour of the 1st defendant was void as against the plaintiff and all other creditors of the 3rd defendant; and (2) that the house was and continued to be owned by the 3rd defendant.
The house was sold in the name of the 2nd defendant for Rs. 69,000.
He is the son of the 3rd defend ant who was alleged to be the real purchaser.
As the 3rd defendant failed to pay the arrears of income tax due from him the house was attached as his property.
The 2nd defendant raised an objection but the objection was reject ed.
The 3rd defendant filed an appeal against the assess ment of income tax and while the appeal was pending before the Appellate Assistant Commissioner, the 2nd and 3rd de fendants, and five other persons formed a limited company, namely, the 1st defendant.
The Appellate Assistant Commis sioner allowed the 3rd defendant 's appeal and ordered a fresh assessment of his income, and the Income Tax Officer made a fresh assessment.
Soon after the 2nd defendant purported to convey the house of the 1st defendant for Rs. 1,00,000 of which Rs. 90,000/ were payable to the 2nd de fendant in the shape of shares in the company.
The house was again attached for recovery of the tax due from the 3rd defendant.
The 1st defendant objected to that attachment.
The objection was allowed and the parties were referred to the Civil Court for.
redress and the suit was filed.
The trial court decreed the suit, but the High Court, in appeal, set aside the judgment.
Allowing the appeal to this Court, HELD: The evidence disclosed that the 3rd defendant 'was the owner of the house, and his son, the 2nd defendant, was merely a benamidar for him; and that the 1st defendant Company was formed just to transfer the house to it in an effort to save it from attachment and sale for realisation of the income tax arrears of the 3rd defendant.
[978 A C] (a) In a case where it is asserted that an assignment in the name of one person is in reality for the benefit of another, it is necessary to find out the source whence the consideration came, and to examine who actually was enjoying the benefits of the transfer.
[907 F G] Gangadara Ayyar and others vs Subramania Sastrigal and others (A,I.R. referred to Meenakshi Mills, Madurai vs The Commissioner of In come tax, Madras [(1956) S.C.R. 691] followed.
(b) Although the.
onus of establishing.
g that a transaction is benami is on the plaintiff, where it is not possible to obtain evidence which conclusively establishes or rebuts the allegation.
, .the case must be dealt with on reasonable probabilities and legal inferences arising from proved.
or admitted facts.
While the burden initially rests on the party who would fail if no evidence is led at all, after the evidence is recorded, it rests upon the party against whom judgment would be given if no further evidence were adduced by either side.
Thus, the burden of proof is not static, and may shift during the course of the trial Where the 968 entire evidence has been led by the contesting parties on the question in issue, abstract considerations of onus are out of place, and the truth or otherwise of the case must always be.
adjudged on the evidence: led by the parties.
It is therefore necessary to weigh the evidence in this case and to decide whether.
even if it were assumed that there was nO conclusive evidence to establish or rebut the benami allegation, what would, on a careful assessment of the evidence, be a reasonable.
probability and a legal inference from relevant and admissible evidence.
[973 A D] Kalwa Devadattam and two Others vs The Union of India and others ; followed.
In the present case, the 2nd defendant, at the time of the sale, was just 18 years old, and did not have any money of his own.
His father the.
3rd defendant was alive.
The High Court did not examine the reliability of the 2nd defendant 's evidence regarding the source.
from which he received the sum of Rs. 60,000/ even though it was an important question and had been examined by the trial court with reference to the entire evidence on record.
The rea sonable preponderance of probability on the evidence is, that the 2nd defendant had failed to establish the source of the consideration of Rs. 60,000/ even though it was an important fact within his special knowledge.
[973 E H] (d) The 2nd defendant had also failed to prove that he enjoyed the benefit of the sale.
[974 G] In order to find out whether the 3rd defendant was enjoying the benefit of the transaction, the finding of the High Court was clearly against the evidence on record.
The admissions contained in the records before the Income Tax Officer proved that the house was purchased by the 3rd defendant out of his own funds in the name, of his son, the 2nd defendant, and that the 3rd defendant was enjoying the income accruing from.
it as his own income.
[975 E F] (f)(i) The admissions by the 3rd defendant were substan tive evidence of the facts admitted and such admissions, duly proved, were admissible evidence irrespective of wheth er the party making them appeared in the witness box or not, and whether that party when appearing as a witness was confronted with those statements in case a statement con trary to those admissions was made.
They were taken into consideration against the 3rd defendant and not against the 2nd defendant.
[975 H, 976 A B] Bharat Singh and another vs Bhagirath ; , followed.
(ii) There is no requirement of the Evidence Act that unless the admissions were adverse to his interests when made, they could not be read against the person making them.
[976 F] (iii) The contention that the evidence of the admissions is admissible only in terms of section 33 of the Evidence Act was untenable because that section deals with statements of persons who cannot be called as witnesses and does not restrict or override the provisions relating to admissions in the Evidence Act.
[977 A C] (g) The 2nd defendant, who had failed to obtain an order for the release of the house from attachment when it was first attached, hastened to sell the house when the assess ment proceedings were pending before the Income tax De partment.
The 1st defendant Company was in fact dominated by the 3rd defendant and his close relations, it did not even pay the sale price.
in cash, and there was no evidence ' to show that it was able to transact any substantial busi ness.
Therefore, the sale of the house in favour of the 1st defendant was a sham transaction and was effected only to defeat and delay the creditors of the 3rd defendant.
[978 A B] |
Appeal No. 1762 of 68.
(Appeal from the Judgment and Decree dated 18 5 1967 of the Calcutta High Court in Appeal from Original Decree No. 183/56).
980 G.L. Sanghi and Girish Chandra, for the Appellant.
Purushottam Chatterjee and Sukumar Ghose, for the respond ent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal by certificate is from the judgment dated April 11, 1968 of the High Court at Calcutta.
The respondent filed this suit against the appellant in the High Court at Calcutta and claimed Rs. 76,691 2 0 with interest or in the alternative Rs. 78,204 8 4.
The respond ent 's case in short is that the respondent delivered to the defendant appellant pursuant to several orders from time to time goods described as Mac Intyre Sleeves and other goods.
The respondent alleged in the plaint that the appellant "wrongfully purported to reject the Mac Intyre Sleeves" supplied by the respondent.
The respondent further alleged that the rejection was unlawful inasmuch as the rejection was after lapse of reasonable time.
The respondent claimed the sum mentioned in the plaint as reasonable price of the goods.
The alternative case of the respondent is that the plaintiff respondent was entitled to the sum for supply of Mac Intyre Sleeves because the same were not supplied gratu itously.
The appellant denied in the written statement that there was any enforceable contract, and, therefore, the respondent was not entitled to sue for price of the goods delivered.
The appellant took the plea bar of the suit that there was no contract in compliance with section 175 of the Gov ernment of India Act, 1935.
The appellant pleaded to.
the alternative case of the respondent by alleging that the goods were lawfully rejected because the goods were found not to be of the correct description and quality.
The appellant further denied that the rejected goods were re tained after lapse of reasonable time without intimating the rejection.
At the trial the respondent found that the claim for the sum of money as price of goods could not be sustained be cause of lack of enforceability of contract.
The respondent therefore sought to make the appellant liable to compensate the respondent by reason of provisions contained in section 70 of the Indian Contract Act.
Counsel for the appellant raised the plea at the trial that there.
was ' no foundation in the plaint for any case under section 70 of the Indian Contract Act.
The three ingredients to support the cause of action under section 70 of the Indian Contract Act are these: First, the goods are to be delivered lawfully or anything has to be done for another person lawfully.
Second, the thing done or the goods delivered is so done or delivered "not intending to do so gratuitously".
Third, the person to whom 'the goods are delivered "enjoys the benefit thereof".
It is only when the three ingredients are pleaded in the plaint that a cause.
of action is constituted under section 70 of the Indian Contract Act.
981 If any plaintiff pleads the three ingredients and proves the three features the defendant is then bound to make compensa tion in respect of or to restore the things so done or delivered.
The allegation in the plaint in the present case was as follows.
"In any event the plaintiff is entitled to the said sum of Rs. 26,248 7 0, and Rs. 50,442 11 0 with interest for the said Mac Intyre Sleeves, Copper Strips and Stay Shackles for the same were not supplied gratuitiously".
The plaint lacked the two other essential features to constitute a cause of action under section 70 of the Indian Contract Act.
These were that the respondent delivered the goods lawfully to the appellant and that the appellant enjoyed the benefits thereof.
The Court should not have allowed the respondent to go to trial in the present case with a Claim under section 70 of the Indian Contract Act in the absence of proper pleadings.
In view of the fact that parties went to trial and issues were raised on claims under section 70 of the Indian Con tract Act and the litigation went through the course of trial and appeal we do not desire to non suit the respondent at this stage.
The trial court held that the goods were not properly rejected.
But the trial court also held that the wordings of the rejection memos negatived any case of enjoyment of benefit.
The trial court said that the documents show that the goods were not utilised or used by the appellant and the appellant disclaimed interest in the goods.
The trial court also found that the respondent accepted the goods.
The findings are inconsistent.
The trial court held that the appellant offered to restore the goods to the respondent but the respondent refused to take them back.
The trial court dismissed the suit.
When the trial court found that the goods were accepted there could be no question of restora tion.
The trial court should have decreed the suit.
The Division Bench on appeal held that the goods were accepted by the appellant.
The Division Bench held that title to the goods passed and if title passed then the whole context of section 70 of the Indian Contract Act would be irrelevant.
The judgment of the Division Bench is con fused.
The Division Bench treated the case of the respond ent to be "a claim for damages for wrongful rejection".
Under the Sale of Goods Act when there is any enforceable contract the seller may claim for price of goods sold or damages for non acceptance.
The present case could not be supported on the footing of any enforceable contract giving rise to damages for non acceptance or wrongful rejection.
The reasoning of the Division 'Bench in allowing the claim is erroneous.
The evidence in the present case as found by the trial court is that the signatures of Rodericks and Francis on the challans indicate acceptance of the goods, and, ,therefore, the rejection is wrongful.
The finding of the trial court that there was acceptance of the goods obviously repels any plea of rejection of the goods.
The error of the trial court was that it found the goods were accepted and yet dismissed the suit on the rea soning that the appellant 982 offered to restore the goods.
The error of the Division Bench was in decreasing the suit not _on the principles of section 70 of the Indian Contract Act but 'on damages for non acceptance of goods on the footing of unenforceable contract for sale of goods.
In view of the fact that there was acceptance of the goods no question of restoration arises.
Counsel for respondent argued that restoration under section 70 of the Indian Contract Act meant that the defendant would have to restore the goods to the plaintiff by delivering the same to the plaintiff.
This contention of the plaintiff respondent is utterly unsound.
As long as there is intimation by the defendant to the plaintiff that the plaintiff can take back the goods the defendant evinces intention of restoration.
In the present case no question of restoration arises be cause of the acceptance of the goods.
The respondent in view of the trial court and the Divi sion Bench of the High Court allowing the respondent to go on with the claim under section 70 of the Indian Contract Act became entitled to compensation for the goods accepted.
The High Court found that the respondent had received a sum of Rs. 7,602 0 0 out of the claim of the claim under sec tion 70 of the Indian contract Act and the respondent has been given a decree for Rs. 69,069 1 0 we order that the parties will pay and bear their own costs in this appeal.
We specify the period of two months for payment of the aforesaid sums of money Rs. 76,671 1 0.
The High Court gave a decree for the sum of Rs. 69,069 1 0.
For the foregoing reasons there will be a decree for Rs. 69.0169 1 0.
The High Court awarded half costs of the trial and full costs of the appeal.
We do not wish to disturb those two orders for costs.
In view of the fact that there was no proper case pleaded to support Appeal dismissed. | In a suit for the recovery of price of "Mac Intyre Sleeves, "supplied to the appellant, but alleged to have been wrongfully ' rejected after a considerable time, the respondent/plaintiff sought to make the appellant/defendant liable to compensate by reasons of provisions containing in Section 70 of the Indian Con tract Act.
The trial Court found that the goods were accepted and it dismissed the suit on the reasoning that the appellant offered to restore the goods.
But .on appeal, the Division Bench decreed the suit, not on the principles of Section 70 of the Contract Act, but treating the case of the respondent to be a claim for dam ages for wrongful rejection and for non acceptance of goods on the footing of uninforceable contract for sale of goods".
Dismissing the appeal by certificate the.
Court, HELD: (1) The three.
ingredients to support the cause of action undersection 70 of the Indian Contract Act are: First, the goods are to be delivered lawfully or anything has to be done for another person lawfully.
Second, the thing done.
or the ' goods delivered is so, done or delivered "not intending to do so gratuiously".
Third, the person to whom the goods are delivered "enjoys the benefit thereof".
It is only when the three ingredients are.
pleaded in the plaint that a cause of action is constituted under section 70 of the India Contract Act.
If any plaintiff pleads three ingredients and proves the three features the defendant is then bound to make compensation in respect .of or to re store the things so done or delivered.
[980 G H, 981 A] (2) Courts should not allow the parties to go to trial in the absence of proper pleadings.
In the instant case, the Court should not have allowed the respondent to go to trial with a claim under section 70 of the Indian Contract Act.
[981 B C] (3) When parties went to trial and issues were raised on claims and the litigation also went through the. course of trial and appeal, non suiting for want of proper plead ings at the appellate stage, by the Supreme Court is not desirable.
[981 C] (4) Restoration under section 70 of the Indian Contract Act does not mean restoration of "goods by actual delivery".
Intimation to take back the goods rejected evinces intention of restoration.
[982 B C] |
ivil Appeal No. 525 of 1989.
From the Judgment and Order dated 11.12.1985 of the Calcutta High Court in Civil Rule No. 2716 of 1981 Shankar Ghosh and Rathin Das for the Appellant.
D.P. Mukherjee, and G.S. Chaterjee for the Respondent.
The Judgment of the Court was delivered by 399 RAY, J.
Special leave granted.
Heard learned counsel for both the parties.
This appeal on special leave arises out of an applica tion for preemption filed under the provisions of Section 8 of West Bengal Land Reforms Act, 1955 (West Bengal Act X of 1956) by the respondent, Md. Nasiruddin to pre empt the land sold to the appellant, Abdulla Kabir by a Kobala dated May 16, 1974 by a co sharer having 1/4th interest in plot No. 115/852 appertaining to Khatian No. 1944 on the ground of his being co sharer in the said holding.
The land in ques tion i.e. plot No. 115/852 measuring 0.3 cents was owned by one Sarat Chandra Dutta, son of Amulaya Ratan.
Sarat Chandra Dutta was an agriculturist and he used to keep his agricul tural implements in the said property.
He also possessed along with the said land other agricultural lands as agri culturist and in occupancy raiyati interest.
During R.S. operation also the said property was recorded in his name as 'Raiyat Sthitiban ' and the classification of land was re corded as 'Bari ' i.e. homestead of the said agriculturist.
On September 20, 1967, Sarat Chandra Dutta, owner of the said plot of land, sold the same by a registered Kobala to four persons namely Sisir Kumar Mondal, Naba Kumar Mondal, Madhusudan Mondal and Purmlakshmi Mondal.
Thereafter on October 28, 1968 Sisir Kumar Mondal and Naba Kumar Mondal sold their shares to Nurunessa Khatun, predecessor of the respondent petitioner.
On the basis of this Kobala Nurunessa Khatun became co sharer in respect of the said land.
After the death of Nurunessa Khatun her heirs including the eldest son, the respondent petitioner, inherited the right of occupancy as co sharer.
On May 16, 1974, Purnalakshmi sold her 1/4th interest to the appellant, Abdulla Kabir by Kobala (Exh. l(b).
It is the case of the respondent petitioner that as no notice of the said sale was served on his mother, Nurunessa Khatun, he could not know of the said sale earli er.
However, on taking certified copy of the said sale on May 3, 1977, the respondent petitioner filed an application for pre emption under Section 8 of the West Bengal Land Reforms Act after depositing the requisite sum as required to be deposited under the said Act.
This application was registered as Misc.
Case No. 36 of 1977 in the Court of Munsif, 2nd Court, Bolpur.
The appellant contested the case by filing a written objection contending inter alia that the respondent petitioner was neither co sharer of the holding nor an adjoining land owner.
The disputed property is non agricultural tenancy.
The petition for preemption is barred by limitation as the respondent petitioner was all along aware of the said sale and the story of his coming to know of such sale after taking copy of sale deed on May 3, 1977 was absolutely false.
400 The distuted deed does not contain the recital that the respondentpetitioner was an adjoining land owner.
The peti tion for pre emption in such circumstances was liable to be dismissed.
Three issues were framed by the Trial Court i.e.: (1) Whether the case land is non agricultural and whether section 8 of the West Bengal Land Reforms Act will be ap plicable in this case; (2) Whether the petitioner was a co sharer in respect of case holding from before purchase of the disputed land; (3) Whether the case is barred by limitation? The Trial Court held that the petitioner respondent was a cosharer and was entitled to pre empt; the application for pre emption was not barred by limitation as it was filed within a period of three years of knowledge of the same as no notice of sale was served on the petitioner respondent.
The Trial Court further held that the subject matter of the sale was recorded as "Bastu" in the Kobala dated May 16, 1974 (Exh. l(b) and "Bari" in the R.S. Record of Right (Exh.
3(h) and though Sarat Chandra Dutta, the owner of the land was an agriculturist yet this homestead land being not included in the raiyat holding could not be treated as agricultural land according to the provisions of West Bengal Land Reforms Act because of the nonagricultural use as evident from the R.S. Record of rights.
The land is non agricultural land and as such the application for pre emp tion under Section 8 of the said Act was not maintainable.
The Misc.
Case was, therefore, dismissed.
Against the said judgment and order, Misc.
Appeal No. 84 of 1980 was filed by the respondent in the 2nd Court of the Addl.
District Judge, Birbhum.
The appellate court reversed the findings of the trial court and held that the suit property was recorded as of raiyati interest in the R.S. Record of rights and the suit land being the homestead of Sarat Chandra Dutta who was an agriculturist, it was agri cultural land according to the provisions of the said Act and the application for pre emption under Section 8 of the West Bengal Land Reforms Act was maintainable.
The appellate court further upheld the findings of the trial court that the application was not barred by limitation and the appel lant (respondent herein) was a co sharer of the said land.
The Misc.
Appeal was, therefore, allowed and the judgment of the trial court was set aside.
401 Against this judgment and order of the appellate court, the appellant, Abdulla Kabir filed a petition in revision being C.R. No. 2716 of 1981 in the High Court at Calcutta.
During the pendency of the said Revisional case the respond ent pre emptor made an application for amendment of the relief claimed in the application for pre emption by adding an alternative relief for pre emption under Section 24 of the West Bengal Non Agricultural Tenancy Act.
After hearing both the parties, the amendment was allowed subject to the payment of costs quantified at Rs. 1,000.
Thereafter, on December 11, 1985 the Civil Rule was discharged by holding that: " . .
I am not satisfied that the finding recorded by the appellate court based as it is on an assessment of evidence, suffers from any jurisdictional defect or error, so as to entitle this Court to interfere in revision.
This Court cannot enter into evidence and come to its conclusion.
" It has also been held that in view of the amendment of the petition even if it is held that the land was non agri cultural land, preemption could be granted under Section 24 of the Non Agricultural Tenancy Act.
Against this judgment and order, the instant appeal on special leave has been preferred in this Court.
Dr. Ghosh, learned counsel appearing on behalf of the appellant has contended in the first place that the land in question has been recorded as "Bari, teen khanna ghar" in the R.S. Record of rights i.e. it is not agricultural land.
The land is used for non agricultural purposes though the right of the owner of the land has been recorded as agricul turist "raiyat sthitiban.
" He further contended that as the 'bari ' or the homestead is not situated on the agricultural land in the holding held by a Raiyat, it cannot be treated as agricultural land.
It is non agricultural land used for non agricultural purposes and the provisions of Section 8 of the Land Reforms Act are not applicable to such a holding as has been held by the trial court.
The finding of the High Court to the effect that there was no error of jurisdiction is wholly unwarranted and as such the appeal should be allowed.
Dr. Ghosh next contended referring to the decision in Eyachhin Ali Naskar and Ant.
vs Golap Gazi, that the nature of the holding whether it is agricultural or non agricultural has to be determined with reference to the user of the land 402 comprised in the holding.
The land in question is used for nonagricultural purposes and it does not form a part of his raiyati holding comprising of Agricultural land.
Therefore, it cannot be treated as agricultural land under the West Bengal Land Reforms Act.
The land being recorded as "Bastu" in the R.S. Record of rights, it is to be treated as non agricultural land.
Dr. Ghosh next submitted that the High Court did not give a definite finding whether Section 8 of the Land Re forms Act or Section 24 of the West Bengal Non Agricultural Tenancy Act was applicable in this case.
Mr. Ghosh, there fore, submitted that there has been an error of jurisdiction and the appeal should be allowed.
Dr. Ghosh has lastly contended that Section 3A was inserted by West Bengal Land Reforms (Amendment) Act, 1981 and assent of the President to the same was published in the Gazette on 24th March, 1986.
Referring to this provision he submitted that the matter should be sent back and the appel lant should be permitted to take such defences in view of the amended provisions as are available to him and the matter should be re heard by the trial court.
He drew the notice of the court to the decisions in Dwarka Nath Prasad Atal vs Ram Rati Devi, and Luigi Ambrosini Ltd. vs Bakare Tinko and Another, A.I.R. 1929 PC 306.
We are unable to accept the contentions made on behalf of the appellant for the reasons stated hereinbelow.
The land in question which is 1/4th share of plot No. 115/852 has been recorded in the R.S. Record of rights as "Raiyat Sthitiban" i.e. the original owner of the said land Sarat Chandra Dutta was a raiyat and the classification of the land has been recorded as "bari".
The entry in the record of right is presumed to be correct and this has not been challenged by any body.
It, therefore, appears that the land in question is the homestead land of Sarat Chandra Dutta who is on agriculturist being recorded as raiyat.
Section 2(6) of the West Bengal Land Reforms Act, 1955 defines holding as: "holding" means the land or lands held by a raiyat and treated as a unit for assessment of revenue.
" Section 2(7) defines land as under: 403 "land" means agricultural land other than land comprised in a tea garden which is retained under sub section (3) of section 6 of the West Bengal Estates Acquisition Act, 1953, and includes homesteads but does not include tank.
Explanation: "Homestead" shall have the same meaning as in the West Bengal Estates Acquisi tion Act, 1953" So according to the above provisions the homestead of an agriculturist is agricultural land.
It has been found by the courts below that the land in question is a homestead land recorded as "Bari" in the R.S. record of rights.
The owner of the said land Sarat Chandra Dutta is also recorded as a raiyat i.e. "raiyat sthitiban".
In other words, it is the homestead of a raiyat i.e. an agriculturist.
The trial court held that this R.S. record of right is not erroneous as the same has not been challenged by any body in the petition.
Rather the respondentpetitioner supported the contention that "Sarat Chandra Dutta, the owner of plot No. 115/852 was mainly an agriculturist and his main source of living was agriculture.
" The learned Munsif however, held that since the said homestead is not included in the holding of the raiyat i.e. the homestead does not stand on the agricultural land included in his holding, the homestead land cannot be treated as agricultural land relying on the decision in Eyachhin Ali Naskar and Anr.
vs Golap Gazi (supra).
This finding of the trial court has been negatived by the lower appellate court as well as by the High Court and it has been held that the said homestead land is agricultural land.
This finding, in our view, is quite valid and legal.
It has been observed by the Calcutta High Court in Eyachhin Ali Naskar and Anr.
vs Golap Gazi that: " . .
It is thus obvious that the nature of the holding has to be determined with reference to the user of its land or lands under the said Act.
Section 2(6) of the West Bengal Land Reforms Act defines "holding" as the land or lands held by a raiyat and treated as a unit for assessment of revenue.
Under clause (7) of Section 2 of the same Act "land" in the Act means agricultural land other than land comprised in a tea garden which is re tained under subsection (3) of Section 6 of the West Bengal Estate Acquisition Act, 1953 and includes homesteads.
" It has been further observed that: 404 " . .
In a case where as here the holding is recorded as bastu and the non agricultural user is also evident, as appearing from the revisional record of rights wherein it has been stated that there are two huts standing thereon, the land cannot be treated as land to which the provisions of the Land Reforms Act will be applicable, as the Act applies to agricultural lands only.
" This observation of the High Court has been made wrongly in as much as the High Court did not take notice of the amended provision of the West Bengal Non Agricultural Tenan cy Act, 1949 amended by Act 8 of 1974.
Section 2(4)(a) defines non agricultural land as land used for purposes not connected with agriculture or horticulture but does not include a homestead to which the provisions of the West Bengal Land Reforms Act, 1955 apply.
Taking notice of this provision it is crystal clear that homestead land does not fall within the province of non agricultural land both under the Non Agricultural Tenancy Act as well as under the West Bengal Land Reforms Act, 1955.
In that view of the matter the whole basis of the observation of the High Court to the effect "that where the holding is recorded as bastu and the non agricultural user is also evident, as appearing from the revisional record of rights wherein it has been stated that there are two huts standing thereon, the land cannot be treated as land to which the provisions of the Land Reforms Act will be applicable as the Act applies to agricultural lands only" is wrong.
The judgment is per incuriam.
As has been stated hereinbefore that the definition of land as given in the West Bengal Land Reforms Act, 1955 refers to agricultural land and includes homestead.
Explanation to sub section 7 of section 2 further provides that "Homestead shall have the same meaning as in the West Bengal Estates Acquisition Act, 1953.
" Section 2(g) of the West Bengal Estates Acquisition Act, 1953 defines; "Homestead" means a dwelling house together with any court, yard, compound, garden, out house, place of worship, family graveyard, library, office, guest house, tanks, wells, privies, latrines, drains and boundary walls annexed to or appertaining to such dwelling house ;" Therefore, on a conspectus of the aforesaid provisions, it obviously follows that homestead of an agriculturist even though the same is included in the holding of the raiyat but not on the agricultural land still it is to be treated as agricultural land being the homestead of the agriculturist under the provisions of the West Bengal Land Reforms 405 Act read with West Bengal Estates Acquisition Act and West Bengal Non Agricultural Tenancy Act.
Therefore, the applica tion under Section 8 of the West Bengal Land Reforms Act filed by the respondentpetitioner as a co sharer of the said holding for pre emption of the land purchased by a stranger i.e. the appellant is maintainable under law as has been rightly held by the lower appellate court as well as High Court.
The application for pre emption under Section 8 of West Bengal Land Reforms Act was properly allowed by lower appellate court and the said order was maintained by High Court.
There is no infirmity in this finding and we uphold the same.
As regards the second contention it appears that by amendment an alternative relief under Section 24 of the West Bengal NonAgricultural Tenancy Act has been inserted in the application for preemption.
It also appears that the said application for amendment was allowed after hearing both the parties and that no objection to the said application for amendment was taken at the time of hearing of the applica tion for amendment nor at the final hearing of the Revision Case any objection was raised on this score.
Moreover, we have already held that Section 8 of West Bengal Land Reforms Act is applicable to this case.
The appellant therefore, cannot be permitted to raise this question anew in this Court.
The last submission advanced on behalf of the appellant is, also, in our considered opinion, of no substance.
Sec tion 3A which has been introduced by West Bengal Land Re forms (Amendment) Act, 1981 is quoted hereinbelow: "3 A. Rights of all non agricultural tenants and undertenants in non agricultural land to vest in the State (1) The rights of all non agricultural tenants and undertenants under the West Bengal Non Agricultural Tenancy Act, 1949 (West Bengal Act XX of 1949), shall vest in the State free from all encumbrances and the provisions of sections 4, 5 and 5A of Chapter II of the West Bengal Estates Acquisi tion Act, 1953 (West Bengal Act I of 1954), shall, with such modification as may be neces sary, apply mutates mutant to non agricultural tenants and under tenants within the meaning of the West Bengal Non Agricultural Tenancy Act, 1949 as if such non agricultural tenants and under tenants were intermediaries and the land held by them were estates and a person holding under a nonagricultural tenant or under tenant were a raiyat.
406 (2) On the vesting of the estates and rights of intermediaries in any non agricultural land under sub section (1), the provisions of Chapter IIS of this Act shall apply.
(3) Every intermediary whose estates or inter ests have vested in the State under sub sec tion (1), shall be entitled to receive an amount to be determined in accordance with the provisions of section 14V of this Act.
" The said section refers to the vesting of the interest of nonagricultural tenants by treating them as intermedi aries and a right of retention of such non agricultural lands within the ceiling limit has been provided therein.
This provision has nothing to do with the questions involved in this appeal.
There is nothing to show that the nonagri cultural land in plot No. 115/852 has vested in the State and the same has not been retained by the owner nor there is any thing to show that the original owner, Sarat Chandra Dutta had in his possession non agricultural land exceeding the ceiling limits even assuming for arguments sake that the land in question is non agricultural land.
But we have held hereinbefore that the land being homestead of an agricultur ist is agricultural land.
Therefore, the amended provision of Section 3 A of the said Act does not require considera tion in the instant appeal in the background of the facts and circumstances of the case and the issues involved here in.
The submission made on behalf of the appellant that the matter should be sent back to the trial court for giving the defendant an opportunity to raise issues on the amended provision for hearing and deciding the same by the court, is not tenable.
In the circumstances it is needless to consider the decision in Dwarka Nath Prasad Atal vs Ram Rati Devi (supra).
In that case an application was filed under Section 24 of West Bengal NonAgricultural Tenancy Act asking for pre emption in respect of the property mentioned in Schedule A of the application.
The appellant resisted the respond ent 's claim for pre emption on various grounds including the ground that the property involved in the proceedings being agricultural land civil court in which the respondent had filed her application for pre emption had no jurisdiction to entertain the application for pre emption by reason of the provisions of the West Bengal Land Reforms Act.
The learned Subordinate Judge held that the property involved in the proceeding was agricultural land and so Section 24 of West Bengal Non Agricultural Tenancy Act was not attracted and civil court had no jurisdiction to entertain the applica tion.
The application was dismissed.
The order was set aside on appeal holding that the land was non agricultural land and the Subordinate 407 Judge had jurisdiction to entertain the application.
The judgment having been confirmed in appeal by the High Court of Calcutta, the petitioner filed an appeal on special leave before this Court.
It had been held that since the judgment was rendered only on the preliminary question whether the court had jurisdiction to entertain the application and the other issues raised therein were not decided by the trial court, the lower appellate court over ruled the said finding but instead of remanding the matter to the trial court for decision on the other issues, disposed of the matter on merits whereas on the other issues the appellant might desire to lead evidence but that opportunity was denied to him.
It was in the interest of justice that the appellant should be afforded an opportunity of being heard on the other issues.
In that view of the matter the case was re manded for disposal.
The decision in Luigi Ambrosini, Ltd. vs Bakare Tinko and Another (supra) does not apply to this case as the facts of that case are different from the facts of the instant case.
As stated hereinbefore that this ruling has no applica tion to the facts of this case inasmuch as the application was not decided on a preliminary issue but the same has been decided on all the issues raised.
Therefore, there is no question for remanding the matter for decision on the other issues.
We therefore, find no substance in this contention advanced by the learned counsel for the appellant.
For the reasons aforesaid we do not find any infirmity nor any illegality in the findings arrived at by the High Court.
We, therefore, dismiss this appeal and uphold the judgment and order of the High Court.
In the facts and circumstances of the case, there will be no order as to costs.
N.V.K. Appeal dis missed. | An application for pre emption was filed under the provisions of section 8 of the West Bengal Land Reforms Act, 1955 by the respondent to pre empt a plot of land sold to the appellant by a Kobala dated May 16, 1974 by a co sharer having 1/4 interest in the plot.
The land in question was owned by an agriculturist and he used to keep his agricultural implements in the said property.
He also possessed other agricultural lands as agriculturists and in occupancy raiyati interest.
The suit property was recorded in his name as 'Raiyat Sthitiban ' and the classification of land was recorded as 'Bari ' i.e. homestead of the said agriculturist.
On September 20, 1967 the land was sold by a registered Kobala to 4 persons, and on October 28, 1968 one of the persons sold his share to the predecessor of the respondent.
On the basis of this Kobala it was alleged that he was a co sharer.
The respondent filed an application for pre emption under section 8 of the West Bengal Land Reforms Act, 1955.
The appellant contested the same contending in the written statement that the respondent was neither co sharer of the holding nor an adjoining owner and that the disputed proper ty is non agriculture tenancy, that the petition was barred by limitation as the respondent was all along aware of the sale of the property and that the story of his coming to know only after taking copy of the sale deed was absolutely false.
397 The Trial Court held that the respondent was a co sharer and was entitled to pre empt, the application of pre emption was not barred by limitation as it was filed within a period of 3 years of the knowledge of the same as no notice of the sale was served on the respondent.
The Trial Court further held that the land was non agricultural land and as such the application for pre emption under section 8 was not main tainable.
The miscellaneous case was accordingly dismissed.
The respondent filed an appeal, and the Additional District Judge reversed the findings of the Trial Court, and held that the suit property was recorded as raiyati interest in the R.S. Record of Rights and being the homestead land of an agriculturist, the application for pre emption under section 8 was maintainable.
The appeal was allowed and the judgment of the trial court was set aside.
The appellant filed a revision petition in the High Court.
During its pendency he made an application for amend ment claiming alternative relief for pre emption under section 24 of the West Bengal NonAgricultural Tenancy Act, 1949.
The High Court held that even if the land was non agricultural land, pre emption could be granted under sec tion 24 of the W.B. Non Agricultural Tenancy Act, but dis missed the petition on the ground that there was no juris dictional defect or error entitling the Court to interfere in revision.
In the appeal to this Court by special leave, it was contended on behalf of the appellant that the land has been recorded as in the R.S. Record of rights as non agricultural land, and that the Trial Court had rightly held that Section 8 of the Land Reforms Act was not applicable to such a holding.
The decision of the High Court to the effect that the finding recorded by the Appellate Court to the contrary suffered from no jurisdictional error was therefore wholly unwarranted.
Relying on Eyachhin Ali Naskar vs Golap Gazi, it was contended that nature of holding had to determined with reference to the user of land comprised in the holding.
Dismissing the appeal, HELD: 1.
The application for pre emption under section 8 of West Bengal Land Reforms Act was properly allowed by the lower appellate court and the said order was maintained by High Court.
There is no infirmity in this finding, and the same is upheld.
[400G H] 398 2.
The definition of land as given in section 2(7) of the West Bengal Land Reforms Act, 1955 means agricultural land, and includes homesteads.
But, homestead land does not fail within the province of non agricultural land both under the Non Agricultural Tenancy Act as well as under the West Bengal Land Reforms Act, 1955.
Eyachhin Ali Naskar and Anr.
vs Golap Gazi, per incuriam & over ruled.
[404E F] 3.
On a conspectus of the provisions contained in sec tion 2(8) W.B. Estates Acquisition Act 1953 & section 2(4)(a) W.B. NonAgricultural Tenancy Act, 1974 it follows that 'Homestead ' of an agriculturist even though the same is included in the holding of the raiyat but not on the agri cultural land, still it is to be treated as agricultural land being the homestead of the agriculturist under the provisions of the West Bengal Land Reforms Act read with West Bengal Estates Acquisition Act and West Bengal Non Agricultural Tenancy Act.
[404G H; 405A] 4.
There is nothing to show that the non agricultural land in the instant case has vested and the same has not been retained by the owner, nor is there anything to show that the original owner had in his possession non agricul tural land exceeding the ceiling limits, even assuming that the land is non agricultural land.
But the land being home stead of an agriculturist is agricultural land.
Therefore, the amended provision of section 3A of the West Bengal Land Reforms Act does not require consideration in this matter.
[406C E] Dwarka Nath Prasad Atal vs Ram Rati Devi, and Luigi Ambrosini, Ltd. vs Bakara Tinko and Another, A.I.R. 1929(PC) 306, distinguished. |
ivil Appeal No. 2111 of 1969.
(Appeal by Special Leave from the Judgment and Order dated 26 9 1968 of the Madhya Pradesh High COurt in Civil Revision No. 711/66).
V.S. Desai, P. C. Bhartari and D. N. Misra for the Appel lants.
B.N. Lokur and Rameshwar Nath for the Respondents.
1018 The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by special leave is directed against the judgment of the Madhya Pradesh High Court dated September 26, 1968 setting aside the appellate order or the Second Additional District Judge, Indore, dated Octo ber 29, 1966 and remitting the matter to the Municipal Commissioner for a fresh determination of the annual value of the building.
The building in question is known as "Viram Lodge", on Ravindra Nath Tagore Marg, Indore.
It belongs to the respondent and has been used by them as a hotel.
The annual gross rental value of the building was determined at Rs. 6600/in 1956.
It was revised by the Assessment Officer on June 3, 1965 and was raised to Rs. 43,405.20.
The respondents filed objections to the valuation, but the Municipal Commissioner fixed the annual value at Rs. 43,405.20.
He held that, in view of the "non obstante" clause in section 138(b) of the Madhya Pradesh Municipal Corporation Act, 1956, hereinafter referred to as the Act, there was no justification for the .argument that the rental value of the premises could not be fixed at a rate higher than the standard rent under section 7 of the Madhya Pradesh Accommodation Control Act, 1961.
An appeal was taken to the Second Additional District Judge, but without suc cess.
The respondents then filed an application for revi sion, which was allowed by the impugned judgment of the High Court dated September 26, 1968.
This is how the present appeal has arisen at the instance of the Municipal Corporation and its officers.
Section 138 of the Act prescribes the mode for determin ing the annual value of any land or building for purposes of assessing it to property tax.
Clause (a) of the section deals with the annual value of land, and it is not the case of the parties that it has any bearing on the controversy.
Clause (b) prescribes the mode of determining the annual value of a building and reads as follows, "(b) the annual value of any building shall notwithstanding anything contained in any other law for the time being in force be deemed to be the gross annual rent at which such building, together with its appurtenances and any furniture that may be let for use or enjoyment therewith might reasonably at the time of assessment be expected to be let from year to year, less an allowance of ten per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent.
" There are two explanations to the clause.
It is nobody 's case that they have any bearing on the short point in con troversy before us.
Clause (c) of the section prescribes that if the gross annual rent of a building cannot be deter mined under clause (b), the annual value of the building shall be determined according to that clause.
If is 1019 not in controversy before us that the Viram Lodge was never let on rent, and is being run as a hotel by its owners, the present respondents, so that the .question of fixing its standard rent under section 7 of the Madhya Pradesh Accommodation Control Act, 1961, has not arisen.
It has argued that, even so, the reasonable rent contemplated by section 138(b) of the Act cannot exceed the standard rent to be fixed under the aforesaid section 7.
It has thus been 'urged that it was incumbent for the Municipal Commissioner to determine the annual value of the building on the same basis on which its standard rent was required to be fixed under section 7.
Reliance in this connection has been placed on the deci sions of this Court in The Car oration of Calcutta vs Smt.
Padma Debi and others,(1) Corporation of Calcutta vs Life Insurance Corporation of India(2) Guntur Municipal Council vs Guntur Town Rate Payers 'Assiciation(3) New Delhi Munici pal Committee vs M.N. Soi and another.(4) As has been stated, clause (b) of section 138 of the Act provides that the annual value of any.
building shall "notwithstanding anything contained in any other law for the time being in force" be deemed to be the gross annual rent for which the building might "reasonably at the time of the assessment be expected to be let from year to year.
" While therefore the requirement of the law is that the reasonable letting value should determine the annual value of the building, it has also been specifically provided that this would be so "notwithstanding anything contained in any other law for the time being in force".
It appears to us that it .would be a proper interpretation of the provisions of clause (b) of section 138 of the Act to hold that in a case where the standard rent of a building has been fixed under section 7 of the Madhya Pradesh Accommodation Control Act, and there is nothing to show that there has been fraud or collusion, that would be its reasonable letting value, hit, where this is not so, and the building has never been let out and is being used in a manner where the question of fixing its standard rent does not arise, it would be permis sible to fix its reasonable rent without regard to the provisions of the Madhya Pradesh Accommodation Control Act, 1961.
This view will, in our opinion, give proper effect to the non obstante clause in clause (b with due regard to its Other provision that the letting value should be "rea sonable".
We have gone through the decision in Padma Debi 's case (supra).
There the premises were on rent and section 127(a) of Calcutta Municipal Corporation Act, 1923, did not con tain a non obstante clause.
That the section provided, inter alia, was that the annual value shall be deemed to be the gross annual rent at which the land or building might at the time of assessment "reasonably be expected to let from year to year." This Court examined the significance of the word "reasonable" and held that it would be incongruous to . (1) ; (2) [1971] 1 .C.R. 248.
(3) ; (4) ; 15 1338SC1/76 1020 consider fixation of rent beyond the limits fixed by penal legislation as reasonable.
That view was taken with refer ence to the provisions of the Rent Control Act which pena lised the taking of a higher rent, and also ' made it irrecoverable.
While, therefore, we are in agreement with the view taken in Padma Debi 's case (supra) that it would not be reasonable to consider fixation of rent beyond the limits fixed by the Rent Control Act as reasonable, it would not be a proper interpretation of section 138(b) of 'the Act to ignore the significance of its non obstante clause altogether.
That is why we have taken the view that it would be a fair and reasonable interpretation of section 138(b) to hold that as no standard rent has been fixed so far in respect of the Viram Lodge, the Municipal Commis sioner was justified in adopting another suitable criterion for determining the annual value of the building.
There is in fact nothing in the Act to.
make it obligatory for the Commissioner to follow the provisions of the Madhya Pradesh Accommodation Control Act in spite of the non obstante clause and to limit the annual value to any standard rent that the building might fetch under that Act.
We have also gone through Corporation of Calcutta vs Life Insurance,Corporation of India (supra).
That was also a case where the premises had been let out on rent.
The standard rent had also been fixed, and that was why Padma Debi 's case (supra) was held to be applicable.
So also, Guntur Municipal Council vs Guntur Town Rate Payers ' Association (supra) was a case where the premises.were on rent and there also Padma Debi 's case was held to be applicable even though the standard rent had not been fixed, because it was held that there was nothing to prevent the authorities concerned from ascertaining the fair rent by keeping in view the principles which had been laid down for its determination under the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960.
Section 82(2) of the Madras District Municipalities Act, which governed that case, did not contain a non obstante clause.
Much the same was the position in M.N. Soi 's case which related to a house in New Delhi, of which rate had to be assessed under the provisions of the Punjab Municipal Act, 1911.
The High Court did not properly appreciate the differ ence between the wordings of section 127 of the Calcutta Municipal Corporation Act, 1923, and section 138(c) of the Act, and committed an error in thinking that this was virtu ally similar to Padma Debi 's case.
We find that the High Court has taken the view that a full hearing was not given to the respondents at the time of fixing the annual value of the Viram Lodge and that the valuation was based on "no principle".
Here again, the High Court was clearly in error because we find from the judgment of the Second Additional District Judge, dated October 29, 1966, that the counsel for the respondents 1021 was given "ample opportunity" by the Municipal Commissioner to represent his case before him.
He has also stated that the Assessment Officer paid due regard to all the relevant circumstances which had a bearing on the determination of the reasonable letting value of the building.
Counsel for the respondents has in fact not found it worth his while to argue either that such a hearing was not given, or that all the relevant factors were not taken into consideration in determining the annual letting value of the premises.
In the result, the appeal is allowed and the impugned judgment of the High Court dated September 26, 1968, is Set aside.
The appellants will however pay the costs of the respondents as stipulated in the order of this Court grant ing the special leave.
P.H.P. Appeal al lowed. | The respondents are the owner of a building known as Viram Lodge.
They run a hotel in the said building.
The annual gross rental value of the.
building was determined at Rs. 6,600/ in 1956.
It was revised to Rs. 43,405/ by the Assessment Officer in 1965.
Section 138(b) of the Madhya Pradesh Municipal Corporation Act, 1956, provides that notwithstanding anything contained in any ,other law for the time being in force, the annual value of any building shall be deemed to be the gross annual rent at which such building might be reasonably at the time of assessment be expected to let from year to year at the time of the less an allowance of 10 per cent for repairs etc.
The respondent challenged the valuation on the ground that the rental value of the premises could not be fixed at a rate higher than the stand ard rent under section 7 of the Madhya Pradesh Accommoda tion Control Act, 1961.
The Municipal Commissioner negatived the respondents ' contention.
An appeal filed by the respondents to the Additional District Judge also failed.
The High Court however allowed the Revision filed by the respondents.
Allowing the appeal by Special Leave held: 1.
In the.
present case the building in ques tion was never let on rent and is being used by the owners as a hotel.
[1019 A] 2.
On a proper construction of section 138(b) where the standard rent of a building has been fixed under section 7 of the Accommodation Control Act, and there is nothing to show that there has been fraud or collusion that would be its reasonable letting value but where the building has never been let out the question of fixation standard rent does not arise.
In that case it would be permissible to fix its reasonable rent without regard to the provi sions of Madhya Pradesh Accommodation Control Act.
This view gives proper effect to the nonobstante clause in section 138(b).
[1019 D F] The Corporation of Calcutta vs Smt.
Padma Debi and others ; , Corporation of Calcutta vs Life Insurance Corporation of India , Guntur Municipal Council vs Guntur Town Rate Payers ' Association ; and New Delhi Municipal Committee vs M.N. Soi and another ; , distinguished. |
Appeal No. 1528 of 1971.
(Appeal by Special Leave from the Judgment and Order dated 23 11 1970 of the Madras High Court in Tax case No. 398/7C (Revision No. 260/70) S.T. Desai and T.A. Ramachandran, for the ,Appellant.
V.P. Raman, .Addl.
Solicitor General for India.
A.V. Rangan and Miss A. Subhashini, for the Respondent.
The, Judgment of the Court was delivered by KHANNA, J.
This appeal by special leave is against the judgment of the Madras High Court Whereby.
the High Court dismissed the petition flied by the appellant under section 38 of the Tamil Nadu General Sales Tax Act, 1959 (hereinaf ter referred to as the State Act).
The matter relates to the assessment year 1960 61.
The appellant firm is a dealer in cotton yarn.
The appellant bought yarn from local dealers and manufacturers and, in turn, sold that yarn by way of inter State sale.
Sales tax under the State Act on the yarn purchased by the appellant had been paid by those manufacturers and dealers.
The inter State sales of yarn made by the appellant were as sessed to tax under the (hereinafter referred to as the Central Act) in the hands of the appel lant.
The appellant claimed refund of the tax amounting to Rs. 16,769.96 paid under the State Act in respect of the yarn sold by it in the course of inter State trade in ac cordance with section 15(b) of the Central Act and the proviso to section 4 of the State Act read with rule 23 of the Tamil Nadu General Sales Tax Rules, as these provisions stood at the relevant time.
The Additional Commercial Taxation Officer admitted the claim of the appellant for refund of the tax only in respect of the sum of Rs. 5,562.59 and rejected the claim in respect of the balance On appeal the Additional Appellate Assistant Commissioner allowed refund of a further sum of Rs. 3,204.73 and rejected the claim regarding the balance of Rs. 8,002.64.
On second appeal the 952 Appellate Tribunal relying upon the decision of the Madras High Court in M.A. Khader & Co. vs Deputy Commercial Taxa tion Officer(1), rejected the claim of the appellant for the balance of Rs. 8,002.64.
At the instance of the State representative, the Tribunal further held that the appellant was not entitled to get refund of the amount of Rs. 5,562.59 and Rs. 3,240.73 in respect of which relief had been granted by the Appellate Assistant Commissioner.
The appellant thereafter preferred revision petition to the Madras High Court under section 38 of the State Act.
The High Court dismissed the said petition after observing that the princi ple laid down in the case of M.A. Khader & Co. (supra) would apply to the facts of this case.
The appellant hereafter came up in appeal to this Court by special leave.
Before dealing with the point of controversy, it may be apposite to refer to the material provisions of law, 'as they stood at the relevant time.
A number of goods have been declared under section 14 of the Central Act to be of special importance.
in inter State trade or commerce.
Cotton yarn is one of those goods.
Section 15 of the cen tral Act at the relevant time read as under: "15.
Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State.
Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely : (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed two per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage; (b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be provided in any law in force in that State.
" Section 4 of the State Act reads as under: "4.
Tax in respect of declared goods.
Notwithstanding anything contained in section 3, the tax under this Act shall be payable by a dealer on the sale or purchase inside the State of declared goods at the rate and only at the point specified against each in .the
Second Schedule on the turnover in such goods in each year, whatever be the quantum of turnover in that year: Provided that where a tax has been levied under this section in respect of the sale or purchase of declared goods and such goods are sold in the course of inter State trade (1) 25 section
T.c. 104.
953 or commerce the tax so levied shall be refund ed to such person in such manner and subject to such conditions as may be prescribed.
" According to the Second Schedule to the Stale Act, the tax on cotton yarn but excluding cotton yarn waste shall be one per cent at the point of the first sale in the State.
Clauses (1) to (3) of rule 23 of the Madras General Sales Tax Rules, 1959 read as under: "23.
(1) The tax levied under section 4 in respect of the sale or purchase inside the State of any goods specified therein shall, if such goods are sold in the course of inter State trade or commerce, be refunded in the manner and subject to the conditions pre scribed in this rule to the dealer who has made the inter State sale and has paid the tax under the , in respect of such sale.
(2) Every ;such dealer who claims a refund under this rule shall within the time allowed in sub rule (3) submit to the assess ing authority a statement in Form A 4.
(3) The statement referred to in sub rule (4) shall be submitted to the assessing authority not later than three months.
from the date on which the dealer paid the Central sales tax due on the transaction in respect of which he claims refund of the State sales tax: Provided that the assessing authority may condone delays up to a period of fourteen days in the submission of the statement, if he is satisfied that the dealer had sufficient cause for not submitting the statement within the said period.
" In appeal before us, Mr. Desai on behalf of the appel lant has assailed the judgment of the High Court and has urged that in accordance with clause (b) of section 15 of the Central Act, the proviso to section 4 of the State Act and rule 23 of the Madras General Sales Tax Rules, the sales tax under the State Act in respect of yarn which was the subject matter of inter State sale, should have been paid to the appellant.
The High Court, according to the learned counsel, was in error in holding to the contrary.
As against that learned Additional Solicitor General has can vassed for the correctness of the view taken by the High Court.
There is in our opinion considerable force in the contention advanced by Mr. Desai.
Section 15 of the Central Act, as it existed at the relevant time, contemplates that every State law in so far as it imposes or authorises the imposition of tax on sale or purchase of declared goods, would be subject to the re striction and condition that the tax payable under that law in respect of any sale of purchase of such goods inside the State shall not exceed two per cent of the sale or purchase price thereof and such tax shall not be levied at more than one stage.
954 Clause (b) of that section has a direct bearing, and accord ing to that clause, where tax has been levied under the State law in respect of sale or purchase of declared goods which are subsequently sold in the course of inter State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be prescribed in any law in force in that State.
Section 4 of the State Act has been cnacted in conformity with section 15 of the Central Act.
The proviso to that section deals with the refund of the sales tax levied under the State Act in respect of declared goods when such goods arc sold in the course of inter State trade or commerce.
According to that proviso, where a tax has been levied under section 4 in respect of the sale or purchase of declared goods and such goods are sold in the course of inter State trade or commerce, the amount of tax shall bc re funded to such person in such manner and subject to such conditions as may be prescribed.
In pursuance of this provi so, the State Government has framed rule 23 of the Madras General Sales Tax Rules, 1959.
According to clause (1) of that rule, the refund of the sales tax has to be made to the dealer who makes the inter State sale and who has paid the sales tax under the Central Act in respect of such sale.
Clause (3) of the rule provides that statement shall be submitted to the assessing authority by the aforesaid dealt not later than three months from the date on which the dealer pays the tax under the Central Act.
It may be stated that the Madras General Sales Tax Rules, 1959 had to be placed on the table of both the Houses of the State, legislature under sub section (5) of section 53 of the State Act.
In the face of clause (b) of section 15 of the Central Act, the proviso to section 4 of the State Act and rule 23 of the Madras General Sales Tax Rules, we have no doubt in our mind that it is the appellant who is entitled to get the refund of the sales tax levied under the State, Act in respect of the goods in question because it was the appel lant who sold the goods in the course of inter State trade and paid the sales tax under the Central Act on that ac count.
The High Court in turning down the claim of the appellant relied upon its earlier decision in the case of M. A. Khader & Co. (supra).
Perusal of the facts of that case would show that the assessee therein sought a writ of certi orari to quash the assessment made under the Central Act in respect of transactions which were admittedly interState sales.
The question of asking for the refund of the sales tax paid under the State Act did not arise directly in that case.
There were no doubt some observations in the course of that judgment, according to which refund of the sales tax can be claimed only by the person who himself has earlier paid that tax, and not by a person who has not himself paid such tax.
So far as those observations are concerned, we are of the opinion that the emphasis in the word "re funded" as used in clause (b) of section 15 of the Central Act and the proviso to section 4 of the State Act is on repayment of the amount.
A word can have many meanings.
To find out the exact connotation of a word in a statute, we must look to the context in which it is used.
The context would quite often provide the .key to meaning of the word and the sense it should carry.
Its setting would give colour to it and provide cue to the intention of the legislature 955 in using it.
A word, as said by Holmes, is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used.
The context in which the word "refunded" is used shows that such repayment need not be to the person who initially paid the tax.
It is indeed for the State legislature to specify the person to whom such amount is to be repaid either in the statute enacted by it or to make a provision for that pur pose in the rules.
The State legislature has made it Clear in the proviso to section 4 of the statute that provision in this respect would be made in the rules.
The rules which have been framed leave no doubt that the amount has to be paid to the dealer who sells the goods in the course of inter State trade and who has paid the tax under the Central Act in respect of such sale.
There is also no anomaly in paying the amount of the sales tax under the State 'Act to a dealer who sells de clared goods in the course of inter State trade, even though he did not himself pay the tax under the State Act in re spect of those goods.
The reason for that is that the price charged from such dealer by the person from whom he pur chases the goods would normally take into account the sales tax paid by the seller.
Assuming that there was some ambiguity in the languages of clause (b) of section 15, as it existed at the relevant time, the matter is made clear by the amendment made in the Central Act by the Central Sales Tax (Amendment) Act, 1972 (Act No. 61 of 1972).
As a result of the amendment, clause (b) of section 15 of the Central Act reads as under: "(b) Where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of inter State trade or commerce, the tax levied under such law shall be reimbursed to the person making such sale in the course of inter State trade or commerce in such manner and subject to such conditions as may be provided in any law in force in that State." The amended provision makes it plain beyond any pale of controversy that the tax levied under the State Act in respect of declared goods has to be reimbursed to the person making sale of those goods in the course of inter State trade or commerce in such manner and subject to such condi tions as may be provided in the law in force in that State.
According to the notes explaining the different clauses appended to the statement of objects and reasons of the Bill which emerged as the amending Act, the amendment made in clause (b) makes it Clear that local sales tax would be reimbursed to the person making the sale in the course of inter State trade and commerce.
The amendment made in clause (b) can thus be taken to be an exposition by the legislature itself of its intent contained in the earlier provision.
We are not impressed by the argument of the learned Additional Solicitor General 11 13 3 85CI/76 956 that the amendment made in clause (b) was intended to mark a departure from the position in law as it existed before the amendment.
The fact that the amendment of clause (b) of section 15 was not like some other provisions given retro spective effect, would not materially affect the position.
As already mentioned above, the legislature as a result of the amendment, Clarified what was implicit in the provisions as they existed earlier.
An amendment which, is by way of clarification of an earlier ambiguous provision can be useful aid in construing the earlier provision, even though such amendment is not given retrospective effect.
We may refer in this context to observations on page 147 of Craies on Statute Law (Sixth Ed.) which read as under: " . in Cape Brandy Syndicate vs I.R.C.(1) Lord Sterndale M.R. said: 'I think it is clearly established in Att.
Gen. vs Clarkson, supra, that subsequent legislation may be looked at in order to see the proper construction to be put upon an earlier Act where that earlier Act is ambiguous.
I quite agree that subsequent legislation if it pro ceeded on an erroneous construction of previ ous legislation cannot alter that previous legislation; but if there be any ambiguity in the earlier legislation, then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier '.
" Looking to all the facts, we are of the view that the appel lant firm is entitled to be paid the amount of sales tax levied under the State Act in respect of the goods sold by it in the course of inter State trade provided the appellant has paid the sales tax under the Central Act in respect of those sales.
We accordingly accept the appeal, set aside the judgment of the High Court and order that the appellant firm be paid the amount of sales tax levied under the State Act in respect of the goods sold by it in the course of inter State trade provided the appellant has paid the sales tax under the Central Act in respect of those sales.
The appellant shall be entitled to recover its costs both in this Court as well as in the High Court from the respondent.
P.B.R. Appeal al lowed.
(1) at P. 156. | Section 15(a) of the as it existed at the rele ant time enacted that tax in respect of any sale or purchase of declared goods inside the State shall not be levied at more than one stage.
According to cl.
(b) if these goods were subsequently sold, in the course of inter state trade, the tax to levied shall be refunded to such person as prescribed in the State law.
The proviso to section 4 of the Tamil Nadu General Sales Tax Act and r. 23 of the Rules provide for the refund of the sales tax in the type of cases mentioned in section 15(b).
The appellant bought cotton yarn from local dealers and sold it by way of inter_state sale.
It paid the State sales tax and claimed refund under section 15 (b)of the Central Act.
It succeeded in part at each of the different stages; but on second appeal for the balance, the Appellate Tribunal re jected the appellant 's claim and held that it was not enti tled to any refund including the relief granted by the Appellate Assistant Commissioner.
The High Court rejected its revision petition.
Allowing the appeal, HELD: (1) The appellant firm is entitled to be paid the amount of sales tax levied under the State Act in respect of the goods sold by it in the course of inter State trade provided the appellant has paid the sales tax tinder the central Act in respect of those sales.
[956 E] (2) The proviso to section 4 of the State Act read with the rules leaves no doubt that the amount has to be paid to the dealer who sells the goods in the course of inter State trade and who has paid the tax under the Central Act in respect of such sale.
[955 B] (3)(a) There is no anomaly in paying the amount of the sales tax under the State Act to a dealer who sells declared goods in the course of inter State trade even though he did not himself pay the tax under the State Act in respect of those goods.
The reason for that is the price charged from such dealer by the person from whom he purchased the goods would normally take into account the sales tax paid by the seller.
[955 C] (b) The case of M. A. Khader & Co. vs Deputy Commer cial Taxation officer 25 S.T.C. 104 followed by the High Court is distinguishable on facts.
The question of asking for refund of the sales tax paid under the State Act did not arise directly in that case.
The emphasis in the word 'refunded ' as used in section 15(b) of the Central Act and the proviso to section 4 of the State Act.
on repayment of the amount.
[954 G] (4) (a) A word can have many meanings.
To find out the exact connotaon of a word in a statute, one should look to the context in which it is used.
The context would quite often provide the key to meaning of the word and the sense it should carry.
Its setting would give.
colour to it and provide due to the intention of the legislature in using it.
In the instant case the context in which the word "refund ed" is used shows that such repayment need not be to the person who initially paid the tax.
[954 H] 951 (b) The amended provision makes it plain beyond doubt that the tax levied under the State Act in respect of declared goods has to be reimbursed to the person making sale of those goods in the course of inter State trade or commerce in such manner and subject to such conditions as may be provided in the law in force in that State.
Accord ing to the notes on clauses appended to the statement of objects and reasons of the Bill the amendment made in cl.
(b) makes it clear that local sales tax would be reimbursed to the person making the sale in the course of inter State trade and commerce.
The amendment made in cl.
(b) can thus be taken to be an exposition by the legislature itself of its intent contained in the earlier provision.
[955 G] (c) The fact that the amendment of cl.
(b) of section 15 was not like some other provisions given retrospective effect, would not materially affect the position.
The legislature as a result of the amendment clarified what was implicit in the provisions as they existed earlier.
An amendment which is by way of clarification of an earlier ambiguous provision can be useful aid in construing the earlier provi sion even though such amendment is not given retrospective effect.
[956 B] |
Appeal No. 1830 of 1975.
Appeal by Special Leave from the Judgment and Order dated 10 9 75 of the Delhi High Court in Civil Writ Petition No. 475/75.
Soli Sorabjee, Ravinder Narain, Talat Ansari and Shri Narain, for the Appellants.
V.P. Raman, Addl.
for India, S.K. Mehta and Girish Chandra, for the Respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by special leave from the judgment dated 10 September 1975 of the Delhi High Court.
984 The appellant is a manufacturer of dry battery cells.
In October 1969 the appellant received a consignment of ten metric tons of manganese dioxide.
The Assistant Collector levied duty on the consignment under Tariff Item 28.
The appellant preferred an appeal.
The Appellate Collector confirmed the order of the Assistant Collector.
The appel lant thereafter made an application to the Revisional Au thority.
The Revisional Authority held that the goods should be assessed under Tariff Item 26 and ordered refund of duty.
The appellant asked for refund and sent reminders to Customs Authorities for refund.
On 3 October 1974 the appellant gave a notice under section 80 of the Civil Procedure Code for institution of a suit for recovery of refund.
On 10 February 1975 a notice under Section 131(3) of the referred to as the Act was.
given to the appellant for revision of the order of refund.
The appellant impeached the aforesaid notice dated 10 February 1975.
The notice inter alia stated that "since the goods 'were processed ore, not meant for extraction of metallic manganese they ceased to qualify as an 'ore ' within the normally accepted sense of the term as in item 26 Indian Customs Tariff.
The notice thereafter said "It, therefore, appears to the Government that the appellate order does not appear to be sustainable.
Therefore, in exercise of the powers under section 131(3) of the the Government of India proposes to annul the order in Appeal No. 590 593/1972 passed by the Appellate Collector of Cus toms, Calcutta".
The appellant made an application under Article 226 and moved the Delhi High Court.
The appellant in the applica tion asked for a writ in the nature of prohibition restrain ing the "Opposite party" thereto from taking any proceeding pursuant to the impugned notice.
The appellant also asked for a writ of certiorari to quash the notice.
The appellant also asked for a writ of mandamus not to withhold the excess duty paid by the petitioner and ordered to be refund ed.
The contention of the appellant was that the power of suo motu revision under section 131(3) of the Act in so far as it relates to a case of non levy or short levy of duty must be exercised within the period of limitation prescribed in section 131(5) of the Act.
In short, the appellant 's contention is that the power of suo motu revision contained in section 131(3) of the Act is subject to the provisions contained in section 131(5) of the Act.
The provisions contained in section 131(3) of the Act at3 as follows: "The Central Government may of its own motion annual or modify any order passed under section 128 or section 130.
" 985 The provisions contained in section 131(5) of the Act are as follows : "Where the Central Government is of opinion that any duty or customs has not been levied or has been short levied, no order levying or enhancing the duty shall be made under this section, unless the person affected by the proposed order is given notice to show cause against it within the timelimit speci fied in section.
" Section 28 of the Act provides for notice for payment of duties not levied, short levied or erroneously refunded.
Under section 28 when any duty has not been levied or has been short levied or erroneously refunded, the proper offi cer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or which has been short levied or to whom the refund has erroneously been made, requiring him to show cause why he should not pay ' the amount specified in the notice.
Counsel for the appellant extracted the provisions contained in sections 28 and 131 (3) and 131 (5) of the Act in support of the contention that any notice for suo motu revision by the Central Government in so far as it relates to a case of non levy or short levy of duty must be given within the period of six months from the date of levy.
Counsel for the appellant further contended that if the Government wanted to revise orders for refund on the ground that there should not be any refund, it would also be a case of short levy, and, therefore, the limitation of six months as provided in section 28 of the Act should apply.
Broadly stated Counsel for the appellant submitted that section 28 of the Act is a substantive provision relating to notice for non levy or short levy and section 131(3) of the Act is a procedural section and power under section 131(3) of the Act cannot be exercised in such a manner as to render section 28 of the Act nugatory.
The alternative contention of Counsel for the appellant is that power under section 131(3) of the Act is to be exercised within a reasonable time and the periods mentioned in section 131 of the Act supply the yard stick or give an indication of what is reasonable time.
The Delhi High Court held that all the objections which the petitioner wishes to raise to the notice, including the objections raised in the writ petition, should be raised before the Central Government.
The Delhi High Court, there fore, directed the Government to give a hearing to the appellant and further held that the Government should con sider all the objections.
The Delhi High Court went on to say that the decision of the Government should be taken within three months unless the appellant himself took ad journment and caused delay in the disposal of the case.
The Delhi High Court also said that if any money was to be refunded, .it should be refunded within two months from the date of the decision.
The provisions contained in section 28 of the Act speak of non levy, short levy and erroneous refund.
The provi sions state that notice 986 of non levy, short levy or erroneous refund should be given within six months from the relevant date.
Section 28(3) states what the "relevant date" means.
In the case of duty not levied, the "relevant date" is the date on which the proper officer makes an order for the clearance of the goods.
In a case where duty is provisionally assessed under section 18 of the Act, the relevant date is the date of adjustment of duty after the final assessment.
In a case where duty has been 'erroneously refunded, the relevant date is the date of refund.
any other case, the relevant date is the date of payment of duty.
The Additional Solicitor General contended that the provisions in section 28 of the Act indicated that any notice with regard to non levy, short levy or erroneous refund, require the person to show cause why he should not pay the amount specified in the notice.
This being the case of erroneous refund, the Additional Solicitor General con tended that the limitation would be six months from the date of actual refund.
The order dated 20 April 1972, which is described as the order of refund, was as follows : "I, therefore, allow the appeals and direct that the goods be re assessed under Item 26 of the Indian Customs Tariff and the consequential refund of duty granted.
" It may be stated here that Tariff Item 26 speaks of duty on metallic ore and Tariff Item 28 speaks of duty on Chemi cal and Pharmaceutical products.
The appellant succeeded in appeal in obtaining an order of refund.
It is an admitted feature of the case that refund has not in fact been made.
Counsel for the appellant contended that even if refund has not been made, the date of refund will be the relevant date and six months.
would be calculated from 20 April 1972, when refund was ordered and, therefore, the notice dated 10 February 1975 will be hit by the provision of limitation of six months from the relevant date.
The contention of the appellant is wrong.
It is only where refund has in fact been made and money has been paid, the relevant date will be six months from the date of actual payment for refund.
The contention of the appellant that refund will also be a case of short levy is not correct.
Section 28 speaks of three kinds of errors in regard to duties.
One is non levy, the second is short levy and the third is erroneous refund.
Levy is linked to assessment.
Section 17th of the Act speaks of assessment order.
In the process of assessment two kinds of errors may occur.
One is non levy and the other is short levy.
Refund is dealt with in section 27 of the Act.
The expression "erroneously refunded" means re funded by means of an order which is erroneously made.
These are three categories of errors in regard to duties.
The notice under section 28 of the Act speaks of demand for money to pay back and the notice is required to be given within six months from the relevant date.
In the case of erroneous refund, it would be six months from the date of actual refund.
If no refund has in fact been made, limita tion cannot be said to arise inasmuch as the relevant date under section 28 in the ease of erroneous refund 987 speaks of the date of refund.
The order dated 20 April 1972 granted refund.
Grant of refund is not actual refund.
Chapter XV contains sections 128 to 131 Of the Act.
Chapter XV speaks of Appeals and Revision.
Section 128 relates to appears, Section 130 deals with powers of revi sion of Board.
Section 131 speaks of revision by Central Government.
Revision can be asked for by the persons aggrieved by any order passed under section 128, or any order passed under section 130.
Section 131(2) provides limitation of six months for an application made under section 131(1) of the Act.
Once the provisions contained in section 131(3) are attracted, the Central Government may of its own motion annul or modify any order passed under section 128 or section 130.
This provision is the power of Central Government to annul or modify any order.
This power is exercised by the Central Government suo motu.
Of course the power is to be exercised on giving notice to the person concerned.
The provisions contained in section 131(5) of the Act speak limitation only with regard to non levy or short levy.
It is significant that section 131(5) does not speak of any limitation in regard to revision by the Central Government of its own motion to annul or modify any order of erroneous refund of duty.
The provisions contained in section 131(5) with regard to non levy or short levy cannot be equated with erroneous refund inasmuch as the three categories of errors in the levy are dealt with separately.
The appellants prayers for writs of Certiorari and mandamus are misconceived.
There is no order either judicial or quasi Judicial which can attract certiorari.
No mandamus can go because there is nothing which is required to be done or for borne under the Act.
The issue of the notice in the present case requires the parties to represent their case.
There is no scope for mandamus to do any duty or act under the statute.
A writ of prohibition cannot be issued for the obvious reason that the Central Government has jurisdiction to revise.
For the foregoing reasons, the appeal is dismissed.
The Central Government will hear the appeal on merits.
In view of our conclusion that there is no bar of limitation in the present case it will not be open to the parties to take any plea of limitation.
The Central Government will hear the matter as expeditiously as possible.
In case the Cen tral Government will hold that the order of refund is valid, the Central Government will pay the amount.
We specify the period of two months from the date of the order as the period during which payment will be made.
The parties will pay and bear their own costs.
S.R. Appeal dismissed. | The appellant succeeded before the revisional authority and obtained the orders of refund of duty levied and col lected on the consignment of ten metric tonnes of Manganese dioxide.
As no action was taken, the appellant gave a notice on October 3, 1974 u/s 80 C.P.C. for institution of a suit for recovery of refund.
On February 10, 1975 the respondent gave a notice u/s 131(3) of the to the appellant for suo motu revision of the order of the refund.
The Writ Petition filed in the Delhi High Court, impeaching the said order was dismissed directing the appel lant to raise all objections including those raised in the Writ Petition before the Central Government.
Dismissing the appeal by special leave, the Court Held: (1) section 28 of the speaks of three kinds of errors in regard to duties.
One is non levy, the second is short levy, and the third is erroneous refund.
Levy is.
linked to assessment.
In the process of assessment two kinds of errors may occur.
One is non levy and the other is short levy.
The expression "erroneously refunded" means refunded by means of an order which is erroneously made.
[986 F G] (2) section 131 (5) of the does not speak of any limitation in regard to revision by the Central Government of its own motion to annul or modify any order of erroneous refund of duty.
The provisions contained in Section 131(5) with regard to non levy or short levy cannot be equated with erroneous refund in as much as the three categories of errors in the levy are dealt with in section 28.
[987 D E] (3) Notice u/s 28 of the speaks of demand for money to pay back and the notice is required to be given within six months from the relevant date.
In the case of erroneous refund, it would be six months from the date of actual refund.
If no refund has in fact been made limita tion cannot be said to arise inasmuch as the relevant date u/s 28 in the case of erroneous refund speaks of the date of refund.
In the instant case the impugned order dated 20, April 1972 granted refund.
Grant of refund is not actual refund.
[986 G H, 987 A] |
Appeal No. 508 of 1976.
(Appeal by Special Leave from the Judgment and Order dated 27 10 1975 of the Delhi High Court in Civil Revision No. 115/75).
S.N. Andley, Urea Dutta and T.C. Sharma, for the appellant.
K.C. Agarwala and M.M.L. Srivastava, for the respondent.
The plaintiff respondent ,alleged to be a regis tered partnership firm filed a suit on 25th April, 1974, through Smt.
Pushpa Mittal, shown as one of its partners, for the recovery of Rs. 21,265.28 as principal and Rs. 7655/ , as interest at 12% per annum.
according to law and Mercantile usage, on the strength of a cheque drawn by the defendant on 12th May, 1971, on the State Bank of India, which, on presentation, was dishonoured.
The plaintiff alleged that the cheque 1061 was given as price of goods supplied.
The defendant appel lant firm admitted the issue of the cheque by its Managing partner, but, it denied any privity of contract with the plaintiff firm.
The defendant appellant had its own version as to the reasons and purposes for which the cheque was drawn.
The suit was instituted under the provisions of Order 37 Civil Procedure Code so that the defendant appellant had to apply for leave under Order 37, Rule 2, of the Code to defend.
This leave was granted unconditionally by the Trial Court after a perusal of the cases of the two sides.
Order 37, Rule 3, Civil Procedure Code lays down: "( 1 ) The Court shall, upon application by the defendant give leave to appear and to defend the suit, upon affidavits which dis close such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application.
(2) Leave to defend may be given uncondi tionally or subject to such terms as to payment into Court, giving security, framing and recording issues or otherwise as the Court thinks fit".
A learned Judge of the High Court of Delhi had on a revision application under Section 115 Civil Procedure Code interfered with the order of the Additional District Judge of Delhi granting unconditional leave, after setting out not less than seven questions on which the parties were at issue.
The learned Judge had, after discussing the cases of the two sides and holding that triable issues arose for adjudication, nevertheless, concluded that the defences were not bona fide.
He, therefore, ordered: "For these reasons I would allow the revision petition and set aside the order of the trial Court.
Instead I would grant leave to the defendant on their paying into Court the amount of Rs. 21,265.28 together with interest at the rate of 6 per cent per annum from the date of.
suit till payment and costs of the suit (Only court fee amount at this stage and not the lawyer 's fee).
The amount will be deposited within two months.
There will be no order as to costs of this revision".
The only question which arises before us in this appeal by special leave: Could the High Court interfere, in exercise of its powers under section 115, Civil Procedure Code, with the discretion of the Additional District Judge, in granting unconditional leave to defence to the defendant appellant upon grounds which even a perusal of the order of the High Court shows to be reasonable ? Santosh Kumar vs Bhai Mool Singh(1), was a case where a cheque, the execution of which was admitted by the defend ant, had been dishonoured.
The defendant had set up his defences for refusal to pay.
(1)[1958] SCR 1211 1215.
1062 This Court noticed the case of Jacobs vs Booth 's Distill ery Company(1), where it was held that, whenever a defence raises a really triable issue, leave must be given.
Other cases too were noticed there to show that this leave must be given unconditionally where the defence could not be shown to be dishonest in limine.
This Court observed there (at p. 1215): "The learned Counsel for the plaintiff respondent relied on Gopala Rao vs Subba Rao (AIR , Manohar Lal vs Nanhe Mal (AIR , and Shib Karan Das vs Mohammed Sadiq (AIR 1936 Lah. 584).
All that we need say, about them is that if the Court is of opinion that the defence is not bona fide, then it can impose conditions and is not tied down to refusing leave to.
defend.
We agree with Varadachariar J. in the Madras case that the Court has this third course open to it in a suitable case.
But, it cannot reach the conclusion that the defence is not bona fide arbitrarily.
It is as much bound by judicial rules and judicial procedure in reaching a conclusion of this kind as in any other matter", On general principles, relating to the exercise of jurisdiction of High Courts under section 115, Civil Proce dure Code, several cases were cited before us by Mr. Andley: M.L. Sethi vs
R.P. Kapur(2); The Managing Director (MIG) Hindustan Aeronautics Ltd. Balanagar, Hyderabad & lint.
vs Ajit Prasad Tarway, Manager, (Purchase & Stores), Hindustan Aeronautics Ltd., Balanagar, Hyderabad(3); D.L.F. Housing & Construction Co. Pvt.
Ltd. New Delhi vs Sarup Singh & Ors.
(4); Milkhiram (India) Pvt. Ltd. & Ors.
vs Chamanlal Bros.(5) We need not dilate on the well established principles repeatedly laid down by this Court which govern jurisdiction of the High Courts under section 115 C.P.C.
We think that these principles were ignored by the learned Judge of the High Court in interfering with the discretionary order after a very detailed discussion of the facts of the case by the learned Judge of the High Court who had differred on a pure question of fact whether the defences could be honest and bona fide.
Any decision on such a question, even before evidence has been led by the two sides, is generally hazard ous.
We do not think that it is fair to pronounce a cate gorical opinion on such a matter before the evidence of the parties is taken so that its effects could be examined.
In the case before us, the defendant had denied, inter alia, liability to pay anything to the plaintiff for an alleged supply of goods.
It is only in cases where the defence is patently dishonest or so unreasonable that it could not reasonably be expected to succeed that the exercise of discretion by the Trial Court to grant leave unconditionally may be, (1) (2) ; (3) (4) ; (5) AIR 1965 SC 1698.
1063 questioned.
In the judgment of the High Court we are unable to find aground of interference covered by Section 115 C.P.C.
In Smt.
Kiranmoyee Dassi & Anr.
vs Dr. J. Chatterjee(1), Das.
J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by order 17 C.P.C. in the form of the following propositions (at p. 253): "(a) If the Defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend.
(b) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional leave to defend.
(c) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shews such a state of facts as leads to the infer ence that at the trial of the action he may be able to establish a defence to the plaintiff 's claim the Plaintiff is not entitled to judg ment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.
(d) If the Defendant has no defence or the defence set up is illusory or sham or practi cally moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend.
(e) If the Defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the Plain tiff is entitled to leave to sign judgment, the Court may protect the Plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise se cured and give leave to the Defendant on such condition, and thereby show mercy to the Defendant by enabling him to try to.
prove a defence".
The case before us certainly does not fall within the class (e) set out above.
It is only in that class of case that an imposition of the condition to deposit an amount in Court before proceeding further is justifiable.
, 253.
1064 Consequently, we set aside the judgment and order of the High Court and restore that of the Additional District Judge.
The parties will bear their own costs.
Appeal allowed. | The appellant issued the respondent a cheque which was dishonoured.
The respondent alleged that the cheque was the consideration for goods supplied.
The appellant admitted issuing the cheque but denied by privity of contract.
The respondent filed a suit under order 37 C.P.C., and the appellant applied for the required leave to defend, which was granted by the trial Court unconditionally.
On revision under section 115 C.P.C., the High Court held that triable issues arose for adjudication.
, but, it considered the defence to be dishonest.
If allowed the revision petition and gave conditional leave to defend on the ground that the defences were not bona fide.
Allowing the appeal, the Court HELD: It is only in cases where the defence is patently dishonest or so unreasonable that it could not reasonably be expected to succeed that the exercise of discretion by the Trial Court to grant leave unconditionally may be questioned.
In other cases, it is not fair to pronounce a categorical opinion on such a matter before the evidence of the parties is taken so that its effects could be examined.
High Court 's interference under sec.
115 C.P.C. with the correct exercise of its discretion by the trial Court was patently erroneous.
11062 Santosh Kumar vs Bhai Mool Singh ; at 1215, Jacobs vs Booth 's Distillery Co. followed.
Kiranmoyee Dassi and another vs Dr. J. Chatterjee ,at 253) distinguished.
M.L. Sethi vs
R.P. Kapur ; The Managing Director (MIG) Hindustan Aeronautics Ltd. Bulana gar, Hyderabad & A nr.
vs A Ajit Prasad Tarway, Manager (Purchase and Stores).
Hindustan Aeronautics Ltd. Balanagar, Hyderabad (AIR ; D.L.F. Housing & Construction Co. Pvt. Ltd., New Delhi vs Sarup Singh & Ors.
[1970] 2.
S.C.R. 368; and Milkhiram (India) (P) Ltd. and Ors.
vs Chamanlal Bros. (AIR 1965 SC 1998) referred to. |
Civil Appeal No. 1798 of 1968.
(From the Judgment and Decree dated 16.6.1966 of the Bombay High Court in Appeal No. 13/62) V.S. Desai & M.N. Shroff for the appellants.
A.G. Ratnaparkhi, for the respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal by certificate is from the judgment dated 16 June, 1966 of the High Court at Bombay (Nagpur Bench).
The respondent filed this suit against the State claim ing that the order dated 1 March, 1955 in Revenue case declaring Gajanan Maharaj Sansthan of Mangrul Dastagir to be a public trust be set aside.
The plaint was filed under section 8 (1) of the Public Trust Act (M.P. Public Trusts Act 1951) against the State of Madhya Pradesh and the Regis trar of Public Trust, Amraoti.
It is admitted by the parties that no notice under section 80 of the Code of Civil Procedure was given.
The defendants took the plea that the suit was liable to be dismissed by reason of no notice under section 80 of the Code of Civil Procedure having been given. 994 The Additional District Judge by his order dated 26 March, 1957 held a notice under section 80 of the Code of Civil Procedure was necessary and the suit was not maintain able and ordered the dismissal of the Suit.
The respondent filed an appeal.
The learned Single Judge agreed with the view of the Additional District Judge.
A Letters Patent Appeal was filed.
The matter was placed before a Full Bench.
The Full Bench held that the provisions of section 80 of the Code of Civil Procedure had No. application to a suit filed under section 8 of the Madhya Pradesh Public Trusts Act, 1951 (hereinafter referred to as the Act).
This Court in Sawai Singhai Nirmal Chand vs Union of India(1) held that notice under section 80 is necessary for setting aside orders of attachment and sale of property.
The provisions contained in section 8 of the Act indi cate that the suit contemplated there is against the Public Officer in his official capacity within the meaning of section 80 of the Code of Civil Procedure.
The provisions of section 80 of the Code of Civil Proce dure are express, explicit and mandatory.
See Bhagchand Dagadusa vs Secretary of State for India in Council and others(2).
The Registrar in the present case held it to be a public trust.
The declaration sought for in this suit is that this is not a public trust.
The High Court was wrong in holding that the suit under section 8 of the Act cannot be regarded as a suit against the Government.
The Full Bench held that neither the Government nor the Registrar was competent to give any relief to any person who felt aggrieved by the order of the Registrar.
The following provisions of the Act are important to be noticed.
The Collector shall be the Registrar of Public Trusts in respect of every public trust the principal office or the principal place of business of which is situate in his district.
Within three months from the date on which section 4 comes into force in any area or from the date on which a public trust is created, the working trustee of every public trust shall apply to the Registrar having jurisdiction for the registration of the public trust.
On receipt of an application the Registrar shall make an inquiry as contemplated in section 5 of the Act.
The Regis trar then shall record his finding with reasons.
The Regis trar shall cause entries to be made in the register.
Any person aggrieved by any finding of the Registrar may within six months from the date of the publication of the notice institute a suit in a civil court to have such finding set aside or modified.
In every such suit, the civil court shall give notice to the State Government through the Regis trar, and the State Government, if it so desires, shall be made a party to the suit.
All monies belonging to a public (1) ; (2) 54.I.A. 338.
995 trust shall be kept in a Scheduled Bank.
No sale, mortgage, exchange or gift of any immoveable property and no lease for a period exceeding seven years in the case of agricultural land or for a period exceeding three years in the case of non agricultural land or a building belonging to a public trust, shall be valid without the previous sanction of the Registrar.
The Budget of every public trust where the gross annual income of which exceeds one thousand rupees shall be submitted to the Registrar.
The Registrar shall have powers to enter on and inspect or cause to be entered on and in spected any property belonging to a public trust, or to call for any return, statement, account or report as contem plated in section 22 of the Act.
If the Registrar finds any defects in the administration of the public trust the Registrar may require the working trust as to submit an explanation.
The Registrar has power as contemplated in section 26 of the Act to direct the trustee to apply to court for directions in certain cases.
If the trustee fails to do so the Registrar shall himself make an application.
The State Government may make rules for the purposes men tioned in the Act.
These provisions indicate that the Registrar is a Public Officer.
The word? "act purporting to be done in official capacity" have been construed to apply to non feasance as well as to misfeasance.
The word "act" extends to illegal omissions.
See Prasaddas vs Bennerjee(1).
No distinction can be made between acts done illegally and in bad faith and acts done bona fide in official capacity.
See Bhagchand Dagadusa 's case (supra).
Section 80 of the Code of Civil Procedure therefore is attracted when any suit is filed against a Public Officer in respect of any act pur porting to be done by such Public Officer in his official capacity.
The language of section 80 of the Code of Civil Proce dure is that a notice is to be given against not only the Government but also against the Public Officer in respect of any act purpoting to be done in his official capacity.
The Registrar is a Public Officer.
The order is an act purport ing to be done in his official capacity.
In the present case, the suit is to set aside the order made by a Public Officer in respect of an act done in the discharge of his official duties.
Therefore, notice under section 80 of the Code of Civil Procedure was required.
For the foregoing reasons the judgment of the High Court is set aside.
Parties will pay and bear their own costs.
M.R. Appeal al lowed. | The respondent filed this suit against the order of the Registrar of Public Trust, Amraoti, declaring the Ganjanan Maharaj Sansthan of Mangrul Dastagir to be a public trust.
The Additional District Judge 's order dismissing the suit, was Upheld in appeal by the Single judge of the High Court on account of the respondent 's failure to serve a notice under section 80 C.P.C.
Allowing a Letters Patent Appeal, a Full Bench of the High Court held that section 80 C.P.C. was not applicable to suits filed under section 8 of the (M.P.) Public Trusts Act, 1951.
Allowing the appeal, the Court HELD: Section 8 of the Act indicates that the suit contem plated there is against the public officer in his official capacity within the meaning of Section 80 of the Code of Civil Procedure.
The words "Act purporting to be done in official capacity" apply to non feasance as well as to misfeasance.
No distinction can be made between acts done illegally and in bad faith and acts done bonafide in offi cia1 capacity.
[994 C, 995 D] Sawai Singhai Nirmal Chand vs Union of India ; referred to.
Bhagchand Dagadusa vs Secretary of State for India in Coun cil and others , Prasaddas vs Bennerjee I.L.R. , applied. |
Appeal No. 30 of 1958.
Appeal by special leave from the judgment and order dated March 24, 1955, of the Punjab High Court in Civil Reference No. 3 of 1953.
Gopal Singh, for the appellants.
K. N. Rajagopala Sastri and D. Gupta, for the respondent.
212 1960.
August 17.
The Judgment of the Court was delivered by HIDAYATULLAH J.
This appeal, by special leave of this Court, is against the judgment 'and order dated March 24, 1955, of the Punjab High Court by which the High Court, purporting to act under section 66(4) of the Indian Income tax Act, called for a supplemental statement of the case from the Income tax Appellate Tribunal.
The special leave granted by this Court is limited to the question whether the High Court had jurisdiction in this case to call for the supplemental statement.
The assessee, Messrs. section Zoraster & Co., Jaipur, consists of three partners.
Two of them are coparceners of a joint Hindu family, and the third is a stranger.
They had formed this partnership in June, 1940, for the manufacture and sale of blankets, felts and other woollen articles.
A deed of partnership was also executed on March 16, 1944.
The assessee entered into contracts with Government for the sup ply of goods, and in the assessment year 1942 43, Rs. 10,80,658 0 0 and in the assessment year 1943 44, Rs. 17,45,336 0 0 were assessed as its income by the Income tax Officer, Contractor 's Circle, New Delhi.
The supplies to Government were made for.
Jaipur by the assessee, and payment was by cheques which were received at Jaipur and were endorsed in favour of the joint Hindu family, which acted as the assessee 's bankers.
The contention of the assessee was that this income was received at Jaipur outside the then taxable territories.
This contention was not accepted by the Income tax Appellate Tribunal, Delhi.
The assessee then applied for a reference to the High Court under section 66(1) of the Indian Income tax Act, and by its order dated December 10, 1952, the Income tax Appellate Tribunal referred the following question for the decision of the High Court: " Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in the taxable territories ? " 213 The Tribunal had stated in the statement of the case as follows: "The payment was made by the Government of India by cheques drawn on the Reserve Bank of India, Bombay Branch.
These cheques were received in Jaipur.
" It may be pointed out that in the contract of sale between the assessee and the Government of India, the following clause was included to determine the system of payment: " 21.
System of payment: Unless otherwise agreed between the Purchaser and the Contractor payment for the delivery of the stores will be made by the Chief Auditor, Indian Stores Department, New Delhi, by cheque on a Government treasury in India or on a branch of the Imperial Bank of India or the Reserve Bank of India transacting Government business.
" In dealing with the Reference, the High Court passed an order under section 66(4) of the Income tax Act observing, ". . it would be necessary for the Appellate Tribunal to find, inter alia, whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the Department in the matter ".
The High Court thereafter remanded the case to the Tribunal for a supplemental statement of the case on the lines indicated.
This order is questioned on the authority of the decision of this Court in The New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax(1) which, it is claimed, completely covers this case.
In that case also, the High Court of Bombay had called for a supplemental statement of the case, and it was ruled by this Court that the High Court had exceeded its jurisdiction.
Before dealing with this question, it is necessary to go back a little, and refer briefly to some cases decided earlier than The New Jehangir Vakil Mills case (1) and Jagdish Mills Ltd. vs Commissioner of Income tax (2), on which reliance has been placed in this case.
ID (1) ; (2) ; 214 Keshav Mills Co., Ltd. vs Commissioner of Income tax (1), the High Court of Bombay called for a supplemental statement of the case, but it expressed the view that if a cheque was received by a creditor on a British Indian Bank and he gave the cheque to his bank for collection, the bank must be treated as his agent and that, on the realisation of the amount of the cheque in the taxable territory, the creditor must be regarded as having received it in the taxable territory, even if he was outside it.
In Sir Sobha Singh vs Commissioner of Income tax (2), it was held by the Punjab High Court that where cheques were given to a bank for purposes of collection, the receipt of the money was at the place where the bank on which the cheques were drawn was situated.
These views found further amplification, and were applied in two other cases by the Bombay If high Court.
They are Kirloskar Bros. Ltd. vs Commissioner of Income tax (3 ) and Ogale Glass Works Ltd. vs Commissioner of Income tax (4).
In both these cases, it was held that unless the payee expressly constituted the post office as his agent, the mere posting of the cheque did not constitute the post office the agent of the payee, and that the amount of the cheque was also received at the place where the cheque was received.
In Kirloskar Bros. Ltd. vs Commissioner of Income tax(3), it was held that the mere posting of the cheque in Delhi was not tantamount to the receipt of the cheque in Delhi, because the payee had not requested the Government to send the cheque by post.
In Ogale Glass Works case (4), the Bombay High Court asked for a supplementary statement of the case from the Tribunal as to whether there was any express request by the assessee that the cheque should be sent by post, and held that as there was no such express request, the receipt of the money was not where the cheque was posted but at the place where the money was received.
(1) (2) (3) (4) I. Tax Reference No. 10 of 1949 of the Bombay H. C. decided on September 17, 1951.
215 The last two decisions of the Bombay High Court were reversed by this Court, and it was held that an intimation to the payer " to remit " the amount by cheque was sufficient nomination of the post office as the agent of the payee: vide Commissioner of Income tax vs Ogale Glass Works Ltd. (1) and Commissioner of Income tax vs Kirloskar Bros. Ltd. (2).
Later, the principle was extended still further by this Court in Jagdish Mills case(3).
It was held that where the bills had an endorsement Government should pay the amount due by cheque and the cheques were received in full satisfaction unconditionally, this constituted a sufficient implied request for the purpose of the application of the rule in Ogale Glass Works case of this Court.
Jagdish Mills case (3) and the New Jehangir Vakil Mills case (4) were decided by this Court on the same day.
In the latter case, the Department had to deal with a non resident Company which, at all material times, was situate at Bhavnagar, one of the Indian States.
Cheques in payment for supplies to Government were sent from British India to Bhavnagar.
The Department contended in the case that though the cheques were received at Bhavnagar, they were, in fact, cashed in British India and until such encashment, income could not be said to have been received but that on encashment in British India, the receipt of income was also in British India.
The Tribunal held that the cheques having been received at Bhavnagar the income was also received there.
In doing so, the Tribunal followed the Bombay decision in Kirloskar Brothers case (5).
The Tribunal, however, observed that if the Bombay view which was then under appeal to this Court were not upheld, then an enquiry would have to be made as to whether the Mills ' bankers at Ahmedabad acted as the Mills ' agents for collecting the amount due on the cheques.
The question whether the posting of the cheques from British India to Bhavnagar at the request, express or (1) (3) ; (2) (4) ; (5) 216 implied, of the Mills or otherwise, made any difference was not considered at any stage before the case reached the High Court of Bombay.
This was expressly found to be so by this Court in these words: " The only ground urged by the Revenue at all material stages was that because the amounts which were received, from the merchants or the Government were received by cheques drawn on banks in British India which were ultimately encashed in British India, the monies could not be said to have been received in Bhavnagar though the cheques were in fact received at Bhavnagar.
" The reference was held back by the Tribunal till the decision of this Court in Ogale Glass Works case (1) and Kirloskar Brothers ' case (2).
Even after seeing that in those two cases the request for payment by cheques to be sent by post made all the difference, the Tribunal did not frame its statement of the case or the question to include this aspect, because that aspect of the matter was never considered before. ' The question referred was thus limited to the legal effect of the receipt of the cheques at Bhavnagar without advertence to the fact whether the cheques were so sent by post at the request, express or implied, of the Mills.
The question framed was: " Whether the receipt of the cheques in Bhavnagar amounted to receipt of the sale proceeds in Bhavnagar ? " The question as framed and the statement which accompanied it brought into controversy the only point till then considered by the Tribunal and the taxing authorities.
When the case *as heard by it, the High Court desired to consider it from the angle of the Kirloskar Brothers(2) and Ogale Glass Works (1) cases.
It called for a supplemental statement of the case.
In doing so, the High Court went beyond the ambit of the controversy as it had existed till then and also the statement of the case and the question.
The High Court directed the Tribunal as follows: "On the finding of the Tribunal that all the cheques were received in Bhavnagar, the Tribunal to find (1) (2) 217 what portion of these cheques were received by post, whether there was any request by the assessee, express or implied, that the amounts which are the subject matter of these cheques should be remitted to Bhavnagar by post." In repelling the objection that such an enquiry was alien to the point decided by the Tribunal and might require fresh evidence, the High Court justified itself by saying: " But we cannot shut out the necessary inquiry which even from our own point of view is necessary to be made in order that we should satisfactorily answer the question raised in the Reference.
It must not be forgotten that under section 66(4) of the Income tax Act we have a right independently of the conduct of the parties to direct the Tribunal to state further facts so that we may properly exercise our own advisory jurisdiction.
" This Court pointed out that the High Court exceeded its jurisdiction under section 66(4) of the Indian Income tax Act.
It was observed: " If the question actually referred does not bring out clearly the real issue between the parties, the High Court may reframe the question so that the matter actually agitated before the Tribunal may be raised before the High Court.
But section 66(4) does not enable the High Court to raise a new question of law which does not arise out of the Tribunal 's order and direct the Tribunal to investigate new or further facts necessary to determine this new question which had not been referred to it under section 66(1) or section 66(2) and direct the Tribunal to submit a supplementary statement of the case.
" It was also pointed out that the facts admitted and/ or found by the Tribunal could alone be the foundation of the question of law which might be said to arise out of the Tribunal 's order.
The case thus set two limits to the jurisdiction of the High Court under section 66(4), and they were that the advisory jurisdiction was confined (a) to the facts on the record and/or found by the Tribunal and (b) the question which 28 218 would arise from the Tribunal 's order.
It was pointed out by this Court that it was not open to the High Court to order a fresh enquiry into new facts with a view to amplifying the record and further that it was equally not open to the High Court to decide a question of law, which did not arise out of the Tribunal 's order.
This was illustrated by comparing the question as framed by the Tribunal with the question which the High Court desired to decide.
Whereas the Tribunal had only referred the question: " Whether the receipt of the cheques at Bhavnagar amounted to receipt of sale proceeds in Bhavnagar ?", what the High Court intended deciding was: " Whether the posting of the cheques in British India at the request express or implied of the appellant, amounted to receipt of sale proceeds in British India ?" These were two totally different questions, and it was held that the High Court could not decide a matter which was different from that decided by the Tribunal, nor call for a statement of the case bearing on this new matter.
The proposition laid down in the Jehangir Vakil Mills case (1), finds support from yet another case of this Court decided very recently.
In Kusumben D. Mahadevia vs Commissioner of Income tax Bombay (2), it was observed: " In our opinion, the objection of the assessee is well founded.
The Tribunal did not address itself to the question whether the Concessions Order applied to the assessee.
It decided the question of assessability on the short ground that the income had not arisen in Baroda but in British India.
That aspect of the matter has not been touched by the Bombay High Court.
The latter has, on the other hand, considered whether the Concessions Order applies to the assessee, a matter not touched by the Tribunal.
Thus, though the result is the same so far as the assessment is concerned, the grounds of decision are entirely different.
(1) ; (2) ; ,421.
219 Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal.
It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order.
It is possible that the same question of law may involve different approaches for its solution, and the High Court may amplify the question to take in all the approaches.
But the question must still be the one which was before the Tribunal and was decided by it.
It must not be an entirely different question which the Tribunal never considered.
" It follows from this that the enquiry in such cases must be to see whether the question decided by the Tribunal admits the consideration of the new point as an integral or even an incidental part thereof.
Even so, the supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal, and should not open the door to fresh evidence.
The fact that in Ogale Glass Works case (1), the Bombay High Court had asked for a supplemental statement in the same way as in the Jehangir Vakil Mills case (2 ), and this Court did not rule out the new matter, cannot help the assessee in the present case, because the jurisdiction of the High Court was not questioned, as it had been done in the Jehangir Vakil Mills case, or has been done here.
We have thus to see whether in this case the question which was decided and which has been referred to the High Court admits the return of the case for a supplemental statement on the lines indicated by the High Court in the order under appeal.
At the very start, one notices a difference in the question of law in this case and the Ogale Glass Works case (3), on the one hand, and the question of law in the Jehangir Vakil Mills case (2), on the other.
In the former two cases, the question is very wide, while in the latter it is extremely narrow.
This can be Been by placing the three questions side by side as below : (1) I. Tax Reference No. 19 of 1949 of the Bombay H. C. decided on September 17, 1951.
(2) ; (3) 220 Jehangir Vakil Mills case " Whether the receipt of the cheques in Bhav nagar amounted to receipt of the sale proceeds in Bhavnagar ?" Ogale Glass Works case " Whether on the facts of the case, income, profits and gains in respect of sales made to the Government of India was received in British India within the meaning of Section 4(1)(a) of the Act ?" This case "Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in taxable territories ?" It is thus quite plain that the question as framed in this case can include an enquiry into whether there was any request, express or implied, that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works case (2) or Jagdish Mills case (3).
The first limit to the jurisdiction of the High Court as laid down by this Court is thus not exceeded by the High Court in exercising its powers under section 66(4) of the Income tax Act.
The question is wide enough to include the alternative line of approach that if there was a request, express or implied, to send the amount due under the bills by cheque, the post office would be the agent of the assessee, and the income was received in the taxable territory when the cheques were posted.
(1) ; (2) (3) ; 221 The next question is whether the High Court has transgressed the second limitation implicit is section 66(4), that is to say, that the question must arise out of the facts admitted and/or found by the Tribunal.
The High Court has observed that, ". . it would be necessary for the Appellate Tribunal to find inter alia whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, bad the assessee firm given to the Department in that matter.
" If the Tribunal has to make a fresh enquiry leading to the admission of fresh evidence on the record, then this direction offends against the ruling of this Court in the Jehangir Vakil Mills case (1).
If, however, the direction be interpreted to mean that the Tribunal in giving the finding must confine itself to the facts admitted and/or found by it, the direction cannot be described as in excess of the jurisdiction of the High Court.
It would have been better if the High Court had given directions confined to the record of the case before the Tribunal; but, in the absence of anything expressly to the contrary, we cannot bold that the direction would lead inevitably to the admit ting of fresh evidence.
This, at least, now cannot be done, since the Jehangir Vakil Mills case (1), has prohibited the admission of fresh evidence.
In our opinion, the present case does not fall within the rule in the Jehangir Vakil Mills case (1), and is distinguishable.
In the result, the appeal fails, and is dismissed with costs.
Appeal dismissed. | The appellant entered into contract with Government for the supply of goods, and in the assessment year 1942 43 Rs. 10,80,653 and in the assessment year 1943 44, Rs. 7,45,336 were assessed as its income by the Income tax Officer.
The supplies to Government were made for.
Jaipur by the appellant, and payment was by cheques which were received at Jaipur.
The contention of the appellant was that this income was received at Jaipur outside the then taxable territories.
This contention was not accepted by the Income tax Appellate Tribunal, Delhi.
The appellant then applied for a reference to the High Court under section 66(1) of the Indian Income tax Act, and by its order dated December 10, 1952, the Tribunal referred the following question for the decision of the High Court.
" Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government 211 of India were received by the assessee in the taxable terri tories ?" The High Court remanded the case to the Tribunal for a supplemental statement of case calling for a finding on the question " whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the department in the matter ".
The appellant questioned the order of the High Court relying on the decision in New Jehangir Vakil Mill 's case; , Held, that the enquiry in such cases must be to see whether the question decided by the Tribunal admits of the consideration of the new point as an integral or an incidental part thereof.
The supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal and should not open the door to fresh evidence.
Held, further, that the question as framed in this case was wide enough to include an enquiry into whether there was any request, express or implied, that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works case, [1955] 1 S.C.R. 185 or Jagdish Mills case; , In the absence of anything expressly said in the Order of the High Court to the contrary, it cannot be held that the direction given would lead inevitably to the admitting of fresh evidence as that has been prohibited by the New Jehangir Vakil Mills case.
The New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax, ; , distinguished.
Jagdish Mills Ltd. vs Commissioner of Income tax, ; , Keshav Mills Co. Ltd., vs Commissioner of Income tax, , Sir Sobha Singh vs Commissioner of Income tax, , Kirloskar Bros. Ltd.v.
Commissioner of Income tax, [1952] 21 I.T.R. 82, Commissioner of Income tax vs Ogale Glass Works Ltd. , Commissioner of Income tax vs Kirloskar Bros. Ltd., and Mrs. Kusumben D. Mahadevia, Bombay vs Commissioner of Income tax, Bombay, ; , referred to. |
Civil Appeal No. 346 of 1958.
452 Appeal by special leave from the judgment and order dated May 10, 1955, of the former Madhya Bharat High Court in Misc.
Appeal No. 26 of 1954.
section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.
section T. Desai, K. B. Bhatt and B. R. L. Iyengar, for the respondent.
November 16.
The Judgment of Wanchoo, Das Gupta and Dayal,JJ., was delivered by Dayal J. Shah J., delivered a separate Judgment.
RAGHUBUR DAYAL, J.
The appellant and the respondent entered into a partnership at Indore for working coal mines at Kajora gram (District Burdwan) and manufacture of cement etc.
, in the name and style of 'Diamond Industries '.
The head office of the partnership was at Indore.
The partnership was dissolved by a deed of dissolution dated August 22, 1945.
Under the terms of this deed, the appellant made himself liable to render full, correct and true account of all the moneys advanced by the respondent and also to render accounts of the said partnership and its business, and was held entitled to 1/4th of Rs. 4,00,000/ solely contributed by the respondent toward the capital of the partnership.
He was, however, not entitled to get this amount unless and until he had rendered the accounts and they had been checked and audited.
The second proviso at the end of the convenants in the deed of dissolution reads: "Provided however and it is agreed by and between the parties that as the parties entered into the partnership agreement at Indore (Holker State) all disputes and differences whether regarding money or as to the relationship or as to their rights and liabilities of the parties hereto in respect of the 453 partnership hereby dissolved or in respect of question arising by and under this document shall be decided amicably or in court at Indore and at nowhere else." On September 29, 1945, a registered letter on behalf of the respondent was sent to the appellant.
This required the appellant to explain to and satisfy the respondent at Indore as to the accounts of the said colliery within three months of the receipt of the notice.
It was said in the notice that the accounts submitted by the appellant had not been properly kept and that many entries appeared to be wilfully falsified, evidently with malafide intentions and that there appeared in the account books various false and fictitious entries causing wrongful loss to the respondent and wrongful gain to the appellant.
The appellant sent a reply to this notice on December 5, 1935, and denied the various allegations, and requested the respondent to meet him at Asansol or Kajoraram on any day suitable to him, within ten days from the receipt of that letter.
On August 18, 1948, the appellant instituted Suit M. section No. 33 of 1948 in the Court of the Subordinate Judge at Asansol against the respondent for the recovery of Rs. 1,00,000/ on account of his share in the capital and assests of the partnership firm 'Diamond Industries ' and Rs. 18,000/ as interest for detention of the money or as damages or compensation for wrongful withholding of the payment.
In the plaint he mentioned about the respondent 's notice and his reply and to a second letter on behalf of the respondent and his own reply thereto.
A copy of the deed of dissolution, according to the statement in paragraph 13 of the plaint, was filed along with it.
On October 27, 1948, respondent filed a petition under section 34 of the Arbitration Act in the Asansol Court praying for the stay of the suit in 454 view of the arbitration agreement in the original deed of partnership.
This application was rejected on August 20, 1949.
Meanwhile, on January 3, 1949, the respondent filed Civil Original Suit No. 71 of 1949 in the Court of the District Judge, Indore, against the appellant, and prayed for a decree for Rs. 1,90,519 0 6 against the appellant and further interest on the footing of settled accounts and in the alternative for a direction to the appellant to render true and full accounts of the partnership.
On November 28, 1949, the respondent filed his written statement in the Asansol Court.
Paragraphs 19 and 21 of the written statement are: "19.
With reference to paragraph 21 of the plaint, the defendant denies that the plaintiff has any cause of action against the defendant or that the alleged cause of action, the existence of which is denied, arose at Kajora Colliery.
The defendant craves reference to the said deed of dissolution whereby the plaintiff and the defendant agreed to have disputes, if any, tried in the Court at Indore.
In the circumstances, the defendant submits that this Court has no jurisdiction to try and entertain this suit.
The suit is vexatious, speculative, oppressive and is instituted malafide and should be dismissed with costs.
" Issues were struck on February 4, 1950.
The first two issues are: "1.
Has this Court jurisdiction to entertain and try this suit? 2.
Has the plaintiff rendered and satisfactorily explained the accounts of the partnership in terms of the deed of dissolution of partnership ?" 455 In December 1951, the respondent applied in the Court at Asansol for the stay of that suit in the exercise of its inherent powers.
The application was rejected on August 9, 1952.
The learned Sub Judge held: "No act done or proceedings taken as of right in due course of law is 'an abuse of the process of the Court ' simply because such proceeding is likely to embarass the other party." He therefore held that there could be no scope for acting under section 151, Code of Civil Procedure, as section 10 of that Code had no application to the suit, it having been instituted earlier than the suit at Indore.
The High Court of Calcutta confirmed this order on May 7, 1953, and said: "We do not think that, in the circumstance of these cases and on the materials on record, those orders ought to be revised.
We would not make any other observation lest it might prejudice any of the parties.
" The High Court further gave the following direction: "As the preliminary issue No.1 in the two Asansol suits have been pending for over two years, it is only desirable that the said issues should be heard out at once.
We would, accordingly, direct that the hearing of the said issues should be taken up by the learned Subordinate Judge as expeditiously as possible and the learned Subordinate Judge will take immediate steps in that direction.
" Now we may refer to what took place in the Indore suit till then.
On April 28, 1950, the appellant applied to the Indore Court for staying that suit under sections 10 and 151 Code of Civil Procedure.
456 The application was opposed by the respondent on three grounds.
The first ground was that according to the term in the deed of dissolution, that Court alone could decide the disputes.
The second was that under the provisions of the Civil Procedure Code in force in Madhya Bharat, the court at Asansol was not an internal Court and that the suit filed in Asansol Court could not have the effect of staying the proceedings of that suit.
The third was that the two suits were of different nature, their subject matter and relief claimed being different.
The application for stay was rejected on July 5, 1951.
The Court mainly relied on the provisions of the Second proviso in the deed of dissolution.
The High Court of Madhya Bharat confirmed that order on August 20, 1953.
The position then, after August 20, 1953, was that the proceedings in both the suits were to continue, and that the Asansol Court had been directed to hear the issue of jurisdiction at an early date.
It was in these circumstances that the respondent applied under section 151, Code of Civil Procedure on September 14, 1953, to the Indore Court, for restraining the appellant from continuing the proceedings in the suit filed by him in the Court at Asansol.
The respondent alleged that the appellant filed the suit at Asansol in order to put him to trouble, heavy expenses and wastage of time in going to Asansol and that he was taking steps for the continuance of the suit filed in the Court of the Subordinate Judge of Asansol.
The appellant contested this application and stated that he was within his rights to institute the suit at Asansol, that that Court was competent to try it and that the point had been decided by overruling the objections raised by the respondent and that the respondent 's objection for the stay or 457 proceedings in the Court at Asansol had been rejected by that Court.
He denied that his object in instituting the suit was to cause trouble and heavy expenses to the respondent.
It may be mentioned that the respondent did not state in his application that his application for the stay of the suit at Asansol had been finally dismissed by the High Court of Calcutta and that that Court had directed the trial Court to decide the issue of jurisdiction at an early date.
The appellant, too, in his objection, did not specifically state that the order rejecting the respondents 's stay application had been confirmed by the High Court at Calcutta and that that Court had directed for an early hearing of the issue of jurisdiction.
The learned Additional District Judge, Indore, issues interim injunction under O. XXXIX, Code of Civil Procedure, to the appellant restraining him from proceeding with his Asansol suit pending decision of the Indore suit, as the appellant was proceeding with the suit at Asansol in spite of the rejection of his application for the stay of the suit at Indore, and , as the appellant wanted to violate the provision in the deed of dissolution about the Indore Court being the proper forum for deciding the dispute between the parties.
Against this order, the appellant went in appeal to the High Court of Judicature at Madhya Bharat, contending that the Additional District Judge erred in holding that he was competent to issue such an interim injunction to the appellant under O. XXXIX of the Code of Civil Procedure and that it was a fit case for the issue of such an injunction and that, considering the provisions of O. XXXIX, the order was without jurisdiction.
The High Court dismissed the appeal by its order dated May 10, 1955.
The learned Judges agreed with the contention that O. XXXIX, r. 1 did not 458 apply to the facts of the case.
They, however, held that the order of injunction could be issued in the exercise of the inherent powers of the Court under section 151, C.P.C.
It is against this order that the appellant has preferred this appeal, by special leave.
On behalf of the appellant, two main questions have been raised for consideration.
The first is that the Court could not exercise its inherent powers when there were specific provisions in the Code of Civil Procedure for the issue of interim injunctions, they being section 94 and O.XXXIX.
The other question is whether the Court, in the exercise of its inherent jurisdiction, exercised its discretion properly, keeping in mind the facts of the case.
The third point which came up for discussion at the hearing related to the legal effect of the second proviso in the deed of dissolution on the maintainability of the suit in the Court at Asansol.
We do not propose of express any opinion on this question of jurisdiction as it is the subject matter of an issue in the suit at Asansol and also in the suit at Indore and because that issue had not yet been decided in any of the two suits.
On the first question it is argued for the appellant that the provisions of cl.
(c) of section 94, Code of Civil Procedure make it clear that interim injunctions can be issued only if a provisions for their issue is made under the rules, as they provide that a Court may, if it is so prescribed, grant temporary injunctions in order to prevent the ends of justice from being defeated, that the word 'prescribed ', according to section 2, means 'prescribed by rules ' and that rr. 1 and 2 of O.XXXIX lay down certain circumstances in which a temporary injunction may be issued.
There is difference of opinion between the High Court on this point.
One view is that a Court 459 cannot issue an order of temporary injunction if the circumstances do not fall within the provisions of Order XXXIX of the Code: Varadacharlu vs Narsimha Charlu (1), Govindarajulu vs Imperial Bank of India (2), Karuppayya vs Ponnuswami (3), Murugesa Mudali vs Angamuthu Mudali (4) and Subramanian vs Seetarama (5).
The other view is that a Court can issue an interin injunction under circumstances which are not covered by Order XXXIX of the Code, if the Court is of opinion that the interests of justice require the issue of such interin injunction: Dhaneshwar Nath vs Ghanshyam Dhar (6), Firm Bichchha Ram vs Firm Baldeo Sahai (7),Bhagat Singh vs jagbir Sawhney (8) and Chinese Tannery owners ' Association vs Makhan Lal (9).
We are of opinion that the latter view is correct and that the Courts have inherent jurisdiction to issue temporary injunctions in circumstances which are not covered by the provisions of O.XXXIX, Code of Civil Procedure.
There is no such expression in section 94 which expressly prohibits the issue of a temporary injunction in circumstances not covered by O. XXXIX or by any rules made under the Code.
It is well settled that the provisions of the Code are not exhaustive for the simple reason that the Legislature is incapable of contemplating all the possible circumstances which may arise in future litigation and consequently for providing the procedure for them.
The effect of the expression 'if it is so prescribed ' is only this that when the rules prescribe the circumstances in which the temporary injunction can be issued, ordinarily the Court is not to use its inherent powers to make the necessary orders in the interests of justice, but is merely to see whether the circumstances of the case bring it within the prescribed rule.
if the provisions of section 94 460 were not there in the Code, the Court could still issue temporary injunctions, but it could do that in the exercise of its inherent jurisdiction.
No party has a right to insist on the Court 's exercising that jurisdiction and the Court exercises its inherent jurisdiction only when it considers it absolutely necessary for the ends of justice to do so.
it is in the incidence of the exercise of the power of the Court to issue temporary injunction that the provisions of section 94 of the Code have their effect and not in taking away the right of the Court to exercise its inherent powers.
There is nothing in O. XXXIX, rr. 1 and 2, which provide specifically that a temporary injunction is not to be issued in cases which are not mentioned in those rules.
The rules only provide that in circumstances mentioned in them the Court may grant a temporary injunction.
Further, the provisions of section 151 of the Code make it clear that the inherent powers are not controlled by the provisions of the Code.
Section 151 reads: "Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of the justice or to prevent abuse of the process of the Court.
" A similar question about the powers of the Court to issue a commission in the exercise of its powers under section 151 of the Code in circumstances not covered by section 75 and Order XXVI, arose in Padam Sen vs The State of Uttar Pradesh (1) and this Court held that the Court can issue a commission in such circumstances.
It observed at page 887 thus: "The inherent powers of the Court are in addition to the powers specifically conferred on 461 the Court by the Code.
They are complementary to those powers and therefore it must be held that the Court is free to exercise them for the purpose mentioned in section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the Legislature.
" These observations clearly mean that the inherent powers are not in any way controlled by the provisions of the Code as has been specifically stated in 151 itself.
But those powers are not to be exercised when their exercise may be in conflict with what had been expressly provided in the Code or against the intentions of the Legislature.
This restriction, for practical purposes, on the exercise of these powers is not because these powers are controlled by the provisions of the Code but because it should be presumed that the procedure specifically provided by the Legislature for orders in certain circumstances is dictated by the interests of justices.
In the above case, this Court did not uphold the order of the Civil Court, not coming under the provisions of order XXVI, appointing a commissioner for seizing the account books of the plaintiff on the application of the defandants.
The order was held to be defective not because the Court had no power to appoint a commissioner in circumstances not covered by section 75 and O. XXVI, but because the power was exercised not with respect to matters of procedure but with respect to a matter affecting the substantive rights of the plaintiff.
This is clear from the further observations made at page 887.
This Court said: "The question for determination is whether the impugned order of the Additional Munsif appointing Shri Raghubir Pershad Commissioner for seizing the plaintiff 's books of account 462 can be said to be an order which is passed by the Court in the exercise of its inherent powers.
The inherent powers saved by section 151 of the Code are with respect to the procedure to be followed by the Court in deciding the cause before it.
These powers are not powers over the substantive rights which any litigant possesses.
Specific powers have to be conferred on the Courts for passing such orders which would affect such rights of a party.
Such powers cannot come within the scope of inherent powers of the Court in matters of procedure, which powers have their source in the Court possessing all the essential powers to regulate its practice and procedure.
" The case reported as Maqbul Ahmad Pratap Narain Singh does not lay down that the inherent powers of the Court are controlled by the provisions of the Code.
It simply holds that the statutory discretion possessed by a Court in some limited respects under an Act does not imply that the Court possesses a general discretion to dispense with the provisions of that Act.
In that case, an application for the preparation of a final decree was presented by the decree holder beyond the period of limitation prescribed for the presentation of such an application.
It was however contended that the Court possessed some sort of judicial discretion which would enable it to relieve the decree holder from the operation of the Limitation Act in a case of hardship.
To rebut this contention, it was said at page 87: "It is enough to say that there is no authority to support the proposition contended for.
In their Lordships ' opinion it is impossible to hold that, in a matter which is governed by Act, an Act which in some limited respects gives the Court a statutory discretion, there can be 463 implied in the Court, outside the limits of the Act, a general discretion to dispense with its provisions.
It is to be noted that this view is supported by the fact that section 3 of the Act is peremptory and that the duty of the Court is to notice the Act and give effect to it, even though it is not referred to in the pleadings".
These observations have no bearing on the question of the Court 's exercising its inherent powers under section 151 of the Code.
The section itself says that nothing in the Code shall be deemed to limit or otherwise affect the inherent power of the Court to make orders necessary for the ends of justice.
In the face of such a clear statement, it is not possible to hold that the provisions of the Code control the inherent power by limiting it or otherwise affecting it.
The inherent power has not been conferred upon the Court; it is a power inherent in the Court by virtue of its duty to do justice between the parties before it.
Further, when the Code itself recognizes the existence of the inherent power of the Court, there is no question of implying any powers outside the limits of the Code.
We therefore repel the first contention raised for the appellant.
On the second question, we are of opinion that in view of the facts of the case, the Courts below were in error in issuing a temporary injunction to the appellant restraining him from proceeding with the suit in the Asansol Court.
The inherent powers are to be exercised by the Court in very exceptional circumstances, for which the Code lays down no procedure.
The question of issuing an order to a party restraining him from proceeding with any other suit in a regularly constituted Court of law deserves 464 great care and consideration and such an order is not to be made unless absolutely essential for the ends of justice.
In this connection, reference may usefully be made to what was said in Cohen vs Rothfield (1) and which case appears to have influenced the decision of the Courts in this country in the matter of issuing such injunction orders.
Scrutton, L. J., said at page 413: "Where it is proposed to stay an action on the ground that another is pending, and the action to be stayed is not in the Court asked to make the order, the same result is obtained by restraining the person who is bringing the second action from proceedings with it.
But, as the effect is to interfere with proceedings in another jurisdiction, this power should be exercised with great caution to avoid even the appearance of undue interference with another Court".
And again, at page 415: "While, therefore, there is jurisdiction to restrain a defendant from suing abroad, it is a jurisdiction very rarely exercised, and to be resorted to with great care and on ample evidence produced by the applicant that the action abroad is really vexatious and useless." The principle enunciated for a plaintiff in a earlier instituted suit to successfully urge a restraint order against a subsequent suit instituted by the defendant, is stated thus in this case, at page 415: "It appears to me that unless the applicant satisfies the Court that no advantage can be gained by the defendant by proceeding with the action in which he is plaintiff in another part of the King 's dominions, the Court should not stop him from proceeding 465 with the only proceedings which he, as plaintiff, can control.
The principle has been repeatedly acted upon.
" The injunction order in dispute is not based on any such principle.
In fact, in the present case, it is the defendant of the previously instituted suit that has obtained the injunction order against the plaintiff of the previously instituted suit.
The considerations which would make a suit vexatious are well explained in Hyman vs Helm (1).
In that case, the defendant, in an action before the Chancery Division of the High Court brought an action against the plaintiffs in San Francisco.
The plaintiffs, is an action in England, prayed to the Court to restrain the defendants from proceeding further with the action in San Francisco.
It was contended that it was vexatious for the defendants to bring the action in San Francisco as the witnesses to the action were residents of England, the contract between the parties was an English contract and that its fulfilment took place is England.
In repelling the contention that the defendants ' subsequent action in San Francisco was vexatious, Brett, M. R., said at page 537: "If that makes an action vexatious it would be a ground for the interference of the Court, although there were no action in England at all, the ground for alleging the action in San Francisco to be vexatious being that it is brought in an inconvenient place.
But that is not the sort of vexation on which an English Court can act.
It seems to me that where a party claims this interference of the Court to stop another action between the same parties, it lies upon him to shew to the Court that the multiplicity of actions is vexatious, and that the whole burden of proof lies upon him.
He does not satisfy that burden of proof by merely she 466 wing that there is a multiplicity of actions, he must go further.
If two actions are brought by the same plaintiff against the same defendant in England for the same cause of action, then, as was said in Mchonry vs Lewis and the case of the Peruvian Guano Company vs Bockwoldt (23 Ch. D. 225), prima facie that is vexatious, and therefore the party who complains of such a multiplicity of actions had made out a prima facie case for the interference of the Court.
Where there is an action by a plaintiff in England, and a crossaction by a defendant in England, whether the same prima facie case of vaxation arises is a much more difficult point to decide and I am not prepared to say that it does.
" It should be noticed that this question for an action being vexatious was being considered with respect to the subsequent action brought by the defendant in the previously instituted suit and when the restraint order was sought by the plaintiff of the earlier suit.
In the case before us, it is the plaintiff of the subsequent suit who seeks to restrain the plaintiff of the earlier suit from proceeding with his suit.
This cannot be justified on general principles when the previous suit has been instituted in a competent Court.
The reasons which weighed with the Court below for maintaining the order of injunction may be given in its own words as follows: "In the plaint filed in the Asansol Court the defendant has based his claim on the deed of dissolution dated 22, 1945, but has avoided all references to the provisions regarding the agreement to place the disputes before the Indore Courts.
It was an action taken by the present defendant in anticipation of the present suit and was taken in flagrant breach 467 of the terms of the contract.
In my opinion, the defendant 's action constitutes misuse and abuse of the process of the Court.
" The appellant attached the deed of dissolution to the plaint he filed at Asansol.
Of course, he did not state specifically in the plaint about the proviso with respect to the forum for the decision of the dispute.
Even if he had mentioned the term, that would have made no difference to the Asansol Court entertaining the suit, as it is not disputed in these proceedings that both the Indore and Asansol Courts could try the suit in spite of the agreement.
The appellant 's institution of the suit at Asansol cannot be said to be in anticipation of the suit at Indore, which followed it by a few months.
There is nothing on the record to indicate that the appellant knew, at the time of his instituting the suit, that the respondent was contemplating the institution of a suit at Indore.
The notices which the respondent gave to the appellant were in December 1945.
The suit was filed at Asansol in August 1948, more than two years and a half after the exchange of correspondence referred to in the plaint filed at Asansol.
In fact, it is the conduct of the respondent in applying for the injunction in September 1953, knowing full well of the order of the Calcutta High Court confirming the order refusing stay of the Asansol suit and directing that Court to proceed with the decision of the issue of jurisdiction at an early date, which can be said to amount to an abuse of the process of the Court.
It was really in the respondent 's interest if he was sure of his ground that the issue of jurisdiction be decided by the Asansol Court expeditiously, as ordered by the Calcutta High Court in May 1953.
If the Asansol Court had clearly no jurisdiction to try the suit in view of the terms of the deed of dissolution, the decision of that issue 468 would have finished the Asansol suit for ever.
He, however, appears to have avoided a decision of that issue from that Court and, instead of submitting to the order of the Calcutta High Court, put in this application for injunction.
It is not understandable why the appellant did not clearly state in his objection to the application what the High Court of Calcutta had ordered.
That might have led the consideration of the question by the Indore Court in a different perspective.
It is not right to base an order of injunction, under section 151 of the Code, restraining the plaintiff from proceeding with his suit at Asansol, on the consideration that the terms of the deed of dissolution between the parties make it a valid contract and the institution of the suit at Asansol is in breach of it.
The question of jurisdiction of the Asansol Court over the subject matter of the suit before it will be decided by that Court.
The Indore Court cannot decide that question.
Further, it is not for the Indore Court to see that the appellant observes the terms of the contract and does not file the suit in any other Court.
It is only in proper proceedings when the Court considers alleged breach of contract and gives redress for it.
For the purposes of the present appeal, we assume that the jurisdiction of the Asansol Court is not ousted by the provisions of the proviso in the deed of dissolution, even though that proviso expresses the choice of the parties for having their disputes decided in the Court at Indore.
The appellant therefore could choose the forum in which to file his suit.
He chose the Court at Asansol, for his suit.
The mere fact that Court is situate at a long distance from the place of residence of the respondent is not sufficient to establish that the suit has been filed in that Court in order to put the respondent to trouble and harassment and to unnecessary expense.
469 It cannot be denied that it is for the Court to control the proceedings of the suit before it and not for a party, and that therefore, an injunction to a party with respect to his taking part in the proceedings of the suit would be putting that party in a very inconvenient position.
It has been said that the Asansol Court would not act in a way which may put the appellant in a difficult position and will show a spirit of cooperation with the Indore Court.
Orders of Court are not ordinarily based on such considerations when there be the least chance for the other Court not to think in that way.
The narration of facts will indicate how each Court has been acting on its own view of the legal position and the conduct of the parties.
There have been case in the past, though few, in which the Court took no notice of such injunction orders to the party in a suit before them.
They are: Menon vs Parvathi Ammal(1), Harbhagat Kaur vs Kirpal Singh (2) and Shiv Charan Lal vs Phool Chand (3).
In the last case, the Agra Court issued an injunction against the plaintiff of a suit at Delhi restraining him from proceeding with that suit.
The Delhi Court, holding that the order of the Agra Court did not bind it, decided to proceed with the suit.
This action was supported by the High Court.
Kapur J., observed at page 248: "On the facts as have been proved it does appear rather extra ordinary that a previously instituted suit should be sought to be stayed by adopting this rather extraordinary procedure.
" It is admitted that the Indore Court could not have issued an induction or direction to the Asansol Court not to proceed with the suit.
The effect of issuing an injunction to the plaintiff of the 470 suit at Asansol, indirectly achieves the object which an injunction to the Court would have done.
A court ought not to achieve indirectly what it cannot do directly.
The plaintiff, who has been restrained, is expected to bring the restraint order to the notice of the Court.
If that Court, as expected by the Indore Court, respects the injunction order against the appellant and does not proceed with the suit, the injunction order issued to the appellant who is the plaintiff in that suit is as effective an order for arresting the progress of that suit as an injunction order to the Court would have been.
If the Court insists on proceeding with the suit, the plaintiff will have either to disobey the restraint order or will run the risk of his suit being dismissed for want of prosecution.
Either of these results is a consequence which an order of the Court should not ordinarily lead to.
The suit at Indore which had been instituted later, could be stayed in view of section 10 of the Code.
The provisions of that section are clear, definite and mandatory.
A Court in which a subsequent suit has been filed is prohibited from proceeding with the trial of that suit in certain specified circumstances.
When there is a special provision in the Code of Civil Procedure for dealing with the contingencies of two such suits being instituted, recourse to the inherent powers under section 151 is not justified.
The provisions of section 10 do not become inapplicable on a Court holding that the previously instituted suit is a vexatious suit or has been instituted in violation of the terms of the contract.
It does not appear correct to say, as has been said in Ram Bahadur vs Devidayal Ltd. (1) that the Legislature did not contemplate the provisions of section 10 to apply when the previously instituted suit be held to be instituted in those circumstances.
The provisions of section 35A indicate that the Legislature was aware of false or vexatious claims or defences 471 being made, in suits, and accordingly provided for compensatory cost.
The Legislature could have therefore provided for the non application of the provisions of section 10 in those circumstances, but it did not.
Further, section 22 of the Code provides for the transfer of a suit to another Court when a suit which could be instituted in any one of two or more Courts is instituted in one of such Courts.
In view of the provisions of this section, it was open to the respondent to apply for the transfer of the suit at Asansol to the Indore Court and, if the suit had been transferred to the Indore Court, the two suits could have been tried together.
It is clear, therefore, that the Legislature had contemplated the contingency of two suits with respect to similar reliefs being instituted and of the institution of a suit in one Court when it could also be instituted in another Court and it be preferable, for certain reasons, that the suit be tried in that other Court.
In view of the various considerations stated above, we are of opinion that the order under appeal cannot be sustained and cannot be said to be an order necessary in the interests of justice or to prevent the abuse of the process of the Court.
We therefore allow the appeal with costs, and set aside the order restraining the appellant from proceeding with the suit at Asansol.
SHAH, J. I have perused the judgment delivered by Mr. Justice Dayal.
I agree with the conclusion that the appeal must succeed but I am unable to hold that civil courts generally have inherent jurisdiction in cases not covered by rr. 1 and 2 of O. 39, Civil Procedure Code to issue temporary injunctions restraining parties to the proceedings before them from doing certain acts.
The powers of courts, other than the Chartertd High Courts, in the exercise of their ordinary original Civil jurisdiction to issue temporary injunctions are defined by the terms of section 94(1)(c) and 472 O. 39, Civil Procedure Code.
A temporary injunction may issue if it is so prescribed by rules in the Code.
The provisions relating to the issue of temporary injunctions are to be found in O. 39 rr. 1 and 2: a temporary injunction may be issued only in those cases which come strictly within those rules, and normally the civil courts have no power to issue injunctions by transgressing the limits prescribed by the rule.
It is true that the High Courts constituted under Charters and exercising ordinary original jurisdiction do exercise inherent jurisdiction to issue an injunction to restrain parties in a suit before them from proceedings with a suit in another court, but that is because the Chartered High Courts claim to have inherited this jurisdiction from the Supreme Courts of which they were successors.
This jurisdiction would be saved by section 9 of the Charter Act (24 and 25 Vict. c. 104) of 1861, and in the Code of Civil Procedure, 1908 it is expressly provided by section 4.
But the power of the civil courts other than the Chartered High Courts must be found within section 94 and O. 39 rr. 1 and 2 of the Civil Procedure Code.
The Code of Civil Procedure is undoubtedly not exhaustive: it does not lay down rules for guidance in respect of all situations nor does it seek to provide rules for decision of all conceivable cases which may arise.
The civil courts are authorised to pass such orders(as may be necessary for the ends of justice, or to prevent abuse of the process of court, but where an express provision is made to meet a particular situation the Code must be observed, an departure therefrom is not permissible.
As observed in L. R. 62 I. A. 80 (Maqbul Ahmed vs Onkar Pratab) "It is impossible to hold that in a matter which is governed by an Act, which in some limited respects gives the court a statutory discretion, there can be implied in 473 court, outside the limits of the Act a general discretion to dispense with the provisions of the Act." Inherent jurisdiction of the court to make order ex debito justitiae is undoubtedly affirmed by section 151 of the Code, but that jurisdiction cannot be exercised so as to nullify the provisions of the Code.
Where the Code deals Expressly with a particular matter, the provision should normally be regarded as exhaustive.
Power to issue an injunction is restricted by section 94 and O. 39, and it is not open to the civil court which is not a Chartered High Court to exercise that power ignoring the restriction imposed there by, in purported exercise of its inherent jurisdiction.
The decision of this Court in Padam Sen vs The State of Uttar Pradesh(1) does not assist the case of the appellant.
In Padam Sen 's case this Court was called upon is a original appeal to consider whether an order of a Munsiff appointing a commissioner for seizing certain account books of the plaintiff in a suit pending before the Munsiff was an order authorised by law.
It was the case for the prosecution that the appellants offered a bribe to the commissioner as consideration for being allowed to tamper with entries therein, and thereby the appellants committed an offence punishable under section 165A of the Indian Penal Code.
This Court held that the commissioner appointed by the civil court in exercise of powers under O. 26 C. P. Code did not hold any office as a public servant and the appointment by the Munsiff being without jurisdiction, the commissioner could not be deemed to be a public servant.
In dealing with the argument of counsel for the appellants that the civil court had inherent powers to appoint a commissioner in exercise of authority under section 151 Civil Procedure Code for purposes which do not fall 474 within the provisions of section 75 and O. 26 Civil Procedure Code, the Court observed: "Section 75 of the Code empowers the Court to issue a commission, subject to conditions and limitations which may be prescribed, for four purposes, viz., for examining any person, for making or adjusting accounts and for making a partition.
Order XXVI lays down rules relating to the issue of commissions and allied matters.
Mr. Chatterjee, learned counsel of the appellants, has submitted that the powers of a Court must be found within the four corners of the Code and that when the Code has expressly dealt with the subject matter of commissions in section 75 the Court cannot invoke its inherent powers under section 151 and thereby add to its powers.
On the other hand, it is submitted for the State, that the Code is not exhaustive and the Court, in the exercise of its inherent powers, can adopt any procedure not prohibited by the Code expressly or by necessary implication if the Court considers it necessary for the ends of justice or to prevent abuse of the process of the Court.
x x x x x x x x The inherent powers of the Court are in addition to the powers specifically conferred on the Court by the Code.
They are complementary to those powers and therefore it must be held that the Court is free to exercise them for the purposes mentioned in section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the Legislature.
It is also well recognized that the inherent power is not to be exercised in a manner which will be 475 contrary or different from the procedure expressly provided in the Code." The Court in that case held that in exercise of the powers under section 151 of the Code of Civil Procedure, 1908 the Court cannot issue a commission for seizing books of account of plaintiff a purpose for which a commission is not authorized to be issued by section 75.
The principle of the case is destructive of the submission of the appellants.
Section 75 empowers the Court to issue a commission for purposes specified therein: even though it is not so expressly stated that there is no power to appoint a commissioner for other purposes, a prohibition to that effect is, in the view of the Court in Padam Sen 's case, implicit in section 76.
By parity of reasoning, if the power to issue injunctions may be exercised, if it is prescribed by rules in the Orders in Schedule I, it must he deemed to be not exercisable in any other manner or for purposes other than those set out in O. 39 rr. 1 and 2.
Appeal allowed. | M filed a suit at Asansol against H for recovery of money.
Later, H filed a counter suit at Indore against M for recovery of money.
In the Asansol suit one of the defences raised by H was that the Asansol court had no jurisdiction to entertain the suit.
H applied to the Asansol court to stay the suit but the court refused the prayer.
An appeal to the Calcutta High Court against the refusal to stay was dismissed with the direction that the preliminary issue of jurisdiction should be disposed of by the trial court immediately.
Thereupon, H applied to the Indore court for an injunction to restrain M from proceeding with the Asansol suit pending the disposal of the Indore suit and the court purporting to act under O. 39 Code of Civil Procedure granted the injunction.
M appealed to the Madhya Bharat High Court which dismissed the appeal holding that though O. 39 was not applicable to the case the order of injunction could be made under the inherent powers of the court under section 151 Code of Civil Procedure. ^ Held, that the order of injunction was wrongly granted and should be vacated.
Per, Wanchoo, Das Gupta, and Dayal,JJ.
The Civil courts had inherent power to issue temporary injunctions in cases which were not covered by the provisions of O. 39 Civil Procedure Code.
The provisions of the Code were not 451 exhaustive.
There was no prohibition in section 94 against the grant of a temporay injunction in circumstances not covered by O. 39.
But inherent powers were not to be exercised when their exercise was in conflict with the express provisions of the Code or was against the intention of the legislature.
Such powers were to be exercised in very exceptional circumstances.
A plaintiff of a suit in another jurisdiction could only be restrained from proceeding with his suit if the suit was vexatious and useless.
It was not so in the present case.
It was proper that the issue as to jurisdiction should be decided by the Asansol court as directed by the Calcutta High Court.
The Indore court could not decide this issue.
Beside, it was open to the Asansol court to ignore the order of the Indore court and to proceed with the suit.
This would place M in an impossible position.
An order of a court should not lead to such a result.
Varadacharlu vs Narsimha Charlu, A.I.R. 1926 Mad.258; Govindarajalu vs Imperial Bank of India, A.I.R. 1932 Mad. 180 ; Karuppayya vs Ponnuswami, A.I.R. 1933 Mad.
500(2); Murugesa Mudali vs Angamuthu Madali, A.I.R. 1938 Mad. 190 and Subramanian vs Seetarama, A.I.R. 1940 Mad. 104, not approved.
Dhaneshwar Nath vs Ghanshyam Dhar, A.I.R. 1940 All.185, Firm Richchha Ram vs Firm Baldeo Sahai, A.I.R. 1940 All.241, Bhagat Singh vs Jagbir Sawhney, A.I.R. 1941 Cal.
670 and Chinese Tannery Owners ' Association vs Makhan Lal, A.I.R. 1952 Cal.
550, approved.
Padam Sen vs State of U.P. [1961] 1 section C. R. 884, Cohen vs Rothfield, L. R. and Hyman vs Helm, L. R.(1883) , relied on.
Per, Shah, J. Civil courts have no inherent power to issue injunctions in case not covered by O. 39, rr. 1 and 2 Code of Civil Procedure.
The power of civil courts, other than Chartered High Courts, to issue injunctions must be found within the terms of section 94 and O. 39, rr. 1 and 2.
Where an express provision is made to meet a particular situation the Code must be observed and departure therefrom is not permissible.
Where the Code deals expressly with a particular matter the provision should normally be regarded as exhaustive.
Padam Sen vs State of U. P. [1961] 1 section C. R. 884, relied upon. |
Civil Appeal No. 1343 of 1969.
From the Judgment and Decree dated 17 2 1969 of the Kerala High Court in Appeal Suit No. 493 of 1966.
S.T. Desai, section Krishan Iyer and A.G. Puddisery, for the Appellant.
T.S. Krishnamoorthy Iyer, K.P.K. Menon, I. N. Shroff and R.P. Kapoor, for the Respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by certificate from the judg ment dated 17 February, 1969 of the High Court of Kerala.
The respondent filed this suit against the appellant for recovery of property with arrears of rent and mesne profits and damages for waste.
The property measuring 550.37 acres consisted of 279.86 acres of planted area and the rest was unplanted area.
By a lease dated 7 October, 1950, the.
respondent leased out to the appellant the plantations together with Bungalow, quarters of what is described as "Beenachi Estate".
The lease was for a period of 12 years with effect from 1 Janu ary, 1950.
The rent for the first six years was fixed at Rs. 3600/ per annum.
The rent for the second period of six years was fixed at Rs. 4500/ per annum.
The rent was payable in advance on 1 January of each calendar year.
The respondent 's case is that since 1953 the appellant failed and neglected to pay rent fixed under the lease.
Clause 4 of the lease provided that if the rent would be in arrears and unpaid for 30 days after the same would become due it would be lawful for the lessor respondent to forfeit the lease notwithstanding the fact that the term had not expired.
The lease provided that the respondent lessor would re enter the premises in that event and the lease would cease and determine.
The respondant by notice dated 5 March, 1959 called upon the appellant to quit, vacate and deliver to the respondent vacant possession of the property.
The notice was consequent upon the wilful default of the appellant to pay rent and consequent on the several breaches of covenants as alleged in the notice.
The respondent filed the suit on 5 February, 1960.
The defendant claimed possession of the property known as the Beenachi Estate together with movable, a declaration that the lease had determined and claimed arrears of rent, mesne profits a sum of Rs. 2,20,394/ as 'damages for waste.
At the trial the appellant raised the plea that the tenancy is governed by the Malabar Tenancy Act, and, there fore, the suit is barred by Act 1 of 1957.
The respondent pleaded that the tenancy 1029 is covered by exception in section 2(1 ) of the Malabar Tenancy Act VII of 1954.
The trial Court accepted the preliminary objection of the appellant and dismissed the suit.
The High Court on appeal remanded the case tO the Subor dinate Judge for fresh trial.
The trial Court on remand decreed the suit on 25 October, 1966.
The respondent ob tained a decree for eviction with arrears of rent and dam ages amounting to Rs. 1,00,000/ for certain items and a further sum of Rs. 51,030/ for other items of damages.
The trial COurt held that in view of the proviso to section 3(1) (vii) of the Kerala Land Reforms Act I of 1964 hereinaf ter referred to as the 1964 Act a tenant having fixity of tenure under the Act as it stood on 21 January 1961 would continue to enjoy it under the 1964 Act notwithstanding the fact that the landlord might be a corporation owned or controlled by the Government of India or by any State Gov ernment in India .as provided in section 3(1) (c) of the 1964 Act.
The appellant was held by the trial Court to be disentitled to resist the prayer for eviction in 'the suit because his holding was a plantation exceeding 30 acres in extent as provided in section 3(1) (vii) of the 1964 Act.
The appellant filed an appeal.
The respondent filed cross objections.
The High Court dismissed the appellant 's appeal and allowed the cross objections of the respondent.
The High Court enhanced the damages from Rs. 1,00,000/ to Rs. 2,20,394/ and confirmed the award of Rs. 51,030/ as damages under other heads.
Counsel for the appellant contended that the High Court was in error in taking the view that the appellant was not entitled to claim fixity of tenure.
Counsel for the appellant relied on section 3(1) (vii)of the 1964 Act as amended by Act 35 of 1969.
Before the 1969 Amendment the 1964 Act provided in clause (vii) to section 3(1) that nothing in this Chapter shall apply to clauses (i) to (vii) of section 3 to the rights of persons who were entitled to fixity of tenure immediately before 21 January 1961 under any law then in force.
The aforesaid proviso was substitut ed by the Amendment Act 35 of 1969 as follows : "Provided that nothing in clauses (i)to (vii) shall apply in the cases of persons who were entitled to fixity of tenure immediately before 21 January 1961 under any law then in force or persons claiming under .such persons".
The High Court held that only rights of persons but not fixity of tenure were saved.
Counsel for the appellant contended that the effect of proviso to section 3(1) (vii) of the 1964 Act as amended in 1969 is that fixity of tenure and rights with regard to the same are both saved, and, therefore, the High Court should have held that the appellant was entitled to fixity of tenure.
The second contention of counsel for the appellant is that the High Court was in error in holding.
that under section 23 of the Malabar Tenancy Act 1929 the appellant was liable to be evicted by the landlord and that the appellant had no right to resist eviction.
1030 The contention of the appellant was that assuming the High Court was right on the above conclusion, the provisions contained in section 108 sub sections (2) and (3) of the 1964 Act as amended in.
1969 require the Court.
to apply the law retrospectively in respect of pending suits, appeals, applications, decree where dispossession had not been ef fected.
It is said by the appellant that the relevant date .for the application of these sub sections was 1 Janu ary 1970 on which, date the 1969 Amendment Act came into force.
It is contended on.
behalf of the appellant that the appellant had not been dispossessed from the property on or before 1 January, 1970, but only an order appointing Receiv er was made by the.
High Court on 17 February, 1969.
The property, therefore, according to the appellant, continued to be on lease and the order appointing Receiver could not have the affect of dispossession.
The appellant, therefore, under section 108(2) of the 1964 Act claimed to have the decree reopened for disposal in accordance with section 125(3) of the 1964 Act as amended in 1969 Section 108(2) of the 1964 Act as amended is as follows : "Any decree passed before the commencement of this section for the dispossession of a person from the land in his possession, pursu ant to which dispossession has not been af fected, may, on the application of such per son, be reopened and the matter may be dis posed of in accordance with the provisions of the principal Act as amended by this Act.
By the principal Act is .meant the 1964 Act.
Section 125(3) of the 1964 Act as amended in 1969 is as follows : "If any suit or other proceeding in ques tion regarding rights of a tenant or of a kudikidappukaran (including a question as to whether a person is a tenant or a kudikidappu karan) arises, the civil court shall stay the suit or other proceeding and refer such ques tion to the Land Tribunal having jurisdiction over the area in which the land or part there of is situate together with the relevant records for the decision of that question only".
Extracting these provisions counsel for the appellant contended that section 125(3) of the 1964 ACt as amended in 1969 indicated that all questions regarding rights of ten ants could be decided only by the Land Tribunal to which a reference has to be made.
The third contention on behalf of.
the appellant is that the 1964 Act as amended in 1969 inserted section 50A to the 1964 Act the effect of which is that notwithstanding any thing contained in any law or contract, or in any judgment, decree or order of court, a tenant.
entitled to fixity of tenure shall have the right to use his holding in any manner he thinks fit.
The 1964 Act as amended in 1969 introduced section 52 which was.
also relied on by the appellant, to show that the cultivating tenant shall have a right to cut such trees and the landlord or the intermediary shall not have the right to cut any such trees.
Section 73 of the 1964 Act which was introduced in 1969 is to the effect that the maximum amount that could be claimed by 1031 way of arrears of rent for the period ending May 1968 notwithstanding any contract, judgment or order of court is only 3 years and nothing more.
These provisions, viz., Sections 50 A, 52 and 73 which were introduced by the 1969 Amendment Act were relied on by the appellant for the purpose of showing that the appellant would be entitled to use the holding and to cut trees and the maximum arrears of rent could be claimed for a period of three years and not more.
Counsel for the appellant next contended that the trial Court was in error in finding that the holding of the appel lant is a plantation in the context of section 3(1) (viii) of the 1964 Act.
The contention on behalf of the appellant was that assuming that the trial Court was right in its conclusion as regards the area of 279.86 acres which accord ing to the respondent was the extent of coffee plantation .on the date of the lease, in respect of the remaining extent of land the appellant was entitled to fixity of tenure in view of the proviso to clause 3(1)(viii) of the 1964 Act.
The crucial date according to the appellant is 1 January 1970 when the 1969 Amendment Act came into force.
The effect of section 108(2) and (3) of the 1964 Act read with section 125(3) of the Act is according to the appellant, that the questions as to whether 'the whole or portion of the land is a plantation, whether there is fixity of tenure and whether the respondent can claim damages could all be disposed of only by the Land Tribunal.
The appellant con tended that the judgment of the High Court has, therefore, to be set aside and this Court should direct that the mat ters may be disposed ' of by the Land Tribunal.
As a corollary counsel for the appellant contended that the trial Court was wrong in holding that the appellant was liable to pay damages and in view of the provisions con tained in sections 50 A and 52 of the 1964 Act as amended in 1969 read which section 125(3) of the Act as amended all matters would be decided by the Land Tribunal.
Counsel for the appellant relied on section 108(3) of the Act which as changed by amendment in 1971 is as follows : "If in any suit, application, appeal, revision, review, proceedings in execution of a decree or other proceedings pending at the commencement of this section before any court, tribunal, officer or other authority, any person claims any benefit, right or remedy conferred by any of the provisions of the principal Act, or the principal ,Act as amend ed by this Act, such suit, application, ap peal, revision, review, proceedings in execu tion or other proceedings shall be disposed of in accordance with the provisions of the principal Act as amended by the 1971 Act.
" In short the contention of the appellant is that ' the whole proceedings in the suit and the pleas therein are to be disposed of in accordance with the provisions ' of the Act.
According to the appellant the provisions of the Act indicate that there should not be 1032 any decree for eviction and .further that the damages award ed against the appellant cannot be sustained by the provi sions of the 1964 Act as amended by Act 35 of of 1971 and Act 17 of 1972.
The appellant filed an application praying for reopen ing the decree passed by the High Court and in that behalf has invoked section 132(3) of the 1964 Act and section 108(2) of the Act as amended in 1969.
The appellant also prayed that section 108(3) as introduced in 1969 and as amended in 1971 indicates that the appeal is to be disposed of in accordance with the provisions of the appeal is as amended in 1971.
Section 132(3) of the 1964 Act is as follows : "Notwithstanding the repeal of the enactments mentioned in sub section (2) any decree passed before.
the commencement of this Act for the eviction of a tenant from his holding, pursuant to which eviction has not been effected, may, on the application of the tenant or the landlord, be reopened and the matter may be disposed of in accordance with the provisions of this Act.
" This provision according to the appellant establishes that it applies to decree passed before the commencement of Act 1 of 1964 and also pursuant to which eviction has not been effected.
In the present case, the decree was passed by the trial Court as well as by the High Court after the 1964 Act came into existence.
The decree was passed in accordance with the provisions of the 1964 Act but before the amendment in 1969.
The appellant claimed benefit of the proviso to section 3 (1) (vii)of the Act.
The benefit claimed is fixity of ten ure.
The proviso as it stood when the 1964 Act came into operation was that nothing in clauses (i) to (vii) of sec tion 3 (1) of the Act "shall affect the rights of persons who are entitled to the fixity of tenure immediately before 21 January 1961 under any law then in force".
The change Substituted by the 1969 Amendment Act is that nothing in clauses (i) to (vii) of section 3(1) of the Act "shall apply in the case of persons who were entitled to fixity of tenure immediately before 21 January 1961 under any law then in force or persons claiming under such persons".
The prevail ing law on 21 January 1961 was the Malabar Tenancy Act.
If, therefore, the appellant did not or could not have fixity of tenure on 21 January 1961 under the Malabar Tenancy Act he would not have any claim to the benefit of fixity of tenure under the 1964 Act or even under the 1964 Act as amended in 1969.
Under section 23 of the Malabar Tenancy Act a Verum pattom tenant would be liable to be evicted from his holding at the instance of his landlord if 'he intentionally commit ted acts of waste sufficient to impair materially the value or utility of the holding for the, purpose for which it was let to him or that he committed default in the pay ment of stipulated rent for more than 3 months after its due date, or allowed strangers to trespass upon the holding.
In the present case,.
the appellant has been found to be a habitual defaulter since 1952 in the payment of rent fixed under the lease of 1950 under which the 1033 appellant was let into possession of the estate.
Further the appellant has been found to be guilty of willful acts of waste before and after the institution of the suit.
The appellant has also been found to have denuded the entire tree growth in more than one half of the area of the estate.
The appellant has been found to have destroyed more than one half of the coffee planted area that had been leased to him.
It was found that the remaining part of the coffee plantation as a result of the acts of the appellant is in utterly neglected condition.
The facts circumstances of the present case as found by the courts establish that the appellant had no fixity of tenure on 21 January 1961 warranting grant of any benefit, remedy or right against eviction.
In fact, this claim was also canvassed by the appellant and found against him by the court.
The respondent in the present case is a Corporation owned or controlled by the Government of Madhya Pradesh and, is, therefore, a Government company under the Indian Companies Act.
The appellant is disentitled to claim fixity of tenure under section 13 of the Act inasmuch as under the 1964 Act and under amendment in 1969 leases of lands owned by the Government owned Companies are by section 3(1) (i) of the 1,964 Act specifically exempted from the provisions of Chap ter II of the Act.
Section 13 which is in Chapter 1I cannot therefore, be invoked by the appellant.
The right to fixity of tenure is denied to a tenant in respect of a holding owned by or belonging to a Government controlled CompanY.
The appellant is, therefore, not entitled to claim fixity of tenure under the 1964 Act as amended.
The Beenachi Estate in the present case does not come within the definition of "plantation" in section 2(44) of the 1964 Act as amended in 1969 because the extent of coffee cultivated area has been found by the court to have dwindled to a little over 110 acres in extent out of the total extent of a little over 550 acres.
Further, tapioca has been grown by the Receiver in the areas other than the coffee planted area.
Therefore, the Estate ceased to be a property princi pally planted with coffee even before 1 January 1970 when the 1969 Amendment Act came into force.
Under the lease the coffee planted area was 279.86 acres and the remaining extent of 271 acres was also intended to be extended area to be planted with coffee.
The courts have found that instead of coffee plantation the appellant deliberately committed waste during the progress of litigation in the courts by reducing the extent of coffee plantation to just 168.58 acres.
This area dwindled to little over 110 acres before 2 March 1969 when the Receiver was appointed by the High Court.
The .large extent of vacant areas within the estate was on account of deliberate devastation of the said area by denudation of tree growth during the pendency of the litiga tion in the courts.
Therefore, it"is obvious that the appellant is dis entitled to take advantage of his own wrongs so as to claim statutory benefits which are also not available to the appellant.
The property by reason of acts of waste, damage, devastation, denudation Ceased to be coffee plantation on 1 January 1970 when the 1969 Amendment came into effect.
Section 108(3) of the Act as amended in 1971 ' will permit the reopening of the decree only if a person has claims to right, benefit or 1034 remedy which has been conferred on him under the Act.
In the present case neither under the Act of 1964 nor under the 1969 Amendment Act the appellant can claim the benefit of section 50 A of the 1964 Act as amended in 1969 because the appellant willully misused the holding and caused acts of waste causing loss 'to the lessor and damage and destruction to the holding.
The High Court rightly held that under the proviso to clauses (i) to (vii) of section 3(1) of the 1964 Act the appellant had no right to fixity of tenure under the Malabar Tenancy Act.
Section 23 of the Malabar Tenancy Act con ferred a right on the landlord to evict the tenant who intentionally and wilfully committed such acts of waste as are calculated to impair materially and permanently the value or utility of the holding for agricultural purposes and who has not paid within three months after the due date, the whole or any portion of the rent due in respect of the holding.
The courts found the defendant to be guilty of wilful waste prior to the institution of the suit and during the pendency of the suit and further that the appellant committed default in payment of rent for seven years.
Therefore, the appellant was not entitled to any rights .of fixity of tenure under the proviso to clauses (i) to (vii) of section 3(1) of the 1964 Act is to be interpreted in the light of the provisions of the Malabar Tenancy Act in the present case.
The appellant invokes the provisions contained in sec tion 125(3) of the Act for the purpose of determination in accordance with the provisions of the Act benefits, rights or remedies conferred by the Act and claimed by him are fixity of tenure, remedy against eviction and remedy against payment of damages and arrears of rent.
The appellant also invokes the provisions contained in section 108(2) and (3) of the Act for the purpose of reopening of the decree and disposal of the same in accordance with the provisions of the Act on the same ground that the appellant claims bene fits, rights and remedies conferred on him by the provisions of the Act.
Counsel for the appellant relied on the Full Bench decision of the Kerala High Court in Anantha Narayana Iyer vs Pran(1) in support of the contention that by reason of the provisions contained in section 125(3) of the Act the appeals_should be disposed of in accordance with the provi sions of the Act.
Section 125 (1 ) of the Act created a bar against civil court to settle, decide or deal with the questions required to be settled by the Land Board in accordance with the provisions of the Act.
The provisions contained in section 125(1) of the Act are prospective.
Section 125 came into effect on 1 January, 1970 when the other amendments intro duced by the 1969 Amendment Act came into force.
The provi so to section 125(1) of the Act expressly states that Sec tion 125(1) of the Act shall not apply to proceedings pend ing in any court at the commencement of the Amendment Act of 1969 on 1 January, 1970.
The effect of the proviso is to carve out by way of exception what would otherwise have fallen within the provision to which it is a proviso.
It, therefore, follows that the proceedings in the present case which were pending at the commencement of the Amendment Act on 1 January, (1) 1035 1970 are saved from the operation of section 125(1) of the Act.
In short, the proceedings are to be determined by the civil court.
Section 125(3) of the Act which provides that if in any suit or other proceeding any question regarding the rights of a tenant arises the civil court shall stay the suit and refer such question to the Land Tribunal having jurisdiction over the area in which the land or the part thereof is situate for the decision of that question only.
The appel lant relied on the Kerala Full Bench decision which held that section 125(3) of the Act as amended in 1969 is retro spective, and, therefore,.
proceedings should be determined by the Land Tribunal.
The reason given by the Kerala High Court is that the suit or proceeding must be pending at the commencement of the Amendment Act 1969 before the provisions contained in section 125(3) of the Act can be applied.
The Kerala High Court has, therefore, concluded that suit or other proceeding which is pending at the commencement of the Act will be governed by section 125(3) of the Act.
This reasoning is not correct.
Section 125(3) of the Act is equally prospective.
Section 125(3) of the Act will be applied with regard to the provisions contained in section 125(1) of the Act.
Matters which will be within the mischief of section 125(1) of the Act are matters which will arise in suits or proceedings initiated and originated after the commencement of the Act.
It is unsound to suggest that pending proceedings which are excepted from the application of section 125 (1) of the Act will yet fall within section 125(1) of the Act by reference to section 125(3) of the Act.
The Kerala High Court fell into the error of overlooking the purpose of section 125(3) of the Act.
The purpose is that suit or other proceeding shall be stayed.
In the present case the appeal in this Court which was pending on 1 January 1970 is a proceeding which was pending at the commencement of the Act and was not initiated or originated at the commencement of the Act.
Therefore, the provisions contained in section 125 are not applicable in the present case.
A statute has to be looked into for the general scope and purview of the statute and at the remedy sought to be applied.
In that connection the former state of the law is to be considered and also the legislative changes contem plated by the statute.
Words not requiring retrospective operation so as to effect an existing statutory provision prejudicially ought not be so construed.
It is a well recognised rule that statute should be interpreted if possible so as to respect vested rights.
Where the effect would be to alter a transaction already entered into, where it would be to make that valid which was previously invalid, to make an instrument which had no effect at all, and from which the party was at liberty to depart as long as he pleased, binding, the prima facie construction of the Act is that it is not to be retrospective.
See Gardner vs Lucas.(1) In Moon vs Durden(2) a question arose as to whether section 18 of the Gaming Act 1845 which came into effect in August 1845 was retrospective so as to defeat an action which had been commenced in (1) (2) ; 16 1338SCI/76 1036 June, 1845.
The relevant section provided that no suit shall be brought or maintained for recovering any such sum of money alleged to have been won upon a wager.
It was held that it was not retrospective.
Parke B said "It seems a strong thing to hold that the legislature could have meant that a party who under a contract made prior to the Act had as perfect a title to recover a sum of money as he had to any of his personal property, should be totally deprived of it without compensation".
Again in Smithies vs National Union of Operative Plas terers(2) section 4 of the Trade Disputes Act, 1906 which enacted that an action for tort against a trade union shall not be entertained by any court was held not to prevent the court 's from hearing and giving judgment in.
actions of that kind begun before the passing of the Act.
It is a gener al rule that the legislature alters the rights of parties by taking away or conferring any right of action, its enact ments, unless in express terms they apply to pending ac tions, do not affect them.
But there is an exception to this rule, namely, where enactments merely affect procedure and do not extend to rights of section.
See Re Joseph Sucha & Co. Ltd.(2).
If the legislature forms a new procedure alteration in the form of procedure are retrospective unless there is some good reason or other why they should not be.
In other words, if a statute deals merely with the procedure in an action, and does not affect the rights or the parties it will be held to apply prima facie to all actions, pending as well as future.
In the present case the provisions in section 50 A, 52 and 73 of the 1964 Act as amended in 1969 were invoked by the appellant.
The appellant is disentitled from doing so by reason of Chapter II of the 1964 Act not being applicable to the lease where the lessor is a Government Company.
Further these sections came toto effect on 1 January 1970.
The sections are not retrospective but prospective in opera tion.
The appellant is not entitled to attract these sec tions.
For the foregoing reasons the appeal is dismissed with costs.
V.P.S. Appeal dismissed. | The proviso to section 3(1)(vii) of the Kerala Land Reforms Act, 1964.
provided that nothing in clauses (i) to (vii) of section 3(1) shall affect the rights of persons who are entitled to the fixity of tenure immediately before 21 January 1961 under any law then in force.
The law prevailing immediate ly before 21 January 1961, was the Malabar Tenancy Act, 1929.
Under section 23 of that Act a tenant would be liable to be evicted from his holding at the instance of h/s landlord if he intentionally committed acts of waste or defaulted in the payment of rent for more than 3 months.
The proviso was amended by 1969 Amendment Act which came into force on January 1; 1970.
The amending Act also.
inserted in the Act new Ss.
50A. 52 and 73.
Section 50A provided that a tenant entitled to fixity of tenure shall have the right to use his holding in any manner he thinks fit.
Section 52 pro vided that a cultivating tenant shall have a right to cut .trees and section 73 is to the effect that the maximum amount that could be claimed by way of arrears of rent is only for 3 years.
Section 108(2) was also amended and it provided that any decree passed before the commencement of the section for the dispossession of a person from the land in his possession may on the application.
of such person be reopened and disposed of in accordance with the provi sions of the 1964 Act as amended by the 1969 Act provided dispossession has not been affected.
Section 125(3) provid ed that if in any suit or proceeding questions regarding the rights of a tenant arose, the civil court shall stay such proceedings and refer the question to the Land Tribunal having jurisdiction over the area.
Section 132(3) provided that any decree pursuant to which eviction has not been effected may, on the application of the tenant or the land lord be reopened and the matter disposed of in accordance with the provisions of the Act.
The respondent owned about 550 acres out of which more than half was Coffee planted area.
He leased the plantation and the remaining unplanted area to the appellant in 1950 for 12 years.
Clause (4) of the lease provided that if the rent was in arrears for 30 days after it became due it was lawful for the lessor to forfeit the lease and re enter on the land.
Alleging_ that since 1953 the 'appellant had neglected to pay the rent, the respondent filed the suit claiming possession of the land, arrears of rent, and dam ages for waste.
The trial court decreed the suit in.
1966 and the decree was confirmed by the 'High Court with the enhanced damages in February 1969.
In appeal to this Court the appellant contended that he was entitled to fixity of tenure; that the unplanted area was not a plantation and 'so he was entitled to fixity of tenure therein; ,hat the pro ceedings were to be disposed of in accordance with the provisions of the 1964 Act as amended by 1969 Amendment Act.
that is.
that all questions regarding rights of tenants and landlords could be decided only by the Land Tribunal; and that the damages were awarded contrary to the 'provisions of the Act as amended.
He, therefore.
filed an application praying for reopening of the decree passed by the High Court and also contended that in view of the amendments in 1971 the appeal is to be disposed of in accordance with the provisions of the Act, as amended in 1969 and 1971.
Dismissing the appeal to this COurt,.
HELD: In the present case, the decree was passed by the trial court as ' well as by the High Court after the 1964 Act came into force but before the, 1027 1969 amendment.
The decree was correctly passed in ac cordance with the provisions of the 1964 Act, since the amendments were prospective and not retrospective.
[1036 E F] .rm60 (1) A statute has to be looked into for the general scope and purview of the statute and at the remedy sought to be applied.
In that connection the former state of law is to be considered and also the legislative changes contemplated by the statute.
Words not requiring retrospective operation so as to affect an existing statutory provision prejudicially ought not to be so construed.
It is a general rule that when the legislature alters the rights of the parties by taking away or conferring any right of action, its enactments.unless in express terms they apply to pending actions, do not affect them.
If however, a statute deals merely with procedure in an action and does not affect the rights of the parties, it will be held to apply prima facie to all actions pending as well as future.
[1033 E G] Gardner vs Lucas (1878) 3 Appeals Cases 582; Moon vs
Durden (1948) 2 Exch.22 and Smithies vs National Union of Operative Plasterers , referred to.
(2) The entire land leased out does not come within the definition of plantation, because.
the extent of coffee cultivated area has been found to have dwindled to about 100 acres out of the total extent of about 550 acres by reason of the acts of waste committed by the appellant and ceased to be a plantation even before 1 January 1970.
The appel lant, however, is disentitled to take advantage of his own wrongs so as to claim statutory benefits which were also not available to him.
[1033 A B, E G] (3) The appellant had been found to be habitual defaulter since 1952 in the payment of rent and to be guilty of wilful acts of waste before and after the institution of the suit.
He had denuded the entire tree growth in morethan one half of the area and destroyed more than one half of the coffee planted area, and the remaining part was in an utterly neglected condition.
Therefore.
under section 23.
Malabar Tenan cy Act, the appellant had no fixity of tenure on 21 Janu ary 1961, and hence was not entitled to the benefit of proviso to section 3(1) either under the 1964 Act or the 1969 Act.
[1032 G H, 1034.B D)] (4) The respondent was a Government company.
Under section 3(1)(i) of the 1964 Act, leases of lands owned by Government companies are exempted from the provisions of Chap.
Section 13, which is in Chap.
II and which provides for fixity of tenure cannot therefore be invoiced.
by the appel lant for claiming 'fixity, of tenure under the 1964 Act.
[1033 C D] (5) The appellant is disentitled from invoking sections 50A, 52 and 73 of the 1964 Act as amended in 1969 because, Chap ter 1I of the 1964 Act is not applicable to the lease since the respondent lessor iS a Government Company.
More over, these sections came into effect on 1st January 1970 and were not retrospective, but were.
prospective in.
opera tion.
[1032 A D, 1033 H, 1036 A B] (6) Sect.ion 108(3) of the Act as amended in 1971 will permit the opening of the decree only if a person has claims to a right benefit or remedy which has been conferred on him under the Act.
In the present case neither under the 1964 Act nor under the 1969 Amendment the.
appellant can claim the benefit of section 50A because he wilfully misused the hold ing and caused acts of waste causing loss to the lessor and damage and destruction to the holding.
[1033 H, 1034 A B] (7) Section 125(1) of the Act which came into force on 1 January 1970, creates bar against the civil court deciding questions required to be settled by the Land Board.
This provision is prospective.
and the proviso expressly states that the section shall not apply to proceedings pending in any court at the commencement of the 1969 amending Act.
It, therefore, follows that the proceedings in the present case which were pending at the commencement of the 1969 Amendment Act are saved from the operation of section 125(1).
Section 125(3) is equally prospective.
It will be applied with regard to the provisions contained in section 125(1) of the Act.
Matters which will be within the mischief of section 125(1) are matters which will arise in suits or proceedings initiated or originated after the commencement of the Act.
It is unsound to 1028 suggest that pending proceedings which are exempt from the application of section 125(1) will yet fall within that sub section by reference to section 125(3).
Therefore, the provisions contained in section 125 are not applicable in the present case.
[1034 G H, 1035 A E] Anantha Narayana Iyer vs Pran , over ruled. |
Appeal No. 463/76.
(Appeal by Special Leave from the Judgment and Order dated 11/12 11 1975 of the Gujarat High Court in L.P.A. No. 113/74).
D.V. Patel, P.H. Parekh and Miss Manju Jetley for the Appellants.
M.C. Bhandare, S.P. Nayar and M.N. Shroff, for the, State of Gujarat.
R. K, Garg and S.C. Agarwala, for Respondents Nos.
5 6 and 8 11.
M.N. Shroff, for the State of Maharashtra.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This is a typical 'service ' appeal, by special leave, which prompts the topical question: Is lit Wiser national policy to process disputes regarding seniori ty, promotion, termination and allied matters affecting the public services, through the docket bound, formalised, methodology of the judicature adopting its traditional, time consuming, tier upon tier system and handicapped by absence of administrative expertise, accessibility to criti cal information and other limitations on the mode and extent of relief, or, alternatively, through built in, high pow ered, but credibility wise less commanding, agencies of composite skills and processes and flexible remedial juris dictions ? 'Justice and Reform ' is a recurrent interroga tion.
Our civil services, if only the static and stratified system were transformed and the men properly oriented and activated, may well prove equal to the dynamic challenges of our times but for the pathetic phenomenon of numbers of officials being locked in long forensic battles.
This litigative pathology of the members of the public services deplorably diverts the undivided energies, sensitive under standing and people based disposition demanded of them for the fulfilment of the Nation 's Tryst with Destiny through implementation of massive 1040 and multiform developmental plans.
Hopefully, constructive thinking on impregnable, competent and quick acting (but not derobed or devalued) intra structures and procedures for improving and accelerating the system of justice to the public services is currently under way.
Now to the merits.
The briefs are big and the arguments long, but the factual matrix and the legal conflicts lend themselves to be condensed without detriment.
The competi tion between two categories of members borne on the cadre of Deputy Collectors of the State of Gujarat viz., direct recruits and in service promotees, on the issue of seniority inter se, with its futuristic career overtones, is the crunch question in this civil appeal.
The grey area of 'service jurisprudence ' covered before us encompasses sever al decisions and if 'by good disputing shall the law be well known ', there has been so much disputation of learned length at the bar that the legal points should have been more pellucid than the precedents read and re read made us feel. 'The aid of the purifying ordeal of skilled argument ' when too lapidary and finical reaches a point of no return, despite Megarry J to the contrary in Cordell vs Second Clanfield Properties Lid. (1).
Seven Deputy Collectors, arriving by direct recruitment in, and after 1963, claim to be ahead, in the gradation list, of their more numerous counterparts former mamlatdars, whose promotional incarnation as Deputy Collectors, dates back to the years 1960 63.
The title of these younger incum bents to be eider in the Civil List is primarily founded on a basic Resolution of Government of July 30, 1959 regulating recruitment to the Deputy Collectors ' cadre by the 'then Bombay State adopting a quota basis.
The Gujarat State, carved out of Bombay and formed on May 1, 1960, continued the system; and so, simplistically presented, the fate of the 'seniority ' struggle critically turns on the construc tion the Bombay Resolution of 1959 bears, the rival versions having been alternately frowned upon or favoured at the original and appellate docks of the High Court.
There are other matters of moment debated at the bar and we will pass on some of them at later stages.
In administrative and legal terms, this case is the projection of the common rivalry for promotional positions between fresh, young recruits and old, seasoned promotees, between alleged excel lence of talented youth and tasted experience of mellowed age.
Sympathies may sway either way and reasons often spring from sympathies.
To be captiously wise in retrospect may itself border on vice.
Even so, we are constrained to observe that when government orders, as here, have the flavour of law and impact upon the fundamental rights and equal opportunities of citizens, they have to be drafted with the case that legal orders deserves lest avoidable litigation should thrive for no better reason than that administrative orders or subsidiary legislation have been drawn up with a casual ness that betrays the skills of insoucience.
Law must be precise, simple, clear, comprehensive and (1) [1968] 3 All E.R. Ch.
1041 there is a duty on the law maker at every level not to injure the community by tengled webs of rules, orders and notifications whose meaning is revealed only through tran scendental meditation or constant litigation.
in a social istic pattern of society there is hardly any part of nation al life or personal life which is not affected by some legal rule or other.
When men have to look to the law from the cradle to the grave, making of even subsidiary laws demands greatest attention.
To begin with the legal beginning is best done with the Bombay Government Resolution of 1959 after giving a thumb nail sketch of the relevant service structure and other minimal particulars.
The composite Bombay State, for purposes of Revenue Administration, had been divided into Divisions which were separate units for promotional prospects, liability to transfer etc., of deputy collectors.
The routine source of recruitment to these posts used to be mamlatdars who were transferred as deputy collectors by promotion.
As early as 1939, a different recruitment policy had been evolved for picking suitable hands from the open market by direct nomi nation.
The inevitable concomitant of a plurality of recruitment categories is the evolution of a workable rule of inter se seniority.
So, by an order of 1941, the mode of determining seniority between 'nominees ' and 'promotees ' was settled.
Service, for seniority purposes, so far as direct recruits were concerned, was to run from the date of their appointment on probation and, in the case of promotee offi cers, such service was to begin with promotion in substan tive vacancies, if continued without break.
For reasons obscure, the direct recruitment scheme of infusion of fresh blood to use the usual validating vascular metaphor to invigorate the Administration, hibernated from 1950 until 1959.
However, the crucial government decision of July 30, 1959 not merely re activated the mode of direct recruitment but fixed the promotion in which recruitment from the two sources was to be made, referred to conveniently as the quota system.
The heart of the debate before us is whether a quota prescription, willy nilly, does postulate ex necessitate a rota process in practice.
We may here read the resolution itself: Deputy Collector: Recruitment of probationers GOVERNMENT OF BOMBAY REVENUE DEPARTMENT Resolution No. RTC.
1157/99153 D Sachivalaya, Bombay, 30th July 1959 Read Government Resolution No. 9313/45, dated the 6th Febru ary 1950.
Government Resolution No. 9313/45, dated the 24th July 1951.
1042 RESOLUTION: Government had for sometime under consideration the question of reviving the system of direct recruitment to the cadre of Deputy Collectors.
It has now been decided that in the interest of administration, the revival of .that system is quite necessary.
Government is accordingly pleased to cancel the orders contained in Government Resolution No. 9313/45, dated 6th February 1950 and those in Government Resolution No. 9313/45, dated the 24th July 1951, in so far as they relate to the recruitment of Bombay Civil Service Executive Branch Deputy Collectors (Upper Division) and to direct that, as far as practicable, 50 per cent of the substantive vacancies occurring in the cadre with effect from 1st January 1959 should be filled in by nomination of candidates to be selected in accordance with the Rules appended herewith.
x x x x x By order and in the name of the Governor of Bombay, G.L. Sheth Secretary to Government" We may also extract the portion from the ' annexed rules of recruitment pertinent to our purpose: "Appointment to the posts of Deputy Collector shall be made either by nomination or by promotion of suitable Mamlatdars: Provided that the ratio of appointment by nomination and by promotion shall, as far as practicable, be 50: 50." The raw materials government proceedings needed for our discussion will be complete if the 1941 Resolution also were read at this stage: "GOVERNMENT OF BOMBAY Political & Services Department Resolution No. 3283/34 Bombay Castle, 21st November, 1941.
x x x RESOLUTION: Government is pleased to direct that the following principles should be observed in determining the seniority of direct recruits and promoted Officers in the provincial services (except the Bombay services of Engineers, Class I) (i) In the case of direct recruits appointed substantively on probation, the seniority should be determined with reference to the date of their appointment on probation.
(ii) In the case of officers promoted to substantive vacancies, the seniority should be determined with reference to the (1 ) Date of their promotion to the (2) substantive vacan cies (3) provided there has 1043 been no break in service prior to their con firmation in those vacancies.
By order and in the name of the Governor of Bombay G.F.S. Collins Chief Secretary to the Govt.
of Bombay Political and Services Department" Flowing out of the fixation of the ratio between the two species of recruits and having a bearing on the issue of seniority is another Resolution of the Bombay Government (continued during the relevant period in Gujarat also by virtue of an omnibus circular of May 1, 1960) of February 3, 1960.
This step became primarily necessary on account of the Reorganisation of States and the abolition of Divisions.
The legal fiction of 'deemed dates of commencement of serv ice ' for the purpose of inter se seniority of personnel drawn from different pre Reorganisation States and from the Divisions within the State on conversion of the deputy collectors ' cadre into a State wide one has been crystal lised in this rule of February 1960.
One more clarificatory proceeding of Government, dated May 27, 1960 has loomed large in Shri Patel 's submissions, especially the Explanation portion thereof and, in a sense, it lends some push to the problematic conclusion.
We there fore read the relevant Government Circular right here: No. GSF 1060 F Government of Gujarat General Administration Department Sachivalaya, Ahmedabad, 27th May 1960 CIRCULAR Read: Government Circular No. GSF 1060, dated the 1st May 1960.
Doubts have arisen as respects the directions given under Government Circular No. GSF 1060 dated the 1st May, 1960 .
To remove any doubt in that behalf, therefore, Government is pleased to direct that the following Explanation shall be and shah be deemed always to have been added to the said circular, namely Explanation : Nothing herein shall apply to appointments of officers, authorities or persons or to the constitution of tribunals or other bodies which may be made by Government on or after the 1st May, 1960 and the condi tions of service of the officers, authorities or persons appointed or the members of the Tribunals or bodies so constituted.
By order and in the name of the Governor of Gujarat.
Sd/ V. Isvaran Chief Secretary to the Government.
" Reliance has been placed on the Explanation quoted above to emancipate Government from compliance with the Bombay rules 1044 regarding appointments of officers or their conditions of service, an aspect we will expand, if needed.
Prima facie, while we agree that the new State is not bound by adminis trative directions of the parent State and may free itself from it by appropriate steps, an unguided power is suspect and a carte blanche in doing what Government fancies with any of its servants is subversive of ordered societies.
We have no further probe to make into this Resolution in the present case and leave it at that.
The fact of the matter is that during 1959 62, no direct recruitments were made but many promotions were effected.
Afterwards, i.e., in 1963 and later, direct recruits were appointed who, contrary to their legal aspira tion, were not assigned seniority over earlier promotees of 1960 63 vintage, having regard to the factual position.
The further hope that for post 1963 recruits, dates of appoint ment, and running of service with effect therefrom, on the basis of a quota allocation and rota system telescoped into it, proved a plain dupe in the seniority list prepared by government.
The doubly chagrined direct recruits moved the High Court for relief, as stated earlier.
The anatomy, in outline, of the deputy collector 's cadre in the Gujarat Government and the grievances of the writ petitioners (respondents before us) thus emerge.
On a 50:50 basis the vacancies in the cadre are filled from two sources viz., direct recruitment and promotion from among mamlat dars.
Once appointed, their seniority gains saliency and turns on length of service, and though no specific provision to count commencement of service is made in the 1959 Resolu tion, it has been understood as set out in the 1941 Resolu tion earlier mentioned.
The contesting respondents plead for pushing down promotees, based on the strict roster system of 1: 1 going by each vacancy and demur to taking the year as a unit for adjustment of ratio.
Which view should prevail? Force, there may be, in the rival versions, indi vidual injustice there can be whichever view were accepted and precedential pushes and pressures may also be brought into play by either side if we surrender to scriptural literality of decisions of this Court and miss the thrust of the ratio therein.
In a liner sense, and within the frame of reference of leading precedents, each case has an individu ality and is a law unto itself.
Strictly speaking, the primary problem is one of fair interpretation of the basic government Resolution of 1959, illumined by the purposes and motivations of good government and unravelling the implications embedded therein, against the background of the administrative structure, service pattern and seniority principles, prevalent contemporane ously, as gleaned from the records of the case.
The milieu aids the meaning although lawyer 's law leans heavily, even lop sidedly, on judicialized lexicography.
Counsel natural ly took us through rulings bearing on the meanings of words and canons of construction which merely re stated time honoured principles and dictionary culls and did not make us any the wiser in coming nearer to a resolution of the conflict here.
Likewise, arguments galore on the connota tion of the quota system of recruitment, with abstractions, propositions and illustrations based on decided cases, were addressed to us, although we 'came out by the same door as in we went ' Common 1045 sense is the first aid in the art of interpretation.
The only sure approach that judges make when confronted by complexity in construction and necessity for rationalisation is on the lines justice Cardozo frankly stated :(1) "We may figure the task of the judge, if we please, as the task of a translator, the reading of signs and symbols given from without.
None the less, we will not set man to such a task, unless they have absorbed the spirit, and have filled themselves with a love, of the language they must read." Two groups, the promotees who came from the lesser stations of life and the direct recruits who have had better advan tages of higher education, fight for berths in the musical chair.
In such situations, while construing rules, sub conscious forces have to be excluded and objectification must be attempted.
Even so, the beautiful candour of Benjamin Cardozo whispers to us that we judges "are . ever and always listening to the still small voice of the herd, and are ever ready to defend and justify its instructions and warnings, and accept them as the nature results of our own reasoning.
This was written, not of judges specially, but of men and women of all classes.
The training of the judge, if coupled with what is styled the judicial temperament, will help in some degree to emancipate him from the suggestive power of individual dislikes and prepossessions .
" ( 2 ) Our effort in unlocking the meaning of the controversial Government Resolution of July 1959 and of other official notifications may inarticulately, minimally and unwittingly, be moulded by these broad under currents.
Other facts relevant for discussion of specific points urged and other legal issues germane to the grounds of attack and defense formulated by counsel may be filled in as and when those points are taken up by us, instead of inartistically clut tering up or en massee lugging together many government proceedings, sequences of events and clarification of difficulties following on the division of Bombay into Gujarat and Maharashtra, even at this preliminary stage.
The pivotal questions one an interpretative exercise and the other a facet of the fundamental right of equal opportunity around which revolve the other arguments may first be set out: (1) If the Gujarat Government has, by an administrative guideline or statutory rule directed that open market recruits and in service promotees will be ap pointed on a 50: 50 basis with the qualification that this principle shall be adhered to, as far as practicable, is Government free to ignore such a rule of conduct as if it were no inflexible directive, violation of which spells illegality on the appointments made, or does this clause obligate the State flatly to try and comply, but if surprise circumstances or insurmountable exigencies arise which make recourse to the rule impracticable, deviate from it without the risk of court branding such deviant appointments void? In short, how far can (1) Benjamin N. Cardozo: The Nature of the Judicial Proc ess: Yale University Press, P. 174.
(2) Cardozo (supra) pP. 175 176.
1046 administrative pragmatics influence, without invalidation, the recruitment mechanics where a narrow rider providing for imponderable exigencies written into the rule, provides for departure ? (2) Assuming there has to be a proportion of 50 50 as above indicated, how is it to be worked out ? On a rotational basis of the direct recruits inexorably getting the first, the third, the fifth and such like vacancies or as an entitlement to half the total number of vacancies arising in the cadre in a particular year or other conven tional period ? Again, does it further imply an imperative obligation on the part of Government to keep untilled all vacancies allocable to direct recruits so that they may be available to be filled up in later years with retroactive repercussions and, if such ear marked posts are, for admin istrative exigencies, filled regularly, not ad hoc, in sub stantive vacancies, not ex cadre posts by selection and promotion, they must be treated as provisional nationally filled by direct recruits who may arrive long later? And consequentially, in counting seniority, reckon their (i.e., direct recruits) deemed dates of entry as prior to those actually officiating promotee deputy collectors by importing a sort of legal fiction that the direct recruits must be allowed to count service from the date when the entitled vacancy for direct recruits arose? May be a diffusive, digressive discussion can be obviated and the focus turned on specific issues if we start with a formulation of the major points urged by Sri D. V. Patel, counsel for the appellant, hotly controverted, of course, by shri R.K. Garg for the contesting respondents.
Elimination of the minor clears the ring for the major bouts.
The appellants represent the group of promotee deputy collectors and the contestants are deputy collectors di rectly recruited.
The Gujarat State lines up with the former, more or less.
We now set out sequentially the six point propositional formulation made by Shri Patel, for the appellants, although salience suggests the third item as first and, if .we anticipate our conclusion, the last in importance.
The cornerstone of the case, as noted earlier, is the Bombay Government 's Resolution of 1959 fixing the proportion between direct recruits and promoted candidates, with an emergency escape route to jump out of the fixed ratio.
Shri Patel 's first point is that once the new State of Gujarat was formed, mere administration proceedings of he former government of Bombay State ceased to be in force proprio vigore unless Gujarat adopted or continued or otherwise modified them.
subject to statutory regulations and consti tutional limitations.
The State of Gujarat had plenary executive power, granted by the Constitution, to fill up administrative posts in any manner it chose.
The clarifi catory government Resolution of May 27, 1960 issued by the Gujarat Government becomes significant in this context as it contains in explanation which specifically provides that the adoption of the Bombay Government Resolution of 1959 does not, in any way, fetter the Gujarat Government in making appointments of officers on or after May 1, 1960 nor does the said 1959 Resolution in any manner restrict the condi tions of service of such officers.
Therefore, it is per fectly oven to the Gujarat Government to make fresh appoint ments to the posts of Deputy Collectors untremmelled by the ratio or other 1047 restrictive conditions which may be read into the Bombay Government Resolution of 1959.
In this view his clients cannot suffer even if the Bombay Resolution has been breached.
(2) Assuming that point No. 1 has no force, Shri Patel submits that the various government Resolutions of the Bombay and Gujarat Governments referred to by the parties are purely administrative directions and cannot have the binding status of statutory rules.
Therefore, no rights can be derived therefrom by the direct recruits or potential direct appointees and breach of such directives or rules cannot invalidate appointments made.
(3) On the further assumption that point No. (2) above is bereft of substance and the Government Resolutions referred to have statutory character, the very terms of the 1959 Government Resolution provide a sensible safely value, wisely anticipatory when we remember the pragmatic considerations and administrative exigencies that the slow moving apparatus of the Government of a newly formed State has to face or be puzzled with.
The 1959 Resolution which is the 'rounding document ' of the rights of the direct recruits itself states that the propor tion between the two categories is to be applied 'as far as practicable '.
Therefore, the rule is neither exception proof nor abstractly absolute but realistic and flexible true to life.
Rigidly to read the rule is surely to misread it.
Since it contemplates special situations of impracticability it is but right for the Court so to construe the Resolution, in the light of the explanation offered by the State for non recruitment directly until 1963, as to make it adminis tratively viable and reasonably workable If such an imagina tive and informed judicial insight plays upon the rule, the difficulties in making immediate recruitments from the open market by the Public Service Commission may sufficiently absolve the State from the supposed violation of Government Resolution of 1959 So viewed, the orders of promotion of the appellants are in order and unassailable.
(4) & (5) The mandate of equality ensconced in Arts 14 and 16 cannot handcuff justice by pushing down the promotees if the Sen iority List in the face of their actual service and legal appointment.
The attack based on article 16 that the roster method of filling up posts is integral to the quota system is baseless.
Quota without rotate is also reasonable and constitutional as much as quota plus rota.
The choice, both being permissible and fair, is left to the Administration, the Court not ferretting or dissecting to detect deadly traces of discrimination or unreasonableness.
(6) The assignment of "deemed dates ' of commencement of service is not unreasonable but is often adopted by Governments when integrating into a common cadre officers drawn from differ ent States or Departments or divisions.
Novel compulsions demand novel solutions and law accepts life 's expediency save where the public Vower has been obliquely exercised or unreasonableness is writ large on the face of the process.
Such a stigma being absent, the promotees cannot be dis lodged from their notches in the ladder.
We are mercifully absolved from making the discussional journey over a long mileage covering the poly pointed formu lation since two essential issues may virtually be decisive of the case.
Both sides have agreed to this abbreviation and the other grounds have dropped out of effective contest in the long course of arguments.
Enough upto the day! 1048 It is fair to state even at this stage that be the Bombay G.O. of 1959 merely administrative or really statuto ry, both the learned Single Judge and the Division Bench have head the Gujarat State bound by it.
The rule of law is tile enemy of arbitrary absolutism and the discretion to disobey is a doctrine of despotism and cannot be subscribed to by a Court merely because the state chooses to label a rule or conduct anecting the rights of others an administra tive regulation.
In a constitutional order governed by the rule of law, whim or humour, even if benignly motivated, masquerading as executive discretion is anathema to law.
When power is vested under the Constitution or other statute in the State to promulgate rules of conduct attracting oth ers, such rules must ordinarily govern the State and subject alike.
When there are service rules affecting the public services, they may either be in exercise of the executive power of the State under article 162 or rules with legislative colour framed under the proviso to article 309 of the Constitu tion.
It is fair for the Administration in a democratic system employing expanding armies of government servants, whose lot in life and career prospects will be governed by recruitment, conduct and disciplinary rules, to respect, beyond suspicion, the rule of law by exercising statutory power as distinguished from executive power, even where it has an option.
Of course, in exceptional situations, or sudden exigencies and for new experiments to be tried, the framing of statutory rules under article 309, proviso, may be postponed and executive orders immediately promulgated.
The best judge is the State Government exercising its power justly and efficiently.
For the art of government is beset with the perils of a journey through life 's jungle and textbook prescriptions can prove ruinous.
We may point to another problem.
It has often been difficult to discover whether a particular set of rules is framed under the provi so to article 309 or, in mere exercise of article 162, although it is desirable that the State makes it explicit.
We are, however, not called upon to investigate this perplexing aspect because, as stated earlier, the High Court has held that the State is bound by the Bombay G.O. of 1959.
Counsel for the appellants, Shri Patel, and counsel for the State, Shri Bhandare, have rightly acquiesed in that posi tion and proceeded with their arguments on that footing.
This point (which is the first) therefore, does not need our pronouncement.
The other points, pedentically capable of being sepa rately dealt with, highlight what we have earlier indicated as the two telling questions of law that settle the outcome of the appeal.
We will seek the tight of common sense to solve them and later test the conclusions with reference to binding rulings of this Court.
The first question that falls for considerations, there fore, is as to whether the 50:50 ratio 'as between direct recruits and promoted hands is subject to the saving clause 'as far as practicable '.
Can Government vary the ratio ? Ordinarily No. Is it permissible at all ? Probably, yes, given proof of the government 's case that it was not practicable for the State to recruit from the open market qualified persons through the specialised agency of the Public Service Commission.
The factual basis for this plea of extenuation will be examined presently but, according to Shri R.K. Garg, appearing for the contestants, 1049 even if the alibi of the State were true, it furnished no legal justification for deviation from the application of the rule.
He interpreted, 'as far as practicable ' occurring in the Government Resolution, in a very different way and submitted that to adopt the appellant 's view on this aspect was to subvert the substance and nullify the conscience of the binding Bombay Resolution of 1959.
Shri Garg argued that the language of the critical G.O. was peremptory, that for the high purpose of improving administrative efficiency a balanced mix of old experience (gained by long service) and young abilities (proved by competitive selection) was hit upon as half and half from each category and the Court could not fall for any construc tion of the words 'as far as practicable ' which would frus trate this goal of overall efficiency unless the semantic search left no other option.
Far from there being no alternative interpretation, the benignant purpose of the Resolution pressed forward to a reasonable meaning that 'as far as practicable ' related not to the tampering with the proportion of the mix but in permitting provisional varia tions or ad hoc solutions or emergency arrangements to meet a difficulty of the Administration without making formal or regular 'appointments ' to the posts meddling irrevocably with the proportion in the prescription.
Later, when direct recruits were secured, they would be entitled to their quota vacancies and commencement of seniority from the date of their appointment.
Logomachic exercises are the favourite of the forensic system but too barren to fascinate the Court and too luxuri ous, in our penury of time to indulge.
Should we chase decisions and dictionaries and finer verbal nuances with explorative industry ? The sense of the setting, the 'why ' the author whispers through his words and the warning 'not this.
not this ' that the objective understanding of the totality of the socially relevant scheme instils these light up the interpretative track alone the criss cross woods of case law and lexicons.
Led by that lodestar, we will eye the situation afresh.
In doing so, we must first set down the meaning Shri Patel suggests, and Shri Bhandare supports, and the manner in which these appellants claim that their appointments and seniority are sequestered by the saving words 'as far as practicable '.
What does 'as far as practicable ' or like expression mean, in simple anglo saxon ? Practicable, feasible, possi ble, performable, are more or less interchangeable.
A skiagraph of the 1959 Resolution reveals that the revival of the direct recruitment, method was motivated by 'the inter est of administration ' an overriding object which must cast the benefit of doubt if two meanings with equal persuasive ness contend.
Secondly, going by the text, 50% of the substantive vacancies occurring in the cadre should be filled in by selection in accordance With appended Rules. 'As far as practicable ' finds a place in the Resolution and the Rule.
In the context what does it qualify ? As far as possible 50% ? That is to say, if 50% is not readily forth coming, then less ? Within what period should be imprac ticabilitv to felt ? What is the content of impracticabi litv ' in the given administrative 'setting ? Contrariwise, can you not contend that impracticability is 1050 not a license to deviate, a discretion to disobey or a liberty with the ratio ? Administrative tone is too impor tant to be neglected but if sufficient numbers to fill the direct recruits ' quota are not readily available, substan tive vacancies may be left intact to be filled up when direct recruits are available.
Since the exigencies of administration cannot wait, expediency has a limited role through the use of the words 'as far as practicable '.
Thereby Government is authorised to make ad hoc appointments by promotion or by creation of ex cadre posts to be filled up by promotees, to be absorbed in the 50% portion falling to the promotional category in later years.
In short 'as far as practicable means, not interfering with the ratio which fulfils the interest of administration, but flexible provision clothing government with powers to meet special situations where the normal process of the government Reso lution cannot flow smooth.
It is a matter of accent and import which affords the final test in the choice between the two parallel interpretations.
We have given close thought to the competing contentions and are inclined to the view that the former is the better.
Certainly, Shri Garg is right that the primary purpose of the quota system is to improve administrative efficiency.
After all, the Indian administration is run for the service of the people and not for opportunities for promotion to a few persons.
But theories of public administration and experiments in achieving efficiency are matters of govern mental policy and business management.
Apparently, the State, having given due consideration to these factors, thought that a blended brew would serve best.
Even so, it could not 'have been the intention of government to create artificial situations, import legal fictions and complicate the composition of the cadre by deviating from the natural course.
The State probably intended to bring in fresh talent to the extent reasonably available but not at the sacrifice of sufficiency of hands at a given time nor at the cost of creating a vacuum by keeping substantive vacancies unfilled for long.
The straight forward answer seems to us to be that the State, in tune with the mandate of the rule, must make serious effort to secure hands to fill half the number of vacancies from the open market.
If it does not succeed, despite honest and serious effort, it qualifies for depar ture from the rule.
If it has become non feasible, imprac ticable and procrastinatory to get the requisite quota of direct recruits, having done all that if could, it was free to fill the posts by promotion of suitable hands if the filling up of the vacancies was administratively necessary and could not wait.
Impracticable cannot be equated with 'impossible ' nor with unplatable and we cannot agree with the learned judges of the High Court in construing it as colossally incapable of compliance.
The short test,there fore, is to find out whether the government, in the present case, has made effective efforts, doing all that it reasona bly can, to recruit from the open market necessary numbers of qualified hands.
We do not agree that the compulsion of the rule goes to the extreme extent of making government keep the vacancies in the quota of the direct recruits open and to meet the urgent needs of administration by creating ex cadre posts or making ad hoc appointments or resorting to other out of the way expedients.
The sense of the rule is that as far as possible the quota system must be kept up and, if not prac 1051 ticable, promotees in the place of direct recruits or direct recruits in the place of promotees may be inducted applying the regular procedures, without suffering the seats to lie indefinitely vacant.
The next question then is as to whether government has satisfied the Court that efforts had been made to secure direct recruits and failure to secure such hands is the explanation for resort to.
promotions of mamlatdars.
The reason for delay in making appointments of direct recruits during the year 1960, 1961 and 1962 has been set out by the State before us.
It appears that a requisition for 12 posts of deputy collectors was sent to the Gujarat Public Service Commission on October 31, 1960 but the Commission raised some linguistic queries 'regarding the requirement of ade quate knowledge of Marathi and Gujarati by the candidates.
Anyway, various points were raised from time to time in the correspondence between the Commission and Government and, eventually, the 'former held a competitive examination for the posts of deputy collectors in July 1962, declared the results in January 1963 and sent up ,its recommendations in the following February.
Government issued orders for ap pointment of the candidates so selected by the Public Serv ice Commission in May 1963.
This is a working explanation, prima facie good and not rebutted as got up.
If it is not necessary for the State Government to have recourse to recondite processes of ad hoc appointments and creation of ex cadre posts and if government has taken active steps in the direction of direct recruitment, the exception to the Government Resolution comes into operation.
Direct recruit ment ordinarily involves processing by the Public Service Commission, an independent body which functions at its own pace.
If Government had excluded the posts of Deputy Col lectors from the purview of the Public Service Commission with a view to achieve expeditious recruitment, it might have been exposed to the criticism that the normal method was being by passed with oblique motives.
Having looked at the matter from a pragmatic angle, we are ,convinced that the government did what it could and need not have done what it ordinarily should not have done.
Therefore the con clusion is inevitable although Shri Garg 's argument to the contrary is ingenious that the State had tried, as far as practicable, to fill 50% of the substantive vacancies from the open market, but failed during the years 1960 62 and that therefore it was within its powers under the relevant rule to promote mamlatdars who, otherwise, complied with the requirements of efficiency.
Now we move on to the more thorny question of quota and rota.
Shri Garg urges that the rotational mechanics is implicit in the quota system and the two cannot be delinked.
To shore up this submission he relies on what he propounds as the correct command of the rule of 'quota '.
In his view, 1: 1 simply means one direct recruit or promotee followed, vacancy by vacancy, by the other.
To maintain 'the propor tion in compliance with the quota fixture, Government must go by each post as it falls vacant and cannot circumvient this necessity by year war reckoning of vacancies and keep ing up the ratio.
The counter view put forward by Shri Parekh, for the appellant, is that 338SC1/76 1052 quota and rota are not indissolubly wedded and are separate and separable.
In the present case, according to him it is an error to import 'rota ' where the rule has spelt out only 'quota ' as a governing principle.
The Usual practice, sanctioned by rulings of this Court,is to go by the year as a unit for working out the quota.
Here a again we are not disposed to hold, having special regard to the recent decisions of this Court cited before us that 'quota ' is so the recent decisions of this where the former is expressly prescribed, interlocked with 'rota, that where the former is expressly prescribed, the latter is impliedly inscribed.
Let us logicise a little.
A quota necessarily postulates more than one source of recruitment.
But does it demand the manner in which each source is to be provided for after recruitment, especially in the matter of seniority ? Cannot quota stand independent of rota ? You may fix a quota for leach category but that fixes the entry.
The quota methodology may itself take many forms vacancy wise ratio, cadre composition wise pro portion period wise or numberwise regulation.
Myriad ways can be conceived of Rotational or roster system is a com monly adopted and easily understood method of figuring out the placement of officers on entry.
It is not the only mode in the code and cannot be read as an inevitable consequence.
If that much is logical, then what has been done here is legal.
Of course, Shri Garg 's criticism iS that mere 'qu ota ' is not viable without provision for seniority and, if nothing more is found in the rule, the quota itself must be understood to apply to each post as and when it falls to be filled.
If exigencies of administration demand quick post ing in the vacancy and one source (here, direct recruit ment) has gone dry for a while, then the proper course is to wait for a direct recruit and give him notional date of entry as of the quota vacancy and manage to keep the wheels of government moving through improvised promotions, express ly stripping such ad hocist of rights flowing from temporary occupancy.
We have earlier dealt with the same submission in a slightly different form and rejected it.
Nothing more remains to be said about it.
What follows and matters on entry into service is seniori ty which often settles the promotional destiny of the var ious brands of incumbents.
Naturally, the inter se struggle turns how best to bend the rules to one 's good account.
Shri Garg criticised the thoughtways apparent in the argu ment, backed by some rulings, that, quota being delinked from rota, annual intake is the unit for adjusting the seniority among candidates from the two sources.
This is an innovation dehors the rule, he says.
We do not think so.
The question is not whether the year being taken as the unit is the only course but whether there is anything in the rule prescribing Government taking it as the unit or prescribing some other specific unit.
It is obvious that the Resolution of 1959 is silent on how to allocate or reckon the quota as also on how to compute 'seniority and Government has a good alibi for taking the year as the unit and length of continu ous service as determining seniority.
The first is evident from the .reading of the 1959 Resolution in the light of some ruling of this Court and the second from the 1941 Resolution.
Moreover, there is nothing in the Resolution of 1959 preventing Government from treating a year as the unit.
1053 We therefore reach the following conclusions: 1.
The promotions of mamlatdars made by Government between 1960 and 1962 are saved by the 'as far as practicable ' proviso and therefore valid, Here it falls to be noticed that in 1966 regular rules have been flamed for promotees and direct recruits flowing into the pool of Deputy Collectors on the same quota basis but with a basic difference.
The saving provision 'as far as practicable ' has been deleted in the 1966 rules.
The conse quence bears upon seniority even if the year is treated as the unit for quota adjustment.
If any promotions have been made in excess of the quota set apart for the mamlatdars after rules in 1966 were made, the direct recruits have a legitimate right to claim that the appointees in excess of the allocable ratio from among mamlatdars will have to be pushed down to later years when their promo tions can be regularised by being absorbed in their lawful quota for those years.
To sim plify, by illustration, if 10 deputy collec tors ' substantive vacancies exist in 1967 but 8 promotees were appointed and two direct recruits alone were secured, there is a clear transgression of the 50: 50 rule.
The redun dancy of 3 hands from among promotees cannot claim to be regularly appointed on a permanent basis.
For the time being they occupy the posts and the only official grade that can be extended to them is to absorb them in the subsequent vacancies allocable to promotees.
This will have to be worked out down the line wherever there has been excessive representa tion of promotees in the annual intake.
Shri Parekh, Counsel for the appellants has fairly conceded this position.
The quota rule does not, inevitably, invoke the application of the rota rule.
The impact of this position is that if sufficient number of direct recruits have not been forthcoming in the years since 1960 to fill in the ratio due to them and those deficient vacancies have. been filled up by promotees, later direct recruits cannot claim 'deemed ' dates of appointment for seniority in service with effect from the time, according to the rota or 'turn, the direct recruits ' vacancy arose.
Seniority will depend on the length of contin uous officiating service and cannot be upset by later arrivals from the open market save to the extent to which any excess promotees may have to be pushed down as indicated earlier.
These formulations based on the commonsense understand ing of the Resolution of 1959 have to be tested in the light of decided cases.
After all, we live in a judicial system where earlier curial wisdom, unless competently over ruled, binds the Court.
The decisions cited 1054 before us start with the leading case in Mervyn Coutindo & Ors.
vs Collector of Customs, Bombay(1) and closes with the last pronouncement in Badami vs State of Mysore & Ors.
This time span has seen dicta go zigzag but we see no diffi culty in tracing a common thread of reasoning.
However, there are divergencies in the ratiocination between Mervyn Coutindo (Supra) and Govind Dattaray Kelkar & Ors.
vs Chief Controller of Imports and Exports & Ors.(3) on the one hand and S.G. Jaisinghani vs Union of India(4) .Bishan
Sarup Gupta vs Union of India,(5) Union of India & Ors.
vs Bishan Sarup Gupta(6) and A.K. Subbraman & Ors.
vs 'Union of India(7) on the other, especially on the rota system and the year being regarded as a unit, that this Court may one day have to harmonize the discordance unless Government wakes up to the need for properly drafting its service rules so as to eliminate litigative waste of its servants ' energies.
In Mervyn Coutindo the validity of the rotational system as applied in fixing the seniority inter se between promo tees and direct recruits fell for decision in the context of the specific rule applicable to Customs ' appraisers.
One of the principles in the circular which contained the rules related to the comparative seniority of the two categories. 'It provides ', says the Court in summarizing the rule, "that relative seniority of direct re cruits and promotees shah be determined ac cording to the rotation of vacancies between direct recruits and promotees which shall be based on the quota of reservation for direct recruitment and promotion respectively in the recruitment rules.
It was further explained that a roster should be maintained based on the reservation for direct recruitment and promotion in the recruitment rules.
Where, for example, the reservation for each method is 50 per cent, the roster will run as fol lows(1) promotion, (2) direct recruitment, (3) promotion, (4) direct recruitment, and so on.
Appointments should be made in accordance with this roster and seniority determined accordingly.
A question has been raised whether the circular of 1940 to which we have already referred survived after this circular of 1959; but in our opinion it is unnecessary to decide that question, for the circular of 1959 itself lays down that seniority shall be determined accordingly, i.e. in accordance with the rotational system, depending upon the quota reserved for direct recruitment and promotion respectively.
It is this circular which, according to the respondent, has been followed in determining the seniority of Appraisers in 1963".
, In the face of such a plain directive in the relevant rule regarding relative seniority for the solution of the problem that arises before us where such a seniority provision is absent and the relevant seniority (1) ; (2) [1976] 1 SCR 815.
(3) [1967] 2 SCR 29.
(4) ; (5) [1975] Supp.
SCR 491.
(6) ; (7) [1975] 2 SCR 979.
1055 provision is different, Mervyn Coutindo (supra) cannot be of any assistance.
That case is authority for the proposition it decides in the matrix of the special facts and rule therein.
In view of the words of the Circular 'that senior ity as between direct recruits and promotees should be determined in accordance with the roster which has also been specified . the inextricable interlinking between quota and rota springs from the specific provision rather than by way of any general proposition.
Mervyn Coutindo (Supra) cannot therefore rescue the respondents.
Nor does the refer ence to a 'service ' being divided into two parts, derived from two sources of recruitment, help Shri Garg 's clients.
The rule of 'carry forward ' struck down in T. Devadasan vs Union of India & Anr.(1) has no relevance ,to a situation where the whole cadre of a particular service is divided into two parts.
Apart from the fact that it is doubtful whether Devadasan 's case survives State of Kerala vs
N.M. Thomas & Ors.
(2) there is no application of the 'carry forward ' rule at all in fact situations where two sources of recruitment are designated in a certain proportion and shortfalls occur in the one or the other category.
In such a case, what is needed is conformity to the prescription of the proportion and No. question of carrying anything forward strictly arises.
It is true that Mervyn (Supra) does not support the year by year intake as the yardstick; but the reason is obvious the rule is specific.
Kelkar (Supra) also dealt with the ratio prescribed as between direct recruits and promotees.
Many grounds of attack were levelled there, one of which was that the rota tional system would itself violate the principle of equal opportunity enshrined in the Constitution (article 16(1) ).
The Court repelled this contention.
Of course, promotions made on an ad hoc basis confer no rights to the posts on the appointees, as was clearly pointed out in that decision.
In the instant case it is common ground that the appointments are not on a purely ad hoc basis but have been regularly made in accordance with the rules to fill substantive vacan cies except that the promotees have exceeded their quota, direct recruits being unavailable.
Kelkar (supra) stands on a different footing, and hardly advances the position advanced by Shri Garg.
Jaisinghani (Supra) which has had a die hard survival through Bishan Sarup Gupta vs Union of India(3) and Union of India & Ors.
vs Bishan Sarup Gupta(4) (if one may refer to.
the two cases flowing out of Jaisinghani (supra) in that fashion), has been referred to by both sides at the bar.
It was relied on by Mr. Garg for the strong observation of Ramaswami, J. that the absence of arbitrary power is the first essential of the rule of law upon which our constitu tional system is based.
He has also drawn attention .to the suggestion made in that decision 'to the ' government that for future years the roster system should be adopted by framing an appropriate rule for working out the quota be tween direct recruits and the promotees . '.
We may straightway state that our Constitutional system is very allergic to arbitrary power but there is nothing arbitrary made out in the present case against the government.
The second observation in (1) ; (2) ; (3) [1975] Supp.
SCR 491.
(4) ; 1056 Jaisinghani (Supra) is of a suggestion that for future years the roster system linking up quota with rota, may well be adopted by government.
It is not the interpretation of any existing rule nor laying down of a rule of law, so much so we cannot have any guideline therefrom to apply to the present case.
The Government could no doubt, if it so thought expedient, frame a specific rule incorporating the roster system so as to regulate seniority.
But we should not forget that seniority is the manifestation of official experience, the process of metabolism of service, over the years, of civil servants, by the Administration and, there fore, it is appropriate that as far as possible he who has actually served longer benefits better in the future.
More over, the search for excellence receives a jolt from the rule of equality and the State is hard put to it in striking a happy balance between the two criteria without impairment of administrative efficiency.
Broadly speaking, the Court has to be liberal and circumspect where the area is trickly or sensitive, since administration by court writ may well run haywire.
Moving on, we may start off with the statement that the last case Badami (Supra) lays down the incontrovertibly harmless principle that quotas that are fixed are inaltera ble according to governmental exigencies.
But there, unlike here, no saving provision 'as far as practicable ' existed and here post 1966 promotees have to suffer a push down where their appointments are in .excess of.
the promotee quota.
Nothing directly bearing on our controversy could be discerned by us in that decision.
Gupta I (Supra) an off shoot of Jaisinghani (Supra), proceeds on the assumption that the quota is for .a year.
Whether the rule stated so or not, that was probably the practice and there was nothing unreasonable in it.
Even if the rule as such had expired, it could, according to that decision, be followed as a guideline.
Government had to follow some guiding principle and not be led by its fancy, as each occasion arose.
Palekar, J. expressed the view of the Court thus: "When the rule is followed as a guideline and appointments made, a slight deviation from the quota would not be material.
But if there is an enormous deviation, other considerations may arise.
" In the present case, prior to 1963, there was departure from the quota system and that was sanctioned by the rule itself because of special circumstances.
For subsequent periods, if by taking the year as a unit there have been surplus promotees beyond their allocation even after taking into account impracticability of getting direct recruits upto 1966 when new statutory rules were enacted, then such spill overs, could and should, as indicated by this Court, be set off and absorbed in the later allocable vacancies, the pro tempore illegal appointments being thus regularised.
Of course, appointees on an ad hoc basis are never clothed with any rights and have to quit when the exit time arrives but here there are none.
In Gupta II(Supra) the Court ruled: 1057 "If there were promotion in any year in excess of the quota those promotions were merely invalid for that year but they were not invalid for all time.
They can be regularised by being absorbed in the quota for the later years.
That is the reason why this Court advisedly used the expression 'and onwards ' just to enable the Government to push down excess promotions to later years so that these promotions can be absorbed in the lawful quota for those years.
" Such is the essence of the two Gupta cases (Supra).
Law conceptualises anew every time life inseminates it with new needs and we have in Gupta the innovation of temporary invalidity of an appointment clinically dead but later resuscitated ? Jurisprudence burgeons from the left neces sities of society.
A.K. Subbaraman (Supra) relying on .Gupta 11 (Supra) and going further, has silenced the direct recruits with reference to the precise contention now urged by Shri Garg that rota being imbedded in the womb of the quota system their co existence could not be snapped.
While quota and rota may constitutionally co exist their separation is also constitutionally permissible, if some 'reasonable ' way, not arbitrary whim, were resorted to.
Even what is 'reasona ble ' springs from sort of reflexes manifesting social sub consciousness, as it were.
Nothing absolutely valid exists and rationality and justice themselves are relative.
Within these great mental limitations, the Court 'S observations in Subbaraman (Supra) have to be decided.
This brief and quick survey of decided cases, and the submissions considered by us in the judicial crucible, yield the following conclusions, leaving aside the question of 'confirmation ' in service which, in the Gujarat set up, leaves our controversy untouched: (a) The quota system does not necessitate the adoption of the rotational rule in practi cal application.
Many ways of working out 'quota ' prescription can be devised of which rota is certainly one.
(b) While laying down a quota when fill ing up vacancies in a cadre from more than one source, it is open to Government, subject to tests under article 16, to choose 'a year ' or other period or the vacancy by vacancy basis to work out the quota among the sources.
But once the Court is satisfied, examining for constitutionality the method proposed, that there is no invalidity, administrative tech nology may have free play in choosing one or other of the familiar processes of implement ing the quota rule.
We, as Judges, cannot strike down the particular scheme because it is unpalatable to forensic taste.
(c) Seniority, normally.
is measured by length of continuous, officiating service the actual is easily accepted as the legal.
This does not preclude a different prescription, constitutionally tests being satisfied.
1058 (d) A periodisation is needed in the case to settle rightly the relative claims of promotees and direct recruits.
1960 62 forms period A and 1962 onwards forms period.
B. Promotees regularly appointed during period A in excess of their quota, for want of direct recruits (reasonably sought but not secured and because tarrying longer would injure the administration) can claim their whole length of service for seniority even against direct recruits 'who may turn up in succeeding peri ods.
(e) Promotees who have been fitted into vacancies beyond their quota during the period B the year being regarded as the unit must suffer survival as invalid appointees acquir ing new life when vacancies in their quota fall to be filled up.
To that extent they will step down, rather be pushed down as against direct recruits who were later but regularly appointed within their quota.
On this basis, the judgment of the High Court stands substantially modified, but preparation of a new seniority list becomes necessitous.
We set aside the judgment under appeal but direct the State Government to draw up de novo a gradation list showing inter se seniority ' on the lines this judgment directs.
The subject has been pending so long that very expeditious administrative finalisation is part of justice.
Officials live in the short run even if Administra tions live in the long run.
We direct the State to act quickly.
Lack of adequate articulation of simple points regarding rotation and seniority, and the amber light shed by case law on the questions raised, warrant the direction that parties shall bear their costs throughout.
The unlovely impact of these protracted and legalistic proceedings makes us epilogue, an unusual step in a judg ment, but pathetically necessitous for the renovation of the judicial process.
Law is not a 'brooding omnipotence in the sky ' nor a sort of secretariat asoterica known only to higher officialdom.
But lengthy legal process, where administrative immediacy is the desideratum, is a remedy worse than the malady.
The fact that the present case has taken around 5 working days for oral arguments is a sad commentary on the system, which compels litigents to seek extra curial forums.
Judge Brian Mokenna was right (and the Indian judicial process needs systemic change 'since his wise words apply also to our judicature) when he said: "The fault is that the rules of our procedure which by their discouragement of written argument make possible extensively protracted hearings in open court.
Those re sponsible might think more of changing them.
In civil cases a written argument supplemented by a short oral discussion, would sometime 's save a great deal of time." To streamline and to modernise court management is a Cinderella subject in India, as elsewhere.
We conclude, by repeating what Chief 1059 Justice Warran Burger of the U.S. Supreme Court said, in 1970, in his address to the American Bar Association: "In the final third of the century we are still trying to operate the courts with fundamentally the same basic methods, the same procedures and the same machinery, Roscoe Pound said were not good enough in 1906.
In the super market age we are trying to operate the courts with craker barrel corner grocer methods and equipment vintage 1900.
" We too have miles to go for law and justice to meet.
P.H.P. Appeal allowed. | The appellants are the promotee Deputy Collectors in the State of Gujarat.
The contesting respondents are the direct recruits to the parent cadre of Deputy Collectors.
7 Deputy Collectors who are the contesting respondents in this appeal and who were directly recruited as Deputy Collectors in and after 1963 claimed that they were senior to the appellants who were the promotees promoted as Deputy Col lectors between the years 1960 and 1963 by filing a Writ Petition in the High Court.
The routine source of recruit ment to the posts of Deputy Collectors used to be Mamlatdars who were promoted as Deputy Collectors.
In 1939, direct recruitment policy was also evolved for this post.
By an order of 1941 the mode of determining seniority between direct recruits and promotees was settled.
As far as the direct recruits were concerned, their seniority was to run from the date of their appointment on probation and in the case of promotees such service was to begin with promotion in substantive vacancy if continued without break.
During the year 1950 to 1959 the direct recruitment was discontin ued.
By the Bombay Government Resolution dated 30 7 1959, the mode of direct recruitment was again started and the proportion in which the recruitment from the two sources, namely, the direct recruits and the promotees, was fixed as 50: 50 as far as practicable.
On 1 5 1960, the Bombay State was bifurcated into Gujarat and Maharashtra.
On 1 5 1960, a circular was issued by the Gujarat Government adopting the rules, resolu tions, notifications etc.
of the Bombay State.
By a further clarificatory resolution dated 27 5 1960 Gujarat Government provided that nothing contained in the circular dated 1 5 1960 shall apply to appointments of officers, authorities or persons which may be made by the Government on or after 1 5 1960.
During the year 1959 62,.no direct recruitment was made but many promotions were effected.
The Writ Peti tion filed by the direct recruits was dismissed by a learned Single judge of the High Court.
The Division Bench of the High Court, however, accepted the appeal of the con testing respondents.
In an appeal by Special Leave the appellants contended: 1.
The expression 'as far as practicable ' in the resolution of 1959 provides a sensible safety valve.
Therefore, the rule is neither exception proof nor abstractly absolute but realistic and flexibly true to life.
The mandate of equality in Articles 14 and 16 does not require pushing down the promotees in the seniority list in the fact of their actual service and legal appointment.
Rotation is not implicit in quota.
Quota without rotation is also reasonable and constitutional as much as quota with rotation.
The choice, both being permissible and fair, is left to the Administration.
The contesting respondents contended (i) The rule of law is the enemy of arbitrary absolutism and the discretion to disobey is a doctrine of despotism and cannot be sub scribed to by a Court.
1038 (ii) 'As far as practicable does not permit the State to deviate from it.
It merely authorises provisional variations or ad hoc solutions or emergency arrangements to meet the difficulty of the Administration without making formal or regular appointments to the posts in question.
(iii) Rotational system is implicit in quota.
(iv) Any deviation from rotational system is violative of Articles 14 and 16 of the Con stitution.
Allowing the appeal held: 1.
The State in tune with the mandate of the quota rule must make serious efforts to secure hands to fill half the number of vacancies from the open market.
If it does not succeed despite honest and serious effort, it qualifies for departure from the rule.
If it has become non feasible, imprac ticable to get the requisite quota of direct recruits having done all that it could, it was free to fill the Post by promotion of suit able hands, if the filling up of the vacan cies was administratively necessary and could not wait.
The sense of the rule is that as far as possible the quota system must be kept up and if not practicable promotees in place of direct recruits or direct recruits in place of promotees may be inducted applying the regular procedures without suffering the seats to lie indefinitely vacant.
[1050 F H, 1051 A] 2.
The Government sent a requisition for 12 posts of Deputy Collectors to the Gujarat Public Service Commission as early as in October, 1960.
On account of commission having raised various queries including require ments of adequate knowledge of Marathi and Gujarati, the examination could not be held during the years 1960 1962.
The expla nation given by the Government is prima facie good and not rebutted as got up.
Since the Government took active steps in the direction of direct recruitment, the excep tion to the Government Resolution comes into operation.
The Government in the present case did all that it could.
[1051 A F] 3.
Quota is not inter locked with Rota.
[1052 A] (a) The quota system does not necessitate the adoption of the rotational rule in practical application.
Many ways of working out 'quota ' prescription can be devised of which rota is certainly one.
(b) While laying down a quota when filling up vacancies in a cadre from more than one source, it is open to Government.
subject to tests under article 16, to choose 'a year ' or other period of the vacancy by vacancy basis to work out the quota among the sources.
But once the Court is satisfied, examining for constitutionality the method proposed, that there is no invalidity, administrative technology may have free play in choosing one or other of the familiar processes of imple menting the quota rule.
We, as Judges, cannot strike down the particular scheme because it is unpalatable to forensic taste.
(c) Seniority, normally, is measured by length of continuous.
officiating service the actual is easily accepted as the legal.
This does not preclude a different prescription, consti tutionality tests being satisfied.
(d) Promotees regularly appointed during period 1960 62 in excess of their quota, for want of direct recruits can claim their whole length of service for seniority.
(e) Promotees appointed in 1963 and onwards in excess of their quota should be pushed down and absorbed in vacancies in their quota during subsequent years.
[1057 E H, 1058 A C] 1039 Mervyn Coutindo & Ors.
vs Collector of Customs, Bombay [1967] 3 S.C.R. distinguished, Badami vs Stale of Mysore & Ors.
[1976] 1 S.C.R. 815 distinguished, Govind Dattaray Kelkar and Ors.
vs Chief Controller of Imports and Exports & Ors.
[1967] 2 S.C.R. 29 distinguished and doubted.
S.G. Jaisinghani vs Union of India [1967] 2 S.C.R. 703 distinguished.
Bishan Sarup Gupta vs Union of India [1975] Supp.
S.C.R. 491, Union of India vs Bishan Sarup Gupta [1975] 1 S.C.R. 104 and A.K. Subbraman & Ors.
vs Union of India [1975] 2 S.C.R. followed.
The Court directed the Government to draw up expedi tiously a fresh seniority list in the light of the observa tions made in the Judgment.
[1058 H] Obiter: (Lengthy legal process, where administrative immediacy is the desideratum is a remedy worse than the malady.
The fact that the present case has taken around 5 working days for oral arguments is a sad commentarY on the legal system.
To streamline and to modernise Court manage ment is a cinderella subject in India, as elsewhere.
We too have miles to go for law and justice to meet). |
Appeal No. 127 of 1976.
(Appeal by Special Leave from the Judgment and Order dated the 20.8.1975 of the Allahabad High Court (Lucknow Bench) at Lucknow in Civil Writ Petition No. 1062 of 2974).
G.N. Dikshit and S.K. Bisaria, for the Appellant.
D. Goburdhan, for the Respondent.
The Judgment of the Court was delivered by GUPTA, J.
This appeal by special leave arises out of a proceeding under the Uttar Pradesh Urban Buildings (Regula tion of Letting, Rent and Eviction) Act, 1972 (referred to hereinafter as the Act).
On September 11, 1973 the appel lant applied under section 16(1)(a) for allotment of a part of house No. 98, Lokmanganj, Lucknow.
He was in fact in occupation of this portion of the building when he made the application: according to the appellant he had been inducted as a tenant by a person representing that he was the owner of the house,though really he was himself a tenant.
On November 24, 1973 the first respondent also applied for alloting the house to him.
Subsequently there were two more applicants for the house.
The Area Rationing Officer (Rent Control) by his order dated June 4, 1974 allotted the accom modation to the first respondent.
The appellant before us preferred an appeal to the District Judge, Lucknow, who on August 7, 1974 allowed the appeal, set aside the order of allotment made in favour of the first respondent and remand ed the case to the Area Rationing Officer (Rent Control) to be decided afresh in accordance with law.
The District Judge pointed out that the Area Rationing Officer (Rent Control) had ignored altogether rule 11 of the Rules framed under the Act which required that in the matter of allotment the principle "first come first served" should be followed.
The District Judge overruled a contention raised on behalf of the first respondent that the appel lant 's application for allotment was not maintainable as he was an unauthorised occupant within the meaning of the Act of the building in question.
The appellate authority held that there was no provision in the Act which bars an unau thorised occupant from applying for an allotment.
On a writ petition filed by the first respondent, the Allahabad High Court quashed the order of the District Judge and restored the order made by the area Rationing Officer (Rent Control) alloting the house to the first respondent on the view that rule 11 requiring "first come first served" prin ciple to be followed was applicable only to persons similar ly situated, and an unauthorised occupant could not be "placed in the same situation as others who were in need of accommodation".
According to the High Court the princi ple "first come first served" was" not intend to be applied mechanically and not in such a manner as to frustrate the object of the Act".
The correctness of the view taken by the High Court is in challenge before us.
It is necessary to refer briefly to the relevant provi sions of the Act and the rules framed thereunder.
The Act, as its long title shows, is a statute "to provide, in the interest of the general public, for the 10 1458SCI/76 130 regulation of letting and rent of, and the eviction of tenants from, certain classes of buildings situated in urban areas, and for matters connected therewith".
Chapter III of the Act which contains provisions regulating letting in cludes section 11 to section 19.
Section 11 lays down that No. person shall let any building except in pursuance of an allotment order issued under section 16.
Section 12 states inter alia that a landlord or a tenant of a building shall be deemed to have ceased.
to occupy the building or part thereof if he has allowed it to be occupied by any person who.
is not a member of his family.
The appellant and the tenant of the building who inducted him there axe not members of the same family.
Section 13 provides that no person shall occupy a building or part thereof which a landlord or tenant has ceased to occupy except under an order of allotment made under section 16 and that if a person "so purports to occupy" he shall be deemed to be an unauthorised occupant such building or part.
Under section 16(1)(a) the District Magistrate may make an order requiring the landlord to let any building which is or has fallen vacant or is about to fall vacant or a part of such building to any person specified in the order.
An order made by the District Magistrate under this provision is called an allot ment order. 'District Magistrate ' as defined in section 3(c) includes an officer authorised by the District Magis trate to exercise all or any of his powers under the Act.
An order under section 16 is appealable under section 18.
Section 41 authorises the State Government to make rules to carry out the purposes of the Act.
Rule 10 of the Rules framed under the Act prescribes the procedure for allotment.
The District Magistrate is required to maintain a register of applications for allotment of buildings.
The applica tions are to be classified according to the priority catego ries specified in rule 11 and they must be registered in the order they are received.
The register is prepared afresh for every calendar year and applicants who are unable to secure allotment by the end of an year and whose applica tions were not rejected as not maintainable are entitled to apply by the 15th of January of the succeeding year for renewal of their applications and they retain their original relative priority.
Sub rule (5) of rule 10 provides that no building shall ordinarily be.
allotted to the persons or for the purposes specified in clauses (a), (b) and (c) of the sub rule.
Sub rule (6) lays down inter alia that a person who is deemed to have ceased to occupy a building within the meaning of section 12(1)(b) shall not be allotted that or any other residential building for a period of two years from the date of such deemed cessation.
Rule 11 which fixes the order of priorities in allotment of residential buildings states in sub rule (1) that: "In making allotment of a residential building, .the following order of priorities shall be observed: Firstly, for public purposes; Secondly, for accommodating a person against whom an order has been passed for eviction under Section 21, not being a tenant referred to in Explanation (1) to Section 21(1), or a decree has been passed in a suit filed with the permission of the District Magistrate under section 3 of the old Act (or such suit or application is pending) and who or 131 members of whose family do not own or hold as tenants any other residential building in the same city, municipality, town 'area or notified area; Thirdly, for accommodating others; and in each of the above categories subject to the provisions of sub rule (2), the principle "first come, first served" shall be followed.
" As intending allottees the appellant and the first re spondent both come within the third category.
If the principle 'first come first served ' is to be followed in choosing between them, the appellant 's applica tion for allotment being earlier in point of time should have preference unless there is any valid ground for reject ing his claim.
We are not concerned in this appeal about the existence of any such ground; the District Judge had remitted the case to the Area Rationing Officer (Rent Con trol) for a fresh decision in accordance with law following the 'first come first served ' principle.
The High Court thought that the appellant being in unauthorised occupation of the building within the meaning of section 13 was not entitled to apply for allotment of the premises to him.
It does not however appear from the Judgment of the High Court that there is any provision in the Act which disentitles such unauthorised occupants from applying for allotment.
The appellant is not one of the persons to whom no building is ordinarily to be allotted under sub rules (5) and (6) of rule 10.
The High Court refers to sub rules (4) and (5) of rule 11 to show that the principle first come first served ' does not apply in all circumstances.
Sub rule (4) gives overriding powers to the District Magistrate to make an allotment out of turn in favour of a person who in occupy ing any accommodation proposed to be requisitioned under the Uttar Pradesh Temporary Accommodation Requisition Act, 1947 and to whom alternative accommodation is required to be provided under that Act.
Sub rule (5) which is expressly made subject to the other sub rules of rule 11 states that it should be ensured that no person shall be allotted a building which carries so little rent that he is able to get a residence on payment of rent which is less than ten per cent of his salary or other income, after taking into con sideration the house rent allowance allowed by his employer.
Both these sub rules are quite irrelevant for the present purpose.
Therefore, assuming that sub rules (4) and (5) are exceptions to the 'first come first served ' principle, the appellant 's application for allotment cannot be thrown out unless there was some provision prohibiting unauthorised occupants from applying for allotment.
The High Court thinks that an unauthorised occupant cannot be "placed in the same situations as others who are in need of accommoda tion" and that the principle 'first come first served ' "has to be applied amongst person of the same category who are similarly situated".
The High Court has not mentioned any provision of the Act to justify the view it has taken, nor any such provision has been referred to by counsel for the first respondent which disables an unauthorised occupant from applying for an allotment.
The disability, the High Court infers from the object of the Act.
The 132 object of the Act has to be gathered from its provisions and we have not found anything in the Act which disentitles an unauthorised occupant to ask for an allotment.
In our opinion the High Court was in error in quashing the order of the District Judge.
The appeal is accordingly allowed.
The judgment of the High Court is set aside and that of the District Judge dated August 7, 1974 is restored.
There will be no order as to costs.
P.H.P. Appeal allowed. | In September, 1973, the appellant applied under section 16(1)(a) of the U.P. Urban Buildings (Regulation of letting, rent and eviction) Act, 1972 for the allotment of a part of a house, which was actually occupied by him.
According to the appellant, he was included as a tenant by a person representing himself to be the owner but who in fact was a tenant.
In November, 1973, the first respondent also ap plied for allotment of the said premises.
The Area Ration ing Officer allotted the premises to the first respondent.
The District Judge allowed the appeal filed by the appel lant, set aside the order of allotment in favour of the first respondent and remanded the case to the Rationing Officer to be decided afresh in accordance with law.
The District Judge pointed out that the Area.
Rationing Officer had ignored altogether rule 11 of the Rules framed under the Act which required that in the matter of allotment the principle 'first come first served ' should be followed.
The District Judge also negatived the contention of the first respondent that the appellant 's application was not main tainable since he was an unauthorised occupant.
The Court held that there was no provision in the Act which bars an unauthorised occupant from applying for an allotment.
In a wit petition filed by the first respondent the High Court quashed the order of the District Judge and restored the order made by the Area Rationing Officer.
Section 11 of the Act provides that no person shall let any building except in pursuance of an allotment order issued under section 16.
Section 13 provides that no person shall occupy a building or part thereof which a landlord or tenant has ceased to occupy except under an order of allotment made under section 16.
Under section 16 the District Magistrate is empowered to make an order requiring the landlord to let any building which is or has fallen vacant or is about to fall vacant or a part of such building to any person specified in the order.
An order under sec tion 16 is appealable under section 18.
In exercise of powers conferred by section 41 of the Act, the rules have been framed by the State Government.
Rule 10 prescribes the procedure for allotment.
It provides that the application should be entered in the register after classifying them according to the priority of the categories.
Rule 10 further provides that a building shall not.be allotted to a person who is deemed to have ceased to occupy a building for a period of two years from the date of such deemed cessation.
Rule 11 fixes order of priorities in allotment of residen tial buildings and it further provides that in each of the categories the principle 'first come first served ' shall be followed.
Al1owing the appeal, HELD: (1) The High Court in its judgment has not men tioned any provision in the Act which dissentitles unautho rised occupants from applying for allotment.
Rules 10(5) & (6) provide that certain persons should not ordinarily be allotted a promises; the appellant does not fall within those categories.
[131D E] 2.
The High Court infers the disability of an unautho rised occupant from applying for an allotment from the object of the Act.
The object of the Act has to be gathered from its provisions.
There is nothing in the Act which disentitles an unauthorised occupant from applying for an allotment.
[131H, 132A] 129 |
: Criminal Appeal Nos. 486 to 489 of 1984.
From the Judgment and Order dated 5.4.1984 of the Bombay High Court in Criminal Revision Application No. 166/83 and Criminal Revision No. 234 of 1983 respectively.
M.C. Bhandare, A.M. Khanwilkar and Mrs. H. Wahi for the Appellants.
S.B. Bhasme and R.A. Gupta for the Respondents.
K. JAGANNATHA SHETTY, J.
These four appeals, by leave, arise out of the common judgment of Bombay High Court dated April 5, 1984 in Criminal Revision Applications 166 and 234 of 1983.
Criminal Appeal Nos. 486 and 487 of 1984 have been preferred by an Organisation called "Stree Atyachaar Virodhi Parishad".
It is an association committed to prevent atroci ties on women.
Criminal Appeal Nos. 488 and 489 of 1984 are by the State of Maharashtra.
563 The case relates to the death of a newly married girl called Chanda.
On June 15, 1981, Chanda was married to Ramesh.
The eider brother of Ramesh is called Dilip and Nathumal is their father.
The marriage of Ramesh and Chanda took place at Nerparsopant, District Yavatmal.
On the next day of the marriage, the bride and groom returned to the house of the latter at Arvi.
On June 19, 1981, they had gone to Amravati to have prayers in the Devi Tampie.
They came back in the same evening.
The day follow ing was a fateful day.
At about 2.30 PM on June 20, 1981, Chanda was seen with flames on the first floor of the resi dential building, with frantically crying for help.
That attracted some of the neighbours from the ground floor.
They rushed to rescue Chanda.
Three of them are: Bhanrao, Ballu alias Nandu and Ramdas.
They extinguished the flame which was practically engulfing Chanda.
The inmates in the house, however, did not render any such help.
Dilip who was on the first floor was seen coming down the stairs.
Shortly, thereafter two doctors came and the police also arrived.
Chanda was taken to Ervin Hospital at Amravati in an uncon scious condition.
She died in the hospital at about 9.00 pm on the same day.
Before the death, her dying declaration was said to have been recorded by the Executive Magistrate.
It was stated therein that when she was preparing tea in the kitchen, her saree caught fire accidentally and consequently she received the burn injuries.
The parents of Chanda were informed of the death.
They suspected foul play by the in laws of Chanda.
They lodged a report at Amravati Police Station complaining that Chanda 's death might have been the outcome of tension due to demand of dowry.
The Crime Branch of the CID investigated the case and charge sheeted Dilip and Nathumal under sec.
306 read with sec.34 IPC.
It was alleged that the Chanda has commit ted suicide by burning herself and Dilip and Nathumal abet ted her.
An investigation of the case revealed that Chanda had hostile atmosphere soon after her marriage.
She was not treated well in her husband 's house.
Vijay, her brother and Mani Chand, father have given statements that the in laws demanded unreasonable dowry which could not be complied with.
Even at the wedding ceremony, it seems, that they behaved badly on the payment of insufficient dowry.
After the marriage, when Vijay came to take his sister back home as per custom, he was not even permitted to meet her.
Kamala Bai, the maid servant accompanying Chanda was also sent back.
She has also 564 given detailed version about the unfavourable atmosphere around Chanda.
In addition to the statements of witnesses, there is a report of the Chemical Analyser and post mortem report.
These indicate that the death of Chanda could not be by accidental fire.
The trial court after considering all the facts and circumstances appearing on record and after heating the counsel for accused and Public Prosecutor was of priraa facie opinion that it was not a suicide but homicidal death.
Accordingly, the charge under sec.
302 IPC was framed against Dilip.
Nathumal, however, was discharged holding that the allegations against him do not justify the framing of any charge.
There were two revision applications before the High Court of Bombay.
The State filed a revision challenging the validity of discharge of Nathumal.
Dilip on his part ques tioned the correctness of the charge framed against him and demanded his discharge also.
The High Court dismissed the revision preferred by the State while accepting the revision of Dilip.
The High Court was of opinion that the charge under sec.
302 against Dilip was misconceived and there is not even a case against him to frame charge under sec.
306 IPC.
He was accordingly discharged.
The primary question for consideration before us, is whether the High Court was justified in interfering with the charge framed by the trial court against Dilip? The next question to be considered is whether it is necessary to put Nathumal also on trial with the material on record.
We have perused the judgments of the courts below and heard counsel on both sides.
We gave our anxious considera tion to the material on record.
Section 227 of the Code of Criminal Procedure having beating on the contentions urged for the parties, provides: "227.
Discharge If, upon considera tion of the record of the case and the docu ments submitted therewith, and after hearing the submissions of the accused and the prose cution in this behalf, the judge considers that there is no sufficient ground for pro ceeding against the accused, he shall dis charge the accused and record his reasons for so doing.
" 565 Section 228 requires the judge to frame charge if he consider that there is ground for presuming that the accused has committed the offence.
The interaction of these two sections has already been the subject matter of considera tion by this Court.
In State of Bihar vs Ramesh Singh, ; , Untwalia, J., while explaining the scope of the said sections observed (at 259): "Reading the two provisions together in juxta pesition, as they have got to be, it would be clear that at the beginning and the initial stage of the trial the truth, veracity and effect of the evidence which the Prosecu tor proposes to adduce are not to be meticu lously judged.
Nor is any weight to be at tached to the probable defence of the accused.
It is not obligatory for the judge at that stage of the trial to consider in any detail and weigh in a sensitive balance whether the facts, if proved, would be incompatible with the innocence of the accused or not.
The standard finding regarding the guilt or other wise of the accused is not exactly to be applied at the stage of deciding the matter under sec.
227 or sec.
228 of the Code.
At that stage the court is not to see whether there is sufficient ground for conviction of the accused or whether the trial is sure to end in his conviction.
Strong suspicion against the accused, if the matter remains in the region of suspicion, cannot take the place of proof of his guilt at the conclusion of the trial.
But at the initial stage if there is a strong suspicion which leads the court to think that there is ground for presuming that the accused has committed an offence then it is not open to the court to say that there is no sufficient ground for proceeding against the accused.
" In Union of India vs Prafulla Kumar Samal & Anr., ; at 234 35, Fazal Ali, J., summarised some of the principles: "(1) That the Judge while consider ing the question of flaming the charges under sec.
227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused had been made out.
(2) Where the material placed before the Court disclose grave suspicion against the accused which has not been properly explained, the Court will be fully justified in 566 framing a charge and proceeding with the trial.
(3) The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application.
By and large, however, if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused.
(4) That in exercising his jurisdic tion under the present Code is a senior and experienced Judge cannot act merely as a Post Officer or a mouth piece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on.
This however, does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.
" These two decisions do not lay down different princi ples.
Prafulla Kumar case has only reiterated what has been stated in Ramesh Singh case.
In fact, sec.
227 itself con tains enough guidelines as to the scope of enquiry for the purpose of discharging an accused.
It provides that "the Judge shall discharge when he considers that there is no sufficient ground for proceeding against the accused".
The 'ground ' in the context is not a ground for conviction, but a ground for putting the accused on trial.
It is in the trial, the guilt or the innocence of the accused will be determined and not at the time of framing of charge.
The Court, therefore, need not undertake an elaborate enquiry in sifting and weighing the material.
Nor it is necessary to delve deep into various aspects.
All that the Court has to consider is whether the evidenciary material on record if generally accepted, would reasonably connect the accused with the crime.
No more need be enquired into.
So much is, we think, established law.
To be fair to the accused, we have examined the material on record and also perused the statements of some of the witnesses.
From the report of the Chemical Analyser, it will be seen that kero sene residue was found on each and every garment of the deceased.
The post mortem report also indicates, 567 besides burn injuries, that Chanda had sustained contusions on the back shoulders.
According to the doctor who conducted the postmortem, those contusions might have been caused with the blunt rounded object.
The learned Judge of the High Court has not adverted to these facts although the conten tion of the Public Prosecutor in this regard has been no ticed.
Not merely that, the events that proceeded the death of Chanda did not receive any consideration.
The statements of brother and father of Chanda and also that of Kamala Bai the maid servant of Chanda have been ignored.
The conduct of Dilip which was highlighted in the context and circumstances, was brushed aside with little significance.
It is said that Dilip was coming down from the staircase when Chanda was crying for help.
The manner in which he went on at that time, if true, did not bring him credit.
The High Court, however, said: "That the accused was passive is neither here nor there.
It all depends upon the mental response and reaction of an indi vidual whether he faces the risk and attempt to extinguish the flames or quietly watches the incident.
By no interpretation could it be stretched to show that the accused either actively committed the act of burning or ac tively aided the commission of suicide.
" Counsel for the State was very critical of the attitude adopted by the High Court in dealing with the case.
His criticism to some extent is not unjustified.
It may not be out of place to mention that "dowry" which is a deep rooted social evil appears to be the cause of ever so many unfortunate death of young ladies.
It is an offence brutal and barbaric.
It is generally committed inside the house and more often with a circumstance to give an impres sion that it was a suicidal death.
There will be all round attempt to cover up such offence by the family members rather than to expose it.
The Government has come forward with legislations from time to time to protect women and to punish those who commit attrocities on them.
In 1961 the Dowry Prohibition Act (Act 28 of 196 1) was passed prohibit ing the taking or giving dowry.
By the Criminal Law (Second Amendment) Act, 1983 (Act 46 of 1983) Chapter XX A was introduced in the Penal Code with sec.
498 A creating a new offence of cruelty.
It provides for punishment to husband or his relatives if they harass a woman with a view to coerce her to meet any unlawful demand for property.
Section 174 of the Criminal Procedure Code was also amended to secure post mortem in 568 case of suicide or death of a woman within seven years of her marriage.
Section 113 A has been introduced in the Evidence Act, 1872 raising presumption of cruelty as defined under sec.
498 A IPC against the husband or his relatives if the wife commits suicide within a period of seven years from the date of her marriage.
These provisions reflect the anxiety of the representatives of our people to deal firmly the menace of dowry deaths.
Again, there are sweeping changes made in the Dowry Prohibition (Amendment) Act, 1984.
A new offence called 'Dowry death ' has been created by introducing sec.
304 B in the Penal Code.
It raised presump tion of culpability against the husband or relative hitherto unknown to our jurisprudence.
It provides that where the death of a woman is caused by any bums or bodily injury or otherwise than under normal circumstances within seven years of her marriage and it is shown that soon before her death she was subjected to cruelty or harassment by her husband or any relative of her husband for or in connection with any demand for dowry, such death shall be called 'dowry death '.
The section also provides hat such husband or relative shall be deemed to have caused her death and shall be pun ished with imprisonment for a minimum of seven years but which may extend to life imprisonment.
We are referring to these provisions not that they are attracted to the present case.
It is only to emphasize that it is not enough if the legal order with sanction alone moves forward for protection of women and preservation of societal values.
The criminal justice system must equally respond to the needs and notions of the society.
The inves tigating agency must display a live concern and sharpen their wits.
They must penetrate into every dark corner and collect all the evidence.
The Court must also display great er sensitivity to criminality and avoid on all counts "soft justice".
In the instant case the trial court has considered every material on record in support of the charge framed.
The trial court has also given reasons why a charge under sec.
302 IPC is warranted against Dilip even though the police charge sheeted him under sec.
306 IPC.
The High Court has gone on a tangent mainly relying on the dying declaration as if it has been conclusively proved to be the true and faith ful version of the deceased.
Apart from that, we are unable to compromise ourselves with the approach made and the opinion expressed by the High Court in respect of many of the matters.
We wish to add a word regarding interference by the High court against a charge framed by the Sessions Court.
Section 227 which 569 confers power to discharge an accused was designed to pre vent harassment to an innocent person by the arduous trial or the ordeal of prosecution.
How that intention is to be achieved is reasonably clear in the section itself.
The power has been entrusted to the Sessions Judge who brings to bear his knowledge and experience in criminal trials.
Be sides, he has the assistance of counsel for the accused and Public Prosecutor.
He is required to hear both sides before framing any charge against the accused or for discharging him.
If the Sessions Judge after hearing the parties frames a charge and also makes an order in support thereof, the law must be allowed to take its own course.
Self restraint on the part of the High Court should be the rule unless there is a glaring injustice stares the Court in the face.
The opinion on any matter may differ depending upon the person who views it.
There may be as many opinions on a particular matter as there are courts but it is no ground for the High Court to interdict the trial.
It would be better for the High Court to allow the trial to proceed.
The counsel for the State was equally critical upon the discharge of Nathumal.
It was argued that Nathumal being the manager of the family ought to have taken care of Chanda and without his connivance, none would have demanded dowry and put Chanda on fire.
It is true that it is his obligation as manager of the family to protect Chanda and safeguard her rights.
We have no doubt that he has failed to perform his moral obligation.
But that by itself without anything more is not sufficient to frame a charge against him.
We, there fore, agree with the discretion exercised by the trial court and leave it at that.
In the result and for the reasons stated, we allow the criminal appeals to the extent indicated only as against Dilip.
We set aside the order of the High Court and restore that of the trial court.
The appeals against Nathumal are dismissed.
His discharge is confirmed.
We direct the court to proceed with the trial expeditiously.
Before parting with the case, we must place on record the useful service rendered by 'Stri Atyachar Virodhi Pari shad ' in this case.
It is a social welfare organisation.
It has come up to this Court spending its own money by prefer ring the appeals.
We very much appreciate the object of the organisation and the assistance rendered P.S.S. Appeals allowed partly. | The deceased was seen in flames on the first floor of her in laws house crying for help within five days of her marriage with the younger brother of the respondent.
While neighbours rushed to her rescue and extinguished the flames, the inmates of the house did not render any such help.
The respondent who was on the first floor was seen coming down the stairs.
The deceased succumbed to the burn injuries in the hospital on the same day.
In her dying declaration recorded by the Executive Magistrate, she stated that when she was preparing tea in the kitchen her saree caught fire accidently.
The parents of the deceased suspected foul play by her in laws and lodged a report with the police.
An investiga tion.of the case revealed that the deceased had met hostile atmosphere soon after her marriage.
The parents gave state ments that the in laws demanded unreasonable dowry which could not be complied with and that at the wedding ceremony they had behaved badly on the payment of insufficient dowry.
Her brother who had gone to bring her back home was not permitted to meet her.
The maid servant sent along with her was also sent back.
The respondent and his father were charge sheeted under section 306 read with section 34 I.P.C.
The trial court came to a prima facie conclusion that it was not a suicide but homici dal death.
Accordingly, a charge under section 302 I.P.C. was framed against the respondent.
The respondent 's father was, however, discharged.
561 The High Court dismissed the revision petition of the State against the respondent 's father.
Wile accepting the respondent 's revision it took the view that the fact that the accused was passive was of no consequence that it all depends upon the mental response and reaction of an individ ual whether he faces the risk and attempts to extinguish the flames or quietly watches the incident, that it does not show that the accused actively committed the act of burning or actively added the commission of suicide, and held that the charge under section 302 against him was not made out, and there was not even a case against him to frame charge under section 306 I.P.C.
The appellant, a social welfare organisation and the State preferred appeals to the Supreme Court.
On the question: Whether the High Court was justified in interfering with the charge framed by the trial court against the respondent, and whether it was necessary to put his father also on trial with the material on record.
Partly allowing the criminal appeals, HELD: 1.
The High Court was not justified in interfering with the charge framed by the trial court against the re spondent accused.
The trial court had considered every material on record in support of the charge framed.
It had also given reasons why a charge under section 302 I.P.C. was warranted against the respondent even though the police had charge sheeted him under section 306 I.P.C. Section 227 Cr.
P.C. which confers power to discharge an accused was designed to pre vent harassment to an innocent person by the arduous trial or the ordeal of prosecution.
The power has been entrusted to the Sessions Judge who brings to hear his knowledge and experience in criminal trials.
If he after hearing the parties frames a charge and also makes an order in support thereof, the law must be allowed to take its own course.
State of Bihar vs Ramesh Singh, ; and Union of India vs Prafulla Kumar Samal & Anr., ; at 234 35, referred to.
Self restraint on the part of the High Court should he the rule unless there is glaring injustice staring the Court in the face.
In the 562 instant case, it had discharged the respondent mainly rely ing on the dying declaration as if it has been conclusively proved to be the true and faithful version of the deceased.
It did not advert to the report of the Chemical Analyser in which he found kerosene residue on each and every garment of the deceased, and the post mortem report which indicated that besides burn injuries the deceased had sustained contu sions on the back shoulders which might have been caused with a blunt round object.
The events that preceded the death of the deceased also did not receive any considera tion.
The statements of brother, father and the maid servant of the deceased have been ignored.
The respondent was seen coming down from the staircase when the deceased was crying for help.
The manner in which he went on at that time, if true, did not bring him credit.
The approach made by the High Court, therefore, cannot be accepted.
[569C; 566H; 567A C] 4.
Although it was the moral obligation of respondent 's father as manager of the family to protect the deceased and safeguard her life and he had failed to perform that obliga tion, that by itself without anything more is not sufficient to frame a charge against him.
The discretion exercised by the trial court in discharging him was, therefore, correct.
[569E] |
Appeal No. 2061/1971.
(From the Judgment and Order dated the 13th May, 1970 of the Allahabad High Court in Civil Misc.
Writ No. 1249 of 1970).
S.C. Manchanda and O.P. Rana, for the Appellant.
J. Ramamurthi, (amicus curiae) for Respondents.
The Judgment of the Court was delivered by 134 KHANNA, J.
This appeal on certificate is against the judgment of Allahabad High Court whereby the High Court accepted petition under article 226 of the Constitution of India filed by the respondent and quashed the recovery proceedings initiated by the appellant.
The respondent firm was assessed to sales tax under the U.P. Sales Tax Act, 1948 (hereinafter referred to as the Act) for the assessment year 1958 59.
The respondent went up in appeal and the tax demand was reduced in appeal.
On revision filed by the respondent the total demand of sales tax was further reduced.
The respondent made various payments towards the amount of tax found due from him.
The sales tax authorities initiated proceedings for ' recovering ' the balance of the tax and realising interest at the rate of 18 per cent from February 1, 1964 on part of the tax demand.
These recovery proceedings were challenged by the respondent by means of writ petition on the ground that a fresh notice of demand should have been issued to him in respect of the amount as reduced in appeal and revision.
Unless that was done, the respondent could not be treated as a default er.
The liability for payment of interest of the respond ent was also questioned.
The High Court accepted the first contention and quashed the recovery proceedings.
We have heard Mr. Manchanda on behalf of the appel lant.
No one appeared on behalf of the respondent.
Mr. Ramamurthi, however, argued the case amicus curiae.
After giving the matter our consideration, we are of the opinion that the judgment under ' appeal cannot be sustained.
Two questions arise for determination in this appeal.
The first question is whether the respondent is liable to pay interest on the amount due from him as sales tax.
The answer to this question, in our opinion, should be in the affirmative in view of the provisions of sub section (1A) of section 8 of the Act.
The aforesaid sub section as also sub section (1) and (8) of that section read as under: "8.
Payment and recovery of tax. (1) The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, not being less than fifteen days from the date of service of the notice of assessment and demand as may be specified in the notice.
In default of such payment, the ,,whole of the amount then remaining due shall become recoverable in accordance with sub section (8).
(1 A) If the tax payable under sub section (1) remains unpaid for six months after the expiry of the time specified in the notice of assessment and demand or, the commencement of the Uttar Pradesh Bikri Kar (Dwitiya Sanshodhan) Adhiniyam, 1963, whichever is later, then, without prejudice to any other liability or penalty which the de faulter may, in consequence of such non payment, incur under this Act, simple interest at the rate of eighteen per cent for annum shall run on the amount then remain 135 ing due from the date of expiry of the time specified in the said notice, or from the commencement of the said Adhiniyam, as the case may be, and shall be added to the amount of tax and be deemed for all purposes to be part of the tax: Provided that where as a result of appeal, revision or reference, or of any other order of a competent court or authority, the amount of tax is varied, the interest shall be recalculated accordingly.
Provided further that the interest on the excess amount of tax payable under an order of enhancement shall run from the date of such order if such excess remains unpaid for six months after the order . (8) Any tax or other dues payable to the State Government under tiffs Act, or any amount of money which a person is required to pay to the assessing authority under sub section (3) or for which he is personally liable to the assessing authority under sub section (6) shall be recoverable as arrears of land revenue.
" This Court considered the above provisions in the case of Haji Lal Mohd. Biri WOrks vs State of U.P.(1) and held that the liability to pay interest under section 8(1 A) is auto matic and arises by operation of law.
It was further ob served in that case that .it is not necessary for the sales tax officer to specify the amount of interest in the recov ery certificate.
We may add that there is no dispute in the present case that the notice of assessment and demand was served upon the assessee respondent.
The respondent cannot, therefore, escape liability for payment of interest.
The second question which arises for consideration is whether it was necessary for the sales tax authorities to issue a fresh notice of demand to the respondent after the tax assessed by the sales tax officer was reduced on appeal and further reduced on revision.
So far as this question is concerned, we find that sub section (9) has been added in section '8 of the Act by the U.P. Sales Tax (Amendment) Act (3 of 1971).
The aforesaid sub section reads as under: "(9) Notwithstanding anything contained in sub section (1) and (1 A) and notwithstanding any judgment, decree or order of any court, tribunal or other authority, where any notice of assessment and demand in respect of any tax or other dues under this Act is served upon a dealer by an assessing authority and an appeal, revision or other proceeding is filed in respect of such tax or dues, then (a) where as a result of such appeal, revision or proceeding the amount of such tax or other dues is enhanced, the assessing authority shall serve upon the dealer a fresh notice only in respect of the amount by which such tax or other dues are enhanced and any proceeding in relation (1) 32 S.T.C. 496.
136 to the amount specified in the notice already served upon him before the disposal of such appeal, revision or other proceeding may be continued from the stage at which it stood immediately before such disposal; (b) where as a result of such appeal, revision or other proceeding the amount of such tax or other dues is reduced, (i) it shall not be necessary for the assessing authority to serve upon the dealer a fresh notice; (ii) if any recovery proceedings are pending, the assessing authority shall give intimation of the fact of such reduction to the Collector who shall thereupon take steps for the recovery of only the reduced amount.; and (iii) any proceedings initiated on the basis of the notice or notices served upon the dealer before the disposal of such appeal, revision or other proceeding, including any recovery proceedings may be continued in relation to the amount so reduced from the stage at which it stood immediately before such disposal; (c) no fresh notice shall be necessary in any case where the amount of the tax or other dues is not varied as a result of such appeal, revision or other proceeding.
" It is apparent from clause (b) of sub section (9) that where as a result of appeal, revision or other proceedings the amount of the tax or other dues is reduced, it shall not be necessary for the assessing authority to serve upon the dealer a fresh notice.
The Allahabad High Court has also taken the same view in the case of Firm Parshuram Rameshwar Lal vs State of U.P.(3) In view of the above, we accept the appeal, set aside the judgment of the High Court and dismiss the writ petition filed by the respondent.
The parties in the circumstances shall bear their own costs throughout.
P.H.P. Appeal al lowed. | The respondent firm was assessed to sales tax under the Uttar Pradesh Sales Tax Act 1948 for the assessment year 1958 59.
On an appeal filed by the respondent the quantum of tax was reduced.
On a revision filed by the respondent made various payments towards the amount of tax found due from time to time. 'the Revenue initiated proceedings for recovering the balance of the tax and realising interest at the rate of 18 per cent.
The Revenue did not issue any fresh notice of demand after the tax was reduced but origi nally demand notice for the entire sum for which the re spondent was assessed was issued.
In a Writ Petition filed by the assessee the High Court quashed the recovery proceedings on the ground that a fresh notice of demand should have been issued to the respondent in respect of the amount as reduced in appeal and the revi sion.
Allowing the appeal by special leave, HELD: (1) Section 8 of the Act was amended by adding sub section (9) thereto by U.P. Sales Tax Amendment Act (3 of 1971).
The said sub section provides that notwithstand ing any judgment, decree etc.
where any notice of assessment and demand in respect of any tax or other dues is served upon a dealer by an Assessing Authority and where as a result of appeal or revision filed by the assessee the amount of tax is reduced it shall not be necessary for the Assessing Authority to serve upon the dealer a fresh notice.
The High Court judgment was, therefore, erroneous.
[135F, H, 136 A E] Firm Parshuram Rameshwar Lal vs State of U.P. 33, STC 540 approved.
(2) Section 8(1A) of the Act provides for payment of interest at the rate of 18 per cent on the tax amount re maining due from the expiry of the time specified in the notice of demand, till the.
date of payment.
The court in Haji Lal Mohammad vs State of U.P. has held that the li ability to pay the interest under section 8(IA) is automatic and arises by operation of law and that it is not necessary to mention the amount of interest in the recovery certifi cate.
[134 E H, 135 A E] Haji Lal Mohd. Biri Works vs State of U.P., 32 STC 496 followed. |
Appeal No. 297 of 1976.
Appeal by Special Leave from the Judgment and Order dated the 16 10 74 of the Allahabad High Court in Special Appeal No. 169/72.
S.T. Desai, M.K. Garg, K.B. Rohtagi, V.K. Jain and M.M. Kashyap, for the Appellant.
O.P. Rana for Respondents 1 4.
V.M. Tarkunde, Pramod Swarup and R.S. Verma for Respond ent No. 5.
The Judgment of the Court was delivered by KHANNA, J.
This appeal by special leave is against the judgment of a Division Bench of the Allahabad High Court, reversing on appeal the decision of learned single Judge, whereby notification dated April 23, 1966 issued by the State Government under section 7(1) of the U.P. Land Acqui sition (Rehabilitation of Refugees) Act, 1948 (hereinafter referred to as the Act) had been quashed.
As a result of the decision of the Division Bench, the writ petition filed by the appellants to quash that notification stood dis missed.
The Sufferers ' Co operative Housing Society, Jaunpur, respondent, applied to the Uttar Pradesh Government in 1955 for acquiring four acres of land for the purpose of erecting houses, shops and workshops for the rehabilitation of the refugees who were members of that society.
At the instance of the State Government, the society deposited a sum of Rs.15,000 towards the cost of the land to be acquired.
In 1964, the society entered into an agreement with the State Government under section 6 of the Act.
The State Government thereafter published on April 23, 1966, the impugned notifi cation and the same reads as under: "Under sub section (1 ) of section 7 of the U.P. Land Acquisition (Rehabilitation of Refugees) Act No. XXVI of 1948, the Governor of Uttar Pradesh is pleased to declare that he is satisfied that the land mentioned in the Schedule is needed and is suitable for the erection of houses, shops and 228 workshops for the rehabilitation of displaced persons and/ or for the provision of amenities directly connected therewith.
All the persons interested in the land in question are, therefore, required to appear personally or by duly autho rised agent before the Compensation Officer of the Distt.
at Jaunpur on the twenty seventh day of April 1966, with neces sary documentary or other evidence for the determination of the amount of compensation under section 11 of the Act.
The Collector of Jaunpur is directed to take possession of the aforesaid land fourteen days after the publication of this notice in the official gazette.
Upon the publication of this notice, the aforesaid land shall be deemed to have been acquired permanently and shall vest absolutely in the State Government free from all encum brances from.
the beginning of the day on which the notice is so published.
SCHEDULE Distt.
Pargana Mauza Municipality PlotNo.
Area Cantonment, Town area or Notified area 154 Mohalla Diwan Shah Kabir alias 152/1 1,00 Tartala Pargana Haveli, Tahsil 152/2 Jaunpur Municipal Area 149 Jaunpur 153 2 shops No. 6 and 7 For what purpose required: for the rehabilitation of displaced persons.
Note: A copy of the site plan may be inspected at the office of the Collector, Jaunpur.
" Subsequent to that notification, the Land Acquisition Offi cer determined the amount of compensation for the land and shops to be acquired at a little over rupees forty one thousand.
The balance of the amount to be paid as compensa tion was thereafter deposited by the society.
On April 10, 1970 the appellants, claiming to be the owners of a part of the land sought to be acquired, fried petition under article 226 of the Constitution of India in the Allahabad High Court with a prayer for quashing the impugned notification.
The notification was assailed on the following three grounds: (1) The notification did not properly specify the lands sought to be acquired; (2) The notification was ultra vires the Act inasmuch as it sought to acquire lands for the rehabilitation of the displaced persons and not for the rehabilitation of refugees; and (3) The notification was not in accordance with the provisions of section 7(1) of the Act.
229 The learned single Judge, while allowing the writ peti tion, did not go into the first ground.
He, however, accepted the second and third grounds and in the result quashed the notification.
On the second ground, the learned Judge referred to the definition in section 2(7) of the Act, according to which refugee means any person who was a resident in any place forming part of Pakistan and who, on account of partition of civil disturbances or the fear of such disturbance, has on or after the first day of March 1947 migrated to any place in the U.P. and has been since residing there.
It was observed that there was nothing to show that the displaced persons for whose benefit the land in question was being acquired had settled in Uttar Pradesh.
Regarding the third ground, the learned Judge expressed the view that the notification under section 7(1) of the Act required that the State Government should indicate in the notification that it had decided to acquire the land.
As the word "decided" was not mentioned in the notification, the notification was held to be not in accordance with law.
On appeal, the Division Bench of the High Court disagreed with the learned single Judge on both the grounds on which he had quashed the notification.
It was held that the notification was substantially in accordance with section 7(1) of the Act.
It was further observed that the society for whose benefit the land was being acquired consisted of refugees.
Dealing with the first ground, namely, that the notification was vague as it did not properly specify the land sought to be acquired, the Division Bench held that all the necessary particulars in respect of the land sought to be acquired had been given.
In the result, the appeal was allowed and the writ petition was dismissed.
In appeal before us, Mr. Desai has assailed the decision of the Division Bench on all the three grounds and has urged that the impugned notification is liable to be quashed on each of those grounds.
We shall accordingly deal with those grounds.
So far as the ground is concerned that the persons for whose rehabilitation the land is sought to be acquired are not refugees, Mr. Desai could not in spite of our query refer us to any paragraph in the writ petition wherein the above ground had been taken.
All the same, he submitted that as the question had been allowed to be agitated before the High Court, we should not debar the appellants from advancing arguments on that score.
The submission made by the learned counsel in this behalf is that there is nothing to show that the persons for whose benefit the land is being acquired arc settled in Uttar Pradesh.
In this respect we are of the view that the question as to whether those per sons are settled in Uttar Pradesh or not is essentially one of fact.
In the absence of any averment in the writ peti tion that the person concerned were not settled in Uttar Pradesh, it is obvious that the material facts having bear ing on this point could not be brought on record.
A party seeking to challenge the validity of a notification on a ground involving questions of fact should make necessary averments of fact before it can assail the notification on that ground.
As such we find it difficult to sustain the contention of Mr. Desai that the persons for whose benefit the land is being acquired were not settled in Uttar Pra desh.
Apart from that, we find that 230 ground No. 13 taken in the writ petition proceeds upon the assumption that the persons for whose benefit the land was being acquired were in fact refugees.
It further appears from the judgment of the Division Bench that there was hardly any dispute before the Division Bench on the point that the respondent society, namely, Sufferers ' Co opera tive Housing Society, consists of refugees and has refugees as its members.
Coming to the second ground taken by the appellants that the notification was not in conformity with section 7(1) of the Act inasmuch.
as it did not state that the State Gov ernment had decided to acquire the land in dispute, we are of the opinion that a reading of the notification which has been reproduced above leaves no manner of doubt that the State Government had decided to acquire the land.
It is stated in the notification that the Governor of Uttar Pra desh is pleased to declare that he is satisfied that the land mentioned in the schedule is needed and is suitable for the erection of houses, shops and workshops for the rehabil itation of displaced persons and/or for the provision of amenities directly connected therewith.
The notification further proceeds to state that the land in question shall be deemed to have been acquired permanently and shall vest absolutely in the State Government free from all encum brances from the date of the notification.
The recital in the earlier part of the notification as well as the opera tive part of the notification that the land shall be deemed to have been acquired permanently and shall vest in the State Government lend clear support for the conclusion that the State Government decided to acquire the land and the order of acquisition was merely an implementation of that decision.
The fact that the word "decided" has not been used in the notification would not prove fatal when the entire tenor of the notification reveals the decision of the State Government to acquire the land and is consistent only with the hypothesis of such a decision having been arrived at.
The courts should be averse to strike down a notification for acquisition of land on fanciful grounds based on hypertechnicality.
What is needed is substantial compliance with law.
The impugned notification, in our opinion, clearly satisfies that requirement.
Lastly, we may deal with the contention advanced on behalf of the appellants that the notification in question is vague.
It is pointed out by Mr. Desai that the total area of the land comprised in field numbers mentioned in the notification is 1.26 acres, while the actual area which is sought to be acquired is one acre.
The learned counsel accordingly urges that it is not possible to find out the particular portions of those fields which are sought to be acquired.
As such, the notification is stated to be vague and thus not in conformity with law.
Our attention has also been invited by Mr. Desaid to the report dated June 23, 1971 of the Tehsildar, who was deputed to deliver possession of the acquired land to the society.
In the said report the Tehsildar stated that he found it difficult to find out as to which part of the fields mentioned in the notification were acquired.
In this respect we find that the report of the Tehsilder itself indicates that when he went to the spot to deliver possession of the acquired 231 land, he did not take with, him the correct plan of the said land.
The impugned notification makes an express reference to the site plan.
An affidavit has been filed on behalf of the society and that affidavit makes it plain that the area of the land which has been acquired comes to exactly one acre.
There appears to be no cogent ground to interfere with the finding of the Division Bench of the High Court that the impugned notification has not been shown to be vague.
We, therefore, find no infirmity in the impugned notification.
The appeal fails and is dismissed but in the circumstances with no order as to costs.
Before we conclude, we would like to observe that the case before us tells a sad tale of delays in a matter which on sheer humanitarian grounds needed to be attended to with expedition.
The case, as would appear from the above, pertains to the acquisition of land with a view to rehabili tate refugees who were uprooted from their hearths and homes in areas now in Pakistan because of disturbances and fear of disturbances which marred the partition of the country.
The refugees for this purpose formed a society, and applied to the administration in 1955 for acquisition of land so that they could erect shops and workshops on that land with a view to earn their livelihood.
It took the administra tion 11 years thereafter to issue necessary notification for the acquisition of the land in dispute.
Four years were thereafter spent because possession of the land could not be delivered.
The only attempt made to deliver possession proved infructuous as the Tehsildar entrusted with this task took a wrong plan.
From 1970 till today the delivery of possession remained stayed because of the writ proceedings initiated by the appellants.
One can only hope that now that the final curtain has been dropped, the matter would be attended to with the necessary promptitude.
P.H.P. Appeal dismissed. | U.P. Government issued a notification under Section 7(1) of the U.P. Land Acquisition (Rehabilitation of Refugees) Act, 1948 for acquiring the land belonging to the appellant for the purpose of Sufferers Cooperative Housing Society.
The Society entered into an agreement with the Government under section 6 of the Act.
The Land Acquisition Officer determined the amount of compensation for the acquired land.
The appellants challenged the validity of the said notifica tion on the following grounds: 1.
The notification did not properly speci fy the land sought to be acquired.
The notification was ultra vires the Act because it sought to acquire land for the rehabilitation of displaced persons and not for the rehabilitation of refugees.
The notification was not in accordance with the provisions of section 7(1) of the Act.
The single Judge of the High Court did not go into the first ground but accepted the second and third grounds and quashed the notification.
He held that according to the definition of refugees in section 2(7) a refugee is a person who has migrated from Pakistan to any place in the U.P. and has been since then residing in U.P. and that there was nothing to show that the displaced persons who are the members of the Society had settled in U.P. While accepting the third ground the learned Judge held that section 7(1) requires to indicate in the notification that it had decid ed to acquire the land.
However, the notification did not mention the expression "decided".
On an appeal, the Division Bench disagreed with the conclusions of the Single Judge and allowed the appeal.
The Division Bench held that the notification was substantially in accordance with the sect.ion 7( 1 ) and that the members of the Society consisted of refugees.
The Division Bench also held that the notification was not vague and it proper ly specified the land sought to be acquired.
In an appeal by Special Leave the appellants repeated the 3 grounds.
Dismissing the appeal HELD: 1.
The ground about the members of the Society not being refugees has not been taken in the Writ Petition at all.
The question whether those members have settled in U.P. is essentially one of fact.
In the absence of any averment in the writ petition the material facts having bearing on the point could not be brought on record.
A party seeking to challenge the validity of a notifi cation on a ground involving questions of fact should make necessary averments of fact before it can assail the notification on that ground.
[229 F H] 227 2.
The recital in the earlier part of the notification as well as the operative part of the notification that the land shall be deemed to have been acquired permanently and shall vest in the State Government lends clear support to the conclusion that the State Government decided to acquire the land and the order of acquisition was merely an implementa tion of that decision.
The fact that the word decided has not been used in the notification would not prove fatal when the entire tenor of the notification reveals the decision of the State Govt.
to acquire land.
The court would not strike down a notification for acquisition on hypertechnicality; what is needed is sub stantial compliance with law and the impugned notification clearly satisfies that require ment.
[230 D F] 3.
The contention that the notification in question is vague is not substantiated.
The notification makes an express reference to the site plan.
[230 G 231 A] |
Appeals Nos. 1944 1946/ 67.
(From the Judgments and Decrees dated the 20th July, 1964 of the Punjab High Court in L.P.As.
23 to 25 of 1960).
M.L. Sethi and Harder Singh, for the appellants.
S.K. Mehta and section Ranga Raju, for Respondents No.s.
The Judgment of A.N. Ray, C.J. and Jaswant Singh J. was delivered by Jaswant Singh, J.M.H. Beg, J. gave a dissenting opinion.
JASWANT SINGH, J.
These three Appeals Nos.
1944, 1945 and 1946 of 1967 by certificate which are directed against the common judgment and decree dated July 29, 1964 of a Division Bench of the High Court of Punjab and Haryana at Chandigarh involving a question of limitation shall be disposed of by this judgment.
The facts leading to these appeals are: As appears from the pedigree table referred to in the judg ment under appeal, Chuhar Singh, a descendant of Amrika, son of Har Lal, sold land admeasuring 167 kanals and 10 marlas situate in village Dhugga, Tahsil Hoshiarpur, to Bhagwan Singh, the grandfather of defendants Nos. 1 to 6, for Rs.23/8/ vide a registered sale deed dated June 20, 1885.
After the aforesaid alienation, one Hamira, a collat eral of Chuhar Singh, filed a suit for possession by pre emption of 52 kanals, 13 marlas out of the aforesaid area which was decreed in his favour on April 29, 1889 on payment of 671/ .
The mutation in respect of the remainder of the land admeasuring 114 kanals and 17 marlas was attested in favour of Bhagwan Singh on May 4, 1890.
Hamira did not retain the property which he secured by pre emption and sold it back to Bhagwan Singh on September 20, 1890, with the result that Bhagwan Singh again became the owner of the entire land which was originally sold tO him by Chuhar Singh who died in 1896.
On July 19, 1898, Jiwan, Bela, Jawahar and Jawala, descendants of Bharimian, another son of Har Lal, filed a representative suit for declaration to the effect that the aforesaid sale by Chuhar Singh in favour of Bhagwan Singh would not affect their reversionary rights as the aforesaid land was ancestral and the sale thereof was with out 18 1458sc//76 258 consideration and legal necessity.
A Division Bench of the Punjab Chief Court finally disposed of the said suit by judgment dated July 29, 1902 declaring that upon the death of Alla Singh, adopted son of Chuhar Singh, and extinction of his line, the aforesaid sale of 1885 would not affect the reversionary interests of Bela and Jawahar.
This declaration was made subject to the condition that before these plain tiffs or their successors in interest would take possession of their share of the laud sold, they would pay to Bhagwan Singh or his successors in interest a sum bearing the same proportion of Rs.1611/ i.e. Rs.2378 minus 767/ ) as their share in the land sold bore to the Whole area sold.
On the death of Alia Singh, Kishan Singh, his only sou, succeeded him.
On December 18, 1943, Jawahar Singh and Bela Singh brought a suit for possession of land admeasuring 113 kanals and 18 marlas situate in village Dhugga alleging that Kishan Singh having died on August 15, 1945, and the line of Alia Singh having become extinct, they were entitled to posses sion of the land in accordance with the aforesaid decree of the Punjab Chief Court.
This suit was followed by two more suits of identical nature for the remainder of the land by two other sets of collaterals of Bhagwan Singh, one by Waryam Singh and his three brothers who claimed half of the entire holding and the other by Khazan Singh and Jagat Singh, who claimed one fourth share of the holding.
The Trial Court consolidated all these three suits and proceeded to try them together, Eventually it decreed the first two suits in favour of the plaintiffs pursuant to the aforesaid decree of the Chief Court of Punjab holding that Kishan Singh had died on August 15, 1945.
It, however, dismissed the suit brought by Khazan Singh and Jagat Singh on the ground that they being the successors in interest of Hamira, who had brought the aforesaid pre emption suit, were stopped from claiming possession of the land.
On appeal, the Dis trict Judge, Hoshiarpur, dismissed all the three suits as premature holding that the factum of Kishan Singh 's death not been established.
The decision of the District Judge was affirmed in appeal by a Single Judge of the Punjab High Court by his judgment and decree dated August 3, 1951.
The plaintiff 's in the last mentioned suits, viz. Waryam Singh and his three brothers, Jawahar Singh and Bela Singh, and Khazan Singh and Jagat Singh again instituted three sepa rate suits (out of which the present appeals have arisen) on October 28, 1952, December 16, 1952, and May 12, 1953, respectively for the same relief which was sought by them in the previous suits.
In these suits, the plaintiffs averted as follows with regard to the cause of action : "5.
After Alia, adopted son of Chuhar Singh, deceased, his son Kishan Singh became his heir and representative.
Now the where abouts of Kishan Singh aforesaid, have not been traceable for more than seven years.
Since the 15th Aug., 1945, no information or intimation that he is alive has been received by any of his relative or any other concerned person.
Hence.
he is considered as dead and his suit is being filed.
The line of Alia has become extinct.
Under these circumstances, the plaintiffs being collaterals of Chuhar Singh, deceased vide the pedigree table given 259 above, are entitled to get possession of the laud of half share, the sale of which has been cancelled vide the decree granted by the Chief Court, subject to payment of Rs.805/8/ of their proportionate share.
Hence, we have filed this suit.
The parties are governed by the Zamindara custom in the matters of succession.
Prior to it, the plaintiffs had filed a suit for possession of this property (land) on the 18th December, 1945, in the Civil Court at Hoshiarpur, alleging that Kishan Singh, son of Alia who was the last man of the line of Alia, has died on 15th August, 1945 . . 7.
The suit of the plaintiffs, detailed in para No. 6 above was based upon the factum of the death of Kishan Singh.
The plaintiffs had no personal knowledge about this fact, rather it was based on mere hearsay, but this event of the 15th of August, 1945, came out to be false and such a decision was passed in the previous suit between the parties and the parties are bound by the same.
But the where abouts of Kishan Singh, aforesaid, have not been traceable since the 15th August, 1945, according to the above facts mentioned in para No. 5.
After the 15th of August, 1952, (1945 ?) the event of his death is to be determined according to law (under section 108) and facts (under section 114) Evidence Act.
According ly, Kishan Singh is to be considered as dead after the 15th of August 1952(?) and he is not alive.
Two months prior to the 15th of Au gust, 1945, he had been residing sometime at Mauza Dhugga, District Hoshiarpur and sometime at Mauza Sonion, District Jullundur, perma nently.
Thereafter, he went outside towards Ahmedabad for searching some job and earning his livelihood.
The last information about his presence in Ahmedabad was received on the 5th of August, 1945 and since then his where abouts have not been available. ". 10.
The right to sue has accrued against defendants Nos. 1 to 6 within the jurisdiction of his district after the 16th of August, 1952, in the beginning of the months of October, 1952 viz., after a period of seven years since the whereabouts of Kishan Singh have not been traceable and since he is con sidered to be dead according to law and so the Civil Court of this District is competent to try this suit .
At any rate, Kishan Singh died within a period of three years from the date of filing the suit and so this suit is within time.
At any rate, the entire aforesaid period mentioned in para No. 6 from 18 12 45 to 3 8 51 is liable to be deducted according to law and facts.
" These suits which were resisted by the contesting de fendants on a number of grounds, were eventually dismissed by the Trial Court as time barred with the finding that though Kishan Singh had not been heard for 'seven years before the institution of the suits, the actual date 260 of this death had not been proved.
The trial Court, however, held that the decree of the Punjab Chief Court enured for the benefit of the entire body of reversioners and not exclusively for the benefit of Jawahar Singh and Bela Singh.
On appeal, the District Judge upheld the dismissal of the suits adding that Hamira having successfully brought a suit for pre emption in respect of a portion of the sale precluded not only himself but his successors as well from acquiring the property.
In this view of the matter, he opined that Jagat Singh and Khazan Singh were not entitled to any share at all in the land.
On further appeal, a Single Judge of the Punjab High Court decreed all the three suits by his judgment dated October 28, 1959, holding that Kishan Singh having been treated as alive by.
the High Court when it passed the previous judgment dated August 3, 1951, the conclusion of the courts below that Kishan Singh had been dead seven years before the institution of the present suits could not be sustained.
While computing the period of limitation, the Single Judge also excluded the time spent on the previous litigation from 1945 to 1951 under section 14(1) of the Limitation Act.
It would be advantageous to reproduce the observations made in this behalf by the.
Single Judge: "Till 3rd of August, 1951, when the judgment (of the High Court in the previous suits) was delivered, the position was that the death of Kishan Singh had not been established.
Admittedly, the whereabouts of Kishan Singh are still not known and, in my opinion, there can be no escape from the conelusion on these facts that the death of Kishan Singh must be presumed under section 108 of the Indian Evidence Act as he had not been heard of for a period of seven years,.
The present suits were brought between 28th of October, 1952 and 12th of May, 1953.
The correct ap proach to reach a solution of the present problem is to give allowance to the plain tiffs, if found necessary, for the period which they spent in previous litigation that is to say, from the years 1945 to 1951.
Under sub section (1) of section 14 of the Indian Limitation Act, the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or in a court of appeal, against the defendant, shall be ex cluded, where the proceeding is found upon the same cause of.
action and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it . .
Both the previous litigation and the present are found on the same cause of action.
The previous litigation ended with the judgment of the Punjab High Court in which it was held that the suit was premature, the plaintiffs having failed to establish the death of Kishan Singh . .
The plain fact of the matter is that no proof is forthcoming of Kishan Singh continued existence since 1945.
Since the judgment of the High Court in 1951, where it was held that the death of Kishan Singh had not been proved 8 years have elapsed.
There can be no escape from the conclusion 261 now that Kishan Singh 's death must be pre sumed.
The decision of the High Court in 1951 should provide a suitable ground for extension of time under provisions of section 14 of the Indian Limitation Act.
The whole basis of the judgment of the courts below, in my opinion, is erroneous.
It is not a requirement of section 108 of the Indian Evidence Act that the date of death of the person whose death is to be presumed must be established.
All that is said is that if a person is not heard of for a period of seven years, his death maybe presumed." The contesting defendants then took the matter in Let ters Patent Appeal to a Division Bench of the High Court which by its Judgment dated July 29, 1964 set aside the afore Said judgment and decree of the Single Judge holding that the Single Judge was in error in excluding.the time spent on the previous litigation by the plaintiffs by apply ing section 14(1) of the Limitation Act.
Relying on the decision of the Full Bench of the Lahore High Court in Bhai Jai Kishan Singh vs People Bank of Northern India, I.L.R. , the Division Bench held that the words. "or other cause of a like nature" occurring in section 14(1) of the Limitation Act had to be read ejusdem generis with the preceding words "relating to defect of jurisdiction" and that it was not possible to give the benefit of that provi sion to the plaintiffs as it could not be regarded that the court was unable to entertain the previous suits because of any defect of jurisdiction or other cause of a like nature merely because of the fact that the court came to the con clusion that the cause of action had not yet arisen.
Ag grieved by this judgement, the plaintiffs have come up in appeal to this Court as already stated.
Before adverting to the contentions raised before us on behalf of the appellants, we must first dispose of the preliminary objection raised by Mr. Mehta, counsel for the contesting respondents, regarding the maintainability of the appeals.
According to Mr. Mehta, the said appeals have been rendered untenable and have to be dismissed in view of the amendment introduced in section 7 of the Punjab Custom (Power to Contest) Act, 1920 (Act 2 of 1920) by the Punjab Custom (Power to Contest) Amendment Act, 1973 (Act 12 of 1973) which has been given a retrospective operation by sub section (2) of section 1 of the Amending Act.
This contention is, in our opinion, wholly misconceived and cannot be allowed to prevail as it overlooks the savings clause contained in section 4 of the Punjab Custom (Power to Contest) Act, 1920 (Act 2 of 1920) which has been left untouched by the Punjab Custom (Power to Contest) Amendment Act, 1973 (Act 12 of 1973) and runs thus: "4.
Savings This Act shall not affect any right to contest 'any alienation or ap pointment of an heir made before the date on which this Act comes into force.
" The alienation in question was admittedly made by Chuhar Singh in favour of Bhagwan Singh in 1885 i.e. long before the 28th day of May, 1920 the date on which the Punjab Custom (Power to Con 262 test) Act 1920 (Act 2 of 1920) came into force.
It was, therefore, not at all affected by Act 2 of 1920.
In this view of the matter, it is not necessary to go into the other contention raised by Mr. I Sethi, counsel for the appellants, to the effect that in any event the preliminary objection raised by Mr. Mehta is not tenable as the Punjab Custom (Power to Contest) Amendment Act, 1973 (Act 12 of 1973) had not the effect of abrogating the declaratory decree already obtained by predecessors in interest of his clients prior to the coming into force of the Amending Act.
Having disposed of the preliminary objection, we now proceed to consider the contentions that have been pressed for our consideration by Mr. Sethi, counsel for the appel lants.
He has strenuously urged that section 14(1) of the Limitation Act was applicable to the facts and circumstances of the present case and that the Division Bench of the High Court has grossly erred in not giving the benefit of the provision to the appellants which would have entitled them to the exclusion of the time from October 10, 1945 to August 3, 1951 spent in prosecuting with due diligence and in good faith the previous suits in the court of first instance and in the courts of appeal which expressed their inability to entertain the suits on the ground that they were premature.
There is no force in these contentions.
It cannot be and has not been disputed that the present suits are governed by Article 2 of the Schedule annexed to the Punjab Limitation (Customs) Act, 1920 (Act 1 of 1920) which provides as follows : Description of suit Period of Time from which period limitation begins to run 2.
A suit for poss ession of ancestral immovable property which has been alienated on the ground that the alienation is not binding on the pla intiff according to custom (a) if no declar atory decree of the 6 years First : If the alienation nature referred is by a registered deed, to in Article 1 is the date of registration obtained.
of such deed.
Secondly If the aliena tion is not by a regis tered deed (a) if an entry regarding the alienation in the Register of Mutation has been attested by a Revenue Officer under the Punjab Land Revenue Act, 1887, the date on which the entry is attested.
263 (1) (2) (3) (b) if such entry has not been attested, the date on which the alienee takes physical posses sion of the whole or part of the property alienated in pursuance of such alienation.
(c) in all other cases, the date on which the alienation co mes to the know ledge of the plaintiff.
(b) if such declaratory 3 years The date on which the decree is obtained.
right to sue accrues or the date on which de claratory decree is ob tained, whichever is later As the plaintiffs had already obtained a declaratory decree, they had to, in order to be able to succeed, bring their suits within three yers of the accrual of the right to sue (which according to the well settled judicial opinion means the accrual of the right to seek relief) viz. within three years of the death of Kishan Singh when the line of Alia Singh became extinct.
They had to prove affirmatively that the death of Kishan Singh took place within three years of the institution of the suits.
The contention of counsel for the plaintiffs is, however, that Kishan Singh not having been heard of for more, than seven years since August 15, 1945, a presumption of the factum or his death has to be drawn at the expiration of seven years from that date in terms of section 108 of the Evidence Act.
We find it diffi cult to accept this contention.
Granting that Kishan Singh has to be presumed to be dead, it cannot be overlooked that under section 108 of the Evidence Act, the precise time of the death is not a matter of presumption but of evidence and the onus of proving that the death took place at any particular time within seven years lies upon the person who claim a right for the establishment of which the proof of that fact is essential.
The plaintiffs had not only, there fore, to prove that Kishan Singh had not been heard of for a period of seven years and was to be taken to be dead, but it also lay heavily on them to prove the particular point of time within seven years when Kishan Singh 's death occurred.
This they have miserably failed to prove.
In the absence of such proof, it cannot be held that the present suits had been brought within three years of the accrual of the right to sue.
We are supported in this view by a catena of au thorities.
In Nepean vs Doe D. Knight ; 7L J Ex 335 Lord Denman delivering the judgment of the Court observed : "The doctrine laid down is, that where a person goes abroad, and is not heard of for seven years, the law presumes the fact that such person is dead, but not that he died at the beginning or the end of any particular period 264 during those seven years; that if it be.
important to anyone to establish the precise time of such person 's death, he must do so by evidence of some sort, to be laid before the jury for that purpose, beyond the mere lapse of seven years since such person was last heard of.
Such inconveniences may no doubt arise, but they do not warrant us in laying down a rule, that the party shall be presumed to have died on the last day of the seven years, which would manifestly be contrary to the fact in almost all instances.
" This case was followed by a Division Bench of the Bombay High Court as far back as 1916 in Jayawant Jivanrao Desh pande vs Ramchandra Narayan Joshi (A.I.R. 1916 Bom.
300) A similar view was taken by the Privy Council in Lalchand Marwari vs Ramrup Gir (LIII I.A. 24: A.I.R. 1926 P.C. 9) where it was observed : "Under the Indian Evidence.
Act, 1872, section 108, when the Court has to determine the date of the death of a person who has not been heard of for a period of more than seven years, there is no presumption that he died at the end of the first seven years, or at any particular date." Another case in point is jiwan Singh vs Kuar Reoti Singh & Anr.
(A.I.R. 1930 All. 427), where it was held : "The presumption raised by section 108 is confined to the factum of death and not the exact time when death may have occurred.
Where a party affirms that a certain person died on or before a particular date, that fact has to be established by positive evidence.
" Similar view was expressed in Kottapalli Venkateswarlu vs Kottapali Bupayya & Ors.
(A.I.R. 1957 A.P. 380).
In Punjab & Ors.v.
Natha & Ors.
(A.I.R. 1931 Lab. 582).
a Full Bench of the Lahore High Court observed : "Where a person has not been heard of for seven years when a suit is instituted, section 108 comes into operation and raises a presump tion that at the institution of the suit he was dead, but no presumption arises as to the date of his death, which has to be proved in the same way as any other relevant fact in the case." Again in Ram Kali & Ors.
vs Narain Singh (A.I.R. 1934 Oudh 298 F.B.) it was laid down: "If a person has not been heard of for seven years, there is a presumption of law that he is dead: but at what time within that period he died is not a matter of presumption but of evidence and the onus of proving that the death took place at any particular time within the seven years lies upon the person who claims a right to the establishment of which that fact is essential." 265 In the instant cases, assuming that Kishan Singh died within seven years of the institution of the suits out of which the present appeals have arisen, even then the benefit of the section 14 cannot be allowed to the appellants.
This provision in so far as it is material for our purpose runs as follows : "14(1).
In computing the period of limitation prescribed for any suit the time, during which the plaintiff has been prosecut ing with due diligence another civil proceed ing, whether in a court of first instance or in a Court of Appeal, against the defendant shall be excluded, where the proceeding is founded upon the same cause of action and is prosecuted in good faith in a Court which, from defect of jurisdiction, or other cause of a like nature, is unable to entertain it . . " It would be noticed that three important conditions have to be satisfied before the section can be pressed into service.
These three conditions are (1) that the plaintiff must have prosecuted the earlier civil proceeding with due diligence; (2) the former proceeding must have been prose cuted in good faith in a court which from defect of juris diction or other cause of a like nature was unable to enter tain it and (3) the earlier proceeding and the later pro ceeding must be based on the same cause of action.
Now the words "or other cause of a like nature" which follow the words "defect of jurisdiction" in the above quoted provision are very important.
Their scope has to be determined according to the rule of ejusdem generis.
Ac cording to that rule, they take their colour from the pre ceding words "defect of jurisdiction" which means that the defect must have been of an analogous character barring the court from entertaining the previous suit.
A Full Bench of the Lahore High Court consisting of Hatties C.J., Abdur Rahman, J and Mahajan J. (as he then was) expressed a simi lar view in Bhai Jai Kishan Singh vs People Bank of Northern India (supra).
In the instant cases, it is not denied by the ' plaintiffs that the Court which tried the previous suits was not pre cluded from entertaining them because of any defect of jurisdiction.
We have, therefore, only to see whether the said court was unable to entertain the former suits on account of any defect of an analogous character.
Even a most liberal approach to the question does not impel us to hold that the court trying the earlier suits was unable to entertain them on any ground analogous to the defect of jurisdiction.
In Dwarkanath Chakravarti vs Atul Chandra Chakravarti (I.L.R. where the court trying the previous suit had refused to entertain a claim for rent because it was premature, it was held that in a subsequent suit for the aforesaid rent, the plaintiff could not rely upon the provisions of section 14(1) of the Limitation Act and say that the time did not run against him while those proceedings were being prosecuted.
Again in Palla Pattabhi ramayya & Ors.
vs Velaga Narayana Rao (A.I.R. it was held that the fact that the previous suit was dis missed as the plaintiff had no cause of action was not a ground which was covered by section 14 (1).
266 Thus it could not be held that the court which tried the previous suits but eventually threw them out as.
premature suffered from inability or incapacity to entertain the suits on the ground of lack of jurisdiction or any other defect of the like character.
Accordingly the exclusion of the period from December 18, 1945 to August 3, 1951 sought by the appellants cannot be legitimately allowed to them while computing the period of limitation.
There is also another factor which prevents us from granting the benefit of section 14(1) of the Limitation Act to the appellants.
It would be seen that in the previous suits, the plaintiffs had averted that the cause of action accrued to them on the death of Kishan Singh which had occurred on August 15, 1945.
They have, however, as already indicated by reference to the averments made in paragraphs 5, 6, 8, 9, and 10 of the petition of plaint based the present suits on a different cause of action.
It is, however, not necessary to dilate upon this aspect of the matter in view of our categoric finding that the earlier suits did not suffer from any defect of jurisdiction or any other defect of the like character which could have preclud ed the court from entertaining them.
It is also significant that the protection of section 14(1) of the Limitation Act was not claimed by the plain tiffs either in the Trial Court or in the first appellate court.
Assuming, therefore, that Kishan Singh died within seven years of the institution of the suits.
out of which the present appeals have arisen even then the protection of section 14(1) cannot be allowed to the appellants and.
the suits have to be dismissed as time barred in terms of sec tion 5 of the Punjab Limitation (Customs) Act, 1920, (Act 1 of 1920) which is reproduced below for facility of reference : "5.
Dismissal of suits of the descrip tion specified in the act if instituted after the period of limitation herein prescribed has expired.
Subject to the provisions con tained in sections 4 to.
25 (inclusive) of the Indian Limitation Act 1903, and notwithstand ing anything to the contrary contained in the first schedule of the said Act, every suit, of any description specified in the schedule annexed to this Act, instituted after the period of limitation prescribed therefor in the schedule shall be dismissed, although limitation has not been set up as a defence.
" As a result of the foregoing discussion, the appeals fail and are hereby dismissed.
In view, however, of the circumstance of the case, the parties are left to pay and bear their own costs in these appeals.
BEG, J.
The question before us is: Were the three suits, the first instituted on 21st October, 1952, the second on 18th December, 1952, and the third on 5th May, 1953, tried and heard together, cut of which the three appeals before us arise, filed within time, and if they were filed beyond time, whether the plaintiffs in each suit were entitled to the benefit of Section 14 of the Limitation Act ? 267 Plaintiffs in the three suits instituted in circum stances explained fully by my learned brother Jaswant Singh, included all those persons who could sue as reversioners of Kishan Singh if it was proved that he was dead or presumed to be dead; and, they are all appellants before us.
It is evident from a bare statement of the case set up in each of the identically similar plaints in the suits now before us that, as three previous suits filed by these very plaintiffs in 1945 for the same reliefs had failed against the same defendants for want of proof of date of death of Kishan Singh, the suits now before us were based on somewhat dif ferent allegations setting up a new cause of action.
Other wise obviously, they would have been barred by res judicata.
As the learned Single Judge, before whom the three cases now before us first came up in the High Court, had pointed out, the earlier suits had failed because they were held to.
be pre mature so.
far as the cause of action now before us is concerned and for want of proof of the date of death of Kishan Singh so far as the actual cause of action set up there was concerned.
We also indicated, quite clearly, how the causes of action in the earlier and later sets of liti gation were quite different.
and why the new cause of action arose within three years before the filing of the suits.
Considerable confusion seems to have been caused by the prolixity of pleadings in the case so that, although the plaintiffs asserted clearly the accrual of a new cause of action, with the aid of a presumption, they were saddled with the responsibility to discharge another onus tied to the proof of a particular date which had been abandoned by them after their dismal failure in the earlier litigation to prove the actual date of death of Kishan Singh who.
had disappeared.
Could they fail again for the same reason although the cause of action they set up is fresh and dif ferent and arose within three years before filing of the suits ? That is the real question we have to answer.
Perhaps the way in which I look at the question and have stated it makes.
an answer in the negative unavoidable.
Hence, my inability, with great respect, to concur with another view put forward by my learned brother Jaswant Singh.
I think that the learned Single Judge, dealing with the question of limitation in the High Court, had correctly summarised the.
whole position and found as follows even without going into the question of burden of proof of date of death of Kishan Singh: "All the three sets of plaintiffs have come up in second appeal to this Court and Mr. M.L. Sethi has addressed a very persuasive argument on the question of limitation which in reality is now the only substantial matter in dispute.
He has pointedly brought to my notice the anomalous and baffling situation in which the plaintiffs have been placed.
According to the judgment of the High Court of 3rd August, 1951, it was found that the death of Kishan Singh had not been proved.
In other words, Kishan Singh was deemed to have been alive at the time when the High Court decree was passed on 3rd of August, 1951.
If that position is accepted, as indeed it must, the conclusion of the 268 Courts below, that Kishan Singh had been dead seven years before the institution of the present suits, cannot be sustained.
To this position there is the added complication of the defendant 's own admission that Kishan Singh was alive at the time when the statement was made by their counsel Milkhi Ram on 27th of April, 1953.
I find myself unable to assent to the proposition on which both the, courts below have founded their conclusions that suits must be.
regarded as barred by time as the date of death of Kishan Singh had not been proved.
The District Judge has arrived at his conclusion because in the previous suits it was asserted that Kishan Singh had died on 15th of August, 1945.
As the death of Kishan Singh had not been proved, the suits were dismissed up in the High Court being premature.
It passes my comprehension how it can now be said that Kishan Singh died some time before 1945 and the suits having been brought more than three years after his death are now barred by statute.
The previous suits filed by the three different sets Of plain tiffs were founded on the allegation that Kishan Singh had died in Ahmedabad some where in August 1945.
A good deal of oral and documentary evidence was led in support of Kishan Singh 's death.
The conclusion of the learned District Judge (Mr. Chhakan Lal) was that the plaintiffs had not succeeded in establishing the death of Kishan Singh and it could not, there, be held that the line of Alia had become extinct.
In the judgment, in second appeal, of Harnam Singh J., the only question which, was discussed was whether the death of Kishan Singh had been proved.
It is pertinent to observe ' that in the High Court it was common ground between both the parties that the: case did not fall under section 108 of the Indian Evidence Act.
Like the District Judge, Harnam Singh J. discussed the oral and documentary evidence, which had been adduced by the parties and agreed with the finding of the lower appellate Court.
Till 3rd of Au gust, 1951, when the judgment (of the HC in the previous suits) was delivered.
posi tion was that the death of Kishan Singh had not been established".
It seems to me that the learned Single Judge had suffi ciently indicared that the cause of action in the previous litigation was different from the one now before us inasmuch as the facts now proved indisputably, showing that Kishan Singh must be presumed to be dead, could not be and were not set up in the.
earlier suits.
In 1945, this cause of action had not accrued.
As the learned Single Judge held, the effect of the judgment in the formed suits was that those suits were premature.
This could not be said of the suits now before us in appeal.
It is true that the learned Single Judge had thought that, alternatively, Section 14 of the Limitation Act could apply inasmuch as the causes of action in the previous litigation as well as in the present litigation were identi cal.
In so far as the learned Single Judge postulated though for a limited purpose, an identity of causes of action of the previous and the present sets of suits, the assumption was inconsis 269 tent with his own emphatically expressed opinion revealing the difference in the causes of action.
The plaints in the suits before us set out the history of the whole litigation and clearly set up a case founded on new facts, not in existence at the time of the earlier litigation, and ex pressly state why the plaintiffs now rely on the presumption of death of Kishan Singh.
The identically similar plaints of the plaintiffs now before us were not based upon any assertion or plea of their own dispossession.
For such suits the period oil limitation was given in Article 2 to the schedule of the Punjab Limita tion (Customs) Act of 1920.
The provisions are set out in the judgment of my learned brother Jaswant Singh.
The period of limitation for such suits is three years from "the date on which right to sue accrues or the date on which declaratory decree is obtained, whichever is later".
If the previous suits were dismissed, as it seems to me that they were, on the ground inter alia, that they were premature, the cause of action could only be said to have accrued after their institution.
It seems to me that the learned District Judge, the fianl Court of facts in the suits now before us, had failed to determine the question whether Section 108 of the Evi dence Act could come to the aid of the plaintiffs on the erroneous assumption that, in any case, the plaintiffs ' suits would be barred by time as the plaintiffs had not proved when Kishan Singh had died.
The learned District Judge seemed to hold the view that not only would the plain tiffs ' suits be barred by limitation, because the plaintiffs could not prove the actual date of Kishan Singh 's death, but also that the presumption under section 108 itself will not be available to a party which could not prove the date of death of the person to be presumed to be dead.
At any rate, the learned District_ Judge was far from clear on the ques tion whether Section 108 would apply to the case.
He re corded his conclusion as follows: "So, it is clear from the above discussion that the plaintiffs appellants have failed to show that their suits are within time from the date of the death of Kishan Singh.
No doubt the presumption is there that Kishan Singh is not heard of for the last 7 years but the date of death was very necessary to be proved and this has not been done by any of the witness es".
If the date of death of Kishan Singh had to be proved by the plaintiffs, no question of invoking the aid of a pre sumption to prove death could arise.
Proof of death would dispense with the need reply on any mere presumption of death.
The result of the District Judge 's failure was that the Single Judge of the Punjab High Court had to record essential findings of fact on this crucial question.
of availability of the presumption of death.
These indicated, beyond the shadow of doubt, that the plaintiffs were enti tled to the benefit of the presumption laid down by Section 108 of the Evidence Act.
This meant that, on new facts asserted and proved, Kishan Singh could be presumed to be dead when the suits now before us were instituted in 270 1952 and 1953.
And, this presumption of the death of Kishan Singh having become available to the plaintiffs within three years of the suits and not before, no occasion for applying Section 14 Limitation Act could arise.
The defendants, while pleading the bar of limitation to the suits had, quite inconsistently, also tried to suggest that Kishan Singh was either alive or must be assumed to be alive.
The plaintiffs could not be expected, on their plea that, proof of date of death of Kishan Singh being absent, they were relying only on the presumption of death, to lead evidence Of any date of death.
All that could be reasonably expected from them was to show that the presumption became available to them within three years before the filing of their suits.
The learned Single Judge of the High Court had, in my opinion correctly, recorded the following finding which made the presumption of death of Kishan Singh avail able to the plaintiffs: "The plain fact of the matter is that no proof is forthcoming of Kishan Singh continued existence since 1945.
Since the judgment of the High Court in 1951, where it was held that the death of Kishan Singh had not been not proved, 8 years have elapsed.
There= can be No. escape from the conclusion now that Kishan Singh 's death must be presumed".
The learned Single Judge had also observed: "The decision of the High Court in 1951 should provide a suitable ground for extension of time under provisions of Section 14 of the Indian Limitation Act.
The whole basis of the judgment of the Courts below, in my opinion, is erroneous.
It is not a requirement of section 108 of the Indian Evidence Act that the date of death of the person whose death is presumed must be established.
All that is said is that if a person is not heard of for a period of seven years, his death may be pre sumed.
There is no presumption as to the time of death at any particular time within that period".
As I have already indicated, there was no need here to seek the aid of the provisions of Section 14 Limitation Act.
In Mohd. Khalil Khan vs Mohboob Ali Mian,(1) it was laid down: "A rough test, although not a conclusive one, as to whether the cause of action in a subsequent suit is the same as that in the former suit, is to see whether the same evidence will sustain both suits, and regard should be had to the allegations in the two suits, and not the facts found by the Court in the former suit".
On the facts of the cases before us, we find the evidence sought to be given in the previous suits was that Kishan Singh had died on a particu lar date (i.e. 15th.
August, 1945), but, the evidence in the subsequent suits (now before us for decision) was not that he had died on a particular date but that he had not been heard of from 5th August, 1945, up.to the time of the filing of new suits.
This evidence could not be given in the previous suit 'section Hence, the above test is satisfied.
(1) A.I.R. 1949 P.C. 78, 86. 271 In Smt.
Mahadevi vs Kaliji Birajman,(1) it was held that, if certain additional facts had to be proved for the success of the subsequent suit, the causes of action would differ.
It did not matter if there is a certain common ground to be covered by the evidence in both sets of cases.
This test would also be satisfied in cases before us now because the additional facts show that Kishan Singh had not been heard of by those who would have otherwise heard of him in the course of seven years.
This evidence could not be led at all in the previous suits as they were filed very soon after the alleged date of death of Kishan Singh.
If causes of action differ from suit to suit, the accrual of the cause action can also not be tied down to a particular kind of fact such as the date of actual death of the holder of the property.
Once it is held that the causes of action differ for purposes of their accrual, their accrual could not be made to depend on facts of one type only.
Facts denoting their accrual must differ from case to case.
Of course, proof of date of actual death is conclusive.
But, where the basis of the right to sue is presumption of death the date of accrual of the right is the date on which that presumption matures.
I have set out above the reasoning which appeals to me and makes the decision of this Court in India Electric Works Ltd. vs James Mantosh & Anr.
,(2) applicable to the cases now before us.
In that case, the appellant before this Court was a defendant tenant in a suit for recovery of damages with interest and costs.
In a previous suit the predecessor in interest of the plaintiff had sued the de fendant for ejectment, but the defendant had continued in occupation of the premises as the suit was compromised.
The accommodation was requisitioned on 2nd February, 1945.
After the accommodation was released by the Govt.
on 21st Novem ber, 1945, the plaintiff filed two suits against defendant one for the recovery of damages upto 1st February, 1944, and another for damage 's from 22nd November, 1945, upto the date of recovery of possession although there was no suit for possession.
When the matter came up before the High Court in appeal, the High Court disallowed the claim for future mesne profits on the ground that it "was a pure money suit and not a suit for recovery of possession of immovable property and for mesne profits under Order 20, Rule 12, Civil Procedure Code".
The plaintiff then filed a third suit on 5th November, 1956, for recovery of Rs.28,650/ as damages with interest thereon for a period from 22nd Novem ber, 1948, to 5th November, 1956.
The benefit of Section 14 of the Limitation Act was claimed for the amount claimed for the period beyond three years.
Two of the learned Judges of this Court, Shah and Grover, JJ., held that, although the claim for future mesne profits, not having been satisfied by the money suit of 1948, in which the decree of the Trial Court was Set aside on 30th June, 1955, by the High Court, a fresh cause of action arose from 30th June, 1955, yet, it was unnecessary to decide the case on that principle because the Court was satisfied that, in any event, Sec tion 14(1) of the Limitation (1) 1969 All L.J. 896.
(2) ; 272 Act, which had to be construed liberally, would cover the period for which the claim was said to be barred by limita tion.
Though, the third learned Judge, Hegde, J., seemed to be of the opinion that Section 24(1) of the Li,mitation Act could not help the plaintiff, yet, following the decision of the Judicial Committee in Mst.
Ranee Surno Moyee vs Shooshee Mokhee Burmonla & Ors.
(1) which had governed later decisions of the Privy Council and various High Courts a new cause of action, arising within the period of limitation, would , ensure to the benefit of the plaintiffs.
It seems to me that the lines on which the case of India Electric Works (supra) was decided enable us to correctly decide whether a new cause of action had accrued in favour of the plaintiffs in the suits before us, which were filed within three years of the accrual of this cause of action, as well as on the question whether, if this be not the correct position, Section 14(2) of the Limitation Act could be invoked by plaintiffs.
Indeed, the view accepted by the three Judges of this Court, that it is enough to institute proceedings within the prescribed period from the accrual of the fresh cause of action, appears to me to provide the common view we cannot reject.
This view would apply if we agree, as my learned brother Jaswant Singh does, that a cause of action had arisen here.
In State of Madras vs
V.P. Agencies & Anr.
,(2) Das, C. J., referred to various expositions of the meanings of the term "cause of action", including that by Lord Watson, in Mst.
Chand Kour vs Partap Singh,(3) where we find (at p. 1310): "Now the cause of action, has no rela tion whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff.
If refers entirely to the grounds set forth in the plaint as the cause of ac tion, or, in other words, to the media upon which the plaintiff asks the court to arrive at a conclusion in his favour".
The expression "cause of action" has sometimes been employed to convey the restricted idea of facts or circum stances which constitute either the infringement or the basis of a right and no more.
In a wider and more compre hensive sense, it has been used to denote the whole bundle of material facts which a plaintiff must prove in order to succeed.
These are all those essential facts without the proof of which the plaintiff must fail in his suit.
Now, whether we use the expression in the narrower or in the wider sense, in the case before us, the death of Kishan Singh was certainly an essential part of the cause of ac tion.
It had to be proved to enable the plainttiffs to put forward their claims to succeed at all.
But, proof of the date of death was not essential or indispensable for that purpose.
It could only become material in deciding whether the right which had accrued had (1)12 Moore 's I.A. 244.
(2) A.I.R. 1960 S.C. 1309 at 1310.
(3) 273 been extinguished by the law of limitation.
Both the nar rower and the wider sense of the term "cause of action" would certainly include all those facts and circumstances on the strength of which the plaintiffs urged that they were entitled to the benefit of the obligatory presumption of law contained in Section 108 of the Evidence Act.
As these were not available to the plaintiffs before the expiry of seven years from 5th August, 1945, it does not seem to be possible to urge that this cause_ of action had arisen more than three years before the filing of the suits now before us.
Applying the tests stated above, the causes of action in the earlier and later litigations would, in my opinion, be materially different.
We could only hold that no cause of.
action had arisen at all if we assume that Kishan Singh had not died at all.
And, how could we assume that without disregarding Section 108 Evidence Act ? If we cannot do that, the cause of action could only accrue when we could presume that he is dead, And, the date of its accrual could not possibly lie a day earlier than 7 years after 5th Au gust,1945, when Kishan Singh was last heard of.
As indicated above, the identity of the relief asked for in the earlier and later suits does not matter.
It also does not matter that the defendant in both sets of suits have.
attempted to suggest that Kishan Singh is still alive.
It iS they who had asserted that the plaintiffs ' rights were extinguished by the operation of the law of limitation.
Therefore, strictly speaking, it appears to me that it was for the defendants to establish, if they could, that Kishan Singh was either alive or had died more than three years before the 'suits were filed.
There is no proof of either of these here, The presumption under Section 107 of the Evidence Act could not.
come to the aid of the defendants when the plaintiffs had established facts necessary to raise the presumption under Section 108 of the Evidence Act.
There seemed to be irrefutable evidence that, after a letter of Kishan Singh, received at Ahmedabad on 5th August, 1945, nothing had been beard or was known about him.
Hence, the plaintiffs relied on the presumption under Section 108 Evidence Act 'because 'they could not prove the actual date of death which had a bearing only on the bar of limitation set up by the defendants.
As has been pointed out some times, the function of a presumption is to fill a gap in evidence.
In these circumstances, it seems to me that the defendants should have been called upon to show, before relying upon the bar of limitation, how the death of Kishan Singh took place on a date.
beyond three years of the filing of the suit before the question of applying Section 14 Limitation Act could arise at all.
The plaintiffs could only be required to show the accru al of their cause of action within the prescribed period of limitation.
They had, obviously, discharged that burden.
If the "media", to use the term employed by Lord Watson, quoted earlier, upon whiCh the plaintiffs rest their cases, are different in the previous and subsequent litigations, the causes of action are different, as held by ray learned brother Jaswant Singh also.
And, if the two causes of action are different, each with a different date of accrual that being the basic difference between the two sets of suits we have only to determine the date 19 1458SCI/76 274 of accrual of the second cause of action.
If the alleged date of death of Kishan Singh was the date of accrual of the previous cause of action, the date of accrual of the second could only be something other than this date of death of Kishan Singh.
It could not possibly be the same.
And, that other date of accrual could only be subsequent to 5th Au gust, 1945, because, as indicated above, it was held in the previous suit that ,the suit was premature on the ground that seven years since Kishan Singh was last heard of on 5th August, 1945, had not elapsed then.
Since the evidence was that he was last heard of at Ahmedabad on 5th August, 1945, the only possible date of accrual of the subsequent cause of action here could be seven years after that (i.e. 6th Au gust, 1952).
The suits before us were flied within three years of that date.
Therefore, I fail to see how the suits before us could possibly be held to be barred by Limitation.
We must not forget that Article 2 of Schedule to the Punjab Limitation (Customs) Act 1 of 1920, lays down that limitation for a suit for possession, which applies to the case before us, commenced from "the date on which the right to sue accrues" and not from the date of death of the holder of property.
The term "fight to sue" must, I think, be equated with "cause of action", unless the context indicates otherwise.
The choice of words used must be presumed to be deliberate.
I do not think that we can substitute "the date of death" for the date of accrual of "the right to sue '.
In the Limitation Act, as well as in other statutes, the accrual when intended to be tied to the date of some event, is specified as the date of that event.
Here, it is not so.
We cannot, without an obvious inconsistency with our find ings that the causes of action in the previous and subse quent limitations were different, hold that the date of accrual in both sets of suits is one and the same, that is to say, the actual date of death.
Such a view could, I think, be contrary also to the plaintiffs ' pleading where the difference in the causes of action must be found.
The solution to the difficulty before us emerges automatically if we answer two questions correctly: What was the differ ence between the two causes of action ? What is the effect of that difference upon the date of accrual of the subse quent and different cause of action ? It is well established that it is not in every suit for possession that the commencement of date dispossession must be established by the plaintiff.
It is only in a suit for possession, based on the allegation by the plaintiff of his own dispossession, that the burden has been held to be governed by Article 142 of the repealed Limitation Act (See Ram Gharib vs Bindhiyachal(1), and the plaintiff is required to prove the date of his dispossession within limitation.
Its equivalent, the present Article 64 of the Limitation Act of 1963, places the position beyond the region of every conceivable doubt.
: "64.
For possession of Twelve years The. date of immovable property dispossession.
based on previous possession and not on title, when the plaintiff while in possession of the property has been dispossessed.
(1) A.I.R. 1934 All.
(ST.) 993.
275 Objects and Reasons Articles 142 and 144 of the existing Act have given rise to a good deal of confusion with respect to suits for possession by owners of property.
Article 64 as proposed replaces article 142, but is restricted to suits based on possessory title so that an owner of property does not lose his right to the property unless the defendant in possession is able to prove adverse posesssion".
(See: Chitaley & Rao the Limitatian Act 1903 Vo1.
There is no suggestion whatsoever in the suits before us that the plaintiffs were ever in possession so that no ques tion of their dispossession could possibly arise.
It was a pure and simple suit for possession on the basis of title against which the defendants had not even alleged adverse possession.
Hence, there was, it seems to me, no room here for bringing in the actual date of death, constructively, as the date of some presumed dispossession or adverse pos session which has not been asserted anywhere.
As pointed out earlier, the defendants seem to have cleverly drafted theft pleadings so that a Division Bench of the High Court, which had erroneously allowed the defendants ' appeals, had been misled into placing a burden upon the plaintiffs which, according to law, as I see it, could not rest there at all.
The Division Bench applied decisions on Section 14 of the Limitation Act when this provision could not, as explained below, be invoked at all.
The plain and simple question which arose on the pleadings was whether seven years had elapsed since Kishan Singh was last heard of by those who would, in the natural course of events, have heard from or about him if he was alive, and if so, did this happen within three years before the filing of the suits ? The plaintiffs have asserted and proved that this period of seven years had elapsed.
Accord ing to them, their cause of action matured within three years of their suits.
Even if, by some stretch of imagina tion, the concept of adverse possession of the defendants were to be introduced in this litigation, when neither the plaintiffs nor the defendants have pleaded it, it is abun dantly clear that the legal position is that the possession of defendants could not conceivably be adverse to Kishan Singh 's reversioners even before Kishan Singh could be presumed to be dead.
Indeed, the defendants had themselves set up the plea that he must be still deemed to be alive.
On these pleadings, the plaintiff could only be required to prove Kishan Singh 's death but not the date of his death or the date of the plaintiff 's dispossession which can occur only after a previous possession of the plaintiffs followed by the adverse possession of the defendants.
Neither cases dealing with recovery of possession on the plaintiff 's allegation of his own dispossession nor those where proof of date of death was a necessary part of either the cause of action or the plaintiff 's statutory duty, for showing that the suit was within time, are really applicable here.
We have a simple case before us where the cause of action seems to me to have clearly been shown to have arisen within three years before the filing of the suits.
Nevertheless,I will deal here with some authorities which are relied upon by my learned brother Jaswant Singh.
The first of these is: Nepean vs Deo D. Knight(1).
Inthis case, an action for ejectment was brought, apparently on an allegation (1) English Reports 150 Exchequer p. 1021.
276 of dispossession of the plaintiff by the defendants.
It was pointed out here that the terms of a statute, applicable in the case, having done away with the doctrine of "adverse possession", except in certain cases specially provided for, the question of adverse possession was unimportant.
It was, however, held that there was a statutory duty cast upon the plaintiff to bring his suit within twenty years of the accrual of the right of entry.
The date of this accrual, therefore, became essential to prove as a statutory duty.
On the terms of statutory provisions to be construed and the facts of the particular case, Denman C. J. said: (at p. 1029): "It is true the law presumes that a person shewn to be alive at a given time remains alive until the contrary be shewn, for which reason the onus of shewing the death of Matthew Knight lay in this case on the lessor of the plaintiff.
He has shewn the death by proving the absence of Matthew Knight, and his not having been heard of for seven years, whence arises, at the end of those seven years, another presumption of law, namely, that he is not then alive; but the onus is also cast on the lessor of the plaintiff of shewing that he has commenced his action within twenty years after his right of entry accrued, that is, after the actual death of Matthew Knight".
This was really a case in which it was not enough to invoke the presumption of death, but, the right to sue itself depended on commencing the suit within 20 years of the date of accrual of the right to entry which was held to be the actual date of death of Matthew Knight who had disappeared In the case before us, I think that the accrual of the right to sue arises only seven years after Kishan Singh was last heard of.
If Nepean 's case (supra) could or did lay down anything applicable to the cases before us, I am unable, with great respect, to accept it as correct law which we could follow.
In my opinion, the facts as well as the applicable provisions of law in the case before us are very different from those in Nepean 's case (supra) which could, in any event, not be more than an authority of some persua sive value in this Court.
In Jaswant livanrao Deshpande vs Ramchandra Narayan Joshi,(1) in a suit governed by Article 141 Limitation Act, it was held (at p. 301): "article 141 Lira.
Act, is merely an exten sion of article 140, with special reference to persons succeeding to an estate as reversioners upon the cessa tion of the peculiar estate of a Hindu widow.
But the plaintiff 's case under each article rests upon the same principle.
The doctrine of non adverse possession does not obtain in regard to such suits and the plaintiff suing in ejectment must prove, whether it be that he sues as a remainderman in the English sense or as a reversioner in the Hindu sense, that he sues within 12 years of the (1) A.I.R. 1916 Bom.
300 @ 277 estate failing into possession, and that onus is in no way removed by any presumption which can be drawn according to the terms of section 108,Evidence Act.
The exact point for the purpose of article 140, and also, in our opinion, of article 141, has been decided many years ago in England soon after the passing of the English Law of Limitation regarding Real Property in Nepean vs Deod.
Knight L.J. exhibit 335".
It is evident that here the cause of action laid down by the statute itself arises from actual date of death.
This case, like the previous one, turns on the special meaning of the statutory provisions prescribing a person 's actual death as the point of time from which the period of limitation is to commence.
In the cases before us the statute explicitly makes a different provision.
We are not concerned at all here with anything more than an accrual of a right to sue which must be shewn to arise within the prescribed period.
No question of any accrual of a right of re entry or one arising from adverse possession or the date on which such rights could conceivably arise is before us at all.
In Lal Chand Marwari vs Mahant Ramrup Gir & Anr.
(1) the suit seems to have been based on an allegation by the plain tiff of his own dispossession by the defendant.
Hence, it.
was governed by Article 142 of the former Limitation Act, the equivalent of which is Article 64 of the Limitation Act of 1963.
It seems to me that Article 144 of the old Limita tion Act is mentioned by mistake in the body of the judgment here.
In any event, the statement of facts showed that the plaintiff had pleaded his own dispossession, or, at least, the plaint could be so construed as to imply that.
Hence, a case of this.
type is distinguishable.
In Jiwan Singh vs Kaur Reoti Singh & Anr,(2) a decree in a previous suit brought against a person alleged to be insane as well as not heard of for more than seven years had been assailed on several grounds: that, the defendant was insane; that, the defendant was unheard of for more than seven years, and, therefore, should have been deemed to be dead; that, the decree was obtained by fraud.
As the High Court upheld the plea of fraud, it did not consider it necessary to decide on other grounds.
Nevertheless, it pointed out, quite correctly, that the presumption under Section 108 of the Evidence Act only enables the Court to presume the factum of death but not the date of death.
No question of limitation arose at all in this case.
In Kottapalli Venkateswarlu vs Kottapalli ' Bapaya & Ors,(3) reliance was placed, Inter alia, on Punjab vs Natha,(4) which, in my opinion, was wrongly decided.
Venkateswarlu 's case (supra), however.
arose on facts and circumstances in which the proof of date of death was neces sary to determine as the question was whether a legatee had (1) A.I.R. 1926 P.C. 9.
(2) A.I.R. 1930 All. 427.
(3) A.I.R. 1957 AP.
(4) A.I.R. 1931 Lah.
582 (F.B.).
278 survived the testator.
In such a case, proof of date of death is necessarily a part of the cause of action.
In Ram Kali & Ors.
vs Narain Singh,(1) it was held that: (at section 299 300): "Before the plaintiff can succeed in approving himself to be the nearest reversion ary heir, he must prove in sequence that Harpal Singh and after him Pahalwan Singh and after him Sheo Ghulam Singh and after him Kali Singh predeceased Ram Lal.
The exact date of Ram Lal 's death is important from the point of view of the success of the plaintiff 's case, because it was only then that succession opened out, and it is only by proving the exact date of Ram Lal 's death that the plain tiff can succeed in establishing his claim to be the nearest reversionary heir of Ram Lal".
This, in my opinion, is the type of case in which the date of death is an essential part of the plaintiff 's cause of action so that the failure to prove it would involve the failure of the plaintiff 's suit.
Incidentally, it may be observed that this also seemed to be a case in which the plaintiff appears to have come to the Court with a suit for possession on the allegation of his own dispossession.
Hence, it became necessary for the plaintiff to prove the date of commencement of the defendant 's adverse interest.
It seems to me that wherever the accrual of a right or com mencement of a period of limitation, within which a suit must be shewn by the plaintiff to have been brought, can only be established by proving the date of a person 's death that duty must be discharged by the plaintiff or the suit will fail.
But, to carry the doctrine beyond that and to lay down that the date of death must invariably be proved whenever the question of limitation is raised in such cases must result in stultifying or defeating legal rights and wiping out the effects of a statutory presumption.
An accrual of a cause of action based on untraceability of the owner cannot be said to depend at all on proof of either actual death or the date of the actual death of the owner.
It accrues as soon as death can be presumed and not a day earlier.
I may point out that the rule laid down in re Phene 's Trusts(2), which has been repeatedly followed by the Privy Council and by our.
High Courts, was enunciated in the circumstances of a case in which it was absolutely essential for the success of the claim before the Court that a legatee claimant must be shown to have survived a testator.
It was a case in which there was a competition between claimants which could only be resolved by a decision of the question as to who died first.
It is in such circumstances that the onus of proving the date of death also would properly and squarely lie upon the plaintiff claimant.
The general principles were thus enunciated in this case(at p. 144): "First: That the law presumes a person who has not been heard of for seven years to be dead, but in the absence (1) A.I.R. 1934 Oudh 298 @ 289,300.
(2) 5 Chancery Appeal cases p. 139 @ 144.
279 of special circumstances draws no presumption from that fact as to the particular period at which he died.
Secondly: That a person alive at a certain period of time is, according to the ordinary presumption of law, to be pre sumed to be alive at the expiration of any reasonable period afterwards.
And, thirdly: That the onus of proving death at any partic ular period within the seven years lies with the party alleging death at such particular period".
It is neither a part of the case of any plaintiff before us nor necessary for the success of his case to prove that Kishan Singh died on a particular date or that.
Kishan Singh died before or after somebody else.
I, therefore, fail to see, with great respect, how the plaintiffs can be saddled with the responsibility to prove this date in the suits now before us.
It was nobody 's case that Kishan Singh died long ago and that the defendants have been in open hostile ad verse possession against Kishan Singh and whoever may be his heirs or feversioners.
In the earliest litigation, the defendants claimed as transferees of the rights of Kishan Singh.
The declaratory decree restricted their rights to the life time of Kishan Singh.
Their rights could not extend beyond the point of time when Kishan Singh must be presumed to be dead.
That is the farthest limit of their rights.
They knew this after the litigation which terminat ed in 1902.
That is why, in the suit 's now before us, they took up the alternative case, though rather obliquely, that Kishan Singh must be or at least deemed to be alive, so that they may benefit from the declaration in 1902 that their rights were limited to the life time of Kishan Singh.
If, even after litigating for such a long period, the plaintiffs are still to be denied their rights to Kishan Singh 's property, to which they were declared entitled to succeed, they would be really deprived of the benefit of the presumption under section 108 of the Evidence Act on the ground that they could not prove the date of his death when they have been asserting repeatedly that the basis of their present claim is that although the actual date of death of Kishan Singh cannot be proved, yet, he has not been heard of for seven years and that they had to wait seven years more for this claim to mature.
That it could and did mature in 1952 follows logically from the judgment of the High Court in 1951 which is binding inter partes.
The plaintiffs are, in my opinion, on the actual basis of their claims, entitled to succeed.
That basis having emerged within three years before the filing of the suits, their suits could not possibly be barred by time.
If the right to sue had not been proved to have accrued at all, due to want of proof of date of death of Kishan Singh, the suits could perhaps, more logically be held to be still premature or infructuous.
But, I fail to see how, even on such a view, we could hold them to be barred by time.
If the cause of action itself does not arise no question of the extinguish ment by the law of limitation could emerge.
If, for some reason, we could still hold that the plain tiffs ' claims were made beyond the period of Limitation.
I think that this would be a fit case in which Section 14(1) of the Limitation Act could 280 come to the aid of the plaintiffs provided there was identi ty of issues to be tried.
The previous suits did not fail for want of jurisdiction.
Nevertheless, the provision has to be liberally construed as this Court has to be a period of time, shown to have elapsed since the expiry of the present suits was certainly due to the fact that no Court could decree the claim before the cause of action matured.
This was, certainly beyond the control of the plaintiffs.
There fore, a cause of "like nature" to a defect of jurisdiction seems to me to be there.
Indeed, it could be urged that it is a stronger ground in equity than a lack of jurisdiction which can be foreseen with sufficient deligence.
It is far more difficult to predict the outcome of a suit depending largely on oral evidence.
The defect revealed by the evi dence in he earlier litigation was that the suits did not lie at all as they were "premature".
This was, in my opin ion, a defect reasonably comparable to want of jurisdiction.
I, however, find it very difficult to attempt to apply Section 14 Limitation Act to the cases before us for two reasons.
Firstly, there has to be a period of time, shown to have elapsed since the expiry of the period of limita tion, which could be excluded under section 14.
If the cause of action does not accrue at all there is no point of time from which any period of limitation could run.
Hence, if no cause of action could accrue at all unless and until the date of actual death of Kishan Singh is established, there could be no commencement of a period of limitation.
If that be the correct position, where is the question of excluding any time in computing it ? The only possible point from which limitation could start running here is the date on which seven years expired from the date on which Kishan Singh was last heard of.
This was within three years before filing of the suits as pointed out above.
Secondly, Section 14 provides that the time to be excluded spent in proceed ings prosecuted in good faith must relate to "the same matter" as is "in issue" in the subsequent proceeding.
It seems to me that the issue in the earlier litigation was whether Kishan Singh was actually shown to have died on a particular date.
This was quite different from the issue decided in the cases now before us.
This is whether Kishan Singh 's whereabouts had remained unknown for seven years so that he could be presumed to be dead.
I, therefore, rest my judgment solely on the ground that, the causes of action in the previous litigation and the litigation now before us being different, and the subsequent cause of action having arisen within three years before the filing of the suits before us, the suits were not barred by limitation.
The Division Bench of the Punjab High Court had proceeded on the obviously erroneous assumption that the learned Single Judge had decided the appeals only by giving the appellants the benefit of Section 14, sub.
s (1) of the Limitation Act.
It had overlooked completely the very first ground of deci sion of the learned Single Judge and also the condition imposed by the learned Judge on the application of Section 14 by.
using the words: "if found necessary".
The learned Judge had held: 281 "Admittedly,.
the whereabouts of Kishan Singh are still not known and, in my opinion, there can be no escape from the conclusion on these facts that the death of Kishan Singh must be presumed under Section 108 of the Indian Evidence Act as he had not been heard of for a period of seven years.
The present suits were brought between 21st of October, 1952 and 5th of May, 1953.
The correct ap proach to reach a solution of the present problem is to give allowance to the plain tiffs, if found necessary.
for the period which they spent in previous litigation that is to say, from the years 1945 to 1951".
The Division Bench had thus completely ignored the effect of the finding of a new cause of action arising within three years before the filing of the plaintiffs suits.
In my opinion, this finding of the learned Single Judge was enough to dispose of these appeals.
And, as I have pointed out above, question of either a time bar or its removal by resorting to Section 14(1) Limitation Act postu lates that a point of time from which lirai, ration can run has been ascertained.
As that point, on the findings of every Court, including this Court, could not be the date of Kishan Singh 's death, which is unknown, the suits could not possibly be dismissed on that ground.
They could con ceivably be dismissed on the finding that the date of death of Kishan Singh, being an indispensable part of the cause of action, the plaints do not disclose a cause of action at all, and, therefore, should have been rejected.
But, the defendants have not taken any such plea directly.
Nor was this argued on heir behalf.
For the reasons given above, I regret to have to re spectfully differ from the view adopted by my learned broth er Jaswant Singh.
I am unable to accept an interpretation of the relevant provision prescribing limitation which would confine the accrual of a cause of action only to cases of direct proof of death, on a particular date.
Such a view implies that suits based on a presumption of death are devoid a cause of action which could support a suit by a reversioner.
I do not think that the provision we have to interpret was meant to define or restrict a right of suit or a cause of action in this fashion at all.
The object of a "statute of repose" is only to extinguish rights of the indolent but not to demolish the causes of action of those who have not been shewn lacking in vigilance in any way whatsoever.
Consequently, I would allow these appeals, set aside the judgment and decrees of the Division Bench of the High Court and restore those of the learned Single Judge and leave parties to bear their own costs throughout.
P.B.R. Appeals dis missed. | The appellants filed three suits (the earliest of the three suits was filed on December 18, 1945) for possession of lands claiming that K, the last owner of the lands died on August 15, 1945.
Those suits were dismissed on August 3, 1951, as premature on the ground that the fact of the death of K had not been established.
The appellants again instituted three suits in October 1952, December 1952 and May 1953 for the same relief as in the previous suits alleging that the right to sue had ac crued after August 16, 1952, that is, after a period of seven years, under section 108 of Evidence Act; that K died three years before the date.
of the filing of the suits; and that they were within time under article 2(b) of the.
Schedule annexed to the Punjab Limitation (Customs) Act, 1920 which provides that the period of limitation for a suit for pos session of ancestral immovable property which has been alienated, is three years, if a declatory decree has been obtained, and that period commences from the date on which the right to sue accrues.
On appeal, a single Judge of the High Court decreed the suits holding that K having been treated as alive by the High Court when it passed the previous decree in 1951, the conclusion of the lower courts that he had been dead for seven.
years before the institution of the suits could not be sustained and also excluded the time spent on the previ ous litigation from 1945 to 1951 under section 14(1) of the Limitation Act.
On Letters Patent appeal, the Division Bench held: (1) that the single Judge was in error in ex cluding the time spent on the previous litigation by apply ing section 14(1) of the Limitation Act; (ii) that the words "or other cause of a like nature" occurring in section 14(1) had to be read ejusdem generis with the preceding words "relating to the defects of jurisdiction" and that it was not possible to give the benefit of that provision to the plaintiffs.
Dismissing the appeal to this Court (per A.N. Ray, C.J. and Jaswant Singh, J) HELD: (1) Under article 2(b) of the Schedule to the Punjab Limitation (Customs) Act, 1920 in order to be able to succeed the plaintiffs must bring their suits within three years of the accrual of the right to sue (which ac cording to well settled judicial opinion means the accrual of the right to seek relief), namely within three years of the death of K.
They had to prove affirmatively that the death of K took place within three years of the institution of the suits.
Granting that K has to be presumed to be dead, it cannot be overlooked that under section 108 of the Evidence Act, the precise time of the death is not a matter of presumption but of evidence and the onus of proving that the death took place at any particular time within seven years lies upon the person who claims the right for the establishment of which the proof of that fact is essential.
The plaintiffs had not only, therefore, to prove that K had not been heard of for a period of seven years and was to be taken to be dead, but it also lay heavily on them to prove the particular point of time within seven years when K 's death occurred.
This they have failed to prove.
In the absence of such proof, it cannot be held that the present suits had not been brought within three years of the accrual of the right to sue.
[263 D G] 251 Nepean vs Doe D. Knight ; ; , Jayawant Jivarao Deshpande vs Ramachandra Narayan Joshi (A.1.R. 1916 Born.
300), Lalchand Marwari vs Ramrup.
Gir (LIII I.A.24; A.I.R. 1926 P.C. 9), Jiwan Singh vs Kuar Reoti Singh & Anr.
(A.I.R. 1930 All. 427), Kottappalli Venkates warla vs Kottapalli Bapayya & Ors.
(A.I.R. 1957 A.P. 380), Punjab and Ors.
vs Natha & Ors.
(A.I.R. and Ram Kali & Ors.
vs Narain Singh (A.I.R. 1934 Oudh 298 F.B.) referred to.
(2) If K had died beyond three years, from the date of the suits, the suits would be barred by limitation because the appellants cannot claim the benefit of section 14 of the Limitation Act 1908.
The three important requirements of the section are: (1) that the plaintiff must have prosecuted the earlier civil proceeding with due diligence; (2) the former proceeding must have been prosecuted in good faith in a court which from defect of jurisdiction or other cause of a like nature was unable to entertain it and (3) the earlier proceeding and the later proceeding must be based on the same cause of action.
[265 D] (3) The contention that the appeals had been rendered untenable as a result of the amendment made to section 7 of the Punjab Customs Power to Contest) Act 1920 by the Amending Act 12 of 1973 has no force and must be rejected.
Section 4 of the Act provides that the Act shall not affect any right to contest any alienation or appointment of an heir made before the Act came into force.
This section has been left untouched by the Amending Act of 1973.
In the instant case, the alienation was made before the 1920 Act came into force and was not affected by that Act.
[261 F H] (4) The words "or other cause of a like nature" in section 14(1) take their colour from the preceding words "defect of jurisdiction" according to the rule of ejusdem generis.
Therefore, the defect must be of a character analogous to jurisdiction barring the Court from entertaining the previ ous suit.
In the instant case, the Court which tried and dismissed the previous suits as premature did not suffer from inability or incapacity to entertain the suits on the ground of lack of jurisdiction or any other ground analogous to the defect of jurisdiction.
The exclusion of the period during which the previous suits were pending, could not, therefore, be allowed to the plaintiffs while computing the period of limitation.
[265 E; I 1; 266 A] Bhai lai Kishan Singh vs People Bank of Northern India, I.L.R. , Dwarkanath Chakravarti vs Atul Chan dra Chakravarti (I.L.R. and Palla Pattabhira mayya & Ors.
vs Velga Narayana Rao (A.I.R. referred to.
[Obiter: The causes of action in the previous suits and in the present suits are also different.
And hence the appellants cannot press section 14 into service.] Beg, .J. (Dissenting) The Division Bench of the High Court was wrong in ignor ing the effect of the finding of the single Judge that a new cause of action had arisen within three years before the filing of the plaintiffs ' suits.
[281 C] The question of time bar or its removal by resorting to section 14(1) of Limitation Act postulates that a point of time from which limitation could run had been ascertained.
As that point could not be the date of the death of K, which was unknown the suits could not be dismisses on that ground.
[281 D] (1) The single Judge had sufficiently indicated that the cause of action in the previous litigation was different from the one in the later inasmuch as the facts proved in the later case showing that K must be presumed to be dead could not be and were not set up in the earlier suits.
The cause of action had not accrued in 1945.
The effect of the judgment in the former suits was that these suits were premature, which is not the case in the suits in appeal.
The plaints in the later cases set out the case founded on new facts not in existence at the time of the earlier liti gation and expressly stated why the plaintiffs rely on the presumption of death of K.
If the previous suits were dismissed on the ground that they were premature, the cause of action could only, be said to have accrued after their institution.
[268 G; 269 C] 252 The findings of the single Judge showed that the.
plain tiffs were entitled to the benefit of the presumption laid down by section 108 of the Evidence Act.
He found that till August 3, 1951 when the judgment of the High Court in the previous suits was delivered, the position was that the death of K had not been established.
This meant that on new facts asserted and proved, K could be presumed dead when the subsequent suits were instituted in 1952 and 1953.
This presumption of death having become available to the plain tiffs within.
three years of the suits and not before, no occasion for applying section 14 of the Limitation Act could arise.
The evidence sought to be given in the previous suits was that K had died on a particular date but the evidence in the subsequent suit was not that he had died on a particular date but that he had not been heard of from August 5, 1945 upto the time of filing of the subsequent suits.
[269 H; 270 H] Modi Khalil Khan vs Mahboob Ali Mian, A.I.R. 1949 PC 78 at 86 referred to.
(2) (a) If causes of action differ from suit to suit, the accrual of the cause of action can also not be tied down to a particular kind of fact such as the date of actual death of the holder of the property.
Once it is held that the causes of action differ for purposes of their accrual, their accrual could not be made to depend on facts of one type only.
Facts denoting their accrual must differ from case to case.
Proof of date of actual death is conclusive.
But, where the basis of the right to sue is presumption of death, the. date; of accrual of the right is the date on which that presumption matures.
[271 C] Indian Electric Works Ltd. vs James Montosh & ,Anr. ; followed.
Rante Surno Moyee vs Shooshee Mokhee Burmonia & Ors.
12 Moore 's I.A. 244, State of Madras
V.P. Agencies & Anr.
AIR 1960 SC 1309 at 1310 and Mst.
Chand Kour vs Partap Singh, , referred to.
(b) The expression "cause of action" has sometimes been employed to convey the restricted idea of facts or circum stances which constitute either the infringement or the basis of a right and no more.
In a wider and more compre hensive sense it has been used to denote the whole bundle of material facts which a plaintiff must prove in order to succeed.
These are all those essential facts without the proof of which the plaintiff must fail in his suit.
[272 G] (c) Applying these tests, in the instant case, the causes of action in the earlier and later litigations would be materially different.
No cause of action had arisen at all if it is assumed that K had not died at all.
K 's death was an essential part of the cause of action.
It had to be proved to enable the plaintiffs to put forward their claims to succeed.
But proof of the date of death was not essen tial or indispensable for that purpose.
It could only become material in deciding whether the right accrued had been extinguished by the law of limitation.
Both the narrow and wider sense of the term "cause of action ' would include all those facts and circumstances on the strength of which the plaintiffs urged that they were entitled to the benefit of the obligatory presumption of law contained in section 108 of the Evidence Act.
As these were not available to the plain tiffs before the expiry of seven years from August 5, 1945, it was not possible to urge that this cause of action had arisen more than three years before the filing of the suits.
Therefore, the date of its accrual could not lie a day earlier than seven years after August 5, 1945 when K was last heard of.
[272 G H; 273 A B] (d) It was for the defendants to establish that K was either alive or had died more than three years before the suits were filed.
The presumption under section 107 of the Evidence Act could not come to the aid of the defendants when the plaintiffs had established facts necessary to raise the presumption under section 108 of the Evidence Act.
[273 E] (e) The suits are not barred by limitation.
The plaintiffs discharged their burden as to when the accrual of their cause of action was within the prescribed period of limita tion.
If the "media" upon which the plaintiffs rest their cases 253 are different in the previous and subsequent litigations, the causes of action are different.
If the alleged date of death of K was the date of accrual of the previous cause of action, the date of accrual of the second could only be something other than the date of death of K, it could not possibly be the same.
The other date of accrual could only be subsequent to August 5, 1945 because it was held in the previous suit that the suit was premature on the ground that seven years since K was last heard of had not elapsed then.
Since the evidence was that he was last heard of on August 5, 1945, the only possible date of accrual of the subsequent cause of action could be seven years after the date.
The suits were filed within three years of that date.
[273 H; 274 A C] (3)(a) The term 'right to sue ' occurring in article 2 of Schedule to the Punjab Limitation (Customs) Act 1 of 1920 must be equated with cause of action.
" The "date of death" cannot be substituted for the date of accrual of the "right to use".
In the Limitation Act the accrual when intended to be tied to the date of some event is specified as the date of that event.
In this case, it is not so.
It cannot be held that the date of accrual in both sets of suits is one and the same, that is to say, the actual date.
of death.
[274 D] (b) Wherever the accrual of a right or commencement of a period of limitation, within which a suit must be shown by the plaintiffs to have been brought, could only be estab lished by proving the date of a person 's death, that duty must be discharged by the plaintiffs or the suit will fail.
But to carry the doctrine beyond that and to lay down that the date of death must invariably be proved, whenever the question of limitation is raised in such cases must result in stultifying or defeating legal right and wiping out the effects of a statutory presumption.
The accrual of a cause of action based on untraceability of the owner could not be said to depend at all on proof of either actual death or the date of actual death of the owner.
It accrues as soon as death can be presumed and not a day earlier.
[278 D F] (c) It is not in every suit for possession that the com mencement of the date of dispossession must be established by the plaintiffs.
It is only in a suit for possession based on the allegation by the plaintiff of his own dispos session that the burden is governed by Art, 142 of the Limi tation Act.
[274 G] (d) In the instant ease, the plaintiffs were never in pos session and, therefore,there was no question of their dis possession.
It was a pure and simple suit for possession on the basis of title against which the defendants had not even alleged adverse possession.
Therefore, there is no need to bring in the actual date of death constructively, as the date of the presumed dispossession or adverse possession has not been asserted anywhere.
[275 B] (e) The plaintiffs have asserted and proved that the period of seven years when K was last heard of by those who would in the natural course of events have heard of or about him if he was alive, had elapsed and that their cause of action matured within three years of their suits.
Assuming that the concept of adverse possession of the defendants was to be introduced, the legal position is that possession of defendants could not be adverse to K 's reversioners even before K could be presumed to be dead.
The defendants them selves had set up.
the plea that he must be still deemed to be alive.
The plaintiffs could only be required to prove K 's death but not the date of his death or the date of the plaintiffs ' dispossession.
Neither cases dealing with recov ery of possession on the plaintiffs ' allegation of their own dispossession nor those where proof of date of death was a necessary statutory duty for showing that the suit was within time; are applicable in these cases.
[275 E F] Nepean vs Doe D. Knight (English Reports 150 Exchequer p. 1021), Jayawant Jivanrao Deshpande vs Ramachandra Narayan Joshi, AIR 1916 Bom.
300 & 301.
, Lal Chand Marwari vs Mahant Ramrup Git & Anr.
AIR 1926 PC 9, Jiwan Singh vs Kuar Reoti Singh & Anr.
AIR 1930 All.
427, Kottapalli Venkateswarlu vs Kottapalli Bapayya & Ors.
AIR 1957 AP 380 Punjab v Natha AIR 1931 Lab.
582 (FB) & Ram Kali & Ors vs Naraian Singh AIR 1934 Oudh 298 & 299 300, refrered to.
254 (f) It is neither a part of the case of any plaintiff in these cases nor necessary for the success of his case to prove that K died on a particular date or that K died before or after somebody else.
The plaintiffs cannot be saddled with the responsibility to prove this date.
[279 ,B] (4) The suits were not barred by limitation because the causes of action in the previous litigation and the litiga tion now are different and the subsequent cause of action has arisen within three years before the filing of the suits.
Assuming that the suits were filed beyond the period of limitation on the actual basis of their claims the plaintiffs are entitled to succeed because this is a fit case in which section 14(1) Limitation Act could come to the aid of the appellants.
They had been asserting repeatedly that the basis of their claim was that although the actual date of death of K could not be proved, yet, he has not been heard of for seven years.
That basis having emerged within three years before the filing of the suits, their suits could not be barred by time.
If the causes of action did not arise no question of its exceeding by the law of limitation, could emerge.
[280 G] The previous suits did not fail for want of jurisdic tion.
The delay in bringing the present suits was due to the fact that no court could decree the claim before the cause of action matured.
Therefore, the cause of action of a "like nature" to a defect of jurisdiction is present in these cases, since the provision has to be liberally con strued.
The defect revealed by the evidence in the latter litigation was that the suits did not lie at all as they were premature.
This was a defect reasonably comparable to a want of jurisdiction.
[280 A C] India Electric Works Ltd. vs James Mantosh & Anr. ; , followed.
(5)(a) If no cause of action could accrue at all unless and until the date of actual death of K was established, there could be no commencement of a period of limitation.
The only possible point from which limitation could start framing in these, cases is the date on which seven years expired from the date on which K was last heard of.
This was within three years before filing of the suits.
[280 D] (b) The issue in the earlier litigation was whether K was actually shown to have died on a particular date.
This was quite different from the issue decided now, which was whether K 's whereabouts had remained unknown for seven years so that he could be presumed to be dead.
[280 F] ARGUMENTS For the appeliants: The legal presumption under Section 108 was not sought to be raised in the prior suits.
It was for the first time raised in the subsequent group of suits instituted in Octo ber, 1952 based on the allegation that Kishan Singh was not heard of since 15th August, 1945.
This submission opens the questions (i) when is the presumption of death to be raised and (ii) whether for the purpose of proceedings in which it is raised or any prior proceedings.
The presumption is to be raised in the pro ceedings where the question has been raised i.e. the second group of suit.
However, there is no presumption as to the time of death of the person whose death is accepted as a result of presumption.
The two are distinct matters (i) the legal presumption of death and (ii) the time of death preceding the period when presumption is drawn.
The death may be at any time during the preceding period of 7 years the period that has enabled the court to draw presumption of death.
The law requires that if one has to establish the pre cise period during these 7 years at which such person died he must do so by evidence.
255 The conclusion of the court of presumption of death based upon disappear ance from 15th August, 1945 cannot be ignored.
Death at any time on or after 15th August, 1945 does not in any manner adversely affect the case of the appellants, inasmuch as the parties had instituted suits (of course premature) on 18th December 1945 (other suits some time later decided by a common judgment).
If the parties are held entitled to the benefit of deduction of time from 18th December 1945 to 3rd August, 1951, the death of Kishan Singh even if it took place between 15th August, 1945 to any date before 3rd August, 1951 the suit are not barred by limita tion.
On the pleading of the parties it cannot be assumed that the presumption of death would justify acceptance of date of death, any time prior to 15th August, 1945.
The period of limitation for the suit for possession was 3 years The defendants had not pleaded in the prior suit that the suit was.
barred by limitation as instituted.
In other words it was not alleged that he had died at any time 3 years prior to the institution of the suit (18th December, 1945).
Actually death has not been admitted even on 15th August, 1945.
The trial Court and the District Judge held the suit to be time barred not on the ground that his death had taken place at a period exceeding 3 years from the date of the institution of the first suit.
They have apparently not ignored the possibility of death having taken place during the period between 18th December, 1945 to 3rd August., 1951.
They have held the. suit to be time barred because it was considered that the appellants are not entitled to deduct the stated period spent in the prior suits.
Even if it is considered that death had taken place during this period or any time after 15th August, 1945 or during the 3rd August to 31st October, 1952 the suits are not time barred.
Preliminary objection was raised by the respondents as to the effect of the Punjab Customs (Power to Contest) Amendment Act, 1973 (Punjab Act 12 of 1973).
It was urged that the Act had come into force on 23rd January, 1973, it has retrospective operation and bars all suits to contest alienation also including the suits for possession of the property following a declaratory decree.
It was urged that the appeals are barred as a consequence of repeal of the provisions of Punjab Act II of 1920.
The contention as to the effect of Act 12 of 1973 is not correct.
The previous law on the subject of right to contest alienation of immovable property and the limitation of suits relating to alienation of ancestral immovable property is regulated by two Acts.
(1) Punjab Act II of 1920 Described an Act to restrict the powers of the descendents or collaterals to contest an alienation of immovable property; and (2) Punjab Act I of 1920 Described as an Act to amend and consolidicate the law govern ing the limitation of suits relating to alien ations of ancestral immovable property etc.
The present Act 12 of 1973 repeals section 6 of Act II of 1920.
It also amends section 7 of the aforesaid Act.
Effect of the repeal of section 6 and amendment of section 7 merely is that the right to.
contest vesting in the collaterals upto 5th degree has been done away with and the suit to contest alienation of ancestral property has been taken away.
Under the previous existing law an alienation of non ances tral property could not be contested.
Act I of 1920 has also not been repealed.
The limitation provided for a suit for possession i.e. 3 years is still an existing provision of the Act.
It is obvious that the legislature has retained 256 Act I of 1920 unrepealed so that the benefit of the decrees may be available to all persons under section 8 of the Act and the period of limitation may be retained as before.
The effect of the declaratory decree in that the alienation is not binding against the inheritance.
The succession never remains in abeyance.
A person entitled to succeed to the last male holder is entitled to sue for possession on the basis of right to succession to the property.
For the respondent: The principle of res judicata would be immediately attracted if the plaintiffs allege the "same cause of ac tion" and seek the exclusion of the time because the earlier suit was tried on merits by a competent court having jurisdiction and was dismissed holding that 'plaintiff failed to prove that Kishan Singh died on 15th August, 1945.
This finding would be binding between the parties in the subsequent suits as they have been given after recording the evidence and a full trial by, the competent court having jurisdiction.
Therefore, the plaintiff is barred by principles of res judicata from alleging the accrual of right to sue before the filing of the earlier suits as the same would be res judicata.
The plaintiff is estopped from alleging the accrual of same cause of action, therefore, no question of exclusion of time inasmuch as the principle of section 14 of exclusion of time arises only if the cause of action is the same.
Section 14 uses the words "the proceeding is founded upon the same cause of action".
The language of section 14 of the Limitation Act by using the words "same cause of action" makes it very clear that time can be excluded for the same cause of action only if the earlier suit is dismissed be cause of defect of jurisdiction or other cause of a like nature.
On the interpretation of section 14 also the time cannot be excluded for the reason that the earlier suit was dis missed as premature and the new suit was filed on a new cause of action, namely, Alla Singh and his line became extinct on the death of Kishan Singh on 15th of August, 1952 i.e. after the expiry of ' seven years from 15th August, 1945.
Since a new cause of action was alleged after the dismissal of previous suit, section 14 cannot be attracted.
The words "is unable to entertain it" mean that it is not able to admit the matter for consideration on merits i.e. the.
inability is of a formal nature but it does not mean inability to grant relief.
From the decisions one principle is deducible that section 14 of the Limitation Act has to be construed harmoniously with section 11 C.P.C. Section 11 C.P.C. bars the filing of a fresh suit on the same cause of action whereas section 14 of Limitation Act allows time to be.
excluded in the previous litiga tions was "founded on the same cause of action ' '.
Section 12 says that if plaintiff is barred under section 11 C.P.C. to file suit for any cause of action then plaintiff cannot file suit for a such cause of action in any court to which C.P.C. applies.
If both.
section 14 of Limitation Act and principles of res judicata are to operate then, it should be held that to apply section 14 the earlier suit had been dismissed on a technical ground of jurisdiction, or other cause of a similar nature, court is unable to entertain it without going into the merits of the case.
In the present case earlier suits were dismissed because the plaintiff failed to prove the death of Kishan Singh and the extinction of line of Alia.
The words used by the High Court at page 302 line 37 are: "The suit had been rightly dismissed as premature" do not mean that Kishan Singh was alive but it means that plaintiffs have not proved the accrual oj cause of action namely the extinction of line of Alia.
In these circumstances it is submitted that the suits were not dis missed on the ground of defect of jurisdiction or other cause of similar nature.
for which the court was unable to entertain it.
Section 14 of the Limitation Act does not apply.
Plaintiffs have failed to prove the date of death of Kishan Singh and the extinction of line of Alla within 3 years of the filing of the suit.
Suits are therefore time barred.
257 Sections 107 and 108 of the Evidence Act do not help the appellants.
Rule of evidence in section 107 is that it is for the plaintiff to prove the death of a person if he was alive within 30 years and section 108 says that burden of proving that a man was ,dive is on the person who alleges he is alive if it is proved that he has not been heard of for seven years by those who would naturally have heard of him if he had even alive.
In this case the plaintiffs appellants have alleged that Kishan Singh was last heard of on 15th August, 1915 and singe then he is not heard of.
The onus is, there fore, on the plaintiff appellant under section 107 of Evidence Act 10 prove as to when Kishan Singh died.
It is; Submit ted that Kishan Singh may have died on any date either before 15th August, 1945 or immediately theereafter.
There is no presumption that he died on the expiry of 7 years from the date he was last heard.
The date of death is thus required to prove by the plaintiff like any other fact.
The suits are, therefore, barred by time and should be dismissed plaintiffs ' failure to prove death of Kishan Singh within three years of the filing of suits. |
N: Criminal Appeal No. 420 of 1974.
Appeal by Special Leave from the Judgment and Order dated 27 11 74 of the Allahabad High Court in Criminal Appeal No. 2646/73 and Referred No. 95/73.
Frank Anthony, E.C. Agarwala and A. T. M. Sampath; for the Appellants.
O.P. Rana; for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, J.
The appellants, Subhash and Shyam Narain, were convicted by the learned Civil and Sessions Judge, Farrukhabad under section 302 of the Penal Code on the charge that at about 9 a.m. on June 9, 1972 they committed the murder of one Ram Sanehi.
Subhash was sentenced to death and Shyam Narain to imprisonment for life.
The judgment of the trial court having been confirmed in appeal by the High Court of Allahabad, the two accused have filed this appeal by special leave of this Court.
588 The case of the prosecution is briefly as follows: on the morning of June 9, 1972 the deceased Ram Sanehi had gone to his field along with his son Bal Kishore and his daughter Kusuma Devi for eating Kharbuzas.
While they were returning from the field at about 9 a.m. the appellants, who were lying in wait near a culvert, suddenly accosted Ram Sanehi.
The Appeallent Subhash pointed the barred of his gun towards the chest of Ram Sanehi and said that since he, Ram Sanehi, was a witness against him in a complaint filed by Pooran Lal and since he was also doing Pairvi on behalf of Pooran Lal he would not be allowed to remain alive.
The appellant Shyam Narain was armed with a lathi.
Bal Kishore and Kusuma Devi pleaded with the appellants to spare their father but Shyam Narain asked Subhash not to delay the matter and finish Ram Sanehi quickly.
Subhash thereupon fired three shots from his double barrelled gun, the last of which misfired.
Ram Sanehi fell down, whereupon the appellants dragged him by his legs over a distance of 6 or 7 paces.
Bal Kishore and Kusuma Devi then raised an alarm whereupon Brij Bhusan, Shyam Lal Mangali Prasad and Jhabbo Singh Thakur reached the place of occurecnce and challenged the appellants.
Before running away, the appellant Subhash told his companion Shyam Narain that he on his own part was going to surrender before a court and that Shyam Narain should make his own arrangements.
Ram Sanehi died within about 10 minutes after receiving the injuries.
Bal Kishore first went to his house which is at about a distance of 120 yards from the scene of offence.
At about 12 o 'clock at noon he went to the Kamalgani police station and lodged his First Information Report (exhibit Ka 3).
S.I. Vishwanath Sharma who was posted as a 2nd officer at the police station recorded Bal Kishore 's complaint.
went to the scene of occurrence, prepared the inquest report and handed over the dead body for being sent for post mortem examination to the District Hospital at Farrukhabad which is about 10 miles away form the village of Kandharpur where the incident took place.
S.I Sharma took samples of earth from the place of occurrence an seized a mis fired cartridge which was lying concealed in the folds of the deceased 's Dhoti.
The Fard in that behalf is exhibit Ka 10 and the site plan is exhibit Ka 11.
The appellant Subhash surrendered before the Additional District Magistrate (Judicial) at Farrukhabad at about 4 p.m. on the very day.
The appellant Shyam Narain was arrested at about 2 40 p.m. on the same day under section 122 of the Railway Act for crossing The railines at Fatehgarh.
The appellants denied the charge that they had committed the murder of Ram Sanehi and stated that they were involved in the case due to enmity.
This defence has been rejected both by the Sessions Court and the High Court.
Before referring to the evidence in the case it has to be mentioned that the High Court had before it not only the appeal filed by the accused but also a reference made by the Sessions Court for confirma tion of the capital sentence under section 374 of the Code of Criminal 589 Procedure.
Time and again this Court has pointed out that on a reference for confirmation of the sentence of death, the High Court is under an obligation to proceed in accordance with the provisions of sections 375 and 376 of the Criminal Procedure Code.
Under these sections the High Court must not only see whether the order passed by the Sessions Court is correct but it is under an obligation to examine the entire evidence for itself, apart from and independently of the Sessions Court 's appraisal and assessment of that evidence.
From the long line of decisions which have taken this view it would be enough to refer to the decisions in Jumman and ors.
vs The State of Punjab, Ram Shanker Singh & ors.
vs State of West Bengal and Bhupendra Singh vs The State of Punjab.
The High Court has failed to show due regard to this well established position in law.
It did not undertake a full and independent examination of the evidence led in the case and it mainly contented itself with finding out whether the Sessions Court had in any manner erred in reaching the conclusion that the charge of murder levelled against the appellants was established beyond a reasonable doubt.
The High Court is right in saying that the main question in the case was whether Bal Kishore and Kusuma Devi who were examined as eye witnesses were truthful witnesses.
But then it did not subject their evidence to any minute scrutiny.
Impressed overbearingly by the circumstance that the Sessions Court "had the opportunity of observing the demeanour" of the witnesses, the High Court apparenty thought that such an opportunity gave to the Sessions Court 's judgment a mystical weight and authority, even though the learned Sessions Judge had not, in his judgment or while recording the evidence, made any special reference to the demeanour of the witnesses.
The High Court accepted the evidence of Ram Sanehi 's children by observing that there was no material contradiction ill their evidence and that certain statements in the F.I.R. afforded a guarantee that the two witnesses were present when their father was done to death.
We will now proceed to show how several significant circumstances either escaped the attention of the High Court or were not given their due and rightful importance.
First as to the manner in which S.I. Sharma conducted investigation into the case.
The offence took place at about 9 a.m. on June 9 and though the District Hospital at Farrukaabad was just 10 miles away, the dead body was not received at the hospital for nearly 24 hours after the incident had taken place.
The excuse offered by the prosecution that cartman was not willing to take the body at night is utterly flimsy because the Investigating officer could have easily made some alternate arrangement for despatchin the dead body for postmortem examination expeditiously.
With the dead body lying at the scene of offence for nearly 12 hours and thereafter at the police station for another 8 or 9 hours, it was easy enough for the witnesses to mould 590 their statements so as to accord with the nature of injuries.
The lnvestigating Officer did not make any note at all in the General Diary as to which witnesses were examined by him on the date of the occurrence which was obligatory upon him to do under paragraph 44 of the U.P. Police Act.
The time when the investigation was commenced and the time when it was concluded are not mentioned in the case diary.
The time when the Investigating officer reached the village and the time when he returned to the police station are also not noted in the case diary.
S.I. Sharma stated in his evidence that several important facts concerning the investigation were being stated by him in his evidence from memory.
He reached the scene of offence at about 2 30 p.m. but it was not until about 6 p.m. that he inspected the site.
The dead body was not removed from the scene of offence till about 9 p.m. and even that is open to grave doubt because the Investigating officer has admitted in his evidence that he was unable to say as to when the dead body was taken way from the spot and whether it was taken directly to the hospital or was detained somewhere on the way.
He was unable to say whether it was right or wrong that the dead body remained in the village till about 4 'O 'clock on the morning of the 10th.
Forty or fifty persons had gathered at the scene of offence when the Investigating officer arrived but the record of the case does not show that the statement of any of those persons was ever recorded.
In fact even the statement of Kusuma Devi was recorded late at night for which the reason is stated to be that her elder sister Pushpa Devi died of shock on the evening of the 9th after hearing of her father 's murder.
It may be that Pushpa Devi died on the 9th, but apart from the cause of her death, the statement of Kusuma Devi need not have been held up so long.
We are doubtful if the Investigating officer at all knew on the 9th that Pushpa Devi had died.
He has admitted that his knowledge in that behalf was derived from hearsay reports.
The appellant Subhash had surrendered before the Additional District Magistrate, Farrukhabad on the afternoon of the 9th itself while the other appellant Shyam Narain was arrested at Fatehgarh at about 2 40 p.m.
The Investigating officer did not even know of these significant developments, though they had taken place just a few miles away from the scene of investigation.
He says that he learnt of the surrender and the arrest of the appellants on the evening of the 12th.
Mangali Prasad has been examined by the prosecution as an eye witness and his name is mentioned in the F.I.R. as one of the four persons who arrived at the scene of offence even before the appellants had run away.
His statement was recorded 11 days later on June 20.
The F.I.R. mentions expressly that the appellants caught hold of the legs of the deceased and started dragging him.
The Investigating officer has not stated in the Panchnama of the scene of offence whether the ground was soft or hard or sandy which had great relevance on the allegation that the deceased was dragged over a certain distance.
Finally, it is surprising that the Investigating officer did not think it worthwhile to pay a visit to the field where the deceased is alleged to have gone with his children for eating Kharbuzas.
Indeed he stated that he was not in a position to say if there were Kharbuzas at all in the field, when the occurrence took place.
591 The High Court has condoned these lapses on the part of the Investigating officer with the observation that he "appears to have been inexperienced and somewhat negligent".
The Investigating officer has stated in his evidence that he had put in 7 years of service.
It is difficult to understand on what basis the High Court attributed the lapses on his part to mere inexperience.
We will presently indicate the significance of the various lapses and loopholes in investigation but to say, as the High Court has done, that the Investigating Officer was "somewhat negligent" seems to us in the circumstances a grave euphemism.
We will now proceed to deal with the various circumstances which, in our opinion, render it unsafe to accept the prosecution case.
Dr. S.C. Pandiya who performed the post mortem examination has described in his evidence the injuries received by Ram Sanehi.
In all he found 7 injuries on the dead body, out of which injuries 1, 3 and 7, injuries 2 and 4, and injuries 5 and 6 are interconnected.
Injury No. 1 is described as a "shot wound" with its entry above the left nipple.
Injury No. 3 is described as multiple rounded abrasions on the left side of the chest.
Injury No. 7 is the wound of exit on the right scapular region, corresponding to injury No. 1.
rnjury No. 2 consists of 8 gunshot wounds of entry below the right nipple while injury No. 4 consists of multiple rounded abrasions above the right nipple.
Injury No. 5 is a gun shot wound of entry on the back of the left forearm while injury No. 6 is the corresponding wound of exit near the ulnar aspect of the left forearm.
The evidence of Dr. Pandiya and the description of the injuries given by him in the post mortem report tend to show that two different kinds of firearms were used by the assailants of Ram Sanehi.
Injury No. 1 was caused by a bullet and that is clear not only from the description of the injury but from what Dr. Pandiya has stated in his evidence.
He says: "The bullet, which had entered through injury No. 1 went out straight after emerging from injury No. 7".
Injuries Nos. 2 and 5 were caused by pellets.
This shows that whereas injury No. 1 was caused by a firearm in the nature of a rifle, injuries 2 and 5 were caused by an ordinary gun.
The medical evidence thus falsifies the eye witnesses ' account according to which, the appellant Subhash alone was armed with a double barrelled gun, the other appellant Shyam Narain being armed with a lathi.
The objective inference arising from the nature of injuries received by the deceased has a significant impact on the case of the prosecution, which has been overlooked by both the Sessions Court and the High Court.
While we are on the medical evidence it would be appropriate to mention that there was no tatooing or charring on any of the firearm injuries which, according to the doctor, shows that the firing was done from a distance of more than 4 feet.
In the First Information Report Bal Kishore has stated that as soon as he, his father and sister, reached the culvert, Subhash "touching the chest" of Ram Sanehi "with the 592 barrel of his gun" said that he shall not leave him alive; Shyam Narain thereupon exhorted Subhash not to delay and fire immediately; Subhash then fired three shots in quick succession, one of which mishred.
The trend of the F.I.R. is that Subhash fired the first two shots at Ram Sanehi from a point blank range, in which event indisputably, there would have been tatooing and charring around the injuries.
Bal Kishore has attempted to offer an explanation that what he meant to say in his compaint was that Subhash trained his gun "towards" Ram Sanehi 's chest and not "on" his chest.
This explanation is an after thought and in the circumstances difficult to accept.
Thus in another important respect, the medical evidence falsifies the case of the prose cution.
There is another aspect of the medical evidence which, though, not as important as the two aspects mentioned above, may also be referred to.
The case of the prosecution is that Ram Sanehi had gone to his Kharbuza field with his son and daughter for eating Kharobuzsas.
There is evidence that they did eat Kharbuzas and almost immediately there after they started back for home.
Within less than 5 minutes, Ram Sanehi met with his deat near the culvert.
The post mortem report shows that Ram Sanehi 's stomach was empty which means that the evidence that he had eaten Kharbuzas just a little time before his death is untrue.
Bal Kishore tried to wriggle out of this situation by saying that Ram Sanehi had eaten just a small slice of Kharbuza.
But even there, Dr. Pandiya has stated that if the entire slice of Kharbuza was eaten by Ram Sanehi, its remains would be found in the stomach provided there was no vomiting after the gun shot injuries.
Since Ram Sanehi had not vomited, his large intestines could not have been found to be empty if the story of his children was true.
This last circumstance may at first sight seem trivial but its importance consists in the fact that the visit of Ram Sanehi, along with his children, to the Kharbuza field for the purpose of eating Kharbuzas is the very genesis of the incident which happened on June 9, 1972.
Coupled with the circumstance that the Investigating officer did not even pay a visit to the Kharbuza field, leave alone making a Panchnama thereof, the conclusion is irresistible that the story that the children had accompanied their father to the Kharbuza field lacks a factual basis.
The other circumstances which render the prosecution case suspect are these (1) Ram Sanehi is alleged to have been drageed over 6 or 7 paces by the appellants but not even an abrasion was found on his back or stomach which could be attributed to dragging.
(2) Thirty or forty persons are alleged to have collected at the sence of occurrence but Bal Kishore was not able to mention the name of even one of them and it is common ground that the Investigating officer did not record the statement of any of them.
(3) Jhabboo Singh, Shyam Lal Brij Bhushan and Mangali Prasad reached the scene of offence even before the appellants had fled away but none from amongst the first three was examined by the prosecution.
Mangali Prasad was examin 593 ed as an eye witness but he has been concurrently disbelieved by the Sessions Court and the High Court.
(4) Though the motive of the offence is alleged to be that in a complaint filed by Pooran Lal against the appellant Subhash, the deceased Ram Sanehi was cited as a witness, Mangali Prasad 's evidence shows that immediately after the firing, Bal Kishore told him that Ram Sanehi was murdered because of the disputes concerning the election to the Pradhanki.
What Bal Kishore told Mangali Prasad immediately after the incident seems more probable because, one Virendrapal had contested that election and the appellant Subhash had defeated him.
When Bal Kishore went to lodge his F.I.R. at the police station he was accompanied by Virendrapal, though an attempt was made to show that Virendrapal was only standing outside the police station and had met Bal Kishore accidently.
(5) The story of Bal Kishore that after the appellant Subhash fired 2 shots he re loaded his gun but the re loaded cartridge misured makes hardly any sense.
Subhash was armed with a double barrelled gun and having fired 2 fatal shots from a close range at his target, it is unlikely that he would re load the gun and that too with only one cartridge.
And if that cartridge misfired, it is impossible to understand how it could be found concealed in the folds of Ram Sanehi 's dhoti.
There is only one other aspect of the matter which remains to be considered and since the High Court has placed great reliance thereon, it is necessary to deal with it.
The F.I.R. which lodged at about 12 O 'clock at noon on the 9th itself mentions that after Ram Sanehi was murdered, the appellant Subhash told his companion Shyam Narain that he himself was going to surrender before a court and that Shyam Narain should make his own arrangement.
In fact, Subhash did surrender in the court of the Additional District Magistrate, Farrukhabad, at about 4 p.m. on the 9th.
What the High Court has over looked is that Subhash did not surrender in connection with the murder of Ram Sanehi but he surrendered along with the 13 or 14 other accused against whom Pooran Lal had filed a complaint.
In so far as Shyam Narain is concerned, the High Court is wrong in saying that he managed somehow to get himself arrested.
The evidence of Constable Virendra Singh shows that Shyam Narain was arrested because he was crossing the railway lines and if he was not caught, he would have been run over by the two trains coming from Kanpur and Farrukhabad.
This was hardly any sensible way of making an "arrangement" for himself, as directed by Subhash.
It is therefore not as if the statement attributed to Subhash in the F.I.R. is corroborated by subsequent events so as to afford a guarantee to Bal Kishore 's presence at the culvert.
We are conscious that the Sessions Court and the High Court have both held that the appellants committed the murder of Ram Sanehi but the weight of the circumstances which we have discussed above is so preponderating that even the concurrent finding cannot be allowed 594 to stand.
In any event, it seems to us impossible to hold that the prosecution has established its case beyond a reasonable doubt.
We therefore allow this appeal, set aside the order of conviction and sentence recorded by the High Court and the Sessions Court and direct that the appellants shall be set at liberty.
M.R. Appeal allowed. | Ram Sanehi received two gun shot wounds on his chest, and died within ten minutes.
Two of his children claimed to have witnessed the occurrence.
The dead body was subjected to post mortem only after about 24 hours had elapsed.
The same evening, appellant Subhash surrendered, and appellant Shyam Narain was arrested, though for another offence altogether.
The Sessions Court convicted them under section 302 I.P.C. and sentenced Subhash to death and Shyam Narain to imprisonment for life.
The accused moved the High Court in appeal, while the Sessions Court referred the matter to it under section 374, for confirmation of the death sentence.
The question before this Court was, whether in the case of such references, the High Court was obliged to examine the entire evidence independently.
Allowing the appeal, the Court, ^ HELD: On a reference for confirmation of the sentence of death, the High Court is under an obligation to proceed in accordance with the provisions of sections 375 and 376 of the Criminal Procedure Code.
The High Court must not only see whether the other order passed by the Sessions Court is correct but it is under an obligation to examine the entire evidence for itself, apart from and independently of the Sessions Court 's appraisal and assessment of that evidence.
[589A B] Jumman and Ors.
vs The State of Punjab AIR 1957 S.C. 460; Ram Shanker Singh and Ors.
vs State of West Bengal [1962] Supp. 1 SCR 49 at 59 and Bhupendra Singh vs The State of Punjab ; , followed. |
Appeal No. 1164 of 1970.
(Appeal by Special Leave from the Order dated the 5th Sep tember 1969 of the Punjab & Haryana High Court in S.C.A. No. 197 of 1968) Naunit Lal, Girish Chandra and R.N. Sachthey, for the appel lant.
S.B. Wad, for respondent No. 1.
The Judgment of the Court was delivered by CHANDRACHUD, J.
The 1st respondent is a co operative transport society carrying on transport business at Kaithal, District Karnal, State of Haryana.
The Society terminated the services of respondents 3 and 4 who were working with it as conductor and driver, respectively.
The State of Punjab, on June 22, 1964 referred the dispute arising out of the dismissal of respondents 3 and 4, under section 10 of the Indus trial Disputes Act (14 of 1947) for the adjudication of the Labour Court, Rohtak.
That Court was then presided over by Shri Jawala Dass.
On Shri Dass 's retirement, Shri Hans Raj Gupta was appointed on June 4, 1965, as the presiding Officer of the Court.
The reference was thereafter heard by him and on April 16, 1966 he gave an award directing the reinstatement of respondents 3 and 4 with 50% backwages from the date of their dismissal until the date of reinstatement.
The Presiding Officer of the Labour Court is the 2nd re spondent to this appeal.
Being aggrieved by the award, the 1 st respondent filed Writ Petition No. 1575 of 1966 in the High Court of Punjab and Haryana under articles 226 and 227 of the Constitution, praying that the award given by the 2nd respondent be set aside on the ground, inter alia, that he was not qualified to hold the post of a Judge of the Labour Court, and, therefore, the award was without jurisdiction.
The Writ petition having been allowed by a Division Bench by its judgment dated March 26, 1968 the State of Haryana has filed this appeal by special leave.
The Presiding Officer of the Labour Court was impleaded to the Writ Petition as the 2nd respondent.
308 The only question for decision in this appeal is whether Shri Hans Raj Gupta who gave his award as the presiding Officer of the Labour Court was qualified for being appoint ed as a Judge of the Labour Court.
Section 7(1) of the provides that the appropriate Gov ernment may constitute one or more Labour Courts for the adjudication of Industrial disputes relating to any matter specified in the Second Schedule to the Act.
A Labour Court, under s.7(2), shall consist of one person only to be appointed by the Government.
Sub section (3) of section 7 reads thus: "(3 ) A person shall not be qualified for appointment as the presiding officer of a Labour Court, unless (a) he is, or has been, a Judge of a High Court; or (b) he has, for a period of not less than three years, been a District Judge or an Additional District Judge; or (c) he has held the office of the chairman or any other member of the Labour Appellate Tribunal constituted under the Industrial Disputes (Appellate Tribunal) Act, 1950 (48 of 1950), or of any Tribunal, for a period of not less than two years; or (d) he has held any judicial officer in India for not less than seven years; or (e) he has been the presiding officer of a Labour Court constituted under any Provincial Act or State Act for not less than five years".
It was common ground in the High Court that Shri Gupta did not satisfy the qualifications laid down in any of the clauses (a), (b), (c) and (e) of section 7(3).
It was, however, urged in the High Court, in the first instance, that Shri Gupta had held a judicial offical in India for not less than seven years and was, therefore, qualified for being appointed as a Judge of the Labour Court under clause (d) of s.7 (3 ).
This argument was made before the learned Chief Justice of the High Court who, while hearing the Writ Peti tion singly, felt that the question raised was of public importance.
He, therefore, referred the matter to a Divi sion Bench.
The contention that Shri Gupta was qualified to hold the office of a Judge of the Labour Court under clause (d) of s.7(3) was, however, given up by the State before the Division Bench.
Before us, the learned counsel for the appellant, the State of Haryana, rightly did not pursue the unstatable contention.
Shri Hans Raj Gupta was initially working as an Upper Division Clerk cure Head Clerk.
Thereafter, he worked from January 14, 1947 to October 19, 1954 as the Registrar to the Pensions Appeals Tribunal, Jullundur Cantonment.
After relinquishing that post, he was reverted as an Upper Divi sion Clerk cum Head Clerk, which office he held till Febru ary 17, 1957.
Subsequentiy, he was appointed as an Assistant Settlement officer in which post he worked fill September 1962.
It is obvious, and requires no clever argument to show, that Shri Gupta was holding clerical posts which, with some courtesy may 309 be described as posts calling for and furnishing administra tive experience.
As an Upper Division Clerk, even if the duties of that post were combined with those of the Head Clerk, Shri Gupta was nowhere in the shadow of a judicial office.
As a Registrar of the Pensions Appeals Tribunal, Jullundur Cantonment, he was admittedly discharging adminis trative functions.
A circumstance which seems to have blurred the perception of the State Government perhaps was that the Pensions Appeals Tribunal was a judicial or quasi judicial body and since Shri Gupta was closely associated with it, does not matter in what capacity, he could be said to hold a judicial office.
Administrative proximity with judicial work was regarded as an excuse good enough to elevate the administrator into a holder of judicial office.
This was a wholly misconceived approach to a matter of some moment for, were it so, many a judicial clerk would be qualified to be appointed to a judicial office.
Having never held any judicial office, Shri Gupta totally lacked judicial experience and was incompetent to discharge the functions of a Judge of the Labour Court.
His appointment was therefore illegal and his award without jurisdiction.
We are happy to note that the State Government did not take the time of the DiVision Bench of he High Court and of this Court in arguing an impossible proposition.
Nevertheless, the award given by Shri Gupta as the Presiding Officer of the Labour Court is defended by the State Government on the Plea that Shri Gupta 's appointment cannot be challenged in a collateral proceeding filed in the High Court for challenging the award.
Reliance is placed in support of this submission on the following passage in Cooley 's "A Treatise on the Constitutional Limitations" (8th edn; vol. 2; pages 1255 1358); "An officer de jure is one who, possessing the legal qualifications, has been lawfully chosen to the office in question, and has fulfilled any conditions precedent to the performance of its duties.
By being thus chosen and.
observing the precedent conditions, such a person becomes of right entitled to the pos session and enjoyment of the office, and the public, in whose interest the office is creat ed, is entitled of right to have him perform its duties.
If he is excluded from it, the exclusion is both a public offense and a private injury.
An officer de lure may be excluded from his office by either an officer de facto or an intruder.
An officer de facto is one who by some color of right is in possession of an office and for the time being performs its duties with public acquiescence though having no right in fact.
His color of right may come.
from an election or appointment made by some officer or body having colourable but no actual right to make it; or made in such disregard of legal requirements as to be ineffectual in law; or made to fill the place of an officer illegally removed; or made in favor of a party not having 310 the legal qualifications; or it may come from public acquiescence in the officer holding without performing the precedent conditions, or holding over under claim of right after his legal right has been terminated; or possibly from public acquiescence alone when accompa nied by such circumstances of official reputa tion as are calculated to induce people, without inquiry, to submit to or invoke offi cial action on the supposition that the person claiming the office is what he assumes to be.
An intruder is one who attempts to perform the duties of an office without au thority of law, and without the support of public acquiescence.
No one is under obligation to recognise or respect the acts of an intruder, and for all legal purposes they are absolutely void.
But for the sake of order and regularity, and to prevent confusion in the conduct of public business and in security of private rights, the acts of officers de facto are not suffered to be questioned because of the want of legal authority except by some direct proceeding instituted for the purpose by the State of by some one claiming the office de lure, or except when the person himself attempts to build up some right, or claim some privilege or emolument, by reason of being the officer which he claims to be.
In all other cases the acta of an officer de facto are as valid and effectual, while he is suffered to retain the office, as though he were an officer by right, and the same legal consequences will flow from them for the protection of the public and of third parties.
This is an important principle, which finds concise expression in the legal maxim that the acts of officers de facto cannot be questioned collaterally.
" Equally strong reliance was placed by the State Govern ment on a decision of the Ontario Supreme Court in Rs Toronto N. Co. City of Tornoto (1) in which, after an exami nation of several American and other decisions, Meredith, C.J.O., observed: "That it is not open to attack, in a collateral proceeding, the status of a de facto Judge, having at least a colourable title to the office, and that his acts are valid, is clear, I think, on principle and on authority, and it is also clear that the proper proceeding to question his right to the office is by quo warranto information." (PP.
551 552) Learned counsel for the State, Shri Naunit Lal, further drew our attention to a decision of the High Court of Tra vancore Cochin in Bhaskera Pillai and Ant.
State(2) which, relying upon the passage in Cooley 's Constitutional Limitations and the Canadian case, held that the appoint ment of the Chief Justice of that Court could not be ques tioned collaterally in a proceeding for leave.
to appeal to the Supreme Court against the decisions rendered by him.
Some sustenance was also sought to the same argument from a decision of a Full Bench of (1) 46 Dominion Law Report 547.
(2) (1950) 5, D.L.R. Travancore Cochin 382.
311 the Allahabad High Court in Queen Empress vs Garsa Sam(1) in which it was held that where a person had in fact been exercising all the functions of a Judge of the High Court, the appointment even if apparently ultra vires must never theless be presumed, in the absence of fuller information, to have been legally made in the exercise of some power, unknown to the Court, vested in the Secretary of State for India.
Broadly, the starting point and the primary basis of these decisions is the passage from Cooley 's Constitutional Limitations, which we have extracted above.
That passage says and means that the acts of officers de facto cannot be suffered to be questioned for want of legal authority except by some direct proceeding.
This important principle, according to Cooley, finds concise expression in the legal maxim that the acts of officers de facto cannot be allowed to be questioned collaterally.
Considering the nature and course of proceedings in the instant case, it seems to us impossible to hold that the challenge to Shri Gupta 's appointment was made in a collat eral proceeding.
That Shri Gupta 's appointment was not challenged in the very proceeding before him does not meet the point and in any case, if the proper mode to challenge the validity of an appointment to a public office is by a petition for the writ of quo warranto, the Labour Court over which Shri Gupta presided was hardly an appropriate forum for challenging the appoinment of its Presiding Officer.
The 1st respondent, the Haryana Co operative Transport Ltd., against whom Shri Gupta gave the award, filed a writ peti tion in the High Court of Punjab and Haryana to challenge the award on the ground that Shri Gupta was not qualified to hold the office of a Judge of the Labour Court and, there fore, the award given by him was without jurisdiction.
The challenge to Shri Gupta 's appointment having been made by a writ petition under articles 226 and 227 of the Constitution, to which Shri Gupta was impleaded as a partyrespondent, the challenge was made directly in a substantive proceeding and not collaterally.
The writ petition was filed mainly with a view to challenge Shri Gupta 's appointment on the ground that he was not qualified to fill the post to which he was appointed.
Having been impleaded to the writ peti tion he had a clear and rightful opportunity to defend his appointment.
The proceedings by way of a writ petition were taken not collaterally for attacking an appointment to a judicial office in a proceeding primarily intended for challenging a so called judicial decision, but the proceed ing was taken principally and predominantly for challenging the appointment itself.
None of the decisions, nor indeed the passage in Cooley 's Treatise, is therefore, any answer to the prayer that the award be declared to be ultra vires on the ground that the officer who gave it was not qualified to hold that post in the exercise of whose functions the award was given.
The mere circumstance that the 1st respondent did not in so many words ask for the writ of quo warranto cannot justi fy the argument that the appointment was being challenged collaterally in a proceeding takes to challenge the award.
Considering the averments in the writ petition, it seems to us clear that the main and real attack on the award (3) I.L.R. 16.
4 1546 SCI/76 312 was the ineligibility of Shri Gupta to occupy the post of a Judge of the Labour Court, in the discharge of whose func tions the award was rendered by him.
The relief of certio rari asked for by writ petition was certainly inappropriate but by clause (c) of paragraph 16, the High Court was invited to issue such other suitable writ, order or direc tion as it deemed fit and proper in the circumstances of the case.
There is no magic in the use of a formula.
The facts necessary for challenging Shri Gupta 's appointment are stated clearly in the writ petition and the challenge to his appointment is expressly made on the ground_ that he was not qualified to hold the post of a Judge of the Labour Court.
It must be mentioned that in the Canadian case of re Toronto vs City of Toronto (supra) the contention was that the Ontario Railway and Municipal Board was a "Superior Court" within the meaning of section 96 of the British North America Act and its members, not having been appointed by the Governor General, had no jurisdiction to exercise the powers conferred upon the Board by the Act by which it was created.
This argument was repelled firstly on the ground that the Board was not a Court but an administrative body and secondly on the ground that there was nothing to show that the members of the Board were not appointed by the Governor General.
In the Travancore Cochin case the Chief JustiCe whose appointment was challenged was qualified to hold that post since he had held the office of a Judge of the Madras High Court though he had retired from that office on attaining the age of 60.
The question really turned on the construc tion of article 376 (2) of the Constitution which confers power on the President is determine the period for which a Judge of a High Court in any Indian State corresponding to any State specified in part B of the First Schedule holding office immediately before the commencement of the Constitu tion may continue to hold that office.
Besides, the Chief Justice 's appointment was challenged collaterally in appli cations for leave to appeal to the Supreme Court against the judgments pronounced by him.
The Full Bench judgment of the Allahabad High) rested on the presumption, in the absence of fuller information, that the appointment must be deemed to have been made in the exercise of some power vested in the Secretary of State for India even if such power was unknown to the Court.
Deliver ing the judgment of the Court, Edge, C.J. observed at page 157: "Being in ignorance as to whether or not any power existed under which Mr, Justice Burkitt may have been lawfully appointed to act as a Judge of this court, we hold that the presumption that he was duly appointed, which arises from the fact of his having acted as a Judge of the Court since November 1892, has not been re butted.
This may seem to be a lame and impotent conclusion for a Court of Justice to arrive at concerning the validity of the appoint ment of one of its acting Judges, but our lack of necessary information,ion as to the appointment, coupled with the circumstances of the case, permits of our arriving at no other.
" Learned counsel for the State of Haryana contends that there is one more impediment in the Court holding that Shri Gupta was not 313 qualified under section 7(3) of the Act to be appointed as a Judge of the Labour Court.
Reliance is placed in support of this argument on section 9(I) of the Act which reads thus: "9.
Finality of orders constituting Boards, etc. (1) No order of the appropriate Government or of the Central Government appointing any person as the chairman or any other member of a Board or Court or as the presiding officer of a Labour Court, Tribunal or National Tribunal shall be called in ques tion in any manner; and no act or proceeding before any Board or Court shall be called in question in any manner on the ground merely of the existence of any vacancy in, or defect in the constitution of, such Board or Court.
" It is true that s.9(1) is worded so widely and generally that it could cover any and every challenge to the appoint ment to the particular posts therein mentioned.
But it is impossible to construe the provision as in derogation of the remedies provided by articles 226 and 227 of the Consti tution.
The rights conferred by those articles cannot be permitted to be taken away by a broad and general provision in the nature of s.9(1) of the Act.
The words "in any manner" which occur in s.9(1) must, therefore, be given a limited meaning so as to.
bar the jurisdiction of civil courts, in the ordinary exercise of their powers, to enter tain a challenge to appointments mentioned in the sub sec tion.
The High Court of Assam(1), Bombay(2) and Rajasthan(3) have taken, like the High Court of Punjab and Haryana in the instant case, a correct view of the scope and meaning of s.9(1) of the Act by limiting its operation to ordinary powers of the civil Courts.
The rights conferred by articles 226 and 227 can be abridged or taken away only by an appro priate amendment of the Constitution and their operation cannot be whittled down by a provision like the one con tained in s.9( 1 ) of the Act.
Accordingly, it is open to the High Courts in the exercise of their writ jurisdiction to consider the validity of appointment of any person as a chairman or a member of a Board or Court or as a presiding officer of a Labour Court, Tribunal, or National Tribunal.
If the High Court finds that a person appointed to any of these offices is not eligible or qualified to hold that post, the appointment has to be declared invalid by issuing a writ of quo warranto or any other appropriate writ or direction.
To strike down usurpation of office is the function and duty of High Courts is the exercise of their constitutional powers under articles 226 and 227.
In the result we affirm the judgment of the High Court and dismiss this appeal.
We are thankful,.
to Shri Wad for assisting the Court as amicus.
S.R. Appeal dismissed.
(1) Bozbarua (G.C.) vs Sate of Assam 1954 Assam 161.
(2) lagannath Vinayak Kale vs Ahmedi (1958) II L.L.J. 50 (Bom.) (3) Mewer Textile Mills Ltd. vs Industrial. | The first respondent, a Co operative Transport Society terminated the services of respondent 3 and 4.
The State of Punjab referred the dispute arising out of the dismissal of respondents 3 to 4 under section 10 of the to the Labour Court that was presided over by Mr. Das.
On Mr. Das 's retirement Shri Hans Raj Gupta was ap pointed as the Presiding Officer of the Court.
Mr. Gupta gave an award directing the reinstatement of respondents 3 and 4 with 50 per cent back wages from the date of their dismissal until the date of reinstatement.
The first respondent being aggrieved by the award filed a writ petition in the High Court under Articles 226 and 227 of the Constitution praying that the award given by second respondent be set aside on the ground, inter alia, that he was not qualified to become the Presiding Officer under section 7(3) of the Act since he did not hold any judicial office in India for not less than 7 years.
The contention of respondent No. 2 was that he held such a judicial office because he worked as Upper Division Clerk cum Head Clerk, Assistant Settlemeat Officer and Registrar of the Pensions Appeals Tribunals.
The contention that he held judicial office was not pressed before the High Court and in this Court by the State.
The State Government, however. supported the award on the plea that Mr. Gupta 's appointment cannot be challenged in collateral proceedings filed in the High Court for challenging the award.
Re Toronto & Co. vs City of Toronto 46 Dominion Law Reports 547; Bhaskara Pillai and Anr.
vs State [1950] 5DLR Travailcore Cochin 382 and Queen Empress vs Ganga Ram ILR 16 All.
136 distinguished.
Dismissing the appeal, HELD: 1.
Considering the nature and course of proceedings in the instant it is impossible to hold that the challenge to Mr. Gupta 's appointment was made in a collateral proceeding.
The appointment of Mr. Gupta could not have been challenged before him.
The challenge to his appointment having been made by writ petition under Articles 226 and 227 of the Constitution to which Mr. Gupta was impleaded as a party respondent, the challenge was made directly in a substantive proceeding and not in a collateral proceeding.
Since he was impleaded in the writ petition he had a clear and right ful opportunity to defend kid appointment.
[311 C E] 2.
The mere circumstance that the first respondent did not in so many words ask for a writ of quo warranto cannot justify the argument that the appointment was being chal lenged collaterally in a proceeding taken to challenge the award.
On the averments in the writ petition it is clear that the main and real attack on the award was the ineligi bility of Shri Gupta to occupy the post of a Judge of a Labour Court in the discharge of whose functions the award was rendered by him.
[311 G H, 312A] 307 3.
The relief of certiorari asked for by the writ peti tion was certainly inappropriate but the High Court was also invited to issue such other suitable writ, order or direction as it deemed fit and proper in the circumstances of the case.
There is no magic in the use of a formula.
The facts necessary for challenging the appointment are stated clearly in the writ petition and the challenge to the ap pointment is expressly made on the ground that the officer was not qualified to hold the post.
[312A B] 4.
The finality of the orders of the Labour Court con templated by section 9(1) although widely worded must be given a limited meaning so as to bar the jurisdiction of civil courts in the ordinary exercise of their powers.
It is impossible to construe the provisions in derogation of the remedies provided by Article 226 and 227 of the Constitu tion.
[313D E] Bezparua (G.C.) vs State of Assam A.J.R. 1954 Assam 161, Jagannath Vinayak Kale vs Ahmadi [1958] II L.L.J. 50 (Bom.) and Mewar Textile Mills Ltd. vs Industrial Tribunal A.I.R. , approved. |
eview Petition No. 16 of 1960.
519 Petition for Review of this court 's Judgment and order dated April 26, 1960, in Civil Appeal No. 64 of 1956.
A. V. Viswanatha Sastri, R. Ganapathy Iyer and Gopalkrishnan, for the petitioners.
K. N. Rajagopala Sastri, and P. D. Menon, for respondent.
November 23.
Das, J., delivered his own Judgment.
The Judgment of Kapur and Hidayatullah, JJ. was delivered by Hidayatullah, J. section K. DAS, J. I had taken a view different from that of my learned brethren when this appeal was heard along with Pringle Industries Ltd., Secunderabad vs The Commissioner of Income tax, Hyderabad (1), and that view was expressed in a very short judgment dated April 26, 1960.
Now, we have had the advantage of hearing a very full argument with regard to the facts of the appeal, and I for myself have had the further advantage and privilege of reading the judgment which my learned brother Hidayatullah, J., is proposing to deliver in this appeal.
I have very carefully considered the question again with reference to the facts relating thereto and, much to my regret, have come to the conclusion that I must adhere to the opinion which I expressed earlier.
My view is that the facts of this case are indistinguishable from the facts on which the decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax, C.P. and Berar(2) was rendered, and on the principles laid down by this court in Assam Bengal cement Co., Ltd. vs The Commissioner of Income tax, West Bengal (3), it must be held that the expenditure of Rs. 6111/ in this case was on revenue account and the respondent firm was entitled to the allowance which it claimed.
520 The short facts are these.
The respondent firm carried on a business in the purchase and sale of conch shells (called chanks).
It used to acquire the stock of conch shells (1)by purchase from the Fisheries purchase from the Fisheries Department of the Government of Madras and (3) by fishing for and gathering such shells from the sea.
It disposed of the stock so acquired at Calcutta, the different between the cost price and selling price less expenses being its profit made in business.
On November 9 1945 it took on lease from the Director of Industries and Commerce, Madras, the exclusive right.
liberty and authority to fish for, take and carry away "chank" shells in the sea off the coast line of the South Arcot District including the French Kuppama of Pondicherry.
The boundary of the area within which the right could be exercised was given in a schedule to the lease.
The lease was for a period of three years from July 1, 1944 to June 30 1947 on a consideration of an yearly rent of section 6111/ to be paid in advance.
Clause 3 of the lease contained the material terms there of and may be set out in full.
The lesser hereby convenants with the lesson as follows: (i) To pay the rent on the day and in manner aforesaid.
(ii) To deliver to the Assistant Director of Pearl and Chank Fisheries, Tuticorn all Velampuri shells that may be obtained by the lessee upon payment of their value as determined by the Assistant Director.
(iii) To collect chanks caught in nets and by means of diving as well.
In the process of such collection of shells not to fish chank shells less than 2/1/4 inches in diameter and if any chank shells less than 2/1/4 inches in 521 diameter be brought inadvertently to shore, to return at once alive to the sea all such undersized shells.
(iv) Not at any time hereafter to transfer or underlet or part with possession of this grant or the rights and privileges hereby granted or any part thereof without the written consent of the lessor.
(v) At the end or sooner determination of the term hereby created peaceably and quietly to yield to the lesson the rights and privileges hereby granted, and (vi) To report to the Assistant Director of Pearl and Chank Fisheries (South), Tuticorn the actual number of shells kept unsold in different stations after the expiry of the lease period.
For the assessment year 1946 47, the respondent firm submitted a return of its income to the Income tax Officer, Karaikudi Circle, showing its income from sale of chanks purchased from divers at Rs. 7194/ by sale of chanks purchased from Government Department at Rs. 23, 588/ and Rs. 2819/ by sale of chanks gathered by themselves (through divers) after deducting Rs. 6111/ being the rent paid to Government under the contract referred to above.
It sought to deduct Rs. 6111/ from its profits from business on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business under section 10(2)(xv) of the Income tax Act.
This claim was disallowed by the Income tax Officer and on appeal by the Appellate Assistant Commissioner.
On further appeal to the Appellate Tribunal the respondent firm contended that the 522 decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax(1)applied to this case inasmuch as the payment was to secure the stockin trade for its business.
The Appellate Tribunal was of the opinion that the Privy Council decision covered the case, but felt itself bound by the decision of the Full Bench of the Madras High Court in K. T. M. T. M. Abdul Kayum Hussain Sahib vs Commissioner of Income tax, Madras (2).
The Tribunal acceded to the demand for a reference to the High Court, and accordingly referred the following question to the High Court for its decision. "Whether on the facts and circumstances of the case the payment of the sum of Rs. 6111/ made by the assessee under the terms of the agreement entered into with the Director of Industries and Commerce, Madras on 9th November, 1945 was not an item of revenue expenditure incurred in the course of carrying on the business of the assessee and, therefore, allowable under the provisions of section 10 of the Indian Income tax Act?" The reference first came before a Division Bench and was then referred to a Full Bench.
By its judgment dated April 2, 1953 the Full Bench answered the question in favour of the respondent firm.
On a certificate of fitness granted by the High Court the Commissioner of Income tax, Madras, brought the present appeal to this Court.
In Assam Bengal Cement Co., Ltd. vs The Commissioner of Income tax (3), this Court referred to the decision in Benarsidas Jagannath.
In re.(4) and accepted the following broad principles for the purpose of discriminating between a capital and a revenue expenditure.
523 (1) The outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment [See Commissioners of Inland Revenue vs Granite City Steamship Company Ltd.(1)].
Such expenditure is regarded as on capital account, for it is incurred not in earning profits but in setting the profit earning machinery in motion.
In my opinion this test does not apply in the present case where no profit earning machinery was set in motion.
(2) Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade.
[See Atherton vs British Insulated and Helsby Cables Ltd. (2)].
In elucidation of this principle it has been laid down in several decisions that by "enduring" is meant "enduring in the way that fixed capital endures" and it does not connote a benefit that endures in the sense that for a good number of years it relieves the assessee of a revenue payment.
In Robert Addie & Sons Collieries Ltd. vs Commissioners of Inland Revenue (3) Lord Clyde formulated the same test in these words: "What is 'money wholly and exclusively laid out for the purposes of the trade ' in a question which must be determined upon the principles of ordinary commercial trading.
It is necessary accordingly to attend to the true nature of the expenditure, and to ask one 's self the question, is it a part of the Company 's working expenses? is it expenditure laid out as part of the process of profit earning? or, on the other hand, is it a capital outlay? is it expenditure necessary for the acquisition of property or of rights of a permanent character, 524 the possession of which is a condition of carryin on its trade at all?" This test was adverted to by the Privy Council in Tata Hydro Electric Agencies Ltd. vs Commissioner of Income tax(1).In my opinion the application of this test makes it at once clear that the sum of Rs. 6111/ which the respondent firm spent was expenditure laid out as part of the process of profit earning; it was not a capital outlay, that is, expenditure necessary for the acquisition of property or of rights of a permanent character, the possession of which was a condition of carrying on its trade.
Under the contract in question the respondent firm did not acquire any right to immovable property.
It acquired no right in the bed of the sea or in the sea.
The only right conferred on the respondent firm was the right to fish for, gather and carry away conch shells (in motion under the surface of the sea) of a specified type and size.
The respondent firm was under an obligation to return to the sea conch shells less than 2 1/2 inches in diameter.
The business of the respondent firm consisted in buying and selling conch shells.
No manufacturing process was involved in it.
Therefore, the stock in trade of the respondent firm was conch shells.
It secured this stock in trade in many different ways, by purchase from divers, by purchase from Government and private parties, and also by gathering conch shells under the contract in question.
In my opinion, the contract into which the respondent firm entered was merely for securing its stock in trade.
It is indeed true that in considering whether an item of expenditure is of a capital or a revenue nature, one must consider the nature of the concern, the ordinary course of business usually adopted in that concern, and the object with which the expense is incurred.
The true nature of the transaction must be collected from the entire 525 document with reference to all the relevant facts and circumstances.
Having regard to the nature of the respondent firm 's business and the course adopted by it for carrying it on, it appears to me to be rather far fetched to hold that by the contract in question the respondent firm acquired property or right of a permanent character, the possession of which was a condition of carrying on its trade.
To me it seems that the better view, in a business sense, is that the respondent firm merely acquired by means of the contract its stock in trade, rather than a source or enduring asset for producing the stock in trade.
It was argued before us, as it was argued in the High Court, that what was acquired in the present case was the means of obtaining the stock in trade for the business rather than the stock in trade itself.
I am unable to accept this argument as correct.
The contract entered into by the respondent firm was wholly and exclusively for the purpose of obtaining conch shells, which were its stock in trade.
As I have stated earlier, the contract granted no interest in the sea, sea bed, or sea water etc.
It was simply a contract giving the grantee the right to pick and carry away conch shells of a specified type and size which of course implied the right to appropriate them as its own property.
In my opinion, in a case of this nature no distinction can be drawn in a business sense between the right of picking and carrying away conch shells and the actual buying of them.
It is not unusual for businessmen to secure, by means of a contract, a supply of raw materials or of goods which form their stock in trade, extending over several years for the payment of a lump sum down.
Even if the conch shells were stored in a godown and the respondent firm was given a right to go and fetch them and so reduce them into its ownership, it could scarcely have been 526 suggested that the price paid was capital expenditure.
I may explain what I have in mind by giving a simple illustration.
Take the case of a fisher may who sells fish.
Fish is his stock in trade.
He man buy the fish he requires from other persons; or he may obtain the supply of fish he requires by catching the fish of a specified size and type in particular water over a short period under a contract entered into by him and take them away.
I do not think that in a business sense any distinction can be made between the two means of obtaining the stock in trade.
Both really amount to securing the stock in trade rather than acquiring an enduring asset or a permanent right for producing the stock in trade.
And a business man, like the fisher man in the illustration given above, would indeed be surprised to learn that buying of fish for his business is revenue expenditure whereas catching fish in particular water under a contract entered into by him for the purpose of obtaining his stock in trade on payment of a lump sum down, is capital expenditure.
(3) The test whether for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business does not arise in the present case and need not be considered.
No different principles were laid down by my learned brethren in their decision in Pringle Industries Ltd. vs Commissioner of Income tax(1) and so far as that case is concerned, their decision must hold the field.
The difficulty and difference of opinion that arise now relate to the application of those principles to the facts of the present case.
One is reminded in this case of what Lord Macmillan said in Tata Hydro Electric Agencies Ltd. vs Commissioner of Income tax(2) at page 209: 527 "Their Lordships recognise and the decided cases show how difficult it is to discriminate between expenditure which is and expenditure which is not, incurred solely for the purpose of earning profits or gains.
" Lord Greene (Master of the Rolls) expressed himself more strongly and adverting to the distinction between capital and income, said: "There have been many cases where this matter of capital or income has been debated.
There have been many cases which fall upon the borderline: indeed, in many cases it is almost true to say that the spin of a coin would decide the matter almost as satisfactorily as an attempt to find reasons." [Vide Commissioners of Inland Revenue vs British Salmson Aero Engines Ltd.(1)].
Perhaps, the case before us is not as bad as the cases which the Master of the Rolls had in mind when he made the above observations.
It is, however, a truism that each case must turn upon its own facts.
Nevertheless the decisions are useful as illustrations of some relevant general principles.
The nearest illustration that we can get is the decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax(2).
That decision was binding on the Indian Courts at the time when it was given and as I think that it is still good law and is indistinguishable from the present case, I offer no apology for referring to it in great detail.
The facts of that case were these.
The assessees there carried on a business at several places as manufacturers and vendors of country made cigarettes known as bidis.
These cigarettes were composed of tobacoo rolled in leaves of a tree known as tendu leaves, which were obtained by the assessees by entering into a number of 528 short term contracts with the Government and other owners of forests.
Under the contracts, in consideration of a certain sum payable by instalments, the assessees were granted the exclusive right to pick and carry away the tendu leaves from the forest area described.
The assesees were allowed to coppice small tendu plants a few months in advance to obtain good leaves and to pollard tendu trees a few months in advance to obtain better and bigger leaves.
The picking of the leaves however had to start at once or practically at once and to proceed continuously.
On these essential facts, the Privy Council held that the contracts were entered into by the assessees wholly and exclusively for the purpose of supplying themselves with one of the raw materials of their business, that they granted no interest in land, or in the trees or plants, that under them it was the tendu leaves and nothing but the tendu leaves that were acquired, that the right to pick the leaves or to go on to the land for the purpose was merely ancillary to the real purpose of the contracts and if not expressed would be implied by law in the sale of a growing crop, and that therefore the expenditure incurred in acquiring the raw material was in a business sense an expenditure on revenue account and not on capital, just as much as if the tendu leaves had been bought in a shop.
I can find no distinction which would make any difference between the facts of that case and the facts of the present case.
Let me compare the essential facts of these two cases and see whether there is any difference.
(1) Two of the contracts were taken as typical of the rest by the Privy Council.
One contract was for the period from September 5, 1939 to June 30, 1941 and the other was for the period from October 1, 1938 to June 30, 1941.
Thus one of the contracts was for a period of about two years and the other contract for a period of about three years.
529 In the case under our consideration the period of the contract is three years.
Indeed, there is no vital difference between the periods in the two cases.
(2) In the case before us the contract area is described in a schedule.
In the two contracts which were under consideration by the Privy Council the contract area was also indicated in a schedule.
The boundaries of the forests in which tendu leaves could be plucked were delimited by the schedule.
Same is the case with the contract before us.
The contract area in which conch shells of a specified type and size can be picked and gathered is described in a schedule.
Such description does not mean that the assessee gets any right other than the right to gather conch shells.
In the Privy Council case the assessees were granted no interest in land or in the trees or plants; it was the tendu leaves and nothing but the tendu leaves that were acquired.
In the case before us no interest was given in the sea bed or in the sea water or in any of the products thereof.
Conch shells of a specified type and size and nothing but such conch shells were acquired by the contract.
I do not think that the reference to the coast line off the South Arcot District makes any difference between the present case and the case on which the decision in Mohanlal Hargovind vs Commissioner of Income tax (1) was rendered.
If in the matter of plucking of tendu leaves the expenditure under the contract was, in a business sense, expenditure on revenue account, I fail to see why a similar expenditure for gathering conch shells in motion under the surface of the sea near the coast line should not, in a business sense, be considered as expenditure on revenue account.
This aspect of the case was emphasised by their Lordships in the following paragraph: 530 "It appears to their Lordships that there has been some misapprehension as to the true nature of these agreements and they wish to state at once what in their opinion is and what is not the effect of them.
They are merely examples of many similar contracts entered into by the appellants wholly and exclusively for the purpose of their business, that purpose being to supply themselves with one of the raw materials of that business.
The contracts grant no interest in land and no interest in the trees or plants themselves.
They are simply and solely contracts giving to the grantees the right to pick and carry away leaves, which of course, implies the right to a appropriate them as their own property.
" In the case under our consideration the only right granted to the respondent firm was to take and carry away conch shells of a specified type and size, which of course, implies the right to appropriate them as the respondent firm 's own property.
The right to go into the sea and cast nets etc.
was merely ancillary to the real purpose of the contract.
Nor do I think that the circumstance that the contracts conferred an exclusive privilege or right is a matter of any significance.
In Mohanlal Hargovind vs Commissioner of Income tax (1) the contracts were exclusive and their Lordships stated: "It is true that the rights under the contracts are exclusive but in such a case as this that is a matter which appears to their Lordships to be of no significance.
These observations are as apt in their application to the present case as they were in the case before their Lordships of the Privy Council.
(3) The Privy Council draw a distinction between cases relating to the purchase or leasing of 531 mines, quarries, deposits of brick earth, land with standing timber etc.
On one side and the case under its consideration on the other.
It referred to the decision in Alianza Co. vs Bell(1) and said: ". the present case resembles much more closely the case described and distinguished by Channell, J. at page 673 of the report in Alianza Co. vs Bell of the cost of material worked up in a manufactory.
That side the learned Judge, is a current expenditure and does not become `a capital expenditure merely because the material is provided by something like a forward contract, under which a person for the payment of a lump sum down secures a supply of the raw material for a period extending over several years '.
" In Kauri Timber Co. Ltd. vs Commissioner of Taxes(2) the company 's business consisted in cutting and disposing of timber.
It acquired in some cases timber bearing lands, in other cases it purchased the standing timber.
The leases were for 99 years.
So far as the cases where the land was acquired were concerned there could have been no doubt that the expenditure made in acquiring it was capital expenditure.
In the case of the purchase of the standing timber what was acquired was an interest in land.
The purchasers bought the trees which they could allow to remain standing as long as they liked.
It was pointed out that so long as the timber at the option of the company remained upon the soil, it derived its sustenance and nutriment from it.
The additional growths became ipso jure the property of the company.
In these circumstances it was held that the expenditure was capital expenditure.
In the case before us some reliance was placed by the appellant on the term that shells less than 2 1/4 inches in diameter brought inadvertently to shore had to be returned at once alive to the sea.
532 The argument was that such shells might later grow in size by receiving sustenance and nutriment from sea water and could be later gathered by the respondent firm when they reached the size of 2 1/4 inches in diameter or more.
This, it was argued, brought the present case nearer the decision in Kauri Timber case (1).
I am unable to agree.
It is to be remembered that live shells move under the surface of the sea and they do not remain at the same place, as trees do.
A shell less than 2 1/4 inches in diameter returned alive to the sea may move away from the contract area and may never be gathered by the respondent firm.
In these circumstances the appellant is not entitled to call to his aid the test of "further vegetation" or "sustenance and nutriment" referred to in the Kauri Timber case (1).
From whatever point of view we may look at the case, it seems to me that the facts of the present case are indistinguishable from those of the case in Mohanlal Hargovind vs Commissioner of Income tax(2) In Mohanlal Hargovind 's case (2) the right was to pluck tendu leaves; in our case the right was to gather conch shells of specified type and size.
This distinction, it is obvious, makes no difference.
In the High Court it was contended on behalf of the appellant that Mohanlal Hargovind 's case (2) related to the acquisition of raw materials whereas the present case relates to the acquisition of "chanks" by a dealer who sells them without subjecting them to any manufacturing process, and this distinction, it was contended, made the decision in Mohanlal Hargovind 's case (2) inapplicable to the present case.
The High Court rejected this contention and in my opinion rightly.
I agree with the High Court that on principle and in a business sense, there is no distinction between acquiring raw materials for a manufacturing business and acquiring or purchasing goods by a dealer for the purpose of sale, particularly when there is no question of any excavation 533 etc., in order to win the goods and make such goods parts of the stock in trade, a point which weighed with the Court of Appeal in Stow Bardolph Cravel Co. Ltd. vs Poole (1) and with my learned brethren in Pingle Industries Ltd. V. Commissioner of Income tax (2).
No such point is present in this case.
I have been unable to find any other distinction between the two cases which would make a difference in the application of the principles for discriminating between capital expenditure and revenue expenditure.
To adopt again the language of Lord Green, I see no ground in principle or reason for differentiating the present case from the case in Mohanlal Hargovind vs Commissioner of Income tax (3).
On behalf of the respondent firm a further question was agitated, namely, whether an allowance for the cost of gathering the conch shells by nets etc., should not be given, even though the rent paid under the contract was not allowable, under section 10 (2) (xv) of the Income tax Act and a reference was made in this connection to the decision in Hood Barrs vs Commissioners of Inland Revenue (4).
I do not think that we are concerned with that matter in the present appeal.
The only question which arises for decision is the one referred to the High Court.
I have held that the High Court correctly answered the question which related to the payment of the sum of Rs. 6111/ only.
The question having been correctly answered by the High Court, the appeal fails and must be dismissed with cost.
HIDAYATULLAH, J.
This appeal was heard with Pingle Industries, Ltd., Secunderabad vs The Commissioner of Income tax (5), in which judgment was delivered by us on April 26 1960.
In accordance with the decision in Pingle Industries case (1), 534 this appeal was allowed.
Later, a review petition of (No. 16 of 1960) was filed on the ground that this appeal was not governed by the decision in Pingle Industries case (1), and that as it was not fully argued, it should be reheard.
It is unnecessary to go into the reasons why the rehearing was granted, except to say that there was perhaps a misunderstanding about the concessions made by counsel.
We were, therefore, satisfied that we should grant the rehearing, and have since heard full arguments in this appeal.
K. T. M. T. M. Abdul Kayoom and Hussain Sahib (respondent) is a registered firm, and carries on business in conch shells locally known as "chanks", which are found on the bed of the sea all along the coast line abutting on the South Arcot District.
The respondent took on lease from the Director of Industries and Commerce, Madras "the exclusive right, liberty and authority to take and carry away all chanks founnd in the sea" for a period of three years ending on June 30, 1947.
The consideration was Rs. 6, 111/ per year payable in advance.
For the year of assessment, 1946 47 (the year of account ending June 30, 1945) the respondent in showing its profits from business sought to deduct Rs. 6,111/ on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business under section 10 (2) (XV) of the Income tax Act.
This claim was disallowed by the Income tax Officer, and on appeal, by the Appellate Assistant Commissioner.
On further appeal to the Appellate Tribunal, the respondent contended that the ruling of the Privy Council in Mohanlal Hargovind 's case (2) applied to the case, inasmuch as the payment was to secure the stock in trade for its business.
The Appellate Tribunal, though it was of opinion that the Privy Council case applied, felt itself bound by the earlier Full Bench decision of the Madras High 535 Court in K.T.M.T.M. Abdul Kayoom Hussain Sahib vs Commissioner of Income tax, Madras (1) relating to this respondent, and dismissed the appeal.
The Tribunal, however, acceded to a demand for a case, and referred the following question to the High Court for its decision : "Whether on the facts and circumstances of the case the payment of the sum of Rs. 6,111 made by the assessee under the terms of the agreement entered into with the Director of Industries and Commerce, Madras, on 9th November 1945 was not an item of revenue expenditure incurred in the course of carrying on the business of the assessee and, "therefore, allowable under the provisions of section 10 of the Indian Income tax Act".
The reference went before a Divisional Bench, which referred the case for decision of a Full Bench.
The Full Bench held that the case was covered by the Privy Council case above referred to, observing: "In our opinion, the facts in the case before the Judicial Committee are indistinguishable from the facts of the present case.
In one case, the leaves had to be picked from trees by going upon the land, while in the other case the chanks had to be collected and gathered by dividing into the sea.
It is impossible to construe the documents in the present case as conferring any interest in that portion of the sea from which the exclusive right of winning the chanks was conferred upon the assessee.
" The High Court also did not see any difference between raw materials acquired for a manufacturing business and the acquisition of chanks in the present case, and held that the chanks were acquired as the stock in trade of the respondent and the transaction was tantamount to purchase of goods, 536 The High Court, however, certified the case as fit for appeal, and the Commissioner of Income tax has filed this appeal.
The material terms of the agreement in the case are as follows : "1.
The lessor hereby grants unto the lessees the full free and exclusive right, liberty and authority to fish or take and carry away all chank shells in the sea off the coast line of the South Arcot District including the French Kuppams of Pondicherry more particularly described in the schedule hereto to hold the premises to the lessees from the first day of July 1944 for a period of three years ending 30th June 1947 paying therefor the yearly rent of Rs. 6, 111 (rupees six thousand one hundred and eleven only) to be paid yearly in advance, the first payment to be made within fifteen days from the date of intimation of acceptance and the second and third payments to be made on or before the 15th June 1945 and 1946, respectively at the Government Treasury at Tuticorin or Madras.
x x x 3.
The lossee hereby covenants with the lessor as follows : x x x (ii) To deliver to the Assistant Director of Pearl and Chank Fisheries, Tuticorin all Velampuri shells that may be obtained by the lessees upon payment of their value as determined by the Assistant Director.
(iii) To collect Chanks in nets and by means of diving as well.
In the process of such collection of shell not to fish chank shells less than 2 1/4 inches in diameter if any chank shells less than 2 1/4 inches in diameter 537 be brought inadvertently to shore, to return at once alive to the sea all such undersized shells.
(iv) Not at any time hereafter to transfer or underlet or part with possession of this grant or the rights and privileges hereby granted or any part thereof without the written consent of the lessor.
x x x (vi) To report to the Assistant Director of Pearl and Chank Fisheries (South), Tuticorin the actual number of shells kept unsold in different stations after the expiry of the lease period.
" An analysis of the agreement shows that the respondent obtained an exclusive right to fish for "chanks" by the method of diving and nets and to appropriate them except those below 2 inches in diameter, which had to be returned alive to the sea and Velampuri shells which had to be sold compulsorily to Government.
The respondent had also to report to its lessors at the end of the term, the number of shells not sold.
The right was exclusive, but was not capable of being transferred or underlet, and it was for a fairly long period.
The coast line involved was also fairly long.
There is no doubt that the payment of Rs. 6,111/ was an expenditure wholly and exclusively for the purpose of the business of selling shells, just as the payment to the divers and other sundry expenses were.
But an expenditure for the purpose of the business may be of a capital nature, and if it is so, it cannot be claimed as a deduction.
The question is whether this payment was of a capital nature.
What is attributable to capital and what, to revenue has led to a long string of cases here and 538 in the English Courts.
The decisions of this Court reported in Assam Bengal Cement Co., Ltd. vs Commissioner of Income tax and Pingle Industries case (1) have considered all the leading cases, and have also indicated the tests, which are usually applied in such cases.
It is not necessary for us to cover the same ground again.
Further, none of the tests is either exhaustive or universal.
Each case depends on its own facts, and a close similarity between one case and another is not enough, because even a single significant detail may alter the entire aspect.
In deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo * by matching the colour of one case against the colour of another.
To decide, therefore, on which side of the line a case falls, its broad resemblance to another case is not at all decisive.
What is decisive is the nature of the business, the nature of the expenditure, the nature of the light acquired, and their relation inter se, and this is the only key to resolve the issue in the light of the general principles, which are followed in such cases.
A trader may spend money to acquire his raw materials, or his stock in trade, and the payment may often be on revenue account but not necessarily.
A person selling goods by retail may be said to be acquiring his stock in trade when he buys such goods from a wholesaler.
But the same cannot be said of another retailer who buys a monopoly right over a long period from a producer of those goods.
The amount, he pays to secure the monopoly, through a part of the expenditure to secure his stock in trade is not of the same character as the price he pays in the first illustration.
By that payment, he secures an enduring advantage and an asset which is a capital asset of his business.
In the same way, if a manufacturer buys his raw materials he makes a revenue expenditure, but when he acquires a source from which he would derive his 539 raw materials for the enduring benefit of his business, he spends on the capital side.
Thus, a manufacturer of wollen goods buys his wool buys his raw materials, but when he buys a sheep farm, he buys a capital asset.
There is then no difference between purchase of a factory and the purchase of the sheep farm, because both are capital asset of enduring nature.
The respondent in this case has tried to distinguish Pingle Industries case (1) and to bring its case within the ruling of the Privy Council in Mohanlal Hargovind 's case (2).
When the former case was argued, the attempt was to bring it also within the rule of the Privy Council, but now, the differences between the two cases are recognised and Pingle Industries case (1) is said to be entirely different.
In deciding the present appeal, it is hardly necessary to do more than analyses once again the facts and circumstances of these two cases to show why those two cases were differently decided, and the present case will then be easily disposed of, not on its similarity to another but on its own facts.
We shall begin with the Privy Council.
Mohanlal Hargovind and Co., was a firm of bidi manufacturers, which needs tendu leaves in which tobacco is wrapped to make bidis.
Tendu leaves were thus the raw material of the business.
Tendu leaves can be bought from dealers who sell tendu leaves in a large way.
Now, what did the firm do ? It took leaves of forests with a right to pick the leaves.
This right carried with it the right to coppice small tendu plants and to pollard the tendu trees.
There was, however, no right in the trees or the land and the right to go over the land was merely ancillary.
Looked at from the point of view of business, there was no more than a purchase of the leaves, and the leaves were needed as raw materials of the business.
In deciding the case, the Judicial Committee discounted the right to 540 coppice small tendu plants and to pollard the tendu trees as a very insignificant right of cultivation necessary to improve the quality of the leaves, but which right ranked no higher than the right to spray a fruit tree.
The right of entry upon the land was also considered ancillary to the main purpose of the contract, which was acquisition of tendu leaves and tendu leaves alone, and it was observed that even if this right of going on the land and plucking the leaves was not expressed in the contract, it would have been implied by law.
Their Lordships then observed that the High Court diverted its view from these points, and attached too much importance to cases decided upon quite different facts.
They then observed that "cases relating to the purchase or leasing of mines, quarries, deposits of brick earth, land with standing timber. " were of no assistance, and concluded: "If the tendu leaves had been stored in a merchant 's godown and the appellants had bought the right to go and fetch them and so reduce them into their possession and ownership it could scarcely have been suggested that the purchase price was capital expenditure.
Their Lordships see no ground in principle or reason for differentiating the present case from that supposed." (p. 478) That case thus involved no right in land or trees; the licence to be on the land was merely an accessory right; the right of cultivation was insignificant.
The term was short, and the collection of leaves was seasonal.
Leaves once collected, the operation pro tempore was over till the fresh crop came.
There was thus no acquisition of an enduring asset in the way capital endures; it was more a purchase of crops of two or three successive years shewered on an agreement to ensure the supply of raw materials, 541 Contrast this with the facts of Pingle Industries case (1).
The business of the assessee there, was selling stone slabe called flag stones.
These stones were first won from the quarries and then dressed and shaped and then sold.
Now, what did the assessee do ? It took leases of stone quarries in a large number of villages for twelve years.
Primarily, this was done to obtain stones for its business.
It could have been a contract by which it would have been entitled to so many cubic feet of stones to be extracted in a particular period.
It took long term leases of vast areas in several villages to ensure supplies for a considerable time.
The leases were not limited by quantity, nor did they refer to any stones in particular.
It could take all or it could take none; but it could not have carried away all the stones, if the supply outran its efforts.
The stones were embedded in earth, layer upon layer, and had to be systematically extracted.
Till the stones at the top were removed, it could not remove those at the bottom, and there were still more layers further below.
In there circumstances, no specific quantity having been bought or sold either expressly or impliedly, the stones being immovable property or a part thereof and the contract being long teem contracts, Mohahlal Rargovind 's case (2) was held inapplicable, and it was held that the assessee in Pingle Industries case (1) had acquired an enduring asset and the expenditure was on capital account.
These cases between them show adequately the dividing line, which exists between capital expenditure and revenue expenditure.
To determine on which side of the line the particular expenditure falls, one may often put himself the question posed by Lord Clyde in Robert Addie and Sons Collieries Ltd. vs Commissioners Inland Revenue (3) 542 "It it part of the Company 's working expenses, is it expenditure laid out as part of the process of profit earning ? or, on the other hand, is it capital outlay, is it expenditure necessary for the acquisition of property or of rights of a permanent character, the possession of which is a condition of carrying on its trade at all?" The same question was again posed by the Judicial Committee in Tata Hydro Electric Agencies, Ltd. vs Commissioner of Income tax (1).
The answer to this question in each of the two case of Mohanlal Hargovind (2) and Pingle Industries (3) is entirely different.
The difference can be noticed easily, if we were to read here what Channell, J. said in Alianza Co. Ltd. vs Bell (4): "In the ordinary case, the cost of the material worked up in a manufactory is not a capital expenditure, it is a current expenditure and does not become a capital expenditure merely because the material is provided by something like a forward contract, under which a person for the payment of a lump sum secures a supply of the raw material for a period extending over several years. .If it is merely a manufacturing business, then the procuring of the raw material would not be a capital expenditure.
But if it is like the working of a particular mine, or bed of brick earth and converting the stuff into a marketable commodity, then, the money paid for the prime cost of the stuff so dealt with is just as much capital the money sunk in machinery or buildings.
" The first part of the observation is applicable to Mohanlal Hargovind 's case (2) and the latter part, to Pingle Industries case (3).
What is said of a manufacturing concern is equally applicable to a non manufacturing business.
It is the quality of the payment taken with what is obtained, that is decisive of the character of the payment.
543 We may now pass on to the facts of the case before us.
The respondent carried on the business of selling chanks.
It obtained its supplies from divers, from whom it purchased the chanks, and having got them, perhaps cheap, it resold them at a profit.
This is one mode in which it carried on its business.
In this business, it was directly buying its stock in trade for resale.
The other method was to acquire exclusive right to fish for chanks by employing divers and nets.
The business then changed to something different.
The sale was now of the product of another business, in which divers and equipment were first employed to get the shells.
It thus took leases of extensive coastline with all the right to fish for chanks for some years.
The shells were not the subject of the bargain at all, as were the tendu leaves; but the bargain was about the right to fisht.
There can be no doubt that what it paid the divers when it bought chanks from them with the view of reselling them was expenditure laid out wholly and exclusively for the purpose of its business, which was not of a capital nature.
That business was buying goods and reselling them at a profit.
But a different kind of business was involved when it went in for fishing for chanks.
To be able to fish for chanks in reserved waters it had to obtain the right first.
It, therefore took lease of that right.
To Mohanlal Hargovind, the leaves were raw materials, and that firm preferred to buy a number of crops over years rather than buy them as it went along.
Hence the remark that the leaves were bought, as if they were in a shop.
Under the lease which the respondent obtained, it had a right to take only chanks of particular dimensions and shape, but it had to fish for them and obtain them first.
The rest of the chanks were not its property.
The smaller chanks had to be returned alive to the sea, and Velampuri chanks had to be compulsorily sold to the state.
Of Course, the smaller chanks put back into the sea 544 would grow, and if fished later, be its property to take, but till they grow, it had not claim.
The chanks were on the bed of the sea.
Their exact existence was not known, till the divers found them, or they got netted.
Chanks which were there one day might have been washed back into the deep sea, and might never be washed back into a place where they would be within reach.
Similarly, other chanks not there one day might come within reach on another day.
All these matters make the case entirely different from the case of a purchase from the divers.
In obtaining the lease, the respondent obtained a speculative right to fish for chanks which it hoped to obtain and which might be in large quantities or small, according to its luck.
The respondent changed the nature of its business to fishing for chanks instead of buying them.
To be able to fish, it had to arrange for an area to fish, and that arrangement had to be of some duration to be effective.
This is not a case of so much clay or so much salt petre or a dump of tailings or leaves on the trees in a forest.
The two modes in which the respondent did the business furnish adequate distinguishing characteristics.
Here is an agreement to reserve a source, where the respondent hoped to find shells which, when found, became its stock in trade but which, insitu, were no more the firm 's than a shell in the deepest part of the ocean beyond the reach of its divers and nets.
The expenses of fishing shells were its current expenses as also the expenses incurred over the purchase of shells from the divers.
But to say that the payment of lease money for reserving an exclusive right to fish for chanks was on a par with payments of the other character is to err.
It was possible to say of the former, as it was possible to say of the tendu leaves in Mohanlal Hargovind 's case (1), that the chanks were bought because the money paid was the price of the chanks.
But it would be a straining of the imagination to say that the amount paid 545 for reserving the coastline for future fishing was the price of chanks, with which the respondent did its business.
That amount was paid to obtain an enduring asset in the shape of an exclusive right to fish, and the payment was not related to the chanks, which it might or might not have brought to the surface in this speculative business.
The rights were not trasferable, but if they were and the firm had sold them, the gain, if any, would have been on the capital side and not a realising of the chanks as stock in trade, because none had been bought by the firm, and none would have been sold by it.
In our opinion, the decision of the High Court, with all due respect, was, therefore, erroneous, and the earlier decision of the Full Bench of the same High Court was right in the circumstances of the case.
In the result, the appeal is allowed; but there will be no order about cost.
BY COURT.
In accordance with the majority judgment of the Court, the appeal is allowed, but there will be no order about costs. | The assessee firm carried on the business in purchase and sale of conch shells.
It obtained a lease for 3 years for gathering specified types of shells from the sea along the coastline abutting on the South Arcot District.
It sought to deduct the amount paid as lease money from its profits from business on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business.
under section 10(2)(xy) of the Income Tax Act.
^ Held, (per kapur and Hidayatullah, JJ., Das, J. dissenting) that the expenditure was capital expenditure and could not be deducted from the profits.
The business of the assessee was buying and selling shells but when it took the lease it went in for a new speculative business of fishing for shells.
The amount paid for reserving the vast coastline for future fishing was not price paid for obtaining the stock in trade i.e. shells with which assessee did his business.
The amount was paid to obtain an enduring asset in the shape of an exclusive right to fish and the payment was not related to the shells.
Mohanlal Hargovind vs Commissioner of Income tax, C. P. & Berar, , distinguished Pringle Industries Ltd., Secunderabad vs Commissioner of Income tax, Hyderabad, [1960] 3 section C. R. 681, applied.
Per Das, J. The expenditure was not capital expenditure and was deductible from the profits.
It was not an expenditure for the acquisition of property or of rights of a permanent character, the possession of which was necessary for carrying on of the assessee 's trade By this lease the assessee acquired its stocks in trade rather than a source or enduring asset for producing the stock in trade.
Mohanlal Hargovind vs Commissioner of Income tax, C. P. & Berar , applied.
Pringle Industries Ltd., Secunderabad vs Commissioner of Income tax, Hyderabad, , distinguished. |
ivil Appeal No. 1020 of 1975.
(Appeal by Special Leave from the Judgment and Order dated the 18 4 1975 of the Maharashtra State Co op.
Appel late Court in Appeal No. 54 of 1975.) J. L. Nain, U. R. Lalit, and V. N. Ganpure, for the appel lant.
V.M. Tarkunde, Sharad Manohar, P.H. Parekh and Miss Manju Jetley, for respondent No. 1.
M.C. Bhandare, Mrs. section Bhandare, N.S. Narasimhan, K.C. Sharma, ,A. K. Mathur and ,4.
K. Sharma, for respondent No. 2. 343 The Judgment of the Court was delivered by RAY, C.J.
This appeal by special leave is from the judgment dated 18 April 1975 of the Maharashtra State Co operative Appellate Court.
The question for consideration in this appeal is whether a mortgagor can exercise his right of redemption after a mortgagee under an English Mortgage with power to sell mortgaged property without the intervention of the court gives notice to the mortgagor to sell the mortgaged property by public auction and sells it by public auction.
The appellant is the auction purchaser.
The respondents are Flora Co operative Housing Society in liquidation the mortgagors (hereinafter referred to as the Society) and the Maharashtra Co operative Housing Finance Society Ltd., the mortgagee (hereinafter referred to as the mortgagee).
In 1964 the Society was registered as a Housing Society with 12 members.
The paid up capital of the Society was Rs.21,000/ .
The Society wanted 12 flats to be constructed in one structure of ground and two upper floors.
The Society purchased plot No. 153 in Santa Cruz at Bombay, measuring 1002 sq. yards.
The price was Rs.1,02,000/ .
In 1966 the Society mortgaged the land and the incomplete structure in favour of the mortgagee.
The mort gage was for the sum of Rs.70,000/ .
It was an English mortgage.
In 1968 the mortgagee advanced a further sum of Rs.42,000/ .
In 1966 Fair Deal Builders entered into a contract with Society to build.
The work was stopped.
Thereafter in 1967 the Society entrusted the work to Maharaja Builders.
In 1968 the contract with Maharaja Builders was terminated.
The work was given in 1969 to Kamal Construction Company, who abandoned it in incomplete stage.
On diverse dates between 29 August 1967 and 29 November 1970, notice was given by the mortgagee to the Society for non payment to the mortgagor and to sell the property by public auction.
On 9 March 1971 the Assistant Registrar of Co opera tive Societies, Maharashtra, appointed a Special Liquidator of the Society under section 102 of Maharashtra Co operative Societies Act, 1960.
The Assistant Registrar communicated the order of appointment liquidator to the mortgagee on 22 April 1971.
The order of appointment of a liquidator was published in Maharashtra Government Gazette on 29 April 1971.
The mortgagee advertised through Government auc tioner for public auction of the property.
The public auction was held on 14 April 1971.
The claim was for Rs.1,22,888.22 paise.
The appellant was declared the highest bidder for Rs.1,31,001/ .
The terms of sale inter alia were that 25 per cent was to be paid in advance and the balance in 30 days.
The sum of Rs.33,000/ was paid as 6 1546SCI/76 344 25 per cent advance and the balance purchase price of Rs.98,001/was paid to attorneys of the mortgagee.
The auction purchaser took possession on 17 April 1971.
On 13 August 1971 the Society filed a dispute before the Officer on Special Duty under the Maharashtra Co operative Societies Act against the auction purchaser and the mortga gee for injunction against completing sale.
The Society obtained an ex parte injunction restraining transfer.
On 29 September 1971, the interim injunction was vacated.
Thereafter the Society filed an appeal against the said order before the Appellate Tribunal.
In the meantime the appellant filed a writ petition in the Bombay High Court under Article 227 of the Constitution.
On 16 June 1972 there was an interim order by the High Court in the writ petition.
The Society undertook not to dispose of property until disposal of dispute.
Both par ties were allowed to keep watchmen.
The Society borrowed a sum of Rs.1,31,000/ and paid the same to the mortgagee on 15 October 1972.
On 16 January 1975 the Officer on Special Duty delivered judgment.
He held that the dispute was maintain able under section 91 of the Maharashtra Co operative Socie ties Act.
The Society was held not competent to challenge the auction sale held on 14 April 1971.
It was also held that the validity of auction was not affected.
The mortgagee was held entitled to exercise power of sale as a secured creditor without being affected by the winding up order against the Society.
It was also held that the mortgagee did ' not commit any breach of the statutory provisions of section 69 of the .
The sale was pot vitiated.
It was found that there was no irregularity at the auction and there is no ground for setting aside the sale.
The society was entitled to redeem the proper ty because the conveyance was not complete.
The auction purchaser filed before the Maharashtra State Cooperative Appellate Court an appeal against the said order.
In appeal the plaint was allowed to be amended and prayer for redemption was allowed to be introduced.
On 18 April 1975 the Maharashtra State Cooperative Appellate Court dismissed the appeal and held that the dispute as initiated by the Society fell within the ambit of section 97 of the Maharashtra Cooperative Societies Act.
The Appel late Court further held that there was no complete sale within the meaning of section 69(3) of the and the equity of redemption was therefore not lost.
It was further held that the auction price was grossly inadequate.
The auction sale was not a sale after a fair competition.
The Mortgage Deed provided inter alia as follows : 345 "it is hereby agreed and declared that it shall be lawful for the mortgagees at any time without any further consent on the part of the mortgagors to sell the said mortgaged premises . .
The aforesaid power shall be deemed to be a power to sell or concur in selling the said mortgaged premises in default of payment of the mortgage money without the intervention of the court within the meaning of section 69 of the .
" Clauses (7), (8) and (33) in the Conditions of Sale may be referred to.
Clause (7) provided as follows.
Upon payment of the balance Of the purchase price, the purchaser shall be enti tled to a conveyance from the vendors.
The vendors shall in the conveyance of the property purchased by purchaser give the usual covenant required of a limited owner against encumbrances.
The vendors shall give no other covenant required of an absolute of full owner.
The vendors shall not be required to procure the consent of the mortgagors or of any other person in the conveyance.
Clause (8) was as follows.
After payment of the balance of the purchase money the purchaser shall be entitled to the rents and profits of the said property.
The vendors as the mortgagees are not in possession of the property and will not do anything to deliver possession of the proper ty to the purchaser.
The vendors as the mortgagees shall not be able to give vacant or symbolic possession of the property to the purchaser.
On payment of the balance of the purchase price the purchaser shall at his own cost be at liberty to take such steps as the purchaser may deem neces sary for obtaining possession of the property from the mortgagors.
Clause (33) provided as follows.
If the mortgagors shall deposit all the amounts due to the vendors as mortga gees in court or pay the same to the vendors or their attor neys between the date of sale and the completion thereof and if as a result thereof the vendors have to reconvey the property to them or if the vendors cannot thus proceed with the sale and the sale is not completed on that account the vendors shall return the said deposit to the purchaser without any interest and/or costs and the vendors as such mortgagees shall not be held liable for any damage.
Counsel for the appellant advanced these contentions.
First, under section 69 of the a mortgagor confers on the mortgagee a power of sale through Court Or without intervention of court.
The power of sale is of the entire legal estate of the mortgagor.
Second, when such a power is conferred it is agency coupled with interest under section 202 of the , the agency cannot be revoked without payment to mortgagee.
Third,if the power is acted upon revocation even on payment cannot nullify acts pursuant to powers.
Reliance was placed on sections 203 and 204 of the .
Fourth, if the act done pursuant to power is that the property is put up for sale and it is knocked down it is an act done by the mortgagee for mortgagor In 346 other words it is as if an act done by the mortgagor.
The, sale pursuant to the power is a subsequent act within the meaning and this subsequent act will extinguish the mortgagor 's right of redemption.
Fifth, in a suit for specific performance by auction pur chaser the purchaser will be entitled to specific perform ance because it is a sale by mortgagor.
Counsel for the appellant relied on two English deci sions.
These are: Waring (Lord) vs London and Manchester Assurance Co. (1), and Property & Bloodstock Ltd. vs Emer ton(2) in support of the propositions that the mortgagor 's right to redemption would be extinguished when the mortgagee exercised the power of sale and the third party entered into a binding contract to purchase the property.
The English decisions are based on the provisions of the English Law of Property Act.
The provisions create a statu tory power of sale, which gives to a mortgagee power to sell the mortgaged property, and it means that the mortgagee has power to sell out and out by private contract or by auction, and subsequently to complete the conveyance.
The English decisions are that if a mortgagee exercises power under section 100(1)(i) of the Law of Property Act, 1925, to sell the mortgaged property by public auction or by private contract it is binding on the mortgagor before completion unless it is proved that he exercised it in bad faith.
It was said in the Property & Bloodstock case (supra) that the contract for sale by the mortgagees to the pur chaser precludes the mortgagor from his right of redemp tion pending completion even if the property is sold subject to one or more conditions.
The English decision naturally notices distinction between condition precedent and the terms of contracts of sale, namely, conditions dealing with matters of title for carrying out the contract.
The mere fact that the label "condition" happens to be attached to conditions does not preclude its being in the latter catego ry of "condition" or matter of title.
The condition that the sale is subject to the reversioner 's licence being obtained where necessary. is held in the English decision to be commonly regarded as no more than a term of the contract relating to title.
The provisions in the relevant to the purpose of present appeal are sections 54, 60 and 69.
Under section 54 of the , sale is a transfer of ownership in exchange for a price paid or promised or part paid and partpromised.
Such transfer in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a rever sion or other intangible thing can be made only by a regis tered instrument.
A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
An English Mortgage is defined in section 58(e) of the .
Where the mortgagor binds himself to repay the mortgage money on a certain date, and transfers the mortgaged pro (1) (1935) Chancery 310.
(2) (1968) L.R. Chancery 94.
347 perty absolutely to the mortgagee, but subject to a proviso that he will retransfer it to the mortgagor upon payment of the mortgagemoney as agreed, the transaction is called an English mortgage.
The Rights and Liabilities of Mortgagor are dealt with in section 60 of the .
It is that at any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgagemoney, to require the mortgagee (a) to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee, (b) where the mortgagee is in possession of the mortgaged property to deliver possession thereof to the mortgagor and (c) at the cost of the mortgagor either to re transfer the mortgaged property to him or to such third person as he may direct, or to execute and to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished.
There is a proviso that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court.
The right conferred by section 60 of the Trans fer of Property Act is called a right to redeem.
Therefore, the said section 60 provides for a right of redemption provided that the right has not been extinguished by the act of parties.
Section 69 of the deals with mortgagees ' power of sale.
Under the said section 69(1)(c), a mortgagee has power of sale without the intervention of the Court where power is conferred by the mortgage deed and the mortgaged property or any part thereof was on the date of the execution of the mortgage deed, situate within the towns of Calcutta, Madras, Bombay or in any other town or area which the State Government, may, by notification in the official Gazette, specify.
The principal question in this appeal is whether the right to redemption has been extinguished by any act of the parties.
The English decisions are based on the provisions of the Law of Property Act, 1925.
In England sale is ef fected by the contract of sale, and in India an agreement for sale is not a sale or transfer of interest.
In England, a mortgagee gets an equitable interest in the property.
Under the English doctrine a contract of sale transfers an equitable estate to the purchaser.
The Court does not assist the mortgagor by granting him a remedy unless there is collusion on the part of the mortgagee.
In India there is no equity or right in property created in favour of the purchaser by the contract between the mortgagee and the proposed purchaser.
In India, there is no distinction between legal and equitable estates.
The law of India knows nothing of that distinction between legal and equitable property in the sense in which it was under stood when equity was administered by the Court of Chan cery in England.
Under the Indian law, there can be but one owner that is, the legal owner.
See Rani Chhatra Kumari vs Mohan Bikram (1) (1) (1931) 58 I.A. 279.
348 A contract of sale does not of itself create any inter est in, or charge on, the property.
This is expressly declared in section 54 of the .
See Rambaran Prasad vs Ram Mohit Hazra(1) & Ors.
C) The fidu ciary character of the personal obligation created by a contract for sale is recognised in section 3 of the and in section 91 of the Trusts Act.
The personal obligation created by a contract of sale is de scribed in section 40 of the as an obligation arising out of contract and annexed to the owner ship of property, but not amounting to, an interest or easement therein.
In India, the word "transfer" is defined with reference to the word "convey".
The word "transfer" in English law in its narrower and more usual sense refers to the transfer of an estate in land.
Section 205 of the Law of Property Act in England defines: "Conveyance" includes a mortgage, charge, lease, assent, vesting declaration, vesting instru ment.
The word "conveys" in section 5 of the transfer of Property Act is used in the wider sense of conveying owner ship.
The right of redemption which is embodied in section 60 of the is available to the Mortga gor unless it has been extinguished by the Act of parties.
The combined effect of section 54 of the Transfer of Proper ty Act and section 17 of the Indian Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption.
In India it is only on execution of the conveyance and registration of transfer of the mortgagor 's interest by registered instru ment that the mortgagor 's right of redemption will be extin guished.
The conferment of power to sell without interven tion of the Court in a Mortgage Deed by itself will not deprive the mortgagor of his right to redemption.
The extinction of the right of redemption has to be subsequent to the deed conferring such power.
The right of redemption is not extinguished at the expiry of the period.
The equity of redemption is not extinguished by mere contract for sale.
The mortgagor 's right to redeem will survive until there has been completion of sale by the mortagee by a registered deed.
In England a sale of property takes place by agreement but it is not so in our country.
The power to sell shall not be exercised unless and until notice in writing requir ing payment of the principal money has been served on the mortgagor.
Further section 69(3) of the Transfer of Proper ty Act shows that when a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise the sale.
Therefore, until the sale is complete by registration the mortgagor does not lose right of redemp tion.
It is erroneous to suggest that the mortgagee is acting as the agent of the mortgagor in selling the property.
The mortgagor exercises his right under a different claim.
The mortgagee 's right is different from, (1) ; 349 the mortgagor 'section The mortgagee exercises his right under a totally superior claim which is not under the mortgagor, but against him.
In other words, the sale is against the mort gagor 's wishes.
Rights and interests of the mortgagor and the mortgagee in regard to sale are conflicting.
In view of the fact that only on execution of convey ance, ownership passes from one party to another it cannot be held that the mortgagor lost the right of redemption just because the property was put to auction.
The mortgagor has a right to redeem unless the sale of the property was complete by registration in accordance with the provisions of the Registration Act.
The decision in Abraham Ezra Issac Mansoor vs Abdul Latiff Usman(1) is correct law that the right to redeem a mortgage given to a mortgagor under section 60 of the , is not extinguished by a contract of sale of the mortgaged property entered into by a mortga gee in exercise of the power of sale given to him under the mortgage deed.
Until the.
sale is completed by a registered instrument, the mortgagor can redeem the mortgage on payment of the requisite amount.
The Madras decision reported in Meenakshi Velu & Ors.
vs Kasturi Sakunthala & Ors.(2) on which counsel for the appellant relied is contrary to the view expressed in Ellappa Naiker and others vs Sivasubramania Maniagaran,(3) and the aforesaid Bombay decision.
We are entirely in agreement with the Bombay decision.
The Madras decision Meenakshi Velu & Ors.
vs Kasturi Sakun thala & Ors.
(2) which holds a contrary view on which coun sel for the appellant relied is wrong.
For the foregoing reasons, the appeal is dismissed with costs to respondent no 1.
P.H.P. Appeal dismissed.
(1)I.L,R, (2) 1.1 .R, (1967) 3 Madras 161.
(3) (1936) 71 Madras Iaw Journal 607. | In 1964, respondent No. 1 Society was registered as a Housing Society.
The Society wanted 12 plots to be con structed for its 12 members.
The Society, therefore, pur chased a plot of land.
In 1966, the Society mortgaged the land and the incomplete structure in favour of respondent No. 2.
In March, 1971, the Special Liquidator of the Socie ty was appointed under section 102 of the Maharashtra Co operative Societies Act, 1960.
The mortgagee after demand ing the dues from the mortgagor advertised the public auc tion for the sale of the property.
In the auction sale the appellant was declared as the highest bidder.
The auction purchaser took the possession of the land and the incomplete structure.
Society filed a dispute before the Officer on Special Duty under the Maharashtra Co operative Societies Act against the auction purchaser and the mortgagee praying for an injunction against the completion of the sale.
The Society in the meanwhile paid the mortgage money to the mortgagee.
The Officer on Special Duty delivered his judg ment in January 1975 and held that the Society was entitled to redeem the property because the conveyance was not com plete.
The appellant filed an appeal before the Maharashtra State Co operative Appellate Court.
In the appeal, plaint was allowed to be amended and a prayer for redemption was allowed to be introduced.
The appellate Court held that there was no complete sale within the meaning of section 69(3) of the and the equity of redemption was, therefore, not lost and that the auction price was grossly inadequate and that the sale was not after a fair competition.
One of the conditions of auction sale was that if the mortgagor deposited the mortgage money in court between the date of the sale and completion thereof and if as a result thereof the mortgagee was to reconvey the property to the mortgagor the auction purchaser Would be entitled to the refund of the amount paid without any inter est and/or cost.
In an appeal by Special Leave the appellant contended: (1) When under section 69 of the a mortgagor confers on the mortgagee a power of sale through court or without intervention of court, the power of sale extends to the entire legal estate of the mortgagor.
(2) When such a power is conferred it is agency coupled with interest under section 202 of the .
If the power is acted upon revocation even on payment of mortgage money cannot nullify acts already done pursuant to the said powers.
(3) Knocking down at an auction sale by the mortgagee pursuant.
to the power of sale extinguishes the mortgagor 's right of redemption.
(4) In a suit for specific performance by auction pur chaser, the purchaser will be entitled to specific perform ance because it is a sale by mortgagor.
Dismissing the appeal, 342 HELD: (1) Under section 69(1)(c) a mortgagee has power to sell without intervention of the court where power is con ferred by the mortgage deed and the mortgaged property or any part thereof was on the date of the execution of the mortgage deed situated in certain big towns.
[347D E] (2) In India the word "transfer" is defined with refer ence to the word ,"convey".
The word "transfer" in English law in its narrower and more usual sense refers to the transfer of an estate in the,land.
Section 205 of the Law of Property Act in England defines "conveyance as including mortgage, charge, lease, assent vesting declara tion, vesting instrument".
The word "conveys" in section 5 of the and section 17 of the Indian Registration Act is that contract for sale in respect of immovable property of the value of more than Rs.100 without registration cannot extinguish the equity of redemption.
In India it is only on execution of the conveyance and regis tration of transfer of the mortgagor 's interest by regis tered instrument that mortgagors right of redemption will be extinguished.
The conferment of power to sell without intervention of the Court in a mortgage deed by itself will not derrive the mortgagor of his right to redemption.
The extinction of the right of redemption has to be subsequent to the deed conferring such power.
The right of redemp tion is not extinguished at the expiry of the period.
The equity of redemption is not extinguished by mere contract for sale.
[348B, D E] Abraham Ezra Issac Mansoor vs Abdul Latif Usman I.L.R. 1944 Bombay 549, approved.
Meenakshi Velu & Ors.
vs Kasturi Sakunthala & Ors.
I.L.R. , overruled.
Ellappa Naiker and Ors.
vs Sivasubramania Manisaran , approved.
(3) Under the English doctrine, a contract of sale transfers an equitable estate to the purchaser.
In India there is no equity or right in property accrued is favour of the purchaser by the contract between the mortgagee and the proposed purchaser.
In India there is no distinction be tween legal and equitable estates.
In India there can be but one owner i.e. legal owner.
[347G H] Rani Chhotra Kumari vs Mohan Bikram (1931) 58 I.A. 279 and Rambaran Prasad vs Ram Mohit Hazra & Ors.
(1967) I SCR 293, followed.
(4) Under section 100(1)(i) of the Law of Property Act, 1925, if a mortgagee exercises power to sell the mortgaged proper ty by public auction or by private contract it is binding on the mortgagor before completion of the sale unless it is proved that the power was exercised in bad faith.
The English decisions are based on the said provision of the English Law of Property ,Act and, therefore, they are not applicable to India.
[346 B D] Waring (Lord) vs London and Manchester Assurance Co. (1935) Chancery 310 and Property & Bloodstock Ltd. vs Emer ton (1968) L.R. Chancery 94 distinguished. |
Civil Appeal No. 424 1971.
Appeal from the Judgment and Order dated the 22 2 1971 of Madras High Court in W.P. No. 3125 of 1970.
M. Natesan, and (Mrs).
section Gopalakrishanan, for the Appel lant.
K.S. Ramamurthi, A. T.M. Sampath, M.M.L. Srivastava and E.C.Agarwala, for Respondent No. 1.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This appeal, without any merit, deserves to be dismissed without much ado.
The few facts of the case are that the appellant and the respondent, both operators Of stage carriages, applied for a permit on an 86 Km.
route.
Marks were awarded to both under the relevant Motor Vehicles Rules to settle their compara tive merit.
The appellant secured 8.79 marks and the re spondent 12.08.
The latter thus secured an easy arithmeti cal victory over the former and the sense of the scheme would have ordinarily led to the award of the permit to the respondent.
However, the Road Transport Authority preferred the candidate with the lesser marks on the compassionate ground that the rival with the larger marks had already got a permit a couple of months before, on an overlapping route of 53 Km.
On appeal, the Appellate Tribunal set aside this award and granted 10 1546 SCI/76 408 the permit to the one who had more merit.
This has been affirmed throughout, repelling the challenge by writ peti tion.
The aggrieved appellant contends that his permit should not have been set aside, the ground being that the respondent had got an earlier permit on a part of the route.
We are not persuaded about this ground being good.
Permits cannot be equated with distribution of patron age.
We must remember that public interest is at stake when public transport services are operated.
The scheme of the statute, viz., the is that he who can serve the travelling public best, is to be chosen as the permit holder.
Considerations of grace, charity and compas sion at the expense of public interest are an act of unfairness to the Act.
The conclusion, therefore is that the appellant 's claim was rightly rejected and the respond ent 's award was rightly made.
We dismiss the appeal but in the circumstances without costs.
P.H.P. Appeal dis missed. | The appellant and the respondent applied for a permit of stage carriages.
The respondent secured higher marks than the appellant.
The Road Transport Authority preferred the appellant on the compassionate ground that the respondent already had another permit on a route which was partly over lapping over the route in question.
On an appeal the Appellate Tribunal set aside the order of the Transport Authority and granted the permit to the respondent.
Dismissing the appeal, HELD: Permits cannot be equated with distribution of patronage.
Public interest is at stake when public trans port services are operated.
The scheme of the Motor Vehi cles Act and the Rules is that he who can serve the travel ling public best is to be chosen as the permit holder.
Considerations of grace, charity and compassion at the expense of public interest are an act of unfairness to the Act.
[408B C] |
Appeal No. 183 of 1952.
Appeal by special leave from the Judgment and Decree dated the 16th day of February 1950 of the Madras High Court in Second Appeal No. 1826 of 1945 from Original Decree dated the 16th March, 1945, of the Court of District Judge, East Godavari at Rajahmundry in A.S. No. 32 of 1943 arising out of the Decree dated the 31st October, 1942, of the Court of Sub Judge, Rajahmundry in Suit No. 17 of 1940 and O.S. No. 39 of 1939.
B. Somayya (K. R. Chaudhury and Naunit Lal, with him) for the appellant.
K. section Krishnaswamy Aiyangar, (K. R. Krishnaswamy, with him) for respondents Nos.
I to 4. 1955.
November 4.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
This is an appeal by special leave against the judgment of the Madras High Court in a second appeal which reversed the concurrent judgments of the courts below, and granted a decree 941 in favour of the respondents for partition and possession of 126 acres 33 cents out of a parcel of land of the extent of 503 acres 18 cents in the village of Kalavacherla and of 10 acres 12 cents out of a parcel of land of the extent of 40 acres 47 cents in the village of Nandarada, with mesne profits, past and future.
All these lands measuring 543 acres 65 cents were purchased by five co sharers on 5 6 1888 under two sale deeds, Exhibits P and P 1.
One of these shares of the extent of about 218 acres was, at the material dates, held in common by two brothers, Rangaraju and Kumara, the former owning 136 acres 45 cents and the latter 81 acres 45 cents.
On 19 8 1908 Kumara executed a simple mortgage, Exhibit Q, over 81 acres 45 cents belonging to him for Rs. 1,000 in favour of Nallapparaju, who with his undivided brother, Achutaramaraju, held a share in the two parcels of land aforesaid in Kalavacherla and Nandarada.
On 19 7 1909 both Rangaraju and Kumara executed a mortgage, Exhibit A, for Rs. 2,000 over all the 218 acres belonging to them in favour of Achutaramaraju.
On 4 6 1910 Kumara again created a mortgage over 81 acres 45 cents belonging to him, Exhibit Q 1 for Rs. 2,500 in favour of Achutaramaraju.
On 14 12 1911 Achutaramaraju executed a mortgage for Rs. 14,000 in favour of one Merla Agastayya, Exhibit C, over the properties which he held in full ownership as co sharer, and also the mortgage right which he held over the properties belonging to Rangaraju and Kumara under the three mortgage deeds, Exhibits Q, A and Q 1.
On 29 8 1920 Kumara sold the 81 acres 45 cents belonging to him and comprised in the mortgages aforesaid to Achutaramaraju for Rs. 11,000 as per Exhibit G, and thereby the two deeds, Exhibits Q and Q 1 became completely discharged and Exhibit A to the extent of the half share of Kumara.
The position then was that Achutaramaraju became the owner of 81 acres 45 cents out of the properties mortgaged under Exhibit A, and continued to be a simple mortgagee as regards the rest of them to the extent of half the amount due therein.
By virtue of section 70 of the Transfer of 942 Property Act, the sale under Exhibit G would enure for the benefit of the mortgagee, Merla Agastayya, being an accession to the interest of his mortgagor.
On 20 1 1924 the representatives of Merla Agastayya assigned their interests in the mortgage, Exhibit C, to the present appellant, who instituted O.S. No. 25 of 1927 on the file of the court of the Subordinate Judge of Kakinada to recover the amount due thereon by sale of the hypotheca.
Achutaramaraju, the mortgagor, and the members of his family were defendants I to 4 in that suit.
Kumara was impleaded as the 14th defendant and Rangaraju and his son as defendants 15 and 16.
In the plaint, it was alleged that the properties comprised in the mortgage deed, Exhibit C, consisted of the properties belonging to the mortgagors in full ownership as co sharers and also of the mortgage right under Exhibits Q, A and Q 1.
Then there was an allegation that defendants I to 4 had themselves purchased the mortgaged properties "towards discharge of the first defendant 's mortgage debts".
As a statement of fact, this was not accurate, because the purchase by Achutaramaraju was only of 81 acres 45 cents belonging to Kumara and the re maining properties continued to be held by Rangaraju, and Achutaramaraju was only a mortgagee thereof under Exhibit A.
There were the further allegations that defendants 14 to 16 were impleaded as parties because they were in possession of the properties, and that they were the predecessors in title in respect of the properties which were mortgaged under Exhibits Q, A and Q 1.
Then there was the general prayer for the sale of the properties.
The mortgagors, defendants 1 to 4, entered into a compromise with the plaintiff, while defendants 14 to 16 remained expert.
On 31 1 1931 the suit was decreed in terms of the compromise as against defendants I to 4 and ex parte as against defendants 14 to 16, and a final decree was passed on 6 11 1932.
On 23 8 1934 the decree holder filed E.P. No. 99 of 1934 praying for the sale of the hypotheca including the properties mentioned in Exhibit A. Defendants 15 and 16 then intervened, and filed an objection to 943 their being sold on the ground that the mortgage had been discharged in 1923, and that the exparte decree against them had been obtained fraudulently.
This application was rejected by the Subordinate Judge on 26 8 1935, and an appeal against this order to the High Court, Madras was also dismissed on 1 9 1938.
Meanwhile, 163 acres 18 cents out of the properties mortgaged under Exhibit A, of which 81 acres 86 1/2 cents belonged to Rangaraju, were brought to sale on the 14th and 15th April 1936, and purchased by the decree holder himself.
The sale was confirmed on 26 6 1936, and possession taken on 15 12 1936.
But before possession was taken, on 14 12 1936 Rangaraju and his sons instituted O.S. No. 268 of 1936 in the District Munsif 's court, Rajahmundry for a declaration that the decree in O.S. No. 25 of 1927 had been obtained fraudulently, and that the decree holder was not entitled to execute the decree as against their pro perties.
An objection was taken to the jurisdiction of the court of the District Munsif to try this suit, and eventually, the plaint was returned to be presented to the proper court.
Thereupon, they instituted on 7 8 1939 the present suit, O.S. No. 39 of 1939 on the file of the District Court, East Godavari for a declaration that the decree in 0.
section No. 25 of 1927 was obtained by suppressing service of summons, and was therefore void and could not affect their title to 136 acres 45 cents which were mortgaged under Exhibit A.
The suit was transferred to the court of the Subordinate Judge of Rajahmundry, and was numbered as O.S. No. 79 of 1946.
In his written statement, the appellant denied that the decree in O.S. No. 25 of 1927 was obtained fraudulently, and contended that the present suit was barred by limitation.
He also pleaded that as he had purchased the properties in execution of the decree and obtained possession thereof, the suit which was one for a bare declaration that the decree was void and inexecutable was not maintainable.
It must be mentioned that while 81 acres 86 1/3 cents of land belonging to Rangaraju and his sons had been sold on the 14th and 15th April 1936, their remaining properties of the 944 extent of 54 acres 58 1/2 cents were sold after the insti tution of O.S. No. 268 of 1936 in the court of the District Munsif, Rajahmundry.
In view of the objections aforesaid, the plaintiffs amended the plaint by adding a prayer that 136 acres 45 cents out of the total of 543 acres 65 cents in schedule A and belonging to them might be partitioned and put in their separate possession.
The Subordinate Judge of Rajahmundry dismissed the suit on the ground that no fraud had been established, and that the suit was barred by limitation in so far as it sought to set aside the decree on the ground of fraud.
The plaintiffs appealed against this judgment to the District Court of East Godavari, which by its judgment dated 16th March 1945 affirmed the decree of the Subordinate Judge.
The plaintiffs then preferred Second Appeal No. 1826 in the High Court, Madras.
There, for the first time the contention was pressed that the decree in O.S. No. 25 of 1927 on its true construction directed a sale only of the mortgage rights which Achutaramaraju had over the A schedule properties, and that the sale of the properties themselves in execution of that decree was in excess of what the decree bad directed., and was therefore void, and that the plaintiffs were accordingly entitled to recover possession of those properties ignoring the sale.
Satyanarayana Rao, J. who heard the appeal, construed the plaint as sufficiently raising this question and issue (2) (b) as covering this contention, and accordingly directed the District Judge to return a finding on the question as to whether the sale of the properties was warranted by the terms of the decree.
The District Judge of East Godavari to whom this issue was referred, held that the decree directed the sale of only the mortgage rights of Achutaramaraju under Exhibit A. and that the sale of the properties themselves was not in accordance with the decree.
But he further held that this was an objection relating to the execution of the decree which could be agitated only before the executing court, and that a separate suit with reference to that matter was barred under section 47, Civil 945 Procedure Code.
On this finding, the second appeal came up for final disposal before Satyanarayana Rao, J. who agreed with the District Judge that the sale of the properties was not authorised by the decree, and was therefore void.
But he declined to entertain the objection that the suit was barred by section 47, Civil Procedure Code, on the ground that it had not been taken in the written statement, and was a new contention preferred for the first time at the stage of second appeal.
In the result,, he granted a decree for partition and delivery of 136 acres 45 cents out of the properties mentioned in schedule A to the plaintiffs, and mesne profits, past and future.
Against this judgment, the defendant prefers the present appeal, and insists that the suit is liable to be dismissed as barred by section 47, Civil Procedure Code.
On behalf of the appellant, it was contended by Mr. Somayya that the question whether having regard to section 47 the suit was maintainable was argued before the learned Judge before he called for a finding, and that it ought to have been therefore considered on the merits, and that, in any event, as it was a pure question of law and went to the root of the matter, it ought to have been entertained.
On behalf of the respondents, Mr. Krishnaswami Iyengar vehemently contends that as the objection to the maintainability of the suit based on section 47 was not taken in the written statement, the learned Judge had a discretion whether he should permit the point to be raised for the first time in second appeal or not, and that we should not interfere with the exercise of that discretion in special appeal.
The basis on which the suit has now been decreed is that the decree in 0.
section No. 25 of 1927 properly construed directed only a sale of mortgage rights under Exhibit A and not of the properties, but it must be conceded that this point does not distinctly emerge on the face of the plaint.
It is true that there are allegations therein which might be read as comprehending that question, but they are vague and elusive, and what is more, this contention was not argued either in the court of the 946 Subordinate Judge of Rajahmundry or in the District Court of East Godavari, and it is only in second appeal that the question appears to have been first thought of in this form.
Though we are not prepared to say that the allegations in the plaint are not.
sufficient to cover this point, we are of the opinion that they are so obscure that it is possible that the appellant might have missed their true import, and omitted to plead in answer thereto that the suit was barred by section 47.
Apart from this, it is to be noted that this point does not involve any fresh investigation of facts.
Indeed, when the matter was before the District Judge in pursuance of the order of the High Court calling for a finding, counsel on both sides understood it as involving a decision on this point as well, and the argument proceeded on the footing that it was a pure question of law involving no further enquiry on facts.
We have therefore permitted the appellant to raise this contention.
Mr. Somayya for the appellant does not challenge the finding of the District Court confirmed by the High Court that the decree directed only the sale of the mortgage rights of Achutaramaraju under Exhibit A, but he contends that the sale in execution of that decree of not merely the mortgage rights under Exhibit A but of the properties themselves was excessive execution against which the judgment debtor was entitled to obtain relief by application to the execution court, and that a separate suit with reference thereto would be barred under section 47, Civil Procedure Code.
It is well settled that when a sale in execution of a decree is impugned on the ground that it is not warranted by the terms thereof, that question could be agitated, when it arises between parties to the decree, only by an application under section 47, Civil Procedure Code and not in a separate suit.
In J. Marret vs Md. K. Shirazi & Sons(1) the facts were that an order was made by the execution court directing, contrary to the terms of the decree, payment of a certain fund to the decree holder.
A separate suit (1) A.I.R. 1930 P.C. 86. 947 having been instituted by the judgment debtor for recovery of the amount on the ground that the payment was not in accordance with the decree, it was held by the Privy Council that the action was barred under section 47.
A case directly in point is Venkatachalapathy Aiyen vs Perumal Aiyen(1).
There, the suit was to enforce a mortgage which related both to properties held in ownership by the mortgagor and mortgage rights held by him.
In execution of the decree passed therein, the properties themselves and not merely the mortgage rights were sold.
The judgment debtor then sued for a declaration that what was sold was only the mortgage right and to recover possession of the properties.
It was held that such a suit was barred under section 47.
Vide also the decisions in Biru Mahata vs Shyama Charan Khawas(2), Abdul Karim vs Islamunnissa Bibi(3) and Lakshmi narayan vs Laduram(4).
The position is, in our opinion, too well settled to be open to argument, and it must accordingly be held that the present suit is barred under section 47, Civil Procedure Code.
That, however, does not conclude the matter.
Section 47, clause (2) enacts that "the Court may, subject to any objection as to limitation or jurisdiction, treat a proceeding under this section as a suit or a suit as a proceeding. . .
Under this provision, this Court has the power to treat the plaint presented on 7 8 1939 as an application under section 47 provided that on that date an application for the relief claimed was not barred by limitation, and provided further that the court in which it was filed was competent to execute the decree.
On the question of limitation, the relevant dates are the 14th and 15th, April 1936, when 81 acres 861 cents belonging to the plaintiffs were sold, and 15th December 1936 when possession was taken thereof through court.
As regards the remaining properties, the exact date on which they were, sold does not appear on the record, but it is sufficient for the present purpose that it was subsequent to the institution of O.S. No. 268 of 1936 on 2,0.4 (1) (2) Cal.
(3) All. 339.
(4) [1931] A.I.R. 1932 Bom.
120 948 the file of the District Munsif 's court, Rajahmundry, which was on 14 12 1936.
Now, the point for determination is whether the plaint was barred by limitation either under article 165 or article 166 of the Indian Limitation Act, if it is treated as an execution application presented.
on 7 8 1939, or whether it was in time under article 181.
Under article 165, an application by a person dispossessed of immovable properties and disputing the right of the decree holder or purchaser at an execution,sale to be put in possession must be filed within 30 days of dispossession.
If this is the article applicable to the present proceedings, then it must be held that the plaint treated as an execution application was filed out of time.
In Vachali Rohini vs Kombi Aliassab(1), a Full Bench of the Madras High Court has held, dissenting from the view previously ex pressed in Ratnam Aiyar vs Krishna Doss Vital DSS(2) and following Abdul Karim vs Mt.
Is amunnissa Bibi (3), that this article applies only to applications for being restored to possession by persons other than judgment debtors, as under Order XXI, rule 100, Civil Procedure Code and that applications by judgmentdebtors claiming relief on the ground that their properties had been erroneously taken in execution of the decree are not governed by it.
This view was approved and followed in Rasul vs Amina (4) and Bahir Das vs Girish Chandra(1).
We are of the opinion that the law has been correctly laid down in the above decisions, and that in accordance therewith, the present proceedings are not barred by article 165.
Coming next to article 166, an application by a judgment debtor to set aside a sale in execution of a decree has, under that article, to be filed within 30 days of the sale.
If the present proceedings are governed by this article, there can be no question that they are barred by limitation.
But then, there is abundant authority that article 166 applies only when the sale is one which has under the law to be 2,0.4 (1) Mad.
(2) Mad.
(3) All. 339 (4) Bom.
(5) [1922) A.I.R. 1923 Cal.
949 set aside as for example, under Order XXI, rules 8990 and 91, but that it has no application when the sale is inoperative and void.
In Seshagiri Rao vs Srinivasa Rao(1), the appellant was a party to the suit, but the decree had exonerated him from liability.
In execution of the decree, his three fourths ' share in the properties was sold on 26 1 1910 and purchased by the decree holder and possession delivered to him on 16 12 1910.
The appellant then filed a suit on 25 7 1911 to set aside the sale on the ground that it was in contravention of the decree and therefore void.
An objection having been taken by the defendant that the suit was barred under section 47, the court, while upholding the same, held that the plaint could be treated as an application under that section if it was in time as an execution application, and the question arose for decision whether the application was governed by article 166 or article 181 of the Indian Limitation Act.
It was held that as the sale was a nullity, it had not to be set aside under the law, and therefore the article applicable was article 181 and not article 166.
This statement of the law was ap proved by a Full Bench of the Madras High Court in Rajagopalier vs Ramanujachariar.
A similar decision was given in, Manmothanath Ghose vs Lachmi Devi(1), wherein it was observed by Page, J. that the sale being void need not have been set aside at all, and the order to be passed was "in substance merely a declaration that the sale was null and of no effect".
The question whether an application by a judgmentdebtor for setting aside a sale on the ground that there was excessive execution and that the sale of his properties was in consequence void was governed by article 166 or article 181 came up directly for consideration in Nirode Kali Roy vs Harendra Nath(1).
In holding that the application was governed by article 181, B. K. Mukherjea, J., (as he then was) observed that "article 166 must be confined to cases where the sale is voidable only and not void when the execution sale is a nullity, if a party files an application under (1) Mad. 813.
(2) [ Mad. 288.
(3) Cal 96.
(4) I.L.R. , 950 section 47 to have it pronounced a nullity or for setting it aside for safety 's sake to avoid future difficulties, the proper article would be article 181 and not article 166 of the Indian Limitation Act".
The decisions in Seshagiri Rao vs Srinivasa Rao(1) and Rajagopalier vs Ramanujachariar(2) were again followed in Ma We Gyan vs Maung Than Byu(3), wherein it was held that if the execution sale was void, it was not necessary for the applicant to have it set aside, and that even if there was such a prayer, that would not affect the real nature of the application which was really "for an order directing the respondent to deliver property on the ground that there was no valid sale".
We are in agreement with these decisions, and hold that when a sale in execution is inoperative and void, an application by a judgment debtor to have it declared void and for appropriate reliefs is governed by article 181 and not article 166.
On the findings of the courts below that the decree in O.S. No. 25 of 1927 properly construed authorised only the sale of the mortgage rights of Achutaramaraju under Exhibit A and not the lands which were the subject matter of that mortgage, the respondents were entitled to apply to the court for delivery of possession of the properties wrongly sold through process of court and delivered to the appellant, and such an application would be governed by article 181.
Then, there is the further question whether applying article 181, the plaint presented on 7 8 1939 was within time under that article.
As already stated, 81 acres 581 cents were sold on the 14th and 15th April 1936.
If the starting point of limitation is the date of sale, then the application must be held to be barred, unless the period during which the suit was pending in the court of the District Munsif, Rajahmundry, is deducted under section 14 of the Indian Limitation Act.
But if limitation is to be reckoned from the date of dispossession, then the application would clearly be in time.
Under article 166, an application to set aside a sale must be presented within 30 days thereof.
(1) Mad. 313.
(2) (1923] I.L.R. 47 Mad.
(3) A.I.R. 1937 Rang.
951 But if the sale in question was void, and for that reason article 166 becomes inapplicable, then the date of the sale must vanish as the starting point of limitation, as it has no existence in law.
It is not until the purchaser acting under colour of sale interferes with his possession that the person whose properties have been sold is really aggrieved, and what gives him right to apply under article 181 is such interference or dispossession and not the sale.
As observed in Ma We Gyan vs Maung Than Byu(1), such an application is really one for an order for redelivery of the properties wrongly taken possession of by the purchaser.
If that is the correct position, the right to apply arises by reason of dispossession and not of sale, and the starting point for limitation would be the date of dispossession.
It was so held in Chengalraya vs Kollapuri(2).
There, the properties of a party to the suit who had been exonerated by the decree were sold in execution of that decree on 8 1 1918 and purchased by the decree holder.
It was found that lie took actual possession of the properties in 1919.
On 23 11 1921 the representatives in interest of the exonerated defendant commenced proceedings to recover possession ,of the properties from the decree holder purchaser on the ground that the sale under which he claimed was void.
It was held that the proper article of limitation applicable was article 181, and that time commenced to run under that article from the date not of sale but of actual dispossession, and that the proceedings were accordingly in time.
We agree with this decision, and hold that an application by a party to the suit to recover possession of properties which had been taken delivery of under a void execution sale would be in time under article 181, if it was filed within three years of his dispossession.
Therefore, there is no legal impediment to the plaint filed on 7 8 1939 being treated as an application under section 47, on the ground that it is barred by limitation.
The next question for consideration is whether the present suit was filed in a court which had jurisdiction to execute the decree in O. section No. 25 of 1927.
(1) A.I.R. 1937 Rang.
(2) A.I.R. 1930 mad.
12. 952 That was a decree passed by the Subordinate Judge of Kakinada, whereas the present suit was filed in the District Court, East Godavari to which the court of the Subordinate Judge of Kakinada is subordinate.
Section 38, Civil Procedure Code provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution.
The District Court of East Godavari is neither the court which passed the decree in O.S. No. 25 of 1927 nor the court to which it had been sent for execution.
But it is common ground that when the present suit was instituted in the District Court, East Godavari, it had jurisdiction over the properties, which are the subject matter of this suit.
It is true that by itself this is not sufficient to make the District Court of East Godavari the court which passed the decree for purpose of section 38, because under section 37, it is only when the court which passed the decree has ceased to have jurisdiction to execute it that the court which has jurisdiction over the subject matter when the execution application is presented can be considered as the court which passed the decree.
And it is settled law that the court which actually passed the decree does not lose its jurisdiction to execute it, by reason of the subject matter thereof being transferred subsequently to the jurisdiction of another court.
Vide Seeni Nadan vs Muthuswamy Pillai(1) Masrab Khan vs Debnath Mali(1) and Jagannath vs Ichharam(3).
But does it follow from this that the District Court, East Godavari has no jurisdiction to entertain the execution application in respect of the decree in O.S. No. 25 of 1927 passed by the court of the Subordinate Judge, Kakinada? There is a long course of decisions in the High Court of Calcutta that when jurisdiction over the subjectmatter of a decree is transferred to another court, that court is also competent to entertain an application for execution of the decree.
Vide Latchman vs Madan Mohun (4), Jahar vs Kamini Devi(1) and Udit Narayan vs Mathura Prasad(6).
But in Ramier vs 2,0.3 (1) Mad. 821.
F.B. (2) I.L.R. (3) A.1 R. (4) Cal.
(5) (6) Cal.
974. 953 Muthukrishna Ayyar(1), a Full Bench of the Madras High Court has taken a different view, and held that in the absence of an order of transfer by the court which passed the decree, that court alone can entertain an application for execution and not the court to whose jurisdiction the subject matter has been transferred.
This view is supported by the decision in Masrab Khan vs Debnath Mali(1).
It is not necessary in this case to decide which of these two views is correct, because even assuming that the opinion expressed in Ramier vs Muthukrishna Ayyar(1) is correct, the present case is governed by the principle laid down in Balakrishnayya vs Linga Rao(1).
It was held therein that the court to whose jurisdiction the subject matter of the decree is transferred acquires inherent jurisdiction over the same by reason of such transfer, and that if it entertains an execution appli cation with reference thereto, it would at the worst be an irregular assumption of jurisdiction and not a total absence of it, and if objection to it is not taken at the earliest opportunity, it must be deemed to have been waived, and cannot be raised at any later stage of the proceedings.
That precisely is the position here.
We have held that the allegations in the plaint do raise the question of excessive execution, and it was therefore open to the appellant to have raised the plea that the suit was barred by section 47, and then, there could have been no question of waiver.
We have, it is true, permitted the appellant to raise the contention that the present suit is barred by section 47, and one of the reasons therefor is that the allegations in the plaint are so vague that the appellant might have missed their true import.
But that is not a sufficient ground for relieving him from the consequence which must follow on his failure to raise the objection in his written statement.
We agree with the decision in Balakrishnayya vs Linga Rao(,), and hold that the objection to the District Court enter taining an application to execute the decree in 0.
section No. 25 of 1927 is one that could be waived and not (1) Mad. 801.
(2) I.L.R. (3) I.L.R. 954 having been taken in the written statement is not now available to the appellant.
There is thus no legal bar to our treating the plaint presented by the respondents on 7 8 1939 as an execution application under section 47, and in the interests of justice, we direct it to be so treated.
But this should be on terms.
We cannot ignore the fact that it is the gross negligence of the respondents at all stages that has been responsible for all the troubles.
They did not appear in the suit, and put forward their rights under Exhibit A.
They intervened at the stage of execution, but their complaint was mainly that the ex parte decree had been obtained by fraud, a plea which has now been negatived.
Even in this suit.
they did not press the plea on which they have succeeded until they came to the High Court.
Under the circumstances, we think it just that they should be dep rived of all claims for mesne profits down to this date.
In the result, treating the plaint as I an execution application, we direct that the properties mentioned in schedule A to the plaint be partitioned and the respondents put in possession of 126 acres 33 cents in Kalavacherla village and of 10 acres 12 cents in Nandarada village in proceedings to be taken in execution of this order.
The respondents will be entitled to their share of the net income attributable to 136 acres 45 cents aforesaid from this date down to the date on which they are put in separate possession thereof.
Subject to the modification of the decree of the court below as stated above, this appeal will stand dismissed.
The parties will, however, bear their own costs throughout. | The appellant was the assignee of a mortgage dated 14 12 1911, executed by A, which comprised.
lands belonging to the mortgagor and also a mortgage executed by the respondents in his favour on 19 7 1909.
The appellant instituted a suit in the court of the Subordinate Judge of Kakinada, for the recovery of the amount due on the mortgage, dated 14 12 1911, and prayed for sale of the hypotheca.
The respondents were impleaded as defendants but did not appear.
The suit was decreed ex parte, and in execution of the decree, the properties of the respondents, mortgaged to A on 19 7 1909, were brought to sale, and purchased by the decree holder.
The respondents then instituted the present suit in the District Court of East Godavari which then bad jurisdiction over the properties in suit, for a declaration that the decree obtained by the appellant was fraudulent and inoperative and could not affect their title.
The plaint was later on amended and a prayer added that the properties might be partitioned and the respondents put in separate possession of their share.
The trial Judge dismissed the suit and the District Court in appeal affirmed his decision.
Before the High Court in second appeal it was contended for the first time that the decree in question did not direct a sale of the mortgaged properties but a sale of the mort gagee 's rights under the mortgage deed dated 19 7 1909 and as such the sale of the properties was void.
The High Court having called for a finding from the District Court as to what was sold, it was 939 found by that Court that the decree bad really directed a sale of the mortgagee 's rights and not of the properties mortgaged and that there was excessive execution.
It was, however, of opinion that the point should have been taken before the executing court and the suit in so far as it claimed relief on the basis of excessive execution was barred under section 47 of the Code of Civil Procedure.
The High Court declined to entertain the objection that the suit was barred under section 47 as it had not been taken in the written statement and was raised for the first time in second appeal, and decreed the respondent 's suit.
It was contended for the appellant that the High Court should have entertained the objection and held that the suit was so barred.
Held, that the appellant should be permitted to raise the contention.
The point relating to excessive execution had never been specifically raised except before the High Court and the allegations in the plaint were vague and obscure.
It is a pure question of law which requires no further investigation of facts and was understood and debated as such by the parties before the District Court.
That it was well settled that the question whether an execution sale was in excess of the decree and, therefore, not warranted by it could be raised as between the parties only by an application under section 47 of the Code before the executing court and not by a separate suit.
J. Marret vs Md. K. Shirazi & Sons (A.I.R. 1930 P. C. 86), Venkatachalapathy Aiyen vs Perumal Aiyen ([1912] M.W.N. 44), Biru Mohata vs Shyania Charan Khowas ([1895] I.L.R. , Abdul Karim vs Islamunnissa Bibi ([1916] I.L.R. 38 All. 339) and Lakshminarayan vs Laduram ([1931] A.I.R. , approved.
That the court, however, had the power to treat the plaint in the suit as an application under section 47 subject to any objection as to limitation or jurisdiction.
That the application was not barred under article 165 as it ap plied only to applications for restoration to possession by persons other than judgment debtors and bad no application to the present case.
Vachali Bohini vs Kombi Aliassan '([1919] I.L.R. 42 Mad. 753), Batnam Aiyar vs Krishna Doss Vital Doss ([1897] I.L.R. , Basul vs Amina ([1922] I.L.R. and Bahir Das vs Girish Chandra ([1922] A.I.R. 1923 Cal.
287), approved.
Nor could article 166 apply since it had application only where the sale was voidable and not void and had to be set aside.
That the article applicable to a case of a void sale such as the present was article 181 of the Indian Limitation Act.
Seshagiri Rao vs Srinivasa Rao ([1919] I. , Bajagopalier vs Bamanujachariar ([1923] I.L.R. 47 Mad. 288), Manmothanoth Ghose vs Lachmi Devi ([1927] I.L.R. 55 Cal.
96), Nirode Kali Boy vs Harendra Nath (I.L.R. [1938] 1 Cal. 280), and 119 940 Md We Gyan vs Maung Than Byu (A.I.R. 1937 Rang.
126), ap proved.
That the starting point of limitation for an application under article 181 would be the date of dispossession by the purchaser and not the date of the void sale which had no existence in law and the plaint in the present suit, treated as an application, having been filed ,within 3 years of such dispossession was in time.
Chengalraya vs Kollapuri (A.I.R. , approved.
That the District Court of East Godavari to whose jurisdiction the properties had been transferred before the present suit was instituted had by reason of such transfer acquired an inherent jurisdiction over them and if it entertained an application for execution with reference to them such action was no more than an irregular assumption of jurisdiction and no objection to jurisdiction having been taken by the appellant at the earliest opportunity he must be deemed to have waived it and, consequently, there was no legal bar to treating the plaint as an execution application under section 47 of the Code.
Balakrishnayya vs Linga Bao, (I.L.R. , applied.
Case law discussed. |
Appeal No. 138 of 1972.
(From the Judgment and Order dated 20.3.1971 of the Madhya Pradesh High Court in Misc.
Petition No. 313/70).
I. N. Shroff, for the appellants.
S.V. Gupte, J. D. Jain, Miss Kanwaljit Miglani and Balram Sahgal for the respondent.
The Judgment of the Court was delivered by KHANNA, J.
Whether sales tax is payable by a photographer under the Madhya Pradesh General Sales Tax Act (Act 2 of 1959) when the 436 photographer takes photographs or does other photographic work and thereafter supplies the photographic prints to his client or customer is the question which arises for determi nation in this appeal on certificate against the judgment of Madhya Pradesh High Court reported in 28 STC 1.
The High Court answered the question in the negative in favour of the assessee respondent.
The respondent is the proprietor of Kame Photo Studio.
He has apart from his main shop two branches.
He carries on business, inter alia, of buying and selling photographic goods.
After buying photographic goods he either sells them to his customers or uses them in three ways (1) in taking photographs and supplying prints thereof, (2) in making enlargements for the clients who bring their own negatives, and (3) in preparing positive prints of the same size from the negatives brought by the clients.
For doing these various types of works the assessee respondent charges consolidated amount depending upon the work involved and the size and number of prints demanded by the client.
The sales tax authorities assessed the respondent for different periods from April 1, 1964 to March 31, 1969 to sales tax on his turnover on best judgment basis as he had not kept full and complete accounts.
It may be convenient to refer to the figures of assessment for one of the years.
For the year 1964 65 the total turnover of the respondent was taken to be Rs. 41,500.
Out of this amount a deduction of Rs. 6,500 was allowed as relatable to developing and enlargement which was considered to be not chargeable to tax.
The balance of Rs. 35,000 was divided into two parts Rs. 12,000 being treated as relatable to sale of materials as such and the rest Rs. 23,000 being taken to be the re ceipts on account of the supply of photo prints to those who got themselves photographed at the studios.
The respondent filed writ petition to challenge the levy of sales tax on the last item, namely, the item for the supply of photo prints.
The contention of the respondent was that in taking a photograph, preparing its negative and thereafter the final positive print for supplying the same to the client, the respondent undertakes a contract of work and labour and does not enter into a sale transaction.
It was also stated on behalf of the respondent that the prepared positive print was not a marketable commodity and he could not sell the photograph of one person to any other person except with the former 's consent.
As against that, the case of the appellants was that the respondent was carrying on a commercial activity in the nature of trade and business and the finished photographs supplied by him to his customer was a commodity and the supply of same attracted the levy of sales tax.
The High Court, on consideration of the matter, came to the conclusion that the respondent only undertook the contract of work and labour and did not enter into a sale transaction.
The respondent as such was held not liable to pay sales tax in respect of the item to which the writ petition related.
The High Court while accepting the writ petition also observed as under: "We may lastly make it clear that in this case we are not called upon to go into the question whether the material used 437 in preparing the photograph is sold and taxa ble.
The petitioner has alleged in the petition that he was paid full tax on the value of such material and the respondents have neither denied the fact nor have claimed tax on such material.
We, therefore, express no opinion on that question and need not consider either Masanda 's case (1957) 8 STC 370, where the only question referred to this Court was whether such material alone could be taxed, or the observations of the Bombay High Court in Camera House Case (1970)25 STC 354, about severability of the contract into one spearately for service and supply of material.
" In appeal before us Mr. Shroff has assailed the judgment of the High Court.
As against that,.
Mr. Gupte on behalf of the respondent has canvassed for the correctness of the view taken by the High Court.
The question as to whether a contract is a contract of work and labour or a contract for sale is not one free from difficulty.
The reason for that is that in border line cases the distinction between the two types of contract is very fine.
This is particularly so when the contract is a composite one involving both a contract of work and labour and a contract of sale.
Nevertheless, the distinction between the two rests on a clear principle.
A contract of sale is one whose main object is the transfer of property in, and the delivery of the possession of, a chattel as a chattel to the buyer.
Where the principal object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, the contract is one of work and labour.
The test is whether or not the work and labour bestowed end in anything that can properly become the sub ject of sale; neither the ownership of materials, nor the value of the skill and labour as compared with the value of the materials, is conclusive, although such matters may be taken into consideration in determining, in the circum stances of a particular case, whether the contract is in substance one for work and labour or one for the sale of a chattel (see The State of Himachal Pradesh & Ors.
vs Associ ated Hotels of India(1).
The respondent company in that case carried on business as hoteliers.
As a part of its business as hoteliers, the company received guests in its several hotels to whom, besides furnishing lodging, it also served several other amenities, such as public and private rooms, bath with hot and cold running water, linen, meals during stated hours.
The bill tendered to the guests was all inclusive one, namely, a fixed amount for the stay in the hotel for each day and did not contain different items in respect of each of the amenities.
The question which arose for determination was whether the company was liable to pay sales tax under the Punjab General Sales Tax Act, 1948 in respect of meals served in the hotel to the ,guests coming there for stay It was held by the Constitution Bench of this Court that the transaction was essentially one and indivisible, namely, one of receiving a customer in the hotel to stay.
It was essentially one of service by the hotelier in the performance of which, and as part of the amenities incidental to the service, the hotelier served meals at stated hours.
The revenue, it was held, was (1) 29 S.T.C. 474.
438 not entitled to split up the transaction into two parts, one of service and the other of sale of food stuffs.
This Court accordingly came to the conclusion that there was no sale of food stuffs and the respondent company was not liable to pay sales tax in respect of the meals served to the guests in the hotel.
In arriving at this conclusion this Court observed as under: "Thus, in considering whether a transaction falls within the purview of sales tax, it becomes necessary at the threshold to deter mine the nature of the contract involved in such a transaction for the purpose of ascer taining whether it constitutes a contract of sale or a contract of work or service.
If it is of the latter kind it obviously would not attract the tax.
From the decisions earlier cited it clearly emerges that such determina tion depends in each case upon its facts and circumstances.
Mere passing of property in an article or commodity during the course of the performance of the transaction in question does not render it a transaction of sale.
For, even in a contract purely of work or service, it is possible that articles may have to be used by the person executing the work and property in such articles or materi als may pass to the other party.
That would not necessarily convert the contract into one of sale of those materials.
In every case the court would have to find out what was the primary object of the transaction and the intention of the parties while entering into it.
It may in some cases be that even while enter ing into a contract of work or even service, parties might enter into separate agreements, one of work and service and the other of sale and purchase of materials to be used in the course of executing the work or performing the service.
But, then in such cases the trans action would not be one and indivisible, but would fail into two separate agreements, one of work or service and the other of sale.
" Reliance in the above cited case was placed upon an earlier decision of this Court in the case of State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd.(1) wherein the Constitution Bench of this Court held that in a building contract the property in materials used, does not pass to the other party to the contract as movable property.
It would so pass if that be the agreement between the parties.
But if there was no such agreement and the contract was only to construct a building, then the materials used therein would, in the opinion of the Court, become the property of the other party to the contract only on the theory of accre tion.
The distinction between a contract of sale and contract for skill and labour has been discussed at page 10 of the 4th Edn. of "Sale of Goods" by P.S. Atiyah.
The following passage in that book has a material beating so far as the present case is concerned: (1) 9 S.T.C. 353. 439 "The distinction between contracts of sale and contracts for skill and labour has agitated the courts for many years, and though its importance has been greatly diminished by the repeal of Sect.
4 of the Act, it still cannot be ignored.
It was thought for many years that Lee vs Griffin ; laid down that, if a contract would result in the trans fer of the property in goods from one party to another, then it must be a contract of sale.
The view was exploded in Robinson vs Graves where it was held that a contract to paint a portrait was a contract for skill and labour and not a contract for the sale o[ goods, despite the fact that it was the object of the contract to transfer the property in the completed portrait to the defendent.
Green L.J. stated the law as fol lows (1935) 1 K.B. at p. 587: If the substance of the contract . is that skill and labour have to be exercised for the production of the articles and . it is only ancillary to that that there will pass from the artist to his client or customer some materials in addition to the skill in volved in the production of the portrait, that does not make any difference to the result, because the substance of the contract is the skill and experience of the artist in produc ing the picture." Keeping the above principles in view, we may now turn to the facts of the present case.
When a photographer like the respondent undertakes to take photograph, develop the negative, or do other photographic work and thereafter supply the prints to his client, he cannot be said to enter into a contract for sale of goods.
The contract on the contrary is for use of skill and labour by the photographer to bring about a desired result.
The occupation of a photographer, except in so far as he sells the goods pur chased by him, in our opinion, is essentially one of skill and labour.
A good photograph reveals not only the aes thetic sense and artistic faculty of the photographer, it also reflects his skill and labour.
A good photograph in most cases is indeed a thing of beauty.
It not only seeks to mirror and portray a scene from actual life, it also catches and preserves for the future what belongs to and is a part of the fleeting moment.
The ravage brought about by the passage of time, the decay and the ageing process which inevitably set in as the years roll by leave what is pre served in the photograph unaffected.
It is no wonder that an old photograph revives nostalgic memories of days no more, but to which we rook back through the mist of time with fondness even though such fondness has a tinge of sadness.
We, therefore, find no cogent ground to disagree with the High Court in so far as it has decided against the revenue and has held the contract to be one for work and labour.
Our attention has been invited during the course of arguments to some decisions of the High Courts.
It is, in our opinion, not necessary to deal with those cases 12 1546 SCI/76 440 because after giving the matter our consideration was are of the opinion, that the view taken by the High Court in the judgment under appeal substantially represents the correct position in law.
The appeal consequently fails and is dismissed, but in the circumstances without costs.
M.P. Appeal dis missed. | The respondent carries on business, inter alia, of supplying photo prints to those who get themselves photo graphed at his studios.
Sales tax authorities assessed him and levied sales tax on his supply of photo prints.
The respondent filed a writ petition in the High Court contend ing that in supplying photo prints, he did not enter into sale transactions but only undertook contracts of work and labour.
He also refuted the appellant 's contention that a finished photograph was a marketable commodity.
The High Court allowed the writ petition holding the respondent not liable to pay sales tax on the supply of photo prints.
Dismissing the appeal, the Court, HELD: (1) When a photographer undertakes to take photo graph, develop the negative, or do other photographic work and thereafter supply the prints to his client, he cannot be said to enter into a contract for sale of goods.
The con tract on the contrary is for use of skill and labour by the photographer to bring about desired result.
[439E] Masanda 's case (1957) 8 STC 370 and Camera House Case (1970) 25 STC 354, distinguished; 28 S.T.C. 1 MP reversed.
(2) A contract of sale is one whose main object is the transfer of property in, and the delivery of the possession of, a chattel as a chattel to the buyer.
Where the principal object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, the contract is one of work and labour.
The test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale.
[437D E] State of Himachal Pradesh & Ors.
vs Associated Hotels of India Ltd. STC 474 and State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd. STC 353, applied.
Sale of Goods, 4th Edn.
p. 10 by P.S. Atiyah relied upon. |
ICTION: Writ Petition (CRL) Nos.
1566/86, 186/85,192/86,338/88 & 649/87.
(Under Article 32 of the Constitution of India.) R.K. Jain, Rangarajan, Mrs. Urmila Sirur, Mohd. Naseem, Rakesh K. Khanna, P.K. Jain, Mukul Mudgal, Sanjay Parikh, B.P. Singh, P. Krishna Rao, B.K. Prasad, Ms. Malini Poduwal, Lalit Kumar Gupta, Manoj Swarup, Harish Salve, Rajiv Garg, Rajiv Shakdhar, N.D. Garg, L.K. Gupta (Amicus curiae), M. Veerappa and Dalveer Bhandari for the Petitioners.
K. Parasaran, Attorney General, B. Datta, Additional Solicitor General, V.C. Mahajan.
T.U. Mehta, Anand Prakash, Ms. A Subhashini, A.K. Srivastava, S.K. Bhattacharya, M.N.Shroff, Ms. Sushma Ralhan.
Mahabir Singh, AV.
Rangam and R.S. Suri for the Respondents.
519 A.K. Goel, Ajit Pudissery and Mrs. Jayamala Singh for the Interveners.
The following Judgments of the Court were delivered: OZA, J.
These matters came up before us because of the conflict in the two decisions of this Court:(i) T.V. Va theeswaran vs State of Tamil Nadu, ; Sher Singh & Others vs The State of Punjab, ; and observations in the case of Javed Ahmed Abdul Hamid Pawala vs State of Maharashtra, ; In Vatheeswaran 's case, a Bench of two Judges of this Court held that two years delay in execution of the sentence after the judgment of the trial court will entitle the condemned prisoner to ask for commutation of his sentence of death to imprisonment for life.
The Court observed that: "Making all reasonable allowance for the time necessary for appeal and consideration of reprieve, we think that delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke article 21 and demand the quashing of the sentence of death." In Sher Singh 's case which was a decision of a three Judges ' Bench it was held that a condemned prisoner has a right of fair procedure at all stages, trial, sentence and incarceration but delay alone is not good enough for commu tation and two years rule could not be laid down in cases of delay.
It was held that the Court in the context of the nature of offence and delay could consider the question of commutation of death sentence.
The Court observed: "Apart from the fact that the rule of two years run in the teeth of common experience as regards the time generally occupied by pro ceedings in the High Court, the Supreme Court and before the executive authorities.
We are of the opinion that no absolute or unqualified rule can be laid down that in every case in which there is a long delay in the execution of a death sentence, the sentence must be substituted by the sentence of life imprison ment.
There are several other factors which must be taken into account while considering the question as to whether the death sentence should be vacated.
A convict is undoubtedly entitled to pursue all remedies lawfully open to him to get rid 520 of the sentence of death imposed upon him and indeed, there is no one, be he blind, lame, starving or suffering from a terminal illness, who does not want to live.
" It was further observed: "Finally, and that is no less important, the nature of the offence, the diverse circum stances attendant upon it, its impact upon the contemporary society and the question whether the motivation and pattern of the crime are such as are likely to lead to its repetition, if the death sentence is vacated, are matters which must enter into the verdict as to wheth er the sentence should be vacated for the reason that its execution is delayed.
The substitution of the death sentence by a sen tence of life imprisonment cannot follow by the application of the two years ' formula, as a matter of "quod erat demonstrandum".
In Javed 's case, it was observed that the condemned man who had suffered more than two years and nine months and was repenting and there was nothing adverse against him in the jail records, this period of two years and nine months with the sentence of death heavily weighing on his mind will entitle him for commutation of sentence of death into im prisonment for life.
It is because of this controversy that the matter was referred to a five Judges ' Bench and hence it is before us.
Learned counsel for the petitioners at length has gone into the sociological, humane and other aspects in which the question of sentence of death has been examined in various decisions and by various authors.
It is however not disputed that in Bachan Singh etc.
vs State of Punjab etc.
; , constitutionality of sentence of death has been upheld by this Court.
Learned counsel has at length referred to the opinion of Hon.
Mr. Justice P.N. Bhagwati, as he then was, which is the minority opinion in Bachan Singh 's case.
In his opinion Justice P.N. Bhagwati has conducted a detailed research and has considered the materi al about the various aspects of sentence of death.
Learned Attorney General appearing for the respondents also referred to some portions of the judgment but contended that howsoev er condemned the sentence may be but its constitutional validity having been accepted by this Court all this study about looking at it from various angles is not of much consequence.
He also contended that the opinion has been drifting and the statistics reveal that 521 at one time there was a trend towards abolition of death sentence and then a reverse trend started and therefore all this, so far as the present case is concerned, is not neces sary.
One of the contentions advanced by learned counsel for the petitioners was that apart from all other considerations it is clear that this is a sentence which if executed is not reversible and even if later on something so glaring is detected which will render the ultimate conclusion to be erroneous the person convicted and executed could not be brought back to life and it was on this basis that it was contended that although the law provides for the sentence and it has been held to be constitutional but still the Courts should be slow in inflicting the sentence and in fact it was contended that courts are in fact slow in awarding the sentence.
In Bachan Singh 's case, it was observed: "To sum up, the question whether or not death penalty serves any penological purpose is a difficult, complex and intractable issue.
It has evoked strong, divergent views.
For the purpose of testing the constitutionality of the impugned provision as to death penalty in Section 320, Penal Code, on the ground of reasonableness in the light of Articles 19 and 21 of the Constitution, it is not necessary to express any categorical opinion, one way or the other, as to which of these two antitheti cal views, held by the Abolitionists and Retentionists, is correct.
It is sufficient to say that the very fact that persons of reason, learning and light are rationally and deeply divided in their opinion on this issue, is a ground among others, for rejecting the petitioners ' argument that retention of the death penalty in the impugned provisions, is totally devoid of reason and purpose.
If, notwithstanding the view of the Abolitionists to the contrary, a very large segment of people the world over, including sociologists, legislators, jurists, judges and administra tors still firmly believe in the worth and necessity of capital punishment for the pro tection of society, if in the perspective of prevailing crime conditions in India, contem porary public opinion channalised through the people 's representatives in Parliament, has repeatedly in the last three decades, rejected all attempts, including the one made recently, to abolish or specifically restrict the area of death penalty, if death penalty is still a recognised legal sanction for murder or some types of murder in most of the civilised countries in the world, if the framers of the Indian Constitution were fully aware of the existence of death 522 penalty as punishment for murder, under the Indian Penal Code, if the 35th Report and subsequent Reports of the Law Commission suggesting retention of death penalty, and recommending revision of the Criminal Proce dure Code and the insertion of the new sec tions 235(2) and 354(3) in that Code providing for pre sentence hearing and sentencing proce dure on conviction for murder another capital offences were before the Parliament and pre sumably considered by it when in 1972 73, it took up revision of the Code of 1898, and replaced it by the Code of Criminal Procedure, 1973, it cannot be said that the provisions of death penalty as an alternative punishment for murder, in section 302, Penal Code, is unrea sonable and not in public interest.
Therefore, the impugned provision in section 302, vio lates neither the letter nor the ethos of Article 19.
" We are in entire agreement with the view expressed above.
It is not necessary to go into the jurisprudential theories of punishment deterrent or retributive in view of what has been laid down in Bachan Singh 's case, with which we agree but the learned counsel at length submitted that the modern theorists of jurisprudence have given a go bye to the retributive theory of punishment although in some coun tries it is recognised on a different principle i.e. to pacify the public anger whereas some theorists have tried to put both the theories together.
So far as the deterrent theory of punishment is concerned even about that doubts have been expressed as regards the real deterrent effect of punishment.
The absence of determent effect has been at tributed to various causes sometimes long delay itself as public memory is always short.
When the convict is utlimate ly sentenced and executed people have forgotten the offence that he has committed and on this basis it is sometimes felt that it has lost its importance.
In the present case we are not very much concerned with all these questions except to some extent the question of delay and its effect.
It was also contended that this sentence is a sentence which is irreversible thereby meaning that if ultimately some mistake in convicting and executing the sentence is detected after the sentence is executed there is no possi bility of correction.
After all the criminal jurisprudence which is in vogue in our system even otherwise eliminates all possibilities of error as benefit of doubt at all stages goes in favour of accused.
Apart from it there are only a few offences where sentence of death is provided and there too the manner in which the 523 law has now been changed ultimately the sentence of death is awarded in the rarest of rare case.
Therefore not much could be made of the possibility of an error.
The offences in which sentence of death is provided are under Sections 120 B (in some cases), 121, 132,302,307 (in some cases) and 396.
The law as it stood before 1955 the Court was expected to give reasons if it chose not to pass a sentence of death as normally sentence of death was the rule and alternative sentence of imprisonment of life could only be given for special reasons.
As Section 367 clause (5) in the Code of Criminal Procedure, 1898 stood: "If the accused is convicted for an offence punishable with death, and the Court sentences him to any punishment other than death, the Court shall in its judgment state the reasons why the sentence of death was not passed." Section 367 clause (5) of Cr.
P.C. was amended in 1955 and after the amendment discretion was left to the courts to give either sentence.
Section 367 clause (5) after the amendment reads: "In trials by jury, the Court need not write a judgment, but the Court of Sessions shall record the heads of the charge to the jury: Provided that it shall not be neces sary to record such heads of the charge in cases where the charge has been delivered in English and taken down in shorthand.
" Thus the legislature dropped that part of the sub clause which made it necessary for the Court to state reasons for not awarding sentence of death.
Thus after the amendment the legal position was that it was the discretion of the Court to award either of the sentences.
In the Code of Criminal Procedure 1973 Section 354 clause (3) has now been introduced and it has been provided that in all cases of murder, life imprisonment should be given unless there are special reasons for giving sentence of death.
This provision Sec.
354 clause (3)reads: "When the conviction is for an offence punish able with 524 death or in the alternative with imprisonment for life or imprisonment of a term of years, the judgment shall state the reasons for the sentence awarded, and, in the case of sentence of death, the special reasons for such sen tence.
" It is thus clear that before 1955 sentence of death was the rule, the alternative sentence had to be explained by rea sons.
Thereafter it was left to the discretion of the court to inflict either of the sentences and ultimately in the 1973 Code normal sentence is imprisonment for life except for the special reasons to be recorded sentence of death could be passed.
It is therefore clear that this indicates a trend against sentence of death but this coupled with the decisions ultimately wherein sentence of death has been accepted as constitutional go to show that although there is a shift from sentence of death to lesser sentence but there is also a clear intention of maintaining this sentence to meet the ends of justice in appropriate cases.
It is there fore clear that in spite of the divergent trends in the various parts of the World there is consistent thought of maintaining the sentence of death on the statute book for some offences and in certain circumstances where it may be thought necessary to award this extreme penalty.
As stated generally that it is awarded in the rarest of rare cases and in this accepted position of law, in our opinion, it is not necessary to go into the academic question about sociologi cal and humane aspects of the sentence and detailed examina tion of the jurisprudential theories.
It was also contended though not very seriously that in ultimate analysis out of the two sentences imprisonment for life or death it has been left to the discretion of the courts.
On the one hand it was suggested that there are no norms laid down for exercise of discretion but on the other hand it was also admitted that it is very difficult to lay down any hard and fast rule and apparently both the sides realised that the attempt that was made by this Court in enumerating some of the circumstances but could not lay down all possible circumstances in which the sentence could be justified.
In Machhi Singh and others vs State of Punjab, it was observed that: "In this background the guidelines indicated in Bachan Singh 's case, will have to be culled out and applied to the facts of each individu al case where the question of imposing of death sentence arises.
The following proposi tions emerge from Bachan Singh 's case: (i) The extreme penalty of death need not be inflicted 525 except in gravest cases of extreme culpabili ty.
(ii) Before opting for the death penalty the circumstances of the 'offender ' also require to be taken into consideration along with the circumstances of the 'crime '.
(iii) Life imprisonment is the rule and death sentence is an exception.
In other words death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime, and provided, and only provided, the option to impose sentence of imprisonment for life cannot be conscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances.
(iv) A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circum stances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised.
In order to apply these guidelines inter alia the following questions may be asked and answered: (a) Is there something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence? (b) Are the circumstances of the crime such that there is no alternative but to impose death sentence even after according maximum weightage to the mitigating circum stances which speak in favour of the offender? If upon taking an overall global view of all the circumstances in the light of the afore said ' proposition and taking into account the answers to the questions posed hereinabove, the circumstances of the case are such that death sentence is warranted, the court would proceed to do so.
" In ultimate analysis it could not be disputed and was not seriously disputed that the circumstances in which the extreme penalty 526 should be inflicted cannot be enumerated in view of complex situation in society and the possibilities in which the offence could be committed and in this context in ultimate analysis it is not doubted that the Legislature therefore was right in leaving it to the discretion of the judicial decision as to what should be the sentence in particular circumstances of the case.
But the Legislature has put a further rider that when the extreme penalty is inflicted it is necessary for the court to give special reasons thereof.
In the matter before us we are mainly concerned with a) delay in execution of the sentence of death; b) what should be the starting point for computing this delay?; c) what are the rights of a condemned prisoner who has been sentenced to death but not executed? and d) what could be the circum stances which could be considered alongwith the time that has been taken before the sentence is executed.
The main theme of the arguments on the basis of delay has been the inhuman suffering which a condemned prisoner suffers waiting to be executed and the mental torture it amounts to and it is in this background also that the par ties argued at length about the starting point which should be considered for computing delay in execution of the sen tence.
On the one hand according to the petitioners the mental torture commences when the trial court i.e. the Sessions Court pronounces the judgment and awards capital punishment.
However, learned counsel also conceded that even the condemned prisoner knows that the judgment pronounced by the Sessions Court in the case of capital punishment is not final unless confirmed by the High Court.
Mainly therefore it was contended that the real mental torture commences after the death sentence is confirmed by the High Court and therefore to consider the question of delay the time should be computed from the date of the High Court judgment.
On the other hand learned Attorney General contended that even if the judgment of confirmation by the High Court is passed in which capital punishment is awarded, invariably comes to this Court and this Court ordinarily grants leave and ap peals are heard at length and it was therefore contended that the delay in execution of the sentence really could be considered after the pronouncement of the final verdict by this Court and it is only after the final verdict is pro nounced that it could be said that the judicial process has concluded.
It is no doubt true that sometimes in these procedures some time is taken and sometimes even long time is spent.
May be for unavoidable circumstances and sometimes even at the instance of the accused but it was contended and rightly so that all this delay upto the final judicial process is taken care of while 527 the judgment is finally pronounced and it could not be doubted that in number of cases considering the time that has elapsed from the date of the offence till the final decision has weighed with the courts and lesser sentence awarded only on this account.
As early as in 1944, the Federal Court in Piare Dusadh and others vs The King Emperor, [1944] Federal Court Reports 61 observed: "It is true that death sentences were imposed in these cases several months ago, that the appellants have been lying ever since under the threat of execution, and that the long delay has been caused very largely by the time taken in proceedings over legal points in respect of the constitution of the courts before which they were tried and of the valid ity of the sentences themselves.
We do not doubt that this court has power, where there has been inordinate delay in executing death sentences in cases which come before it, to allow the appeal in so far as death sentence is concerned and subsitute a sentence of transportation for life on account of the time factor alone, however right the death sentence was at the time when it was originally im posed." Similarly in State of Uttar Pradesh vs Lalla Singh and others, ; Sadhu Singh vs State of U.P., AIR 1978 SC 1506; State of U.P. vs Sahai, AIR 1981 SC 1442 and Joseph Peter vs State of Goa.
Daman & Diu, ; while finally deciding the matter the courts have taken notice of the delay that has occurred in the judicial proc ess.
It was contended that Article 21 contemplates not only a fair procedure but also expeditious procedure and in this context it was contended that observations be made so that judicial process also is concluded as expeditiously as possible.
Learned Attorney General has filed compilation of rules of various High Courts and it is not disputed that practically in all the High Courts, a confirmation case where the sentence of death is awarded by the Sessions Court and the case is pending in the High Court for confirmation time bound programme is provided in the rules and it could be said that except on some rare occasion the High Court has disposed of a confirmation case between six months to one year and therefore it could not be said that there is no procedure provided for expeditious disposal of these cases.
At the Sessions level also the normal procedure of the Sessions trial is that it is taken up day to day although after coming into force of the Code of 528 Criminal Procedure in 1973 where the number of offences triable by the Sessions Court have been increased but there is sometimes a slight departure from the normal rule which is the cause to some extent for some slackness in the Ses sions trial but attempt is always made and it is expected that Sessions case where offences alleged is one which is punishable with death should be given top priority and normally it Is given top priority and it is expected that the trials must continue day to day unless it is concluded.
Although it is well known that sometimes it is at the in stance of the advocates appearing for defence also that this normal rule is given a go bye but ordinarily it is expected that these cases must be tried expeditiously and disposed of.
Even in this Court although there does not appear to be a specific rule but normally these matters are given top priority.
Although it was contended that this reference before us a Bench of five Judges, was listed for heating after a long interval of time.
We do not know why this reference could not, be listed except what is generally well known the difficulty of providing a Bench of five Judges but ordinarily it is expected that even in this Court the matters where the capital punishment is involved will be given top priority and shall be heard of and disposed of as expeditiously as possible but it could not be doubted that so long as the matter is pending in any Court before final adjudication even the person who has been condemned or who has been sentenced to death has a ray of hope.
It therefore could not be contended that he suffers that mental torture which a person suffers when he knows that he is to be hanged but waits for the Dooms Day.
The delay therefore which could be considered while considering the question of commutation of sentence of death into one of life imprisonment could only be from the date the judgment by the apex court is pronounced i.e. when the judicial process has come to an end.
After the matter is finally decided judicially, it is open to the person to approach the President or the Gover nor, as the case may be, with a mercy petition.
Some times person or at his instance or at the instance of some of his relatives, mercy petition and review petitions are filed repeatedly causing undue delay in execution of the sentence.
It was therefore contended that when such delay is caused at the instance of the person himself he shall not be entitled to gain any benefit out of such delay.
It is no doubt true that sometimes such petitions are filed but a legitimate remedy if available in law, a person is entitled to seek it and it would therefore be proper that if there has been undue and prolonged delay that alone will be a matter at tracting the jurisdiction of this Court, to consider the question of the execution of the 529 sentence.
While considering the question of delay after the final verdict is pronounced, the time spent on petitions for review and repeated mercy petitions at the instance of the convicted person himself however shall not be considered.
The only delay which would be material for consideration will be the delays in disposal of the mercy petitions or delay occurring at the instance of the Executive.
So far as the scope of the authority of the President and the Governor while exercising jurisdiction under Article 72 and Article 16 1 are concerned the question is not at all relevant so far as the case in hand is concerned.
But it must be observed that when such petitions under Article 72 or 161 are received by the authorities concerned it is expected that these petitions shall be disposed of expedi tiously.
It was also contended that when capital punishment is awarded the sentence awarded is only sentence of death but not sentence of death plus imprisonment and therefore if a condemned prisoner has to live in jail for long in substance it amounts to punishment which is sentence of death and imprisonment for some time and this according to the learned counsel will amount to double jeopardy which is contrary to Article 20 and the imprisonment cannot be justified in law.
Section 366 of the Code of Criminal Procedure provides: "366.
Sentence of death to be submitted by Court of Session for confirmation (1) When the Court of Session passes a sentence of death, the proceedings shall be submitted to the High Court, and the sentence shall not be executed unless it is confirmed by the High Court.
(2) The Court passing the sentence shall commit the convicted person to jail custody under a warrant.
" This no doubt authorises the Court of Sessions to commit a person sentenced to death to jail custody under a warrant.
But this Section does not contemplate how long he has to be in jail.
Clause (1) of Section 366 provides that when the Court of Sessions passes a sentence of death the proceedings shall be submitted to the High Court and the sentence shall not be executed unless it is confirmed by the High Court.
It is therefore apparent that sub clause (2) provided for committing the convicted person to jail awaiting the confir mation of the sentence by the High Court.
It is also clear that when a person is committed to jail awaiting the execu tion of the sentence of death, it is not imprisonment but the prisoner has to be kept secured till the 530 sentence awarded by the court is executed and it appears that it is with that purpose in view that sub clause (2) of Section 366 simply provided for committing the convicted person to jail custody under a warrant.
The question about solitary confinement or keeping the condemned prisoner alone under strict guard as provided in various jail manuals was considered by this Court in Sunil Batra vs Delhi Administration, ; and consid ering the question of solitary confinment it was observed: "In our opinion sub section
(2) of section 30 does not empower the jail authorities in the garb of confining a prisoner under sentence of death, in a cell apart from all other prisoners, to impose solitary confinement on him.
Even jail discipline inhibits solitary confinment as a measure of jail punishment.
It completely negatives any suggestion that because a pris oner is under sentence of death therefore and by reason of that consideration alone, the jail authorities can impose upon him addition al and separate punishment of solitary con finement.
They have no power to add to the punishment imposed by the Court which addi tional punishment could have been imposed by the Court itself but has in fact been not so imposed.
Upon a true construction, sub section
(2) S.30 does not empower a prison authority to impose solitary confinment upon a prisoner under sentence of death.
" In the same judgment, it was further observed: "What then is the nature of confinement of a prisoner who is awarded capital sentence by the Sessions Judge and no other punishment from the time of sentence till the sentence becomes automatically executable? Section 366(2) of the Cr.
P.C. enable the Court to commit the convicted person who is awarded capital punishment to jail custody under a warrant.
It is implicit in the warrant that the prisoner is neither awarded simple nor rigorous imprisonment.
The purpose behind enacting sub section
(2) of S.366 is to make avail able the prisoner when the sentence is re quired to be executed.
He is to be kept in jail custody.
But this custody is something different from custody of a convict suffering simple or rigorous imprisonment.
He is being kept in jail custody for making him available for execution of the sent 531 ence as and when that situation arises.
After the sentence becomes executable he may be kept in cell apart from other prisoners with a day and night watch.
But even here, unless special circumstances exist, he must be within the sight and sound of other prisoners and be able to take food in their company.
If the prisoner under sentence of death is held in jail custody, punitive deten tion cannot be imposed upon him by jail au thorities except for prison offences.
When a prisoner is committed under a warrant for jail custody under section 366(2) Cr.
P.C. and if he is detained in solitary confinement which is a punishment prescribed by section 73 IPC, it will amount to imposing punishment for the same offence more than once which would be viola tive of Article 20(2).
But as the prisoner is not to be kept in solitary confinement and the custody in which he is to be kept under section 30(2) as interpreted by us would preclude detention in solitary confinement, there is no chance of imposing second punishment upon him and therefore, section 30(2) is not violative of Article 20.
" It is therefore clear that the prisoner who is sentenced to death and is kept in jail custody under a warrant under Section 366(2) he is neither serving rigorous imprisonment nor simple imprisonment.
In substance he is in jail so that he is kept safe and protected with the purpose that he may be available for execution of the sentence which has been awarded and in this view the aspect of solitary confinement has already been dealt with in the above noted case but it must be said that the life of the condemned prisoner in jail awaiting execution of sentence must be such which is not like a prisoner suffering the sentence but it is also essen tial that he must be kept safe as the purpose of the jail custody is to make him available for execution after the sentence is finally confirmed.
It was contended that the delay in execution of the sentence will entitle a prisoner to approach this Court as his right under Article 21 is being infringed.
It is well settled now that a judgment of court can never be challenged under Article 14 or 21 and therefore the judgment of the court awarding the sentence of death is not open to chal lenge as violating Article 14 or Article 21 as has been laid down by this Court in Naresh Shridhar Mirajkar and Ors.
vs State of Maharashtra and Anr.
, ; and also in A.R. Antulay vs
R.S. Nayak and 532 another; , the only jurisdiction which could be sought to be exercised by a prisoner for infringement of his rights can be to challenge the subsequent events after the final judicial verdict is pronounced and it is because of this that on the ground of long or inordinate delay a condemned prisoner could approach this Court and that is what has consistently been held by this Court.
But it will not be open to this Court in exercise of jurisdiction under Article 32 to go behind or to examine the final verdict reached by a competent court convicting and sentencing the condemned prisoner and even while considering the circum stances in order to reach a conclusion as to whether the inordinate delay coupled with subsequent circumstances could be held to be sufficient for coming to a conclusion that execution of the sentence of death will not be just and proper.
The nature of the offence circumstances in which the offence was committed will have to be taken as found by the competent court while finally passing the verdict.
It may also be open to the court to examine or consider any circum stances after the final verdict was pronounced if it is considered relevant.
The question of improvement in the conduct of the prisoner after the final verdict also cannot be considered for coming to the conclusion whether the sentence could be altered on that ground also.
So far as our conclusions are concerned we had delivered our Order on October 11, 1988 and we had reserved the rea sons to be given later.
Accordingly in the light of the discussions above our conclusion is as recorded in our Order dated October 11, 1988, reproduced below: "Undue long delay in execution of the sentence of death will entitle the condemned person to approach this Court under Article 32 but this Court will only examine the nature of delay caused and circumstances ensued after sentence was finally confirmed by the judicial process and will have no jurisdiction to re open the conclusions reached by the Court while finally maintaining the sentence of death.
This Court, however, may consider the question of inordi nate delay in the light of all circumstances of the case to decide whether the execution of sentence should be carried out or should be altered into imprisonment for life.
No fixed period of delay could be held to make the sentence of death inexecutable and to this extent the decision in Vatheeswaran 's case cannot be said to lay down the correct law and therefore to that extent stands overruled." 533 K. JAGANNATHA SHETTY, J In Bachan Singh vs State of punlab, , this Court pronounced that the provision of death penalty as an alternative punishment for murder, under sec.302 IPC is valid and constitutional.
Sarkaria, J. who spoke for the majority view held that the provisions relating to imposition of death sentence and the procedure prescribed thereof would ensure fairness and reasonableness within the scope of Article 21.
It was also observed that by no stretch of imagination it can be said that death penalty under sec.
302 either per se or because of execution by hanging constitutes an unreasonable, cruel or unusual punishment Nor the mode of its execution has a degrading punishment which would defile the "dignity of the individual ' within the preamble to the Constitution.
The learned Judge, however, cautioned (at 751): "A real and abiding concern for the dignity of human life postulates resistance to taking a life through law 's instrumentali ty.
That ought not to be done save in the rarest of rare cases when the alternative option is unquestionable foreclosed.
" (Empha sis supplied) Bachan Singh case has thus narrowly tailored the sen tencing discretion of courts as to death sentence.
Death sentence cannot be given if there is any mitigating circum stance in favour of the accused.
All circumstances of the case should be aggravating.
It is in the gravest of grave crimes or in the rarest of rare cases, the death sentence may be awarded.
There is no offence in the penal code carry ing mandatory death penalty.
Section 303 IPC carrying the mandatory punishment has been declared unconstitutional in Mithu vs State of Punjab, ; So much so, the death sentence is now awarded only in miniscule number of cases.
All the accused in these cases belong to that limited and exceptional category.
The trial court convicted them under sec.
302 IPC and sentenced them to death.
The High Court confirmed their conviction and sentence.
This Court dismissed their special leave petitions or appeals and subsequent review petitions.
Their mercy petitions to the President and/or the Governor were also rejected.
They have now moved writ petitions under Article 32 of the Constitu tion.
They are not seeking to overturn the death sentence on the ground that the Court has illegally inflicted it.
Obvi ously, that they can not do.
The judgment of the court has become final.
Under Article 141, it shall be binding on all Courts.
Under Article 142, it shall be enforceable through out the territory of India.
Under Article 144 all authori ties, 534 civil and judicial, in the territory of India shall act in aid of this Court.
The judicial verdict pronounced by court in relation to a matter cannot be challenged on the ground that it violates one 's fundamental right.
The judgment of a court cannot be said to affect the fundamental rights of citizens (See Naresh Sridhar Mirajkar 's case, The petitioners, however, contend that this Court must set aside the death penalty and substitute a sentence of life imprisonment in view of the prolonged delay in the execution.
The dehumanising factor prolonged delay with the mental torture in solitary confinement in jail, according to them, has rendered the execution unconstitutional under Article 21.
There are also some other subsidiary contentions to which I will presently refer.
We have earlier dismissed all but one petition giving our unanimous conclusion stating therein that we would give our reasons later.
Here are my own reasons in support of that conclusion: The question whether prolonged delay renders death sentence inexecutable and entitles the accused to demand the alternate sentence of life imprisonment has arisen amid the diversity of judicial decisions in (i) T.V. Vaitheeswaran vs State of Tamil Nadu, ; (ii) Sher Singh vs State of Punjab; , ; and (iii) Javed Ahmed Abdul Hamid Pawala vs State of Maharashtra, ; Vaitheeswarn case was decided by a two Judge Bench, where Chinnappa Reddy, J. said (at 359): "We find no impediment in holding that the dehumanising factor of prolonged delay in the execution of a sentence of death has the constitutional implication of depriv ing a person of his life in an unjust, unfair and unreasonable way as to offend the consti tutional guarantee that no person shall be deprived of his life or personal liberty except according to procedure established by law.
The appropriate relief in such a case is to vacate the sentence of death.
" There then the learned Judge said (at 360): "Making all reasonable allowance for the time necessary for appeal and considera tion of reprieve, we think that delay exceed ing two years in the execution of a sentence of death should be considered sufficient to entitle the person 535 under sentence of death to invoke Article 21 and demand the quashing of the sentence of death." Sher Singh case was decided by a three Judge Bench.
Chandrachud, CJ., who spoke for the Bench while disagreeing with above view in Vaitheeswaran, said (at 595): "The substitution of the death sentence by a sentence of life imprisonment cannot follow by the application of the two years ' formula, as a matter of "quod erat demonstrandum." Then followed the decision in Javed Ahmad case.
There Chinnappa Reddy, J. raised a question whether a three Judge Bench would overrule the decision of a two Judge Bench merely because three is larger than two? The learned Judge said: "The court sits in division of two and three Judges for the sake of convenience and it may be inappropriate for a Division Bench of three Judges to purport to over rule the decision of a Division Bench of two Judges.
Vide Young vs Bristol Aeroplane Co. Ltd. It may be otherwise where a full Bench does so.
We do not, however, desire to embark upon this question in this case.
In the present case.
we are satisfied that an overall view of all the circumstances appears to us to entitle the petitioner to invoke the protec tion of Article 21 of the Constitution.
We accordingly quash the sentence of death and substitute in its place the sentence of im prisonment for life.
" The question posed in Javed Ahmad case relates to the practice and procedure of this Court.
It presents little problem and could be conveniently disposed of without much controversy.
At the time of flaming the Constitution, Mr. B.N. Rau, after his return from United States reported to the President of the Constitution Assembly as follows: "Again Justice, Frankfurter was very emphatic that any jurisdiction, exercisable by the Supreme Court, should be exercised by the full Court.
His view is that the highest Court of appeal in the land should not sit in divi sions.
Every Judge, except of course such judges as may be disqualified by personal interest or otherwise from hearing 536 particular cases, should share the responsi bility for every decision of the Court." (The Framing of India 's Constitution Vol.
III by section Shiva Rao p. 219).
This was a very good suggestion.
But unfortunately that suggestion was not accepted and the principle which was dear to Justice Frankfurter was not incorporated in out Constitu tion.
The result iS that each Judge does not share the responsibility for every decision of this Court.
For a proper working arrangement in the Court, we have framed Rules under Article 145 of the Constitution confer ring power on the Chief Justice to constitute benches for disposal of cases.
Order VII Rule (1) of the Supreme Court Rules 1966 provides that every cause, appeal or matter shall be heard by a Bench consisting of not less than two judges nominated by the Chief Justice.
But this rule is subject to the requirement under Article 145(3) of the Constitution.
Article 145(3) requires a minimum number of five judges for deciding any case involving substantial question of law as to interpretation of the Constitution.
In any event, the Supreme Court has to sit in benches with judges distributed as the Chief Justice desires: In this context, Order VII Rule 2 of the Supreme Court Rules also needs to be noted.
It provides: "Where in the course of the hearing of any cause, appeal or other proceeding, the bench considers that the matter should be dealt with by a larger bench, it shall refer the matter to the Chief Justice, who shall thereupon constitute such a bench for the hearing of it.
" This is undoubtedly a salutory Rule, but it appears to have only a limited operation.
It apparently governs the procedure of a smaller bench when it disagrees with the decision of a larger bench.
The bench in the course of hearing of any matter considers that the matter should be dealt with by a larger bench, it shall refer the matter to the Chief Justice.
The Chief Justice shall then consitute a larger bench for disposal of the matter.
This exercise seems to be unnecessary when a larger bench considers that a decision of a smaller bench is incorrect unless a constitu tional question arises.
The practice over the years has been that a larger bench straightaway considers the correctness of and if necessary overrules the view of a smaller bench.
This practice has been held to be a crystallised rule of law in a recent decision by a 537 special bench of seven learned judges.
In A.R. Antulay vs
R.S. Nayak; , , Sabyasachi Mukharji, J., speaking for the majority said: "The principle that the size of the bench whether it is comprised of two or three or more judges does not matter, was enunciat ed in Young vs Bristol Aeroplace Ltd. (supra) and followed by Justice Chinnappa Reddy in Javed Ahmad A bdul Hamid Pawla vs State of Maharashtra, ; where it has been held that a Division Bench of two judges, has not been followed by our courts.
XXXX XXXX XXXX XXXX XXXX "The law laid down by this Court is some what different.
There is a hierarchy within the court itself here where larger benches over rule smaller benches.
See Mattulal vs Radhey Lal, [1975] 1 SCR 127: ; ; Union of India vs K.S. Subramanian ; at 92: ; at 2437 and State of U.P.v.
Ram Chandra Trivedi; , at 473: ; at 2555.
This is the practice followed by this Court and now in is a crystallised rule of law.
" The answer to the question posed in Javed Ahmad case thus stands concluded and it is now not open to any one to contend that a bench of two judges cannot be overruled by a bench of three judges.
We must regard this as a final seal to the controversy.
Before grappling with the crucial issue that has been raised in these petitions, it would be convenient to dispose of what may be regarded as peripheral submissions.
Mr. R.K. Jain, learned counsel who led the arguments on behalf of the petitioners referred to us in detail the consideration of justice, morality and usefulness of capital punishment.
The counsel also referred to us the opinion expressed by eminent persons like Shri Arvindo (Tales of Prison Life) with regard to torment in the prison life.
He also invited our attention to the dissenting opinion of Bhagwati, J., in Bachan Singh where learned Judge observed that the execution "serves no social purpose." The learned counsel made an impassioned appeal to save the life of these condemned persons by sub stituting life imprisonment on the ground of inordinate delay in execution.
I can really appreciate the compassion ate feeling with which the counsel made his submission.
The "self" in 538 him came out with every word he uttered.
He seems to belong to a faith where 'non violence ' to every life is a must.
Not that we are different underneath the rotes.
As said by Justice Brennan, white dealing with his opinion in Furman vs Georgia. ; "I am not, that we are each not, a human being with personal views and moral sensioilties and religious scruples.
But it is to say that above all, 1 am a Judge".
(The Oliver wendell Homes Lecture, delivered in September 5, 1986).
We are flesh and blood mortals with normal human traits.
Indeed, like all others, we too have some inborn aversions and acquired attractions.
But it is not for us while presiding over courts to decide what pun ishment or philosophy is good for our people.
While examin ing constitutional questions, we must never forget Mar shall 's mighty phrase "that it is a constitution that we are expounding".
We are oath bound to protect the Constitution.
We are duty bound to safeguard the life and liberties of persons.
We must enforce the constitutional commands, no matter what the problem.
In other issues of constitutional considerations, we must understand the aspirations and convictions of men and women of our time.
And we should not be swayed by our own convictions.
We must never allow our individuality t0 overshadow or supersede the philosophy of the Constitution.
These are various philosophical ideologies and underpin nings about the purposes of punishment.
It includes among others deterfence, retribution, protecting persons, punish ing guilty and acquitting the innocent.
Among these objec tives deterfence and retribution are prominent.
Retribution is often confused with revenge, but there are distinct differences.
Retribution embodies the concept that an of fender should receive what he rightfully deserves.
Deter fence has a two fold object.
The first object relates to specific deterrence.
It will deter the individual from committing the same or other offences in the future.
The second object is as to general deterrence.
It will convince or deter others that "crime does not pay") (See Crime and Punishment ' by Harry E. Allen & Ors.
at 735).
The Law Commission of India summarised these aspects as to the capital sentence (35th report para 265( 18)): "The fact remains however, that whenever there is a serious crime.
the society feels a sense of disapprobation.
If there is any element of retribution in the law, as administered now, it is not the instinct of the man of jungle but rather a refined evolu tion of that instinct the feeling prevails in the public is a fact of which notice is to be taken.
The law 539 does not encourage it, or exploit it for any undesirable ends.
Rather, by reserving the death penalty for murder, and thus visiting this gravest crime with the gravest punishment the law helps the element of retribution merge into the element of deterrence.
" Sarkaria, J., after referring to this report speaking for the majority in Bachan Singh, [19801 2 SCC 684 at 721 recognises: "Retribution and deterrence are not two divergent ends of capital punishment.
They are convergent goals which ultimately merge into one.
" The punishments are provided in order to deter crimes.
The punishments are imposed to make the threat credible.
Threats and imposition of punishments are obviously necessary to deter crimes.
As a venerated British Historian, Arthur Bryant writes "The sole justification for the death penalty is not to punish murderers but to prevent murder." Professor Earnest Van Den Haag states: "The murderer learns through his punishment that his fellow men have found him unworthy of living, that because he has mur dered, he is being expelled from the community of the living.
This degradation is self in flicted.
By murdering, the murderer has so dehumanised himself that he cannot remain among the living.
The social recognition of his self degradation is the punitive essence of execution.
" (See Harward Law Review: 1986 Vol.
99 p. 1699).
Of course, one cannot have any empirical data to prove that capital punishment can be deterrent greater than life imprisonment.
It may be that most killers as the Professor Jack Greenberg states "do not engage in anything like a cost benefit analysis.
They are impulsive and they kill impulsively.
" The paradigm of this kind of murderers cannot be properly accounted for.
However, many classic experiments on the effects of corporal punishments on dogs, monkeys, pigeons and other animals have been conducted in psychology laboratories.
Graeme Newman in his book "Just and Painful" (at 127) refers to such experiments.
The learned author states that corporal punishment works and it has been so successful that some animals have starved themselves to death rather than eat the forbidden food.
This position with the human beings is said to be not different.
Indeed, it cannot be different as we could see from day to day life.
As between life and 540 death one lives life.
It is the love of life with sensuous joy of companionship that moves the race and not so much the ideals.
One views the death with trepidation.
In fact, every living being dreads death and it cannot be an exception with those on death row.
They like all others want to live and live as long as they can.
Because, the life has its own attraction, no matter in what form and condition.
The death has no such attraction and cannot have any, since it is the most mysterious of all in this world.
The criminal law always keeps pace with the development of society.
It reflects as Chief Justice Warren said: "the evolving standards of decency that mark the progress of a maturing society".
(Trop. vs Dulles; , , 101 (1958).
We have much to learn from history of every country.
The punishment which meets the unanimous approval in one generation, may rank as the most reprehensible form of cruelty in the next.
Take for instance, the punishment of whipping.
A search of historical records of 16th century England shows that men and women were whipped unmercifully for trivial offences as peddling, being drunk on a Sunday, and participating in a riot.
Many other instances of ferocious whippings of men and women, both for political and other offences, besprinkle and blacken English historical records.
Rarely did any shred of excuse for human frailty seem to enter into the souls of those sitting in judgment.
In the days of Charles the Sec ond, however, the Duke of York did interpose in one such case he saved Lady Sophia Lindsay from being publicly whipped through the streets of Edinburgh for the crime of assisting at the escape of the Earl of Argyle, her own father in law.
In the early eighteen hundreds the Australian penal settlements were the scene of floggings of so severe a nature as to rival, for sheer savagery, the worst that were inflicted in England during the sixteenth century, or in the southern State of America during the days of slavery.
In the United States of America whipping was a favorite seven teenth century punishment for various offences, and both male and female culprits came under the lash.
Of all the civilized, nations, Russia may be considered to be the one which not only used the whip unmercifully, but also as the nation which continued to use it longer by far and for a greater variety of crimes than did any other.
Next to Rus sia, for sheer love of whipping, comes China, and little less formidable than the Russian known is the Chinese rod of split bamboo.
The sharp edges of the bamboo cut into the flesh, inflicting terrible lacera 541 tions.
Little wonder that deaths, as a result of these floggings, have been frequent, and that those who escape this fate are often so terribly mutilated that they remain crippled for the rest of their lives (The History of corpo ral Punishment by G.R. Scott (1948) pages 39 to 56).
Take the history of punishment of death in England.
In 1810 Sir Samuel Romilly who asked the Parliament to abolish the death penalty for some of crimes said "there is probably no other country in the world in which so many and so great a variety of human actions are punishable with loss of life as in England".
(A History of English Criminal Law By L. Radzinowicz V(1) p(1).
The beginning of the nineteenth century was a period of indiscriminate imposition of capital punishment in England for numerous widely differing offences.
There were two hundred or more such offences.
There were several legisla tions providing punishment of death in the reign of George IV.
All felonies except petty larceny and mayhem were theo retically punishable with death.
From 1827 to 1841 several legislations were passed abolishing the punishment of death in a variety of cases.
Burning continued till 1790 to be the punishment inflicted on women for treason, high or petty.
(Which latter included not only the murder by a wife of her husband, and the murder of a master or mistress by a servant but also several offences against the coin).
Burning in such cases was abolished by 30 Geo, 3, c. 48.
In practice, women were strangled before they were burnt; this, however, de pended on the executioner.
In one notorious case a woman was actually burnt alive for murdering her husband, the execu tioner being afraid to strangle her because he was caught by the fire.
In the reign of George II, an act was passed which was intended to make the punishment for murder more severe than the punishment for other capital crimes.
This was 25 Geo. 2, c. 37, which provided that a person convicted of murder should be executed on the next day but one after his sentence (unless he was tried on a Friday, in which case he was to be hanged on the Monday).
He was to be fed on bread and water in the interval and his body, after death, was either to be dissected or to be hung in chains.
The judge, however, had power to respite or to remit these special severities.
Under this act murderers were usually anato mized, but sometimes gibbeted.
By the 2 & 3 Will 4, c. 7 section 16 (for the regulation of schools of anatomy), it was enact ed that the bodies of murderers should no longer be anato mized, but that the sentence should direct that they should either be hung in chains or a buried in the prison.
Several persons were gibbeted under this act.
542 These provisions distinguish English law in a marked manner from the continental laws down to the end of the last cen tury.
In most parts of the continent breaking on the wheel, burning in some cases quartering alive and tearing with red hot pincers, were in use, as well as simpler forms of death.
(History of the Criminal Law of England by Stephen Ch.
XIII p. 477 478).
Through out the reign of Henry the Eighth, there were no fewer than two thousand executions a year.
As the stress on the value of property increased, the net was widened.
Not alone murderers and traitors; but robbers, coiners, heretics and witches were sent to their death.
The shooting of a rabbit; the forgery of a birth certificate; the theft of a pocket handkerchief; the adoption of a disguise; the damag ing of a public property were also included in the list of death sentence.
In 1814 a man was hanged at Chelmsford for cutting down a cherry tree.
The public hangings in England continued until well into the nineteenth century.
There were public executions with a large number of people watching.
On January 22, 1829, Willi an Burke was hanged at Edinburgh, and the crowd was great beyond all former precedent.
The last person to be hanged publicly in England was Michael Marett, who was executed at Newgate on May 26, 1868.
As time went past, the list of death sentence crimes was rapidly reduced and in 1950, it was confined for four crimes only, to wit; (1) murder, (2) treason, (3) piracy with violence, and (4) setting fire to arsenals and dockyards.
Later this was also abolished.
G.R. Scott, The History of Capital Punishment, 38 66 (1950).
What happened in the United States? It will be noticed that in the United States, the accused has a constitutional right to be tried by a Jury, as provided under 6th Amend ment.
The accused has a right not to be subjected to "cruel and unusual punishment" as mandated under 8th Amendment.
In Furman, some Judges took the view that death sentence was unacceptable to the evolving standards of decency of the American people.
But the American people rejected that view.
Since then 35 States have re enacted laws providing for the death sentence for murder of suitably altering the provi sions to comply with Furman.
What do we have here? The representatives of our people are cognizant of the contemporary social needs.
The legisla tive amendments brought about from time to time are indica tive of their awareness.
Sub sec.
(5) of sec.
367 of the Code of the Criminal Procedure, 543 1898 as it stood prior to its amendment by Act 25 of 1955 provided: "If the accused is convicted of an offence punishable with death, and the court sentences to any punishment other than death, the court shall in its judgment state the reasons why sentence of death was not passed.
" This provision laid down that if an accused was convict ed of an offence punishable with death, the imposition of death sentence was the rule and the awarding of a lesser sentence was an exception.
The court had to state the rea sons for not passing the sentence of death.
There was a change by the amending Act 26 of 1955 which came into force with effect from January 1, 1956.
The above sub section was deleted and it was left to the discretion of the court in each case to pass a sentence of death or life imprisonment.
In 1973 there was again a reshaping of the provision regard ing the death penalty.
In the Code of Criminal Procedure, 1973, sec.
354(3) was inserted in these terms: "When the conviction is for an offence punishable with death, or in the alternative with the imprisonment for life or imprisonment for a term of years, the judgment shall state the reasons for the sentence awarded, and in the case of sentence of death, the special reasons for such sentence.
" It is now obligatory for the court to state reasons for the sentence awarded for the offence of murder.
The court cannot award death sentence without giving special reasons.
As earlier noticed that death sentence Could be awarded only in exceptional cases and not in the usual run of murders.
We have got just six offences carrying death penalty and that too as an alternate sentence (Sections 120B, 121, 132, 302,307 and 396 IPC).
This is the need and notion of the present day society.
Tomorrow 's society and the atmosphere in which they live may be quite different.
They may not have rapist murderers like Ranga and Billa.
They may not have any merciless killing and bride burning They may have more respect for each other life.
They may be free from criminalisation of politics and elimination of political leaders by muscle power.
There then the penal law cannot remain isolated and untouched.
It will be profoundly influenced by philosophy prevailing.
Time may reach for the representatives of people to consider that death penalty even as an alternate sentence for murder is uncalled for and unnecessary.
There is 544 nothing in our Constitution to preclude them from deleting that alternate sentence.
The crusade against capital punish ment may,, therefore, go on elsewhere and not in this Court.
Let me now turn to the pivotal question which I have referred at the beginning of the judgment.
The question is whether the sentence of life imprisonment should be substi tuted on account of time factor alone, however, right and valid and death sentence was at the time when it was award ed.
The arguments for the petitioners primarily rested on the common area of agreement in Vaitheeswaran and Sher Singh cases on the implication of Article 21.
The accepted princi ple according to counsel, is that prolonged delay in execu tion would be "unjust, unfair and unreasonable".
It would be inhuman and dehumanising to keep the condemned person for a long period.
It offends the constitutional safeguards under Article 21.
Article 21 of the Constitution mandates the state that no person shah be deprived of his life or personal liberty except according to the procedure established by law.
The scope and content of this Article has been the subject matter of intensive examination in the recent decisions of this Court.
I do not want to add to the length of this judg ment by recapitulating all those decisions in detail.
I may only highlight some of the observations which are relevant to the present case.
In Maneka Gandhi vs Union of India, [1978] 1 SCC 248 this Court gave a new dimension to Article 21.
The seven Judge bench held that a statute which merely prescribes some kind of procedure for depriving a person of his life or personal liberty cannot meet the requirements of Article 21.
Bhagwati, J., as he then was, while explaining the nature and requirement of procedure under Article 21 observed (at 283): "We must reiterate here what was pointed out by the majority in E.P. Rayappa vs State of Tamil Nadu, [1974] 3.
SCR 348: , namely, that from a posi tivistic point of view, equally is antithetic to arbitrariness.
In fact equality and arbi trariness are sworn enemies; one belongs to the rule of law in a republic, while the other, to the whim and caprice of an absolute monarch.
Where an act is arbitrary, it is implicit in it that it is unequal both accord ing to political logic and constitutional law and is, therefore, violative of Article 14".
Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment.
The principle of reasonableness, which 545 legally as well as philosophically, is an essential element of equality or non arbi trariness pervades Article 14 like a brooding omni presence and the procedure contemplated by Article 21 must answer the test of reasona bleness in order to be in conformity .with
Article 14.
It must be "right and just and fair" and not "arbitrary, fanciful or oppres sive", otherwise, it would be no procedure at all and the requirement of Article 21 would not be satisfied.
" If one prefers to go yet further back, the procedural fairness in the defence of liberties was insisted upon even in 1952.
The State of West Bengal vs Anwar Ali, ; Bose, J., remarked (at 367): "The question with which I charge myself, is, can fair minded, reasonable, unbiased and resolute men, who are not swayed by emotion or prejudice, regard this with equa nimity and call it reasonable, just and fair, regard it as that ' equal treatment and protection in the defence of liberties which is expected of a sovereign democratic repub lic in the conditions which obtain in India today? I have but one answer to that.
On that short and simple ground I would decide this case and hold the Act bad.
" In Bachan Singh case, Sarkaria, J., affirming this view said (at 730): "No person shall be deprived of his life br personal liberty except according to fair, just and reasonable procedure estab lished by valid law." In Mithu vs State of Punjab, ; Chandra chud.
C.J., said (at 284): " . that the last word on the question of justice and fairness does not rest with the legislature.
Just as reasonableness of restrictions under clauses (2) to (6) of Article 19 is the for the courts to determine, so is it for the courts to decide whether the procedure prescribed by a law for depriving a person of his life or liberty is fair, just and reasonable." In Sher Singh vs State of Punjab, [1983] 2 SCC 582 Chandrachud, C.J. again explained (at 593): 546 "The horizons of Article 21 are ever widening and the final word on its conspectus shall never have been said.
So long as life lasts, so long shall it be the duty and endea vour of this Court to give to the provisions of our Constitution a meaning which will prevent human suffering and degradation.
Therefore, Article 21 is as much relevant at the stage of execution of the death sentence as it is in the interregnum between the impo sition of that sentence and its execution.
The essence of the matter is that all procedure no matter the stage, must be fair, just and reasonable." Article 21 thus received a creative connotation.
It demands that any procedure which takes away the life and liberty of persons must be reasonable, just and fair.
The procedural fairness is required to be observed at every stage and till the last breath of the life.
In Vaitheeswaran the court thought that the delay of two years would make it unreasonable under Article 21 to execute death sentence.
The court did not attach importance to the cause of delay.
The Cause of delay was immaterial.
The accused himself may be responsible for the delay.
The court said that the appropriate relief would be to vacate the death sentence and substitute life imprisonment instead.
The learned counsel for the petitioners argued that if two years period of delay set out in Vaitheeswaran does not present favourably, we may fix any other period but we should not disturb the basis of the decision.
He invited our attention to a number of authorities where courts have awarded life imprisonment on the ground of delay in disposal of cases.
In Vivian Rodrick vs The State of West Bengal, ; six years delay was considered sufficient for impos ing a lesser sentence of imprisonment for life.
In State of U.P. vs Paras Nath Singh & Ors., , the Court, while reversing the order of acquittal awarded life imprisonment on the ground that the accused was under sen tence of death till he was acquitted by the High Court.
Similar was the view taken in State of Bihar vs Pashupati Singh, ; ; State of U.P. vs Suresh, at 643 and State of U.P. vs Sahai, In State of U.P.v. Suresh, the accused was given life imprisonment in view of the fact that seven years had elapsed after the date of murder.
In Ram Adhar vs State of U.P., at 777, the 547 delay of six years from the date of occurrence was held sufficient to commute the sentence of death to life impris onment.
The court also observed that the accused was not responsible in any manner for the lapse of time that has occurred.
In Nethi Sreeramulu vs State of A. P., 14 the Court while disposing of the appeal in 1973 commuted the sentence of death given in 1971 to life imprisonment.
In State of U.P.v. Lalla Singh & Ors., six years delay from the date of judgment of the trial court was a consideration for not giving the death sentence.
In Sadhu Singh vs State of U.P., about three years and seven months during which the accused was under spectre of death sentence, was one of the relevant factors to reduce the sentence to life imprisonment.
There are equally other decisions where in spite of the delay in disposal of the case, the Court has awarded the death sentence.
In Nachhittar Singh vs State of Punjab, , the court refused to consider the question of delay as a mitigating circumstances.
In Maghar Sing vs State of Punjab, [19751 4 SCC 234, the court said that delay does not appear to be good ground to commute to life impris onment in view of the pre planned, cold blooded and dastard ly murder committed by the accused.
In Lajar Mashi vs State of U.P., , the court while confirming the death sentence observed (at 809): "The value of such delay as a miti gating factor depends upon the features of a particular case.
It cannot be divorced from the diabolical circumstances of the crime itself, which, in the instant case fully justify the award of capital sentence for the murder of the deceased.
We, therefore, uphold the award of the capital sentence to the appellant and dismiss his appeal.
" All these decisions are of little use to determine the constitutionality of execution of the death sentence on the relevance of delay.
These decisions relate to the sentencing discretion of courts with which we are not concerned.
We are concerned with the right of the accused to demand life imprisonment after the final verdict of death sentence with every justification to impose it.
The demand for life imprisonment herein as solely based on the ground of prolonged delay in the execution.
The delay which is sought 548 tO be relied upon by the accused consists of two parts.
The first part covers the time taken in the judicial proceed ings.
It is the time that the parties have spent for trial, appeal, further appeal and review.
The second part takes into fold the time utilized by the executive in the exercise of its prerogative clemency.
I start with the first part of the delay.
In Vaitheeswa ran this part of the delay was expressly taken into consid eration.
It was observed that the period of two years as prolonged detention would include the time necessary for appeal from the sentence of death and consideration of reprieve.
In Sher Singh, this period has not been accepted as good measure.
The court said that the fixation of time limit of two years did not accord with the common experience of time normally consumed by the litigative process and the proceedings before the Government.
Mr. Parasaran, learned Attorney General has altogether a different approach and in my opinion very rightly.
He argued that the time spent by the courts in judicial proceedings was intended to ensure a fair trial to the accused and cannot be relied upon by the same accused to impeach the execution of the death sentence.
The relevant provisions in the Indian Penal Code, the Criminal Procedure Code, the Evidence Act and the Rules made by the High Courts and the Supreme Court governing the trial, appeal, execution of sentence, etc., were all highlighted.
According to learned Attorney, these provisions are meant to examine the guilt or innocence of the accused and to have an appropriate sentence commensurate with the gravity of the crime.
They constitute reasonable procedure, established by law.
I entirely agree.
The time taken in the judicial pro ceedings by way of trial and appeal was for the benefit of the accused.
It was intended to ensure a fair trial to the accused and to avoid hurry up justice.
The time is spent in the public interest for proper administration of justice.
If there is inordinate delay in disposal of the case, the trial court while sentencing or the appellate court while dispos ing of the appeal may consider the delay and the cause thereof along with other circumstances.
The court before sentencing is bound to hear the parties and take into ac count every circumstance for and against the accused.
If the court awards death sentence, notwithstanding the delay in disposal of the case, there cannot be a second look at the sentence save by way of review.
There cannot be a second trial on the validity of sentence based on Article 21.
The execution which is impugned is execution of a judgment and not apart from judgment.
If the judgment 549 with the sentence awarded is valid and binding, it falls to be executed in accordance with law since it is a part of the procedure established by law.
Therefore, if the delay in disposal of the case is not a mitigating circumstance for lesser sentence, it would be, in my opinion, wholly inappro priate to fall back upon the same delay to impeach the execution.
If the delay in passing the sentence render the execu tion unconstitutional, the delay subsequent thereof cannot also render it unconstitutional.
Much less any fixed period of delay could be held to make the sentence inexecutable.
It would be arbitrary to fix any period of limitation for execution on the ground that it would be a denial of fair ness in procedure under Article 21.
With respect, I, am unable to agree with the view taken in Vatheeswaram case on this aspect.
Under Article 72 of the Constitution, the President shall have the power to "grant pardons, deprives, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted in an offence".
Under Article 161 of the Constitution, similar is the power of the Governor to give relief to any person convicted of any offence against any law relating to a matter to which the executive power of the State extends.
The time taken by the executive for disposal of mercy petitions may depend upon the nature of the case and the scope of enquiry to be made.
It may also depend upon the number of mercy petitions sub mitted by or on behalf of the accused.
The Court, therefore, cannot prescribe a time limit for .disposal
Of even for mercy petitions.
It is, however, necessary to point out that Article 21 is relevant at all stages.
This Court has emphasized that "the speedy trial in criminal cases though not a specific fundamental right, is implicit in the broad sweep and con tent of Article 21".
(See: Hussainara Khatoon vs The State of Bihar, [1979] 3 SCR 169 and ; Speedy trial is a part of one 's fundamental right to life and liberty.
(See Kadra Pahadiya vs State of Bihar, and This principle, in my opinion, is no less important for disposal of mercy petition.
It has been uni versally recognised that a condemned person has to suffer a degree of mental torture even though there is no physical mistreatment and no primitive torture.
He may be provided with amenities of ordinary inmates in the prison as stated in Sunil Batra vs Delhi Administration, , but nobody could succeed in giving him peace of mind.
550 Chita Chinta Dwayoormadhya, Chinta tatra gariyasi, Chita Dahati Nirjivam, Chinta dahati Sajeevakam.
As between funeral fire and mental worry, it is the latter which is more devastating, for, funeral fire bums only the dead body while the mental worry burns the living One.
This mental torment may become acute when the judicial verdict is finally set against the accused.
Earlier to it, there was every reason for him to hope for acquittal.
That hope is extinguished after the final verdict.
If, therefore, there is inordinate delay in execution, the condemned pris oner is entitled to come to the court requesting to examine whether, it is just and fair to allow the sentence of death to be executed.
What should be done by the Court is the next point for consideration.
It is necessary to emphasise that the juris diction of the Court at this stage is extremely limited.
If the Court wants to have a look at the grievance as to delay, it is needless to state, that there should not be any delay either in listing or in disposal of the matter.
The person who complains about the delay in the execution should not be put to further delay.
The matter, therefore, must be expedi tiously and on top priority basis, disposed of.
The Court while examining the matter, for the reasons already stated, cannot take into account the time utilised in the judicial proceedings up to the final verdict.
The Court also cannot take into consideration the time taken for disposal of any petition filed by or on behalf of the accused either under Article 226 or under Article 32 of the Constitution after the final judgment affirming the conviction and sentence.
The Court may only consider whether there was undue long delay in disposing of mercy petition; whether the State was guilty of dilatory conduct and whether the delay was for no reason at all.
The inordinate delay, may be a significant factor, but that by itself cannot render the execution unconstitutional.
Nor it can be divorced from the dastardly and diabolical circumstances of the crime itself.
The Court has still to consider as observed in Sher Singh case (at 596): "The nature of the offence, the diverse circum stances attendant upon it, its impact upon the contemporary society and the question whether the motivation and pattern of 551 the crime are such as are likely to lead to its repetition, if the death sentence is vacated, are matters which must enter into the verdict as to whether the sentence should be vacated for the reason that its execution is delayed.
" The last contention urged for the petitioners that the accused should not be executed if he was since improved is unavailable since it seeks to substitute a new procedure which the Code does not provide for.
We have already considered all these cases in the light of these principles and disposed them of by our earlier unanimous order. | The accused were convicted under section 302 I.P.C. and sentenced to death by the trial court.
The High Court con firmed their conviction and 510 sentence.
This Court dismissed their special leave peti tions/appeals and subsequent review petitions.
Their mercy petitions to the President and/ or Governor were also re jected.
Therefore, they approached this Court by way of Writ Petitions for setting aside the death sentence and substi tuting it by a sentence of life imprisonment on the ground of prolonged delay in the execution.
They contended that the dehumanising factor of prolonged delay with the mental torture in confinement in jail had rendered the execution unconstitutional.
In view of the conflicting decisions of this Court in T.V. Vaitheeswaran vs State of Tamil Nadu, and Sher Singh & Ors.
vs The State of Punjab, ; and observations in Javed Ahmed Abdul Hamid Pawala vs State of Maharashtra; , on the question of delay, the writ petitions were referred to a five judges Bench.
While a Bench of two Judges held in Vaitheeswaran 's case that two years delay in execution of the sentence after the judgment of the trial court would entitle the condemned prisoner to ask for commutation of his sentence of death to imprisonment for life, a three Judges ' Bench held, in Sher Singh 's case, that delay alone is not good enough for commu tation and two year 's rule could not be laid down in the cases of delay and that the Court in the context of the nature of the offence and delay, could consider the question of commutation of death sentence.
In Javed 's case this Court observed that where the condemned man had suffered more than two years and nine months and was repenting and there was nothing adverse against him in the jail records, this period of two years and nine months with the sentence of death heavily weighing on his mind, would entitle him for commuta tion of sentence of death into imprisonment for life.
The questions for consideration in these cases were: (a) whether prolonged delay in execution of the sentence of death rendered it inexecutable and entitled the accused to demand the alternate sentence of imprisonment for life, (b) what should be the starting point for computing this delay, (c) what were the rights of a condemned prisoner who had been sentenced to death but not executed, and (d) what could be the circumstances which should be considered along with the time that had been taken before the sentence is execut ed.
On October 11, 1988 this Court dismissed all the writ petitions, except Writ Petition No. 1566 of 1985, which was partly allowed and the sentence of death awarded to the accused was substituted by the sen 511 tence of imprisonment.
Over ruling the decision in Vaithees warans case that two years ' delay would make the sentence of death inexecutable, this Court held that undue long delay in execution of the sentence of death would entitle the condem ned person to approach this Court under Article 32 but this Court would only examine the nature of delay caused and circumstances ensued after sentence was finally confirmed by the judicial process and would have no jurisdiction to reopen the conclusions reached by the Court while finally maintaining the sentence of death, that this Court, might consider the question of inordinate delay in the light of all circumstances of the case to decide whether the execu tion of the sentence should be carried out or should be altered into imprisonment for life and that no fixed period of delay would be held to make the sentence of death inexe cutable.
Reasons for the judgment were to follow.
Giving the reasons for the Judgment, HELD: Majority: Oza, Murari Mohon Dutt, Singh and Sharma JJ.
Per Oza, J: 1.1 The delay which could be considered while consider ing the question of commutation of sentence of death into one of life imprisonment could only be from .the date the judgment by the apex Court is pronounced i.e when the judi cial process has come to an end.
[528E F] 1.2 The condemned prisoner knows that the judgment pronounced by the Sessions Court in the case of capital punishment is not final unless confirmed by the High Court.
All the delay upto the final judicial process is taken care of while the judgment is finally pronounced, and in a number of cases the time that has elapsed from the date of offence till the final decision, has weighed with the courts and lesser sentence awarded only on this account.
[526E, H; 527A] State of Uttar Pradesh vs Lalla Singh and others, ; Sadhu Singh vs State of U.P., AIR 1978 SC 1506; State of U.P.v.
Sahai, AIR 1981 SC 1442 and Joseph Peter vs State of Goa, Daman & Diu, ; , referred to.
Piare Dusadh and others vs The King Emperor, [1944] Federal Court Reports 61, referred to.
1.3 Practically, in all the High Courts a confirmation case i.e. a 512 case where the sentence of death is awarded by the Sessions Court and is pending in the High Court for confirmation in the High Court a time bound programme is provided in the rules and, except on some rare occasions, the High Court has disposed of a confirmation case between six months to one year.
At the Sessions level also, the normal procedure of the sessions trial is that it is taken up day today and it is expected that such a sessions case should be given top priority and it is expected that such trials must continue day to day till it is concluded.
Even in this Court, al though there is no specific rule, normally these matters are given top priority, and ordinarily, it is expected that these matters will be given top priority and shall be heard and disposed of as expeditiously as possible.
Therefore, as long as the matter is pending in any Court before any final adjudication, even the person who has been condemned or sentenced to death has a ray of hope.
Therefore, it could not be contended that he suffers that mental torture which a person suffers when he knows that he is to be hanged but waits for the Dooms day.
[527G H; 528C E] 1.4 After the matter is finally decided judicially, it is open to the person to approach the President or the Governor as the case may be with a mercy petition.
It is no doubt true that sometimes such mercy petition and review petitions are filed repeatedly causing delay, but a legiti mate remedy if available in law, a person is entitled to seek it and it would, therefore, be proper that if there has been undue and prolonged delay, that alone will be a matter attracting the jurisdiction of this Court, to consider the question of execution of the sentence.
However, while con sidering the question of delay after the final verdict is pronounced, the time spent on petitions for review and repeated mercy petitions at the instance of convicted person himself shall not be considered.
[528F, G; 529A] 1.5 The only delay which would be material for consider ation will be the delay in disposal of the mercy petitions or delays occurring at the instance of the Executive.
[529B] 1.6 When petitions under article 72 or 161 are received by the authorities concerned, it is expected that these peti tions shall be disposed of expeditiously.
[529C] T.V. Vaitheeswaran vs State of Tamil Nadu, , over ruled.
Sher Singh & Others vs The State of Punjab, ; , affirmed.
513 Javed Ahmed Abdul Hamid Pawala vs State of Maharashtra, ; , referred to.
2.1 A judgment of the Court can never be challenged under article 14 or 21 and, therefore, the judgment of the court awarding the sentence of death is not open to chal lenge as violating article 14 or 21.
[531G H] Naresh Shridhar Mirajkar and Ors.
vs State of Maharash tra and Anr.
; , and A.R. Antulay vs R.S. Nayak and another; , , relied on.
2.2 The only jurisdiction which could be sought to be exercised by a prisoner for infringement of his rights can be to challenge the subsequent events after the final judi cial verdict is pronounced and it is because of this that on the ground of long or inordinate delay a condemned prisoner could approach this Court.
[532A B] 2.3 It will not be open to this Court in exercise of jurisdiction under article 32 to go behind or to examine the final verdict reached by a competent court convicting and sentencing the condemned prisoner and even while considering the circumstances in order to reach a conclusion as to whether the inordinate delay coupled with subsequent circum stances could be held to be sufficient for coming to a conclusion that execution of the sentence of death will not be just and proper.
The nature of the offence, circumstances in which the offence was committed will have to be taken as found by the competent court while finally passing the verdict.
It may also be open to the court to examine or consider any circumstances after the final verdict was pronounced if it is considered relevant.
[532B D] 2.4 The question of improvement in the conduct of the prisoner after the final verdict also cannot be considered for coming to the conclusion whether the sentence could be altered on that ground also.
[532D] 3.1 Before 1955, sentence of death was the rule, the alternative sentence had to be explained by reasons.
There after, it was left to the discretion of the court to inflict either of the sentences and ultimately in the 1973 Code normal sentence is imprisonment for life except that for the special reasons to be recorded sentence of death could be passed.
This indicates a trend against sentence of death but this coupled with the decisions wherein sentence of death has been accepted as constitu 514 tional, show that although there is a shift from sentence of death to lesser sentence, there is a clear intention of maintaining this sentence to meet the ends of justice in appropriate cases.
Therefore, in spite of the divergent trends in the various parts of the world there is a consist ent thought of maintaining the sentence of death on the statute book for some offences and in certain circumstances where it may be thought necessary to award this extreme penalty.
It is awarded in the rarest of rare cases and this is the accepted position of law.
[524B D] Bachan Singh etc.
vs State of Punjab etc.
; , and Machhi Singh and others vs State of Punjab, referred to. 3.2 The circumstances in which the extreme penalty should be inflicted cannot be enumerated in view of complex situation in society and the possibilities in which the offence could be committed and the Legislature was, there fore, right in leaving it to the discretion of the judicial decision as to what should be the sentence in particular circumstances of the case.
But the Legislature has put a further rider that when the extreme penalty is inflicted it is necessary for the court to give special reasons thereof.
[525H; 526A B] 4.
The prisoner, who is sentenced and kept in jail custody under a warrant under section 366(2) of the Criminal Procedure Code is neither suffering rigorous imprisonment nor simple imprisonment.
In substance, he is in jail so that he is kept safe and protected with the purpose that he may be available for execution of the sentence which has been awarded.
Hence this will not amount to double jeopardy.
[53 1E] The life of the condemned prisoner in jail awaiting execution of sentence must be such which is not like a prisoner suffering the sentence, and it is essential that he must be kept safe.
[531F] Sunil Batra vs Delhi Administration, ; re ferred to.
Per Jagannatha Shetty, J (Concurring): 5.
Article 21 demands that any procedure which takes away the life and liberty of persons must be reasonable, just and fair.
This procedural fairness is required to be observed at every stage and till the last breath of the life.
[546C] 515 Maneka Gandhi vs Union of India, [1978] 1 SCC 248; The State of West Bengal vs Anwar Ali, ; ; Bachan Singh vs State of Punjab ; Mithu vs State of Punjab, ; and Sher Singh vs State of Punjab, [1983] 2 SCC 582, relied on.
6.1 The delay which is sought to be relied upon by the accused consists of two parts.
The first part covers the time taken in the judicial proceedings.
It is the time that the parties have spent for trial, appeal, further appeal and review.
The second part takes into fold the time utilized by the executive in the exercise of its prerogative clemency.
[547H; 548A B] 6.2 The time taken in the judicial proceedings by way of trial and appeal was for the benefit of the accused.
It was intended to ensure a fair trial to the accused and to avoid hurry up justice.
The time is spent in the public interest for proper administration of justice.
If there is inordinate delay in disposal of the case, the trial court while sen tencing or the appellate court while disposing of the appeal may consider the delay and the cause thereof along with other circumstances.
The court before sentencing is bound to hear the parties and take into account every circumstance for and against the accused.
If the court awards death sentence, notwithstanding the delay in disposal of the case, there cannot be a second look at the sentence, save by way of review.
[548F H] 6.3 There cannot be a second trial on the validity of sentence based on article 21.
The execution which is impugned is execution of a judgment and not apart from judgment.
If the judgment with the sentence awarded is valid and binding, it fails to be executed in accordance with law.
Therefore, if the delay in disposal of the case is not a mitigating circumstance for lesser sentence, it would be wholly inap propriate to fail back upon the same delay to impeach the execution.
[548H; 549A B] 6.4 If the delay in passing the sentence cannot render the execution unconstitutional, the delay subsequent thereof cannot also render it unconstitutional Much less any fixed period of delay could be held to make the sentence inexe cutable.
It would be arbitrary to fix any period of limita tion for execution on the ground that it would be a denial of fairness in procedure under Article 21.
[549B C] T.V. Vaitheeswaran vs State of Tamil Nadu, , over ruled.
516 6.5 The time taken by the executive for disposal of mercy petitions may depend upon the nature of the case and the scope of enquiry to be made.
It may also depend upon the number of mercy petitions submitted by or on behalf of the accused.
The Court, therefore, cannot prescribe a time limit for disposal of even mercy petitions.
However, Article 21 is relevant at all stages, and the principle that speedy trial is a part of one 's fundamental right to life and liberty is no less important for disposal of mercy petition.
[549E F] Hussainara Khatoon vs The State of Bihar, [1979] 3 SCR 169 and ; and Kadra Pahadiya vs State of Bihar, and relied on.
6.6 It has been universally recognised that a condemned person has to suffer a degree of mental torture even though there is no physical mistreatment and no primitive torture.
He may be provided with amenities of ordinary inmates in the prison.
But nobody could succeed in giving him peace of mind.
[549G H] Sunil Batra vs Delhi Administration, ; re ferred to.
As between funeral fire and mental worry, it is the latter which is more devastating, for, funeral fire burns only the dead body while the mental worry burns the living one.
This mental torment may become acute when the judicial verdict is finally set against the accused.
Earlier to it, there was every reason for him to hope for acquittal.
That hope is extinguished after the final verdict.
If, therefore, there is inordinate delay in execution, the condemned pris oner is entitled to come to the court requesting to examine whether, it is just and fair to allow the sentence of death to be executed.
[550C] 6.7 The jurisdiction of the Court at this stage, is extremely limited.
The Court, while examining the matter, cannot take into account the time utilised in the judicial proceedings up to the final verdict.
The Court also cannot take into consideration the time taken for disposal of any petition filed by or on behalf of the accused either under article 226 or under article 32 of the Constitution after the final judgment affirming the conviction and sentence.
The Court may only consider whether there was undue long delay in disposing of mercy petition; whether the State was guilty of dilatory conduct and whether the delay was for no reason at all.
Though the inordinate delay may be a significant factor, but that by itself cannot render the execution uncon 517 stitutional.
Nor it can be divorced from the dastardly and diabolical circumstances of the crime itself.
[550D G] T.V. Vaitheeswaran vs State of Tamil Nadu, over ruled.
Sher Singh vs State of Punjab, ; affirmed.
Javed Ahmed Abdul Hamid Pawala vs State of Maharashtra, ; ; Vivian Rodrick vs The State of West Bengal, ; ; State of U.P. vs Paras Nath Singh & Ors., ; Bihar vs Pashupati Singh, ; ; State of U.P. vs Suresh, at 643; State ofU. P. vs Sahai, ; Ram Adhar vs State of U.P., at 777; State of U.P. vs Lalla Singh ; Nachhittar Singh vs State of Punjab, ; Maghar Singh vs State of Punjab, ; Lajar Mashi vs State of U.P., ; Hussainara Khatoon vs The State of Bihar, [1979] 3 SCR 169 and ; and Kadra Pahadiya vs State of Bihar, and referred to.
6.8 If the Court wants to have a look at the grievance as to delay then there should not be any delay either in listing or in disposal of the matter.
The person who com plaints about the delay in the execution should not be put to further delay.
The matter, therefore, must be expedi tiously and on top priority basis, disposed of.
[550D E] 6.9 The contention that the accused should not be exe cuted if he has since improved is unavailable, since it seeks to substitute a new procedure which the Code does not provide for.
[551B] 7.
The judicial verdict pronounced by court in relation to a matter cannot be challenged on the ground that it violates one 's fundamental right.
The judgment of a court cannot be said to affect the fundamental rights of citizens.
[534A B] Naresh Sridhar Mirajkar, relied on.
It is now obligatory for the court to state reasons for the sentence awarded for the offence of murder.
The court cannot award death sentence without giving special reasons and only in exceptional cases and not in the usual run of murders.
There are just six offences carrying death penalty and that too as an alternate sentence.
[543E F] 518 9.
The criminal law always keeps pace with the develop ment of society.
The punishment which meets the unanimous approval in one generation, may rank as the most reprehensi ble form of cruelty in the next.
The representatives of the people are cognizant of the contemporary social needs.
The legislative amendments brought about from time to time are indicative of their awareness.
The penal law cannot remain isolated and untouched.
It will be profoundly influenced by philosophy prevailing.
Time may reach for the representa tives of people to consider that death penalty even as an alternate sentence for murder is uncalled for and unneces sary.
There is nothing in our Constitution to preclude them from deleting that alternate sentence.
[540C; 542H; 543H; 544A] Bachan Singh vs State of Punjab, and Mithu vs State of Punjab, ; , referred to.
The practice prevailing over the years had been that a larger bench straightaway considers the correctness of and, if necessary, overrules the view of a smaller bench.
This practice has been held to be the crystallised rule of law in a recent decision by a special bench of seven judges of this Court.
This must be regarded as a final seal to the controversy, and it is now not open to any one to contend that a bench of two judges cannot be overruled by a bench of three judges.
[536H; 537E] A.R. Antulay vs
R.S. Nayak, AIR 2988 SC 1532, followed. |
Civil Appeals Nos.
1221 1226 of 1974.
(Appeals by.
Special Leave from the Judgment and Order dated 26 2 1974 of the Andhra Pradesh High Court in Tax Revision Cases Nos. 5 10 of 1973).
K. Sen, S.T. Desai, B.M. Bagaria and D.P. Mukherjee, for the appellants.
P.P. Rao and T.V.S.N. Chari for the respondent.
The Judgment of the Court was delivered by RAY, C.J.
These six appeals are by special leave from the judgment dated 26 February, 1974 of the Andhra Pradesh High Court.
The principal question in these appeals is whether the appellants are the last purchasers of manganese ore within the State of Andhra Pradesh.
The appellants contended before the Sales Tax authorities that their sales of manga nese ore to the Mines and Minerals Trading Corporation in short called the M.M.T.C. were complete within the State of Andhra Pradesh.
The appellants therefore contended that they were not the last purchasers but the M.M.T.C. was the last purchaser within the State, and therefore, the M.M.T.C. was liable to pay the tax.
The High Court came to the conclusion that the appel lants were the last purchasers in the State.
The High Court held that the contract between the appellants and the M.M.T.C. indicated that the appellants ' contract of sale occasioned the export and that the contract of the appel lants with the M.M.T.C. was integrally connected with the contract entered into by the M.M.T.C. with their foreign buyer.
In short, the High Court held that there existed a bond between the contracts of sale entered into by the appellants with the M.M.T.C. and the actual exportation of the goods.
The High Court held that these contracts were intrinsically linked and connected and the sales effected were held to be sales in the course of export of manga nese ore out of the territory of India.
443 The Constitution Bench of this Court in the recent decision in Mohd. Serajuddin etc.
vs State of Orissa(1) held that manganese merchants who bought manganese from mines and thereafter sold the goods to the State Trading Corporation for short the S.T.C. could not be said on the terms and conditions of the contracts in that case to be exporters of the goods.
The S.T.C. contracts with the manganese merchants and the S.T.C. contracts with the For eign Buyers were held not to be integrated activities in the course of export.
The crucial words in section 5 of the are that a sale or purchase of goods shall be deemed to take place out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India.
This Court found that the contracts between the manganese merchants and the S.T.C. on the one hand and the contracts between the S.T.C. and their foreign buyers on the other were two separate and independent con tracts of sale.
The S.T.C. entered into direct contract with their foreign buyers.
The S.T.C. alone agreed to sell the goods to their foreign buyers.
The S.T.C. was the exporter of goods.
There was no privity of contract between the manganese merchants and the foreign buyers from the S.T.C.
The privity of contract was between the S.T.C. and the foreign buyers.
The immediate cause of the movement of goods and export was the contract between the foreign buyers who were the importers and the S.T.C. who was the exporter and shipper of the goods.
In Serajuddin 's case (supra) this Court referred to the rulings in Coffee Board Bangalore vs Joint Commercial Tax Officer Madras (a) and M/s Binani Bros. (P) Ltd. vs Union of India & Ors.(3) as laying down the correct tests to find out the sale in the course of export.
The tests are that there must be a single sale which itself causes the export or is in the progress or process of export.
There is no room for two or more sales in the course of export.
The only sale which can be said to cause the export is the sale which itself results in the movement of the goods from the export er to the importer.
Counsel for the State submitted that there were six contracts and it has been the case of the appellants that the contracts were different, and, therefore, there should be examination of five other contracts.
It may be stated here that counsel for the State did not dispute that the decision in Serajuddin 's case (supra) applied to one of the six contracts but he disputed the application of the ruling in Serajuddin 's case to the other five contracts.
The reasons given by counsel for the State are these.
Only one contract was referred to in the High Court.
The case of the appellants has all along been that the Sales Tax Appel late authorities considered only one contract.
The High Court also considered only one contract.
In the special leave petition the appellants assailed the assumption made by the High Court to the effect that all contracts between the appellants and the M.M.T.C. were similar.
(1) [1975] Supp.
S.C.R. 169.
(2) ; (3) ; 444 Counsel for the State put in the forefront the conten tion that the M.M.T.C. could not be the last purchaser of goods within the State of Andhra Pradesh because property in the goods passed from the appellants to the M.M.T.C. on board the ship.
In aid of that contention reliance was placed on F.O.B. character of the contract between the appellant and the M.M.T.C.
The position is identical in all the six contracts.
This Court in Serajuddin 's case (supra) pointed out that mention of F.O.B. price in the contracts between the manga nese merchants and the S.T.C. did not render these contracts F.O.B. contracts with the foreign buyers from the S.T.C.
The reason is simple.
The contracts between the S.T.C. and the foreign buyers are different contracts and it is the S.T.C. which entered into independent contracts with their foreign buyers on F.O.B. basis.
Under the contracts between the manganese merchants and the S.T.C. the merchants were required to bring the goods F.O.B. to the ship named by the S.T.C.
It has to be appreciated that quite often merchants dealing in goods which are exported out of our country enter into what is called string contracts for purchase of the goods from the factory or the mines for sale to exporters for sale to foreign buyers.
The Trading Corporations are often the only authorities allowed to export out of our country.
These Corporations enter into direct contracts with their foreign buyers for export.
The directions given by the Corporations to the merchants to place the goods on board the ship are pursuant to the contracts of sale between the merchants and the Corporation.
These directions are not in the course of export, because the export sale is an independent one between the Corporation and their foreign buyers.
The taking of the goods from the merchants ' place to the ship is completely separate from the transit pursuant to the export sale (See Serajuddin 's case at pp.
184 185).
In string contracts or chain contracts delivery is made by the original seller and eo instanti it is delivered in implement under each separate contract in the chain.
In chain or string contracts starting between the mills or mines or factories and their immediate buyer and ending with the ultimate buyer through several intermediaries not only does the mill give and its immediate buyer take actual delivery but eo instanti each middleman gives and takes actual delivery This process of delivery of possession goes all along the chain at the same moment when delivery is made to the steamer.
See Duni Chand Rataria vs Bhuwalka Brothers Ltd.(1).
In F.O.B. contracts the seller 's duty is to place the goods "free on board" a ship to be named by the buyer.
When the seller delivers the goods for loading on board he normally obtains a mate 's receipt which he transmits to the buyer and the buyer exchanges this for the proper bill of lading.
In this sort of F.O.B. contract the almost univer sal rule is that property and risk both pass on shipment as soon as the goods are over the ship 's rail and if it should be material, the property and risk in each part of the cargo will pass as it crosses the (1) ; 445 ship 's rail.
The loading of the goods is an unconditional appropriation which passes the property.
This is not because of any peculiarity of F.O.B. contracts but because in this type of contract the seller 's duty is to deliver the goods F.O.B. Once they are on board the seller has delivered them to the buyer and it is natural that they should thereafter be at the buyer 's risk.
Now a days a party which has contracted to sell goods to a foreign buyer may itself buy the goods F.O.B. Indian port from Indian seller in order to fulfill F.O.B. contract with a foreign buyer.
This Court in Serajuddin 's Case '(supra) has laid down that the mere mention of F.O.B. price or F.O.B. delivery in contract between a merchant and the S.T.C. which .exports the goods under a separate contract with the foreign buyer to the latter will not make the two contracts either inte grated or the contract between the merchant and the S.T.C. an F.O.B. contract.
There cannot be two last purchasers in the sale of same goods within the same State.
Similarly, there cannot be two exporters in respect of the same goods.
After the decision of the Constitution Bench in Serajuddin 's case (supra) the decision in National Tractors Hubli vs Commissioner of Commercial Taxes Bangalore(1) is no longer good law.
In the National Tractors case (supra) which was a three Judge Bench decision reliance was placed on the decision in B.K. Wadeyar vs M/s. Daulatram Rameshwarlal(2).
In Wade yar 's case (supra) this Court said that the normal presump tion attaching to F.O.B. contracts is that property in the goods passes only when they are put on board the ship.
Wadeyar 's case (supra) was before the Central Safes Tax Act 1956.
Further the Bill of Lading, the export licence and the export clause all showed that the export did not commence till the slip left the port.
In the National Tractors case (supra) it was said that the purchase by the State Trading Corporation from the merchant was in the course of export by the S.T.C. to the foreign buyer and, therefore, the purchase by the merchant from the mine owner was the last purchase in the State.
The basis of the decision is that these were integrated F.O.B. contracts in the course of export.
The decision in National Tractors case (supra) made no reference to the decision of this Court in Coffee Board case (supra).
The correct law is laid down by this Court in the Coffee Board case and Serajuddin 's case (supra).
The law is this.
It has to be found out whether the contracts between the merchants and the Corporation are integrated contracts in the course of export or they are different.
If they are different contracts, as they are in the present case, the last purchaser within the State is the M.M.T.C.
For the foregoing reasons the appeals are accepted.
The judgment of the High Court is set aside.
The parties will pa their costs.
P.B.R. Appeals allowed. | Under item 1 in the Second Schedule to the Andhra Pradesh General Sales Tax Act 1957, manganese ore was liable to be taxed at the point of purchase by the last dealer who bought in the State.
The appellants sell manganese ore to the Mines and Minerals Trading Corporation which exports the ore to buyers in foreign countries.
Their contention before the Sales Tax authorities that the sales of the ore to the MMTC were complete within the State of Andhra Pradesh and that it was the MMTC which was the last purchaser liable to pay sales tax was rejected.
On appeal the High Court held that the appellants ' contracts with the MMTC were integrally connect ed with the contract entered into by the MMTC with the foreign buyer and, as such, the appellants were the last purchasers liable to pay the tax.
The respondent State contended before this Court that since the property in the goods passed from the appellants to the MMTC on board the ship in view of the f.o.b.
charac ter of the contract, it was the appellants who, as the last purchasers, were liable to pay the tax and not the MMTC, Allowing the appeals, HELD: The law is that it has to be found out whether the contracts between the merchants and the Corporation are integrated contracts in the course of export or different contracts.
If they are different, the last purchaser within the State is liable to pay the sales tax.
[446G] (i) The tests for finding out the sale in the course of export are that there must be a single sale which itself causes the export or is in the progress or process of ex port.
There is no room for two or more sales in the course of export.
The only sale which can be said to cause the export is the sale which itself results in the movement of the goods from the exporter to the importer.
[443E F] (ii) State Corporations are often the only authori ties allowed to export goods out of the country.
These corporations enter into contracts with foreign buyers for export and the Corporations in turn give directions to the merchants to place the goods on board a ship.
These direc tions are not in the course of export because the export sale is an independent one between the Corporations and their foreign buyers.
[444D E] (iii) In f.o.b. contracts the sellers ' duty is to place the goods free on board a ship named by the buyer but the mere mention of f.o.b. price or f.o.b. delivery in a contract between the merchants and the trading corporations which export the goods under a separate contract with the foreign buyers to the latter will not make the two contracts either integrated or the contract between the merchants and the Corporation an f o.b. contract.
There cannot be two last purchasers in the sale of the same goods within the same State.
There cannot be two exporters in respect of the same goods.
[444G & 445C] 442 (iv) In string contracts the contracts between the Corporation and the foreign buyers are different and it is the Corporation which enters into independent contracts with foreign buyers on f.o.b. basis.
Under the terms of the contract, the merchants are required to bring the goods f.o.b.
to the ship named by the Corporation.
[444C] Mohd. Serajuddin etc.
vs State of Orissa [1975] Supp.
S.C.R. 169, Coffee Board, Bangalore vs Joint Commercial Tax Officer, Madras ; and M/s. Binani Bros. (P) Ltd. vs Union of India & Ors.
[1974] 1 S.C.C. 459, followed.
National Tractors Hubli vs Commissioner of Commercial Taxes Bangalore , no longer good law. |
APPEAL NO. 691 of 1976.
(From the Judgment & Order dated the 16th December 1975 of the Gujarat High Court in Special Civil Appln.
No. 572 of 1975).
G.L. Sanghi and Girish Chandra, for the Appellants.
480 V.M. Tarkunde, K.L. Hathi and Mrs. P.C. Kapur, for respondent No. 1.
The Judgment of the Court was delivered by GOSWAMI, J.
This appeal on certificate is from the judgment of the High Court of Gujarat.
The appellants 1 and 2 are respectively the Union of India and the Regional Provident Fund Commissioner.
Dhrangadhra Chemical Works Kamdar Sangh (hereinafter to be described as the union) is the first respondent.
The second respondent is Dhrangadhra Chemical Works (hereinafter to be described as the employer).
With respect to the dearness allowance (D.A.) of the workers under the employer there was a reference No. 70/70 before the Industrial Tribunal at Ahmedabad.
The parties arrived at a settlement of the said industrial dispute and an award was passed in terms of the settlement.
According to the award the employer was to pay D.A. to its employees at the rate of the quarterly average cost of living index as settled by the Simla Bureau, popularly known as "All India Consumers Price Index" for the relevant quarter.
Thus for the 'months of January, February and March, 1974, the rate of D.A. was on the basis of the average cost of living index for the months of July, August and September 1973 as pub lished by the said Bureau and this was to follow for every quarter.
It is the accepted position that for the months of April, May and June 1974 the D.A. worked out at Rs. 78/ per month, but for the quarter.
commencing on 1st July, 1974, and ending on 30th September, 1974, it worked out at Rs. 88.50 per month.
In other words, it was an agreed position between the union and the employer that the rate of D.A. payable to all the workers from 1st July, 1974, was at the rate of Rs. 88.50 per month.
With effect from 6th July, 1974, The Additional Emolu ments (Compulsory Deposit) Ordinance 1974 came into force.
This Ordinance was replaced by The .
(Act No. 37 of 1974) (briefly the Act) and the Act is deemed to have come into force on the 6th day of July 1974.
We have already made a detailed reference to the aim and object of the Act and also dealt with the material provi sions thereof in dealing with a similar question in Civil Appeal No. 690 of 1976 in which we have delivered our judg ment to day(1).
It is, therefore, not necessary to repeat those observations here.
The short question that arises in this particular appeal turns on the Explanation I to section 2(b) of the Act.
We will, therefore, read that provision: "2(b) 'additional dearness allowance ' means such dearness allowance as may be sanc tioned from time to time, after the appointed day, over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect.
(1) [1977] 2 S.C.R.472.
481 Explanation I.
Where payment of dearness allowance is linked to a cost of living index or any other factor, any automatic payment, after the appointed day, of dearness allowance in consequence of any rise in such cost of living index or in consequence of any change in such other factor shall, notwithstanding the provisions of this clause, be deemed to be the additional dearness allowance.
" It is clear under section 2(b) that additional D.A. has to be sanctioned after the appointed day. "Sanctioned" is the heart of the definition clause.
Since additional D.A. is defined to mean such D.A. as may be sanctioned from time to time after the appointed day, Explanation I 'to the definition is inserted to.
deal with a situation to avoid any controversy about the sanction while there is an auto matic rise in D.A. linked to a cost of living index.
Where D.A. is linked to a cost of living index any automatic payment, after the appointed day, of D.A. in consequence of any rise in such cost of living index shall be deemed to be the additional D.A.
In the absence of Explanation I there would have been scope for controversy whether additional D.A. which is paid automatically with the rise in the cost of living index, as agreed upon, can be said to be D.A. sanctioned from time to time.
Such a controversy is set at rest by insertion of Explanation I which is a deeming clause.
The question that arises for consideration in this appeal is whether the rise in the cost of living index has also got to be after the appointed day.
The union contends that the D.A. of Rs. 88.50 which is payable from 1st of July, 1974, for the quarter 1st July, 1974 to 30th Septem ber, 1974 is an pursuance of the rise of cost of living index between January to March 1974 which is prior to the appointed day, namely, 6th July, 1974.
It is, therefore, submitted that no additional D.A. is deductible under the Act.
The High Court has accepted the contention of the union and allowed the application under Article 226 of the.
Con stitution granting a Mandamus restraining the employer from deducting additional D.A. from the emoluments of the em ployees.
The High Court also granted certificate to appeal to this Court.
it is common knowledge that when D.A. is linked to a cost of living index, actual determination of the D.A. takes place after the index is published and known.
The index, therefore, is always of a past period by the yardstick of which D.A. is adjusted.
This being the concept about link age of D.A. to cost of living index, Explanation I makes it clear that when payment of D.A. is linked to a cost of living index any automatic payment after the appointed day of D.A. in consequence of any rise in the cost of living index shall.
notwithstanding the provisions of this clause, be deemed to be the additional D.A.
The non obstante clause in the Explanation takes note of the definition clause where sanction after the appointed day has been mentioned.
Explanation I therefore, plays its role, not withstanding whatever is stated in section 2(b), the definition clause.
We do not find anything in Explana tion I to warrant the conclusion that rise of the cost of living index should be after the appointed day.
What is to be after the appointed day is "any automatic payment of D.A. in consequence of any 482 rise . "and not that any rise in the cost of living index should be after the appointed day.
We are, therefore, unable to agree with the High Court that the rise of cost of living index also should be after the appointed day.
It is sufficient for the purpose of Explanation I if payment of D.A., in consequence of rise of cost of living index, takes place after the appointed day on account of rise in the cost of living index even prior to the appointed day.
The nexus for the purpose of Explana tion I is with the payment after the appointed day and not with the rise in the cost of living index.
The specified percentage of additional D.A. which is 50% of the rise, being the difference, between Rs. 78/ and Rs. 88.50 is, therefore, deductible under section 6(2)(b) of the Act and the High Court was not correct in holding to the contrary.
The appeal is allowed and the judgment of the High Court is set aside.
There will be, however, no order as to costs.
P.B.R. Appeal allowed. | Section 2(b) of the defines additional dearness allowance to mean such dearness allowance as may be sanctioned from time to time after the appointed day over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect.
Expla nation I to the clause states that where payment of dearness allowance is linked to the cost of living Index any auto matic payment after the appointed day of dearness allowance in consequence of any rise in such cost of living index or in consequence of any change in such other factor shall, notwithstanding the provisions of this clause, be deemed to be the additional dearness allowance.
Dearness allowance was paid to the employees of the respondent at the rate of quarterly average cost of living index for the relevant quarter.
The rate of dearness allow ance for one quarter e.g. the first quarter of 1974 was paid on.
the basis of the average cost of living index for the months of July September, 1973.
For the quarter July September, 1974 there was a rise in the cost of living index and consequently there was a rise in the dearness allowance payable to the employees.
In a writ petition under article 226 of the Constitution the employees contended that the increased dearness allowance payable for the quar ter July September, 1974 was as a result of rise in the cost of living index between January March, 1974 which was before the appointed day in July 6, 1974 and, therefore, no additional dearness allowance was deductible under the Act.
The High Court granted the writ.
Allowing the appeal, HELD: The High Court was wrong in its view that the rise of cost of living index should be after the appointed day.
The nexus, for the purpose of the explanation, is with the payment after the appointed day and not with the rise in the cost of living index.
There is nothing in the Explanation to warrant the conclusion that rise in the cost of living index should be after the appointed day.
What is to be after the appointed day is any automatic payment of dearness allowance in consequence of any rise in such cost of living index and not that any rise in the cost of living index should be after the appointed day.
[482B: 481H] When D.A. is linked to the cost of living index, actual determination of the D.A. takes place after the index is published and known.
The index, therefore, is always of a past period by the yard stick of which D.A. is adjusted.
This being the concept about linkage of D.A. to cost of living index.
Explanation I makes it clear that when pay ment of D.A. is linked to cost of living index any automatic payment after the appointed day of D.A. in consequence 'of any rise in the cost of living index shall, notwithstanding the provisions of this clause, be deemed to be the addition al D.A. [481G] |
n No. 340 of 1972.
(Under article 32 of the Constitution of India).
P.H. Parekh and Miss Manju Jetlcy, for the petitioners in W.P. 340/72 excepting petitioner No. 59 and for petition ers in W.P. 1526/ 73.
Petitioner No. 59 in W.P. No. 340/72 in person.
Yogeshwar Prasad, S.K. Bagga, Mrs. section Bagga and Miss Yesh Bagga for the petitioner in W.P. No. 286/74.
Niren De, Attorney General in writ petition 340, Sardar Bahadur Saharya and Vishnu Bahadur Saharya, for respondents Nos. 1, 3, 4, 5 and 15 in W.P. 340/72 and respondents in all the W.Ps.
K.J. John for M/s. J. B. Dadachanji & Co. for R.R. 2, 6, 8, 10, and 12 in W.P. 340 & 1526 and R.R. 6, 8, 9, 11 and 12 in W,P. 286/74.
S.K. Mehta, K.R. Nagaraja and P.N. Puri for R.R. 13 178 in W.P. 1526/73.
The Judgment of the Court was delivered by RAY, C.J.
This Court on 29 August, 1974 appointed Shri Debabrata Mookerjee Chairman to convene, fix the date and hold the meeting of New Friends Cooperative House Build ing Society Ltd. referred to as the Society in accordance with the provisions of the Delhi Co operative Societies Act, 1972.
This meeting was direct 374 ed to be held for the purpose of electing the members of the New Managing Committee The Chairman was directed to look into each and every disputed question of membership.
The Chairman was further directed to decide whether the persons had been rightly or wrongly declared to be defaulters.
The order further directed that if the Chairman came to the conclusion that the person had been wrongly declared to be a defaulter, the Chairman would include him or her in the list of members.
The Chairman was also asked to give effect to all orders of this Court already made in regard to persons who were declared defaulters and who according to orders of this Court on payment of moneys are not and cannot be treat ed defaulters.
The Chairman was asked to go into cases where money had been sent and not accepted.
If the Chairman came to the conclusion that money had been wrongly not accepted, the Chairman would decide the same in accordance with Rules and Bye laws of the Society.
There are further details in the order dated 29 August, 1974.
In the order dated 29 August, 1974 Brij Mohan Malhotra was given liberty to adduce proof before the Chairman that the money was tendered Within time.
If the Chairman came to the conclusion that it was tendered in time, he would decide in accordance with Rules and Bye laws of the Society.
The Chairman was entitled to scrutinise whether any person had been either illegally brought in as a member or illegally removed, having regard to the rules, bye laws and regulations of the Society.
Inder Bir Kaur alleged that she had been illegally removed from membership.
The Chairman was directed to go into the question.
The order was made in two writ petitions No. 340 of 1972 and 1526 of 1973 and in a number of miscellaneous applica tions.
On 6 July, 1971 the Lt. Governor passed an award direct ing the Society to pay Rs.22 lakhs to the Delhi Administra tion.
On 9 July, 1971 the Lt Governor by a notification removed the elected Managing Committee and appointed a nominated ' Managing Committee under Rule 56 of the Rules made under the Bombay Cooperative Societies Act, 1925 here inafter referred to as the Bombay Act which applied to Delhi.
The term of the Managing Committee was for one year.
On 23 October, 1971 the nominated Managing Committee passed a resolution to make the award rule of the Court.
On 18 December, 1971 the nominated Managing Committee passed a resolution for having direct sub leases.
On 22 January, 1972 the nominated Managing Committee called for more funds.
On 5 July, 1972 the Lt. Governor issued second notification extending the term of the nominated Managing Committee by two years.
The Society was the subject matter of two writ peti tions.
287 members of the Society filed writ petition No. 340 of 1972 hereinafter referred to Raj Rani 's petition.
The members challenged 375 the vires of Rule 56 of the Society on the ground that the rule.was ultra rites section 71 of the Bombay Act and fur ther that the rule was bad on account of excessive delega tion.
The petitioners contended that action under Rule 56 could not.
be taken without complying with the provisions of section 46A of the Bombay Act which was applicable to.
Delhi at the relevant time.
The petitioners also challenged some notifications on the ground that the Lt. Governor having exercised his powers once could not extend the term, In short, it was said that the power of the Lt. Governor was exhausted.
The other challenges were that the notifications were not speaking order and were made malafide.
The broad challenge in the petition was against the extension of term of the Managing Committee.
On 29 August, 1972 Rule Nisi was issued.
On 30 April, 1973 the nominated Chairman of the Managing Committee issued a circular asking the members of the Socie ty to pay certain amount.
On 6 July, 1973 this Court restrained the Society and its Chairman from declaring any member a defaulter. 'On 13 August, 1973 this Court directed that all the interim orders passed in the writ petition should be confined to the petitioners in Raj Rani 's peti tion.
On 16 August, 1973 K.V. Johar filed a writ petition in a representative capacity under Order I Rule 8 of the Code of Civil Procedure.
This is writ petition No.
1526 of 1973 hereinafter referred to as Johar 's petition.
On 20 August, 1973 this Court issued Rule Nisi in Johar 's petition.
On 17 August, 1973 the nominated Managing Committee declared 321 members as defaulters.
This Court on 21 Sep tember, 1973 restrained the Society from taking any steps in pursuance of the resolution dated 17 August, 1973 against the petitioners and all other members of the Society.
On 29 November, 1973 respondent No. 6 filed an applica tion in Johar 's petition for vacating the stay order granted on 21 September, 1973.
An application for vacating the stay order granted on 6 July, 1973 in Raj Rani 's petition was not pursued.
This Court vacated the stay granted on 21 Septem ber, 1973 in Johar 's petition and granted a fortnight 's time to make the requisite payment.
On 6 January, 1974 the nominated Managing Committee declared 39 members as defaulters for non payment of dues, 42 members as defaulters for not submitting the affidavits.
This was one of the controversies which formed the subject mattter of the enquiry made by the Chairman.
On 25 January, 1974 the nominated Managing Committee decided to enrol 60 new members.
On 26 January, 1974 a confidential letter was addressed by respondent No. 6 to the Lt. Governor seeking his approval to the enrolment of 60 new members and allotment of plots to them.
On the same day, the Lt. Governor addressed a letter to respondent No. 6 giving his approval.
The enrolment of 8 1546SCI/76 376 new members on 25 January, 1974, the approval of the Lt. Governor on 26 January, 1974 and the allotment of plots to those 60 new members formed a big controversy which was also enquired into by the Chairman.
Two Civil Miscellaneous Petitions No. 1683 and 1072 of 1974 challenging the declaration of defaulters and the enrolment of new members were filed in this Court in February, 1974.
C.M.P.No.1683 of 1974 is in Raj Rani 's petition and C.M.P.No.
1072 of 1974 is in Johar 's petition.
This Court on 29 March, 1974 directed that all the papers including resolutions, original applications, original allotments should be produced in this Court on 4 April, 1974.
This Court also restrained the Managing Committee by an injunc tion from talking any steps in any manner.
On 4 April, 197 4 this Court passed directions in respect of persons who had made part payments within the time prescribed or even beyond the time prescribed not to be treated as defaulters.
This Court mentioned in its order that the allotment of plots to 60 new members who were characterised by the petitioners as very important persons appeared to have been made in undue haste and the persons in the Waiting list were not considered and that no notice was given to persons inviting application.
This Court directed that the said list of 60 new members had to await final adjudication by.
this Court.
This Court also directed that in case of 60 allot tees no further steps should be taken.
This Court directed that the case of 24 defaulters would be considered if it came to the conclusion that the allotment in favour of 60 new members would be treated as defaulters.
In the order dated 4 April, 1974 petitioners No. 60, 46, 216, 171 and 165 in Raj Rani 's petition who paid in part after due date were not to be treated as defaulters and they were given four weeks time to pay the balance.
It was said that if they failed to pay the balance within the time granted they would be treated as defaulters.
Petitioners No. 1,118, 43 and 287 in Raj Rani 's petition were stated to have paid in full but after the due date.
They were not to be treated as defaulters.
It was also said that if they had not paid the full amount, they were also given four weeks time for paying the balance,if any.
If they did not pay the balance within the time granted they would be treated as defaulters.
In Johar 's petition section Diwan, Virendra Singh, Dalip Singh and Hari Singh were stated to have made payments in part beyond time.
Iqbal Khanna and H. Bhatia were stated to have made payments in part within time.
They were all given four weeks time from the date of the order and in default of payment within the time they would be treated so defaulters.
Ten other persons in Raj Rani 's petition and 14 persons in Johar 's petition were said not to have paid within time.
A list of 31 sons was handed up to this Court by the petitioners.
These 31 persons were alleged to have been admitted as members and to have been allotted plots.
It was contended that this allotment is irregular.
These allotments were made on 26 January, 1974 to which reference has already been made.
It was 377 said that the list of 31 persons would await final adjudica tion.
Ten defaulters in Raj Rani 's petition and 14 de faulters in Johar 's petition aggregating 24 defaulters were to be considered at the time of final adjudication.
It was said that if the allotment in respect of 31 per , sons could not be allowed to stand then the cases of these 24 persons would be considered.
In this back ground on 29 August, 1974 when the two writ petitions filed by Raj Rani and K.V. Johar came up for heating this Court appointed Shri Debabrata Mookerjee as Chairman of the Society.
It may be stated here that some time in 1975 some one started a suit against the Chairman to stop the enquiry by him.
The matter was brought to the notice of this Court.
Some malicious and baseless allegations were made against the Chairman.
Under these circumstances this Court direct ed notice to the respondent who filed the suit to show cause why he should not be committed for contempt.
The Chairman was in the meantime asked to continue and he was directed to look into each and every matter as mentioned in the earlier orders.
The Chairman between 17 March, 1975 and 5 August, 1975 restored the membership of the alleged defaulters.
On 26 April, 1976 tentative voters list was published.
On 14 May, 1976 the Chairman informed the parties that election would be held on 29 August, 1976.
On 12 July, 1976 the Chairman informed the parties that the election would be held on 29 August, 1976 at Mavalankar Hall.
On 27 July, 1976 the Chairman declared that of the 60 new members who had been described as very important persons 21 did not have applications for membership and 38 were not legally admitted members and could not be included in the list.
The Chair man said that the allotment of plots in their favour could not be upheld.
On 28 July, 1976 the list of members was published.
On 17 August, 1976 there was scrutiny of the ballot papers.
On 24 August, 1976 11 persons out of the 60 persons who were enrolled members on 25 January, 1974 and allotted plots on 26 January, 1974 filed two Civil Miscellaneous praying for an order restraining the Chairman from holding the election on 29 August, 1976 These applications were held without serving any party to the proceedings contrary to the rules and practice of this Court.
On 25 August, 1976 coun sel for those petitioners mentioned the applications before the Court presided over by Khanna, J. asking that the applications filed might be heard.
It was also mentioned without informing the parties.
On 27 August, 1976 this Court further adjourned the applications.
On 29 August 1976 the meeting was held and voting took place at Mavalankar Hall.
On 23 September, 1976 the Chairman submitted his report and give copies to the parties.
On 15 October, 1976 11 persons who 378 had made the two applications for restraining of holding of the election filed an application for adjournment of the case for two months.
This Court cannot help observing two features.
One is that an attempt was made some time in the year 1975 to restrain the Chairman from proceeding with the enquiry by filing a suit against him and making baseless allegations.
It is only because this Court took immediate notice of the matter that the frivolous suit which had been filed in abuse of process of court was put an end to.
The second is that on the eve of the election another attempt was made to.
restrain the Chairman from holding the election.
These facts.
along with the attempt on the part of those 11 peti tioners to keep the matter adjourned for two months indicate the persistent attitude on the part of some of those persons to mark time for some oblique purposes.
In view of the importance of issues involved and the gravity of the situation where interest of ordinary citizens was sacrificed to meet the interest of persons of importance and influence that this Court took the aforesaid steps, in order to put an end to the litigation and the controversies, It was to be kept in the forefront that the Society is not yet the lessee of the Government in respect of the land which is to be allotted to the members.
In Volume II in Raj Rani 's petition No. 340 of 1972 appears the printed memorandum agreement to be entered into between the Society and the President of India in respect of land which will be allotted to the members of the Society, On 3 August, 1967 the Deputy Secretary, Delhi Administration wrote to the Secretary of the Society, inter alia, as follows: "I am desired to make it clear that the list of members submitted with your letter ' has been treated as final and no change in that list can be made without prior written permission of the Delhi Administration." The printed memorandum of agreement has three recitals.
One of the racitals is that whereas the Society has depos ited with the Chief Commissioner the sum of Rs.41, 62, 456.61 and has further agreed to deposit with the Chief Commissioner the additional sum or sums as hereinafter provided, being the amounts agreed to be paid by the Society to the President by way of premium for the grant to the Society of the lease hereinafter mentioned which amounts, pending the grant of the said lease, are to be a security to the President for due performance by the Society of the terms of the Agreement.
It is agreed between the parties, inter alia, as follows: 1.
The President hereby grants f0r a period of three years commencing from 13 February, 1973 a licence to the Society to enter upon the said land only for the purposes of making surveys and taking measurements and levels for preparing a lay out plan.
Upon the completion of the development of the land in accordance with the provisions contained herein and to the satisfaction of the Chief Commissioner and issue by him of a certificate to that effect 379 and provided that the other conditions of the Agreement have been duly observed, the President will, in .considera tion of the expenses incurred by the Society on the develop ment of the land and the payment of the premium and of the yearly rent as herein provided and of the covenants on the part of the Society to be;contained in the lease, grant to the Society and the Society ,shall accept a lease of such of the residential plots as may be determined by the Chief Commissioner in ,his absolute discretion.
XV(a).
After the execution and registration of the lease, the Society shall sub lease, within such time and on such premium and yearly rent as may be fixed by the President, one residential plot to each of its members who or whose wife/husband or any of his/her dependent relatives including unmarried children does not own, in full or in part, on the free hold or lease hold basis, ,any residential plot or house in the urban areas of Delhi, New Delhi or Delhi Can tonment and who may be approved by the Chief Commissioner.
Reference to the Agreement is necessary to show that the Society is not yet lessee of the Government in respect of the land.
This is a mere agreement for the grant to the Society of the lease.
The Government refused to grant lease.
Thereafter the matter was referred to the arbi tration of the Lt. Governor.
The Lt. Governor made an award directing the Society to pay Rs.22,45,742/ as the balance amount representing the cost of land.
In 1972 a supplementary agreement was made between the President of India and the Society.
One of the recitals in that agreement mentions that the Society has not completed the development of the land and the members of the Managing Committee resolved that the Lt. Governor of Delhi be re quested to allow the members to pay their individual dues to the Administration to evacute their sub teases.
This recital indicates that there was an attempt on the part of individual members to pay dues to the Society as well as to the Government.
It can, therefore, be seen that membership of the Society and the allotment of lands are different matters.
One of the main contentions before the Chairman was in regard to membership of 60 persons.
These 60 persons were admitted to membership on 25 January, 1974.
The Lt, Governor approved of their membership on 26 January, 1974.
The Chairman found that of these 60 persons 21 had at one time or another withdrawn their membership.
10 out of those 21 had either never applied or never paid the requi site membership fee.
The result, according to the Chair man, was that the cases of 39 persons were to be consid ered.
The Chairman noticed that "many of these 60 persons were highly placed Government officials and friends and relations of persons prominent in public life." Another allegation was that many of them happened "to be close relations or friends and members of the nominated Managing Committee.
" At the meeting held on 27 July, 1976 the Chairman re ferred to Rules 24 and 30 of the 1973 Delhi Cooperative Societies Rules.
These 380 rules were under the Delhi Co operative Societies Rules 1972 which replaced the Bombay Act 1925 in relation to the Union Territory.
These rules relate to conditions to be complied with for admission to membership.
Bye law 5 of the Society Bye laws was also referred to by the Chairman.
Broadly stated, Rule 24 requires a person to apply in writing in the form laid down by the Society for membership.
His application is to be approved by the Committee of the Society.
He has to fulfil other conditions laid down in the Act, the Rules and the Bye laws.
Rule 25 of the Delhi Co operative Societies Rules, 1973 provides toter alia that no person shall be eligible for admission as member of a co operative society, if in the case of membership of a housing society (1 ) he owns a residential house or a plot of land for the construction of a residential house in any of the approved or up approved colonies or other localities in the Union Territory of Delhi, in his own name or in the name of his spouse or any of his dependent children on lease hold or free hold basis; (2) he deals in purchase or sale of immovable property either as principal or as agent in the Union Territory of Delhi; or (3) he or his spouse or any of his dependent children is a member of any other housing society except otherwise permitted by the Registrar.
Rule 25(2) provides that if a member becomes or has already become subject to any disqualifications specified in sub rule (1), he shall be deemed to have ceased to be a member from the date when the disqualifications were incurred.
Rule 30 deals with the disposal of application for admission of members.
The rule provides that on receipt of an application for membership, the co operative society shall enter particulars of the application in the register of applications in the form mentioned therein.
The co opera tive society shall dispose of an application received for admission as member as early as possible and in no case later than the expiration of a period of one month from the date of receipt of the application by the Society.
In case of refusal to admit, such society shall communicate its decision together with reasons thereof.
The appeal to the Registrar lies against the order for refusal to admit a member.
An important feature in rule 30 is the date of receipt of application for membership because the applica tion is to be dealt with within one month.
Rule 30(4) provides that the person whose membership has been approved by the Managing Committee of a co operative society shall deposit the membership fee, and the amount of the qualify ing shares necessary to become a member, within 14 days of the passing of the resolution of the Managing Committee approving the membership of the person concerned.
Bye law 5, inter alia, provides that every person seek ing membership of the Society shah sign a declaration to the effect that he or his wife (she or her husband) or any of his/her dependents does not own a dwelling house or plot in Delhi and that he/she is not a member of any other coopera tive house building society.
381 Judged by these rules and considering the rival conten tions of the parties the Chairman found that of the 39 cases there was only one case of N.K. Mukherjee M. No. 1526 which fulfilled the requirements of the rules and the bye laws and the Chairman in his report declared him as having been validly accepted as member.
Out of those 39 persons 20 applications did not bear any date.
The date of an applica tion, the prescription of time for deposit of the membership fee and the amount of qualifying share and the filing of the requisite declaration arc formalities which could not be disregarded.
The Chairman rightly came to the conclusion that out of 39 persons except N.K. Mukherjee the other 38 were not legally admitted to the membership and, therefore, they could not be treated as members.
The Chairman in paragraphs 9 to 16 of the Report consid ered the cases of several persons who. had been declared defaulters.
He rightly came to the conclusion that 108 persons mentioned in Annexure 'C ' should be restored to membership.
The Chairman next considered whether there should be a waiting list.
A list of 102 persons described as the wait ing list was forwarded and endorsed by the officers of the Delhi Administration.
The Chairman came to the conclusion that of the 102 persons on the list, only a few prosecuted their claims before the Chairman and the rest appeared to him to be no more interested in the membership of the Socie ty.
In an annexure marked 'G ' the Chairman rightly included in the waiting list the names of such persons who could be considered.
The Chairman said that 38 persons whose membership was cancelled by him at the meeting held on 27 July, 1976 could apply afresh so that their applications could be considered.
The Chairman said that 24 persons made applications for membership.
The Chairman rightly said that it would be fair to leave the consideration of the applications of these 24 persons to the new Managing Committee and that their names should be kept in a waiting list.
The Chairman next found that the Society had received from 4 persons deposits towards the price of the land more than a decade ago but took no steps to return the moneys or to admit them to the benefit of membership.
Again, there were 4 other persons whose land had been acquired by the Delhi Administration.
There was an agreement which required the Society to offer membership to these persons upon their fulfilling the conditions of membership.
The Chairman found that those 4 persons whose land had been acquired had made applications.
The Chairman tightly came to the conclu sion that these 8 persons, namely 4 from whom moneys had been received and the other 4 whose land had been acquired should be accepted as members.
Out of 38 persons whose membership was cancelled by the Chairman on 27 July 11 applied to this Court in C.M.P. No. 2065 of 1976 for an order that admission of 124 members mentioned in 382 Annexure 'C ' to the petition is illegal and for further declaration of revocation of membership of 38 members as mentioned in Annexure 'B ' to the said petition.
These petitioners also asked for an order directing the Chairman not to proceed with the meeting of the Society and the holding of elections on 29 August, 1976.
These 11 persons also made applications C.M.Ps.
No. 8485 and 8486 for filing objections to the report of the Chair man.
They wanted two months to file objections.
It should be stated here that 11 applicants wanted to prevent the holding of the meeting and the election for the purpose of prolonging litigation.
This Court rightly did not prevent the holding of the meeting and the election.
The report of the Chairman shows that the meeting as well as the election was lawfully and validly held.
These 11 persons were given full opportunity to make their submissions by way of objection to the report.
Coun sel appeared and made their submissions.
These 11 persons submitted that no relief can be sought by the petitioners in the writ petitions against the Society and that Article 19 cannot now be invoked for the enforce ment of rights.
Their further submissions were these.
On 6 January, 1974 39 persons were declared defaulters by the Managing Committee for non compliance with the order of this Court passed on 11 December, 1973.
One of those 39 defaulters made an application to this Court on 9 February, 1974 for condonation of delay and for restoration of his membership.
The application was dismissed on 25 February, 1974.
On 4 April, 1974 this Court granted four weeks time to 15 persons out of the 39 declared defaulters and there fore the default of 24 persons was confirmed.
The Chairman re considered the cases of 24 defaulters including the one whose application was dismissed.
These 11 persons submitted that their membership and allotment should have been restored.
The Chairman was also in error in considering the cases of 8 persons because records were not available.
It is significant that out of 1100 members and the several parties to the writ petitions none has taken objec tion to the report of the Chairman.
The only persons who objected are out of the 24 persons those membership and allotment on 26 January, 1974 was cancelled.
These 24 per sons have however been put by the Chairman in a waiting list.
The membership as well as the allotment of plots to these 38 persons is rightly rejected by the Chairman.
The Chairman based his finding on facts of tabulated statements prepared in the presence of counsel and parties in open public hearings.
No challenge can be taken to the dates and facts.
The Chairman rightly found that even if the date of the eligibility certificate is taken as the effective date of application the position cannot be otherwise.
The Chairman rightly found that the records do not indicate that the payment was 383 made within 14 days of the date of resolution.
The Chairman rightly found that the requirement of payment is not proved and there has not been substantial compliance.
The conclu sion is correct and inescapable that the enrolment of 38 persons was not only rushed but was done with unseemly haste.
It also appears from the report of the Chairman that persons the waiting list were not considered before these 38 persons were enrolled as members.
Reference may be made to clause (7) of the Award of the Lt. Governor which was made the rule of Court.
The award is dated 6 July, 1971.
Clause (7) made it encumbent on the Society to act in ac cordance with the award.
There were some persons who were treated by the new Managing Committee as defaulters and these 38 persons were taken by the new Managing Committee unlawfully as members.
The Chairman in Annexure 'C ' restored 108 persons to membership.
These 108 persons had been declared defaulters by the nominated Managing Committee.
This Court by order dated 29 August, 1974 required the Chairman to look into each and every disputed question of membership and to decide as to whether a member has been rightly or wrongly declared a defaulter.
The nominated Managing Committee on 6 January, 1974 declared a number of persons to be defaulters.
The declara tion of defaulters could not have been made except by the General Body with a special majority and with the approval of the Registrar.
The nominated Managing Committee could not have functioned after 1 April, 1973 in view of the provisions of section 92 read with section 32 of the Delhi Co operative Societies Act, 1972.
In view of the award of the Lt. Governor dated 6 July, 1971 the Committee had there after no jurisdiction to declare any member a defaulter.
This Court by order dated 4 April, 1974 observed that the case of 24 defaulters would be considered if it transpired that the list of new allottees could not be allowed to stand.
The act of declaration of defaulters on 6 January, 1974 cannot be dissociated from the enrolment of new allottees on 25 and 26 January, 1974.
The report of the Chairman in restoring 108 alleged defaulters to membership is just and correct.
This Court by Order dated 29 August, 1974 required the Chairman to look into each and every disputed question of membership and to decide whether a person has been tightly or wrongly declared a defaulter.
The order further stated that if the Chairman came to the conclusion that the person has been declared to be a defaulter the Chairman will include him or her in the list of members.
The report of the Chairman is lucid and direct to the point.
The report noticed that there was widespread discontent as to the way in which the affairs of the Society were conducted.
The report said "Allegations of favouritism want of fairplay, mal administration, deliberate suppression of the rights of members were freely made against the nominated Managing Committee in 1971".
The Chairman noticed that there was "nothing to 384 choose between the old elected Committee which was super seded and the nominated Managing Committee which came to take its place".
Letters were hardly replied to.
En quiries were rarely attempted to.
Cheques were hardly ever cashed in time.
Sudden declarations of default were made without following the prescribed procedure laid down in the Act and the Rules.
The nominated Managing Committee issued a circular dated 30 April, 1973 demanding Rs.6 per sq. yard and threatened the members that in case they did not pay the said amount they would be declared defaulters.
This circular is not a notice within the meaning of the bye laws of the Society and declaration of defaulters on the basis of the circular is illegal and contrary to bye laws of the Society.
Further the said circular was despatched after the time for payment mentioned therein was over.
No opportunity was given tog member as required by the mended bye laws to show cause why his right to a plot would not be forefeited for non payment of deposit.
Figures of alleged dues were not mentioned in the circular in most of the case.
In view of the award of the Lt. Governor dated 6 July, 1971 the nominated Managing Committee could not declare, any member to be a defaulter.
Further the order of this Court dated 6 July, 1973 continued to be in force, in so far as the petitioners in Raj Rani 's petition are concerned.
The declaration of defaulters from amongst the petitioners in Raj Rani 's petition was unjustified.
The action of the Managing Committee declaring defaulters was in bad faith because they wanted to confer benefits on other persons under the guise of declaration of defaulters.
This Court in the order dated 4 April, 1974, observed that the cases of 24 defaulters would be considered if it transpired that the list of allottees on 26 January, 1974 could not be allowed to stand.
The Chairman has rightly dealt with the cases of 24 defaulters in view of his right conclusion that the allotments on 26 January; 1974 were bad.
The Chairman considered the cases of 42 persons who had been declared defaulters.
The Chairman rightly came to the conclusion that 30 persons had genuine grievances and he accepted them as members on their submitting fresh affida vits with a view to putting an end to all controversies whether they filed affidavits of not.
R was admitted before the Chairman that all these persons had field their affidavits originally while seeking membership.
The ques tion was whether they filed any fresh affidavits as required by the subsequent direction of the Delhi Development Author ity.
Some of the members contended before the Chairman that they filed amended affidavits.
Some members contended that in spite of their request to give the proforma of the amend ed affidavit the nominated Managing Committee did not give the proforma of the affidavit.
Under these circumstances the Chairman rightly accepted the contentions of 30 out of the 42 persons.
385 The Chairman rightly held that 4 persons whose money was lying with the Society should be made members.
The Chairman also rightly held that 4 persons whose lands had been ac quired by the Society should be accepted as members.
The Chairman in paragraph 37 of the report has indicated that the new Managing Committee should fix priorities in the order mentioned in sub paragraph (a) to (e).
These in sub paragraphs (a) to (b) belong to classes of members in whose favour there was specific allotment as early as the year 1957.
Due communication was made to them about the specific allotment of plots.
They were persons who had paid more than Rs.17,000.
They were declared defaulters for non payment of Rs.3000 or less by the nominated Managing Com mittee as late as the year 1974.
The Chairman rightly put persons in sub paragraphs (a) and (b) in order of priority.
Persons in sub paragraph (c) in paragraph 37 of the Chairman 's report comprise those who were declared default ers round about the year 1962 63.
The amounts paid by persons in sub paragraph (c) are less than the amounts paid by persons in sub paragraphs (a) and '(b).
There was no specific allotment of plots in favour of persons mentioned in sub paragraph (c).
Persons in sub paragraph (c) there fore cannot claim priority over persons in sub paragraphs (a) and (b).
In sub paragraph (c) only one person objected regarding priority.
The other 47 persons accepted their places in sub paragraph (c).
This also shows the justness of the report,.
Subject to the following directions, the report of Mr. D. Mookerjee dated 23 September, 1976 is accepted and con firmed.
The Managing Committee of the New Friends Co opera tive Society Ltd. (hereinafter called "the new Managing Committee") elected at the meeting held on 29 August, 1976 shall assume charge with effect from the date of this order.
The new Managing Committee shall send to all persons referred to in sub paragraphs (a) to (e)of paragraph 37 of Mr. Mookerjee 's report, through Mr. Mookerjee, a letter stating that membership fee and the amount of qualifying share necessary to become a member of the Society and also copies of this order as well as the appropriate forms of application for membership of the Society and of the affida vits to be sent by the applicants to the new Managing Com mittee within one month from the date of this order.
Each person referred to in sub paragraphs (a) to (e) of paragraph 37 shall, if he desires to have any plot allot ted to him, apply for membership of the Society.
All such applications for membership of the Society shall be sent to Mr. Mookerjee within 30 days.
from the date of receipt of the documents referred to in the next preceding paragraph hereof.
If any application is not received by Mr. Mooker jee within the said period, or if the affidavit referred to in the next preceding paragraph is not enclosed with the application, or if any application or affidavit be found by Mr. Mookerjee to be 386 not in compliance with the form of the application and the affidavit sent to the applicant, Mr. Mookerjee shah reject such application.
Such rejection by Mr. Mookerjee shall be final.
All applications for membership along with affida vits, found by Mr. Mookerjee to be in order, will be for warded by Mr. Mookerjee to the new Managing Committee upon the expiry of the said period of 30 days.
Mr. Mookerjee will make a list of the persons whose applications are so forwarded by him to the new Managing Committee.
The new Managing Committee shall convene a meeting of the Committee within 30 days from the receipt of the appli cations along with the affidavits sent by Mr. Mookerjee to the new Managing Committee as aforesaid and pass a resolu tion accepting all such applicants for membership as members of the Society.
The new Managing Committee shall convey to Mr. Moo kerjee its said resolution within 14 days of the passing of such resolution and shall send to Mr. Mookerjee at least as many copies of the resolution as the number of persons who are admitted as members of the Society by virtue of that resolution.
Mr. Mookerjee will thereafter send a copy of the said resolution to each of the applicants Who is admit ted as a member of the Society by virtue of the said resolu tion.
On receipt of the said communication from.
Mr. Mookerjee each person who has been admitted as member of the Society by virtue of the said resolution shall, within 14 days from the receipt of the communication from Mr. Mooker jee, pay to Mr. Mookerjee by Bank Draft (drawn in favour of "New Friends Co operative House Building Society Ltd.") an amount including the membership fee and the amount of quali fying share necessary to become a member of the Society.
Mr. Mookerjee will thereafter forward the Bank Drafts to the new Managing Committee.
Regarding the allotment of plots, the suggestions of Mr. Mookerjee contained in sub paragraphs (a) and (b) of paragraph 37 of his report will be given effect to by the new Managing Committee, subject to the availability of plots and subject also to each person referred to in the said two sub paragraphs and to whom any plot is allotted complying with the direction contained in the preceding paragraph 7 hereof and further subject to each such person paying his full share of the money payable to the Delhi Development Authority under the Supplementary Agreement entered into between the President of India and the Society on 1 Febru ary, 1972 by a Bank Draft drawn in favour of the Delhi Development Authority".
The allotment of plots among persons referred to in sub paragraphs (a)and (b) of paragraph 37 of Mr. Mookerjee 's report shall be in the order of priority mentioned there and already earmarked for them.
If plots which are already earmarked for persons in subparagraphs (a) and (b) are not available then there will be allotments to those persons by draw of lots first among those in sub 387 paragraph (c): and thereafter among those in sub pargraph (b).
Mr. Mookerjee will prepare a list of persons to whom plots are so allotted and send copies of,the list of the new.
Managing Committee and,the Delhi Development Authority and inform the persons to Whom, such allotments are made.
Each person referred to in the said.
sub paragraphs.
(a) and (b) of paragraph 37 and to whom any plot is allotted shall, within (b) days from the receipt of the communication from Mr. Mookerjee as referred to reparagraph 6 hereof, enquire from the Delhi Development Authority as to the sum payable by him to the Delhi Development Authority as afore said and upon receipt of the reply from the Delhi Develop ment Authority pay the sum to the latter by a Bank Draft within 15 days from the date of the receipt of the reply.
In default of such payment the allotment to him will stand cancelled.
In the event of any such cancellation allotment may be made to the next person if any, in this sub para graph.
Thereafter, if any plot or plots remain to be allotted the allotment or allotments shall strictly be in accordance with the order of priority laid down in paragraph 37 of Mr. Mookerjee 's report.
Such allotments shall be made by Mr. Mookerjee by means of draw of lots first among the persons referred to in sub paragraph (c) thereafter among those in sub paragraph (d) and thereafter among those in sub paragraph (e) of paragraph 37 of his report.
Mr. Moo kerjee will prepare a list of persons to whom the plots are so allotted and send copies of the list to the new Managing Committee and the Delhi Development Authority and inform the persons to whom such allotments are made.
Any person referred to in sub paragraphs (c), (d) and (e) of Mr. Moo kerjee 's report who is allotted any plot shall within 14 days from the receipt of the communication from Mr. Moo kerjee to the effect that a particular plot has been allot ted to him enquire from the Delhi Development Authority as to the sum payable by him to the Delhi Development Authority as aforesaid and upon receipt of the reply from the Delhi Development Authority pay the sum to the latter by a Bank Draft within 15 days from the date of the receipt of the reply.
In default of such payment the allotment to him will stand cancelled.
In the event of any such cancellation, allotment may be made to next person, if any, in that subparagraph.
Each allotment of plot, referred to in this order, shall be in accordance with the application of each appli cant for membership referred to in paragraph 3 hereof, that is to say, will not be entitled to any allotment of any land, the area whereof is different from the area mentioned in his application form.
If any person referred to in any of the sub para graphs of paragraph 37 of Mr. Mookerjee 's report has al ready paid any money to the Society and proves such payment to Mr. Mookerjee, the money so paid and proved shall be appropriated towards payment of the amounts mentioned in paragraphs No. 7, 8 mad 11 hereof.
388 14.
Upon allotment of land to any person mentioned in this Report each allottee shall pay to the Society a sum of Rs.1,000/ within one month from the date of such allotment as and by way of costs relating to these proceedings.
In default of payment of such sum, the allotment to such person shall stand cancelled.
In the event of any such default, the procedure laid down in paragraph 10 and 11 hereof shall be followed.
To sum up.
In the event of any lucia default the allotment may be made to the next person, if any, in the sub paragraph group of the defaulting persons and thereafter to next sub paragraph group of persons.
No lease shall be granted to any allottee until and unless all directions contained in this order are fully complied with by him.
The Society shall pay to Mr. Mookerjee a further sum of Rs.45,000/ as his remuneration for the work done by him so far.
The Society shall also pay Mr. Mookerjee a further stun of Rs.5,000/for the work to be done by him under this order and also such further sum or sums as he may intimate to the new Managing Committee as extra expenses, including remuneration for his staff, postage etc.
for the work to be done under this order.
Mr. Mookerjee 's Personal Assistant Mr. Jain will be paid Rs.300/ per month.
This order shall not apply to such members of the Socie ty who have already obtained leases from the President of India.
This order will govern only the affairs of this Society and will not be a precedent for the affairs of any other co operative society.
Some persons have deposited monies with the Registrar of this Court.
The Registrar may hand over the money to the Society.
Writ Petition No. 340 of 1972, 1526 of 1973 and 286 of 1974 and all proceedings in these writ petitions are dis posed of accordingly.
All parties will pay and bear their own costs.
P.H.P. Petitions allowed. | On 6 7 1971 the Lt. Governor of Delhi passed an award directing the New Friends Co operative House Building Socie ty Limited to pay Rs.22 lacs to the Delhi Administration.
On 9 7 1971 the Lt. Governor by a notification removed the elected Managing Committee and appointed a nominated Manag ing Commitee under rule 56 of the Delhi Cooperative Socie ties Rules, 1950 framed under the Bombay Cooperative Socie ties Act 1925 as applied to Delhi.
The term of the Manag ing Committee was for one year.
On 23 10 1971 the nominated Managing Committee passed a resolution to make the award of the Lt. Governor a rule of the court.
In December, 1971, the nominated Managing Committee passed a resolution for having direct sub leases and in January 1972 called for more funds.
In July, 1972, the Lt. Governor issued a second notification extending the term of the nominated Managing Committee by further two years.
287 members of the Society filed writ petition No. 340 of 1972, challenging the rites of rule 56 and challenging the action of the Lt. Governor in superseding the elected Managing Committee and in extending the term of the nominat ed Managing Committee by a further period of 2 years.
On 30 4 1973, the nominated Managing Committee issued a circu lar asking the members of the Society to pay certain amounts.
On 6 7 1973, this Court restrained the Society and its Chairman from declaring any member a defaulter.
On 13 8 1973, this Court directed that all the interim orders passed in the writ petition should be confined to the 287 petitioners.
On 16 8 1973, K.V. Johar filed a writ petition in a representative capacity under Order 1 rule 8 of the C.P.C. on behalf of all the members of the Society.
On 17 8 1973, the nominated Managing Committee declared 321 members as defaulters.
On 21 9 1973 this Court restrained the Society from taking any steps in pursuance of the said resolution.
On an application made by respondent No. 6 the stay granted in K.V. Johar 's petition was vacated.
However, application for vacating the stay order in Raj Rani 's petition was not pursued.
On 6 1 1974 the nominated Managing Committee declared 39 members as defaulters for non payment of dues and 42 members as defaulters for not submitting the affidavits.
On 25 1 1974 the nominated Managing Committee decided to enrol 60 new members.
On 26 1 1974 a confidential letter was ad dressed by respondent No. 6 to the Lt. Governor seeking his approval to the enrolment of 60 new members and allotment of plots to them.
On the same day the Lt. Governor gave his approval.
Two C.M. Ps. were filed by the writ petitioners challenging the declaration of the members as defaulters and enrolment of 60 new member`.
This Court on 29 3 1971 di rected that all the papers including resolutions, original applications and original allotments should be produced in the Court.
This Court also restrained the nominated Manag ing Committee by an injunction from taking any steps in any manner.
On 4 4 1974.
this Court passed direction in respect of some members who were declared defaulters and who had made part payments either within the time prescribed or even beyond the time prescribed.
This Court also mentioned that the allotment of plota to 60 new metal:era who were cha racterised as very important persons appeared 372 to have been made in undue haste and the persons on the waiting list were not considered and that no notice was given to persons inviting applications.
This Court directed that the list of 60 new members had to await final adjudica tionand also directed that no further steps should be taken in the case of those 60 allottees.
The Court also directed that the cases of remaining 24 defaulters would be consid ered if it came to the conclusion that the allotment in favour of 60 new members could not be allowed to stand.
Rule 24 of the Delhi Cooperative Societies Rules 1973, requires a person to apply for membership in writing in the form prescribed by the Society.
His application is to be ap proved by the Managing Committee of the Society.
He has to fulfil other conditions laid down in the Act, the Rules and the Bye laws.
Rule 25 provides that a person shall not be eligible for admission as a member if he owns a residential house or a plot of land for the construction of a residen tial house in Delhi.
Rule 30 provides that on receipt of an application for membership the Cooperative Society shall enter particulars of the application in the register of applications in the form mentioned therein.
It also re quires the Society to dispose of the application received as early as possible and in no case later than the expiration of a period of one month from the date of receipt of the application.
Rule 30 further provides that the person whose membership has been approved by the Managing Committee of a Cooperative Society shall deposit the membership fee and the amount of qualifying shares necessary to become a member within 14 days of the passing of the resolution of the Managing Committee approving the membership of the person concerned.
Bye law 5 provides that every person seeking membership of the Society shall sign a declaration to the effect that he or his wife or any of his dependants does not own a dwelling house or a plot in Delhi.
When the writ petitions came up for final hearing along with the C.M.Ps.
on 29 8 1974 this Court appointed Shri Deb Brat Mukherjee as Chairman of the Society.
The Chairman was asked to scrutinise whether any person had been either illegally brought in as a member or illegally removed having regard to the rules, the bye laws and the regulations of the Society.
The Chairman restored the membership of the alleged default ers and published a tentative voters ' list.
The Chairman declared that out of the 60 new allottees 21 did not have applications for membership and 38 were illegally admitted and could not be included in the voters ' list.
The chairman said that the allotment of plots in their favour could not be upheld.
11 persons out of the 60 new allottees filed two C.M.Ps.
in August 1976 praying for an injunction restraining the chairman from holding elections.
These applications were filed without serving any party to the proceedings contrary to the rules and practice of the court.
On 23 9 1976, the Chairman submitted his report.
Allowing the writ petitions, HELD: 1.
The date of the application, prescription of time for deposit of membership fee and the amount of qualifying shares, and the filing of the requisite declaration are formalities which cannot be disregarded.
The Chairman rightly came to the conclusion that the new allottees could not be treated as members.
The new allottees were taken in without considering the persons on the waiting list.
It was incumbent on the Society to act in accordance with clause 7 of the Lt. Governor 's award.
The Managing Committee took 38 persons as members unlawfully.
The declaration of default ers could not have been made except by the General Body with a special majority and with the approval of the Regis trar.
The nominated Managing Committee could not have functioned after 1st April 1973 in view of the provisions of section 92 read with section 32 of the Delhi Cooperative Societies Act 1972.
In view of the award of the Lt. Governor dated 6 7 1971 the Committee had no jurisdiction to declare any member a defaulter.
The act of declaration of defaulters of 6 1 1974 cannot be dis associated from the enrolment of new allottees on 25th and 26th January 1974.
The report of the chairman in restoring membership to the 108 alleged defaulters is just and correct.
The circular dated 30 4 1973 issued by the nominated Managing Committee is not a notice within the meaning of 373 the bye laws of the Society and the declaration of default ers on the basis of the circular is illegal and contrary to the bye laws of the Society.
The circular was despatched after the time for payment mentioned therein was over.
No opportunity was given to a member as required by the amended bye laws to show cause why his right to a plot would not be forfeited.
The order of this court dated 6 7 1973 continued to be in force in so far as the petitionrs in Raj Rani 's petition are concerned.
Therefore, the declaration of defaulters from amongst the petitioners in Raj Rani 's peti tion was unjustified.
The action of the nominated Managing Committee declaring defaulters was in bad faith because they wanted to confer benefits on other persons in the guise of declaration of defaulters.
[381 A B, D, E, H, The Chairman rightly came to the conclusion that out of the 42 declarations of defaulters for not submitting affidavit 30 members had genuine grievances.
[384 F] The Chairman rightly held that the 4 persons whose money was lying with the Society should be made members.
The Chairman also rightly held that the 4 persons whose lands had been acquired by the Society should be accepted as members [385A B] The priority fixed by the Chairmaan about allotment of plots is just.
[385 C] [The Court with a view to ensuring that the persons mentioned in the Chairman 's report should get the reliefs mentioned in the report held that those persons should make fresh applications with affidavits through the Chairman 'and the allotment of plots should be made in accordance with the priority laid down by the Chairman.] |
Civil Appeal No. 325/61.
Appeal from the judgment and decree dated March 6.
1961, of the Allahabad High Court in Writ No. 3116 of 1960.
WITH Petitions Nos. 180, 181 and 205 of 1961.
Petitions Under article 32 of the Constitution of India for enforcement of Fundamental Rights.
section N. Kacker and J. P. Goyal, for the appellant (In C.A. No. 325/61) and the petitioner (In Petn.
No. 205/61).
H.N. Sanyal, Additional Solicitor General of India, K.L. Misra, Advocate General, U. P. H. N. Seth, J. K. Srivastva and C. P. Lal, for the respondents (in C.A. No. 325/61 and Petn.
No. 205 of 1961).
J. P. Goyal, for the petitioners (In petitions Nos. 180 and 181 of 1961).
C. P. Lal, for the respondents (In Petitions Nos. 180 and 181 of 1961).
December II.
The Judgment of the Court was delivered by SHAH, J.
The appeal and the writ petitions practically raise the same points and may be 78 disposed of together.
At the outset we shall briefly state the facts relevant to each of the said proceedings.
The appellant in Civil Appeal No. 325 of 1961 held a permit for plying stage carriage on the Kanpur Bela Bidhuna route via Chaubepur, in the State of Uttar Pradesh.
The entire route is 68 miles long, and a part of the route 16 miles in length i.e., Kanpur to Chaubepur, is a notified route.
This part was common between the said route and the Kanpur Chaubepur Sarai Miran route, which was a nationalised route.
A condition was, therefore, attached to the appellant 's permit that he would not be entitled to pick up passengers or drop them between Kanpur and Chaubepur.
His permit was to expire on June 10, 1960.
Before the said date, he applied for renewal of his permit, and on May 20, 1960 it was published in the U.P. Govt.
Gazette calling for objections.
On the same day, the State Government published a notification in the Gazette proposing to nationalise the said route.
As the application for renewal could not be disposed of before the expiry of the period fixed in the permit a temporary permit for the route was granted to the appellant.
On July 19, 1960 the application for renewal of the appellant 's permit was considered by the Regional Transport Authority, Kanpur, and his permit was renewed for three years with effect from July 23, 1966, only in respect of a part of the old route, namely, Chaubepur Bela Bidhuna; but under the directions of the Transport Commissioner, the Regional Transport Authority made an endorsement on the renewed permit authorizing the appellant to ply his vehicle between Kanpur and Chaubepur for a period of four months commencing from July 23, 1960.
As regards the proposed scheme of nationalization, on June 22, 1960 the appellant filed his objections thereto.
The said objections were heard by the Joint Secretary, Judicial 79 Department, who approved the scheme with some modifications.
The approved scheme was published in the Gazette on October 8, 1960.
Under the notification the scheme was to be put into operation from October 5, 1960 or thereafter.
On November 12, 1960, a notification dated November 4, 1960 was published in the Gazette under section 68F of the cancelling the appellant 's renewed permit with effect from November 27, 1960.
Under the nationalization scheme the stage carriages belonging to the State Transport Undertaking could ply on the said route without obtaining permits.
The appellant filed a petition under Art, 226 of the Constitution in the High Court of Judicature at Allahabad praying for the following reliefs: (a) That a writ in the nature of mandamus may issue to command the respondents not to interfere with the Petitioner 's right to ply on Kanpur Bela Bidhuna Via Chaubepur route under the permit duly renewed in his favour till the entire duration of the permit viz., till July 22, 1963.
(b) That a Writ in the nature of certiorari may issue to quash so much of the Resolution dated July 19, 1960 passed by the Regional Transport Authority, Kanpur, as directs imposition of illegal conditions to the renewed permit of the petitioner.
(c) That a Writ in the nature of mandamus may issue to command respondents No. 2 and 3 not to give effect to the illegal endorsements made on the petitioner 's permit on July 23, 1960 and to treat the petitioner 's permit as having been renewed without the illegal conditions attached thereto by the two endorsements dated July 23, 1960, reproduced in paragraph 15 of the affidavit.
80 (d) That a Writ in the nature of certiorari may issue to quash the notifications dated May 18, 1960 under section 68C of the Act, so also the subsequent notifications under section 68D(2) of the Act dated September 26, 1960 and the notification dated November 4, 1960 under section 68F (2) of the Act in regard to Kanpur Bela Bidhuna route.
(e) That a Writ in the nature of mandamus may issue directing the respondents Nos. 1 to 3 not to give effect to the notifications dated May 18, 1960, September 26, 1960 and November 4, 1960 in regard to Kanpur Bela Bidhuna route.
(f) That an interim direction may issue to the respondents Nos. 2 and 3 not to interfere with the Petitioner 's right to ply on the entire Kanpur Bela Bidhuna route under the renewed permit irrespective of the illegal conditions attached thereto or of the illegal scheme for the nationalization of the said route.
(g) That costs of this petition may be awarded to the Petitioners as against the opposite parties.
On December 2, 1960 the High Court made an interim order directing the State of Uttar Pradesh not to interfere with the petitioner operating his vehicle on Kanpur Bela Bidhuna route in accordance with the terms of his permit.
To that writ petition, the State of Uttar Pradesh, the Regional Transport Authority, and the Secretary to Regional Transport Authority, were made respondents.
The respondents opposed the petition.
On March 6, 1961 a Division Bench of the High Court, accepting the contentions raised by the respondents, dismissed the petition.
Hence the appeal.
81 Writ Petition No. 205 of 1961 is filed in this Court by another operator under article 32 of the Constitution.
He was plying his stage carriage on the Jaunpur Shahganj route in Uttar Pradesh under Permit No. 430, which was valid upto March 15, The State Government published in the Gazette dated July 23, 1960 a notification dated July 15, 1960 under section 68C of the Act proposing to nationalize the said route along with another route.
The petitioner and others filed objections against the scheme within the time prescribed.
The objections were heard by the Joint Secretary, Judicial Department, who approved the scheme.
The approved scheme was published in the U. P. Official Gazette dated February 25, 1961.
Thereafter, the Secretary to the Regional Transport Authority, Allahabad, issued a notification dated July 29, 1961 wherein it was stated that the permits of the operators on the said routes including that of the petitioner would stand cancelled and that the notification would come into force upon the expiry of 15 days from the date of publication of the said notification.
The petitioner has filed the present writ petition asking for the following reliefs: (a) A writ in the nature of certiorari quashing the notification (Annexures A, B and C to this writ petition).
(b) A writ in the nature of mandamus directing the respondents not to give effect to the notifications.
(c) A writ in the nature of mandamus commanding the respondents not to interfere with the rights of the petitioner to ply his stage carriage on the aforesaid route (Jaunpur Shahganj route), due to the aforesaid scheme.
(d) Award the costs of this petition to the petitioner.
82 Writ Petitions Nos.
180 and 181 of 1961 relate to the route Robertasgunj Dudhi Mamhani.
The State Government issued a notification dated July 13. 1960, proposing to nationalize the said route and published the same in the Gazette on July 23, 1960.
The petitioners filed objections against the scheme and the said objections were heard by the Joint Secretary, Judicial Department, and the scheme was finally approved by him.
The approved scheme was notified in the Gazette on May 20, 1961.
Under the said notification, the State Transport Undertaking would commence to operate its stage carriage service on the said route from July 15, 1961 or thereabout.
Aggrieved by the said scheme, the petitioners filed the said petition for writs in this Court for reliefs similar to those in the other petition.
Mr. Kacker, learned counsel for the petitioner in Writ Petition No. 205 of 1961, raised the following points: (1) Under section 68C of the , the State Transport Undertaking has to form its opinion and prepare a scheme for nationalisation and publish it in the manner prescribed thereunder, but in the present cases the State Government initiated the schemes and, therefore, the schemes were not validly made; (2) As neither the objection to the proposed scheme were heard nor were they approved by the State Government as they should be under section 68D of the , the schemes were invalid; (3) The Regional Transport Authority acted illegally in curtailing the period of renewal this question arises only in the appeal; (4) The Regional Transport Authority had not applied its mind in dealing with the renewal application but mechanically followed the provisions in the proposed schemes and, therefore, its order was bad; (5) Even after the approval of the nationalisation schemes, the State owned buses were required to apply for and get permits under the Act and plying of buses 83 by the State without permits was illegal; and (6) The Secretary to the Regional Transport Authority had no jurisdiction to issue an order under section 68F (2) of the , since under the said section only the Regional Transport Authority had the power to do so this question arises only in Writ Petition No. 205 of 1961.
To appreciate the first argument it is necessary to notice briefly the relevant provisions of Ch.
IVA of the (IV of 1939) hereinafter called the Act.
Section 68A(b) defines "State transport undertaking" to mean "any undertaking providing road transport service, where such undertaking is carried on by (i) the Central Government or a State Government.
Section 68C reads: "Where any State transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct".
Section 68D reads: "(1) Any person affected by the scheme published under section 68C may, within 84 thirty days from the date of the publication of the scheme in the Official Gazette, file objections thereto before the State Government.
(2) The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport undertaking to be heard in the matter, if they so desire, approve or modify the scheme." Section 68E provides for the cancellation or modification of the scheme by the State transport undertaking and in that event the same procedure prescribed for framing a scheme is to be followed.
The effect of the said provisions, in so far as they are relevant to the present inquiry, may be stated thus: The State transport undertaking is an undertaking providing road transport service which is carried on by the State or any other corporation or authority mentioned in section 68A.
The definition creates a statutory authority distinct from authorities which run it.
This is made clear by section 68C whereunder it is the State transport undertaking that will have to form the requisite opinion.
This is further elucidated by the fact that under section 68C of the Act the state transport undertaking is required to publish the proposed scheme in the Official Gazette and also in such other manner as the State Government may direct.
This distinction between the two entities is further made clear by section 68D(2) whereunder the State Government has to hear the representatives of the State Transport undertaking.
Briefly stated, under the said provisions, a statutory authority called the State transport undertaking is created it is authorised to initiate a scheme of nationlisation of road transport, the aggrieved parties are given opportunity to file objections thereto, and 85 the State Government is empowered to hear both the parties and approve or modify the scheme, as the case may be.
Counsel for the appellant contends that the underlying scheme of the Act cannot be worked out unless a clear distinction is maintained between the State transport undertaking and the State Government, for, if one is equated with the other, the State Government would become a judge of its own cause, and that, therefore, it was incumbent upon the Government to form a separate and distinct, authority to enable it to initiate a scheme in accordance with law.
Counsel for the State contends that a transport undertaking run by a State Government is a State transport undertaking and, therefore, the scheme initiated by the State Government which runs the State undertaking is a scheme initiated by the said undertaking.
It is true that the provisions maintain a distinction between a State transport undertaking and the State Government.
It is also true that the State Government has to hear the objections of the aggrieved parties and also the representatives of the State transport undertaking before approving or modifying the scheme, indicating thereby that the State Government has to decide the dispute that may arise between the two contestants.
Though the functions of the different bodies are clearly demarcated in the case of undertakings run by corporations, there is overlapping in the case of an undertaking run by a State Government.
This may lead to anomalous position, but in practice it can be avoided, if the State Government creates a department to be in charge of the undertaking and hears the objections and approves or modifies the scheme in a manner without violating the principles of natural justice.
86 A State transport undertaking means, inter alia, an undertaking run by a State.
The statutory authority created is an undertaking run by a State.
The State can only run an undertaking through its officers; it may entrust the conduct of the transport service to a particular officer or to a department of the State; in either event, it is the State Government that runs the undertaking.
The statutory authority, namely, the State transport undertaking, has to form an opinion within the meaning of section 68C of the Act, and the opinion must necessarily be that of the State Government which runs it.
If the State Government running an undertaking forms an opinion, it can legitimately be said that the statutory authority i. e., the State transport undertaking, has formed the opinion.
In Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation (1) before the State of Andhra was formed in November, 1956, the Motor Vehicles (Hyderabad Amendment) Act, 1956 was in force in Telengana area.
Under the said Act the State transport undertaking was defined to mean the road transport department of the State providing road service.
After the Andhra Pradesh State was formed, that department initiated the scheme and this Court held that the said department clearly fell within the definition of state transport undertaking.
This Court observed in that case: "The State Government maintained the department for providing road transport service and therefore the department clearly falls within the definition of State Transport Undertaking.
" If a state directly runs an undertaking, it can only be through a department.
In law there cannot be any difference between an undertaking run by a department of a State Government and that run 87 by the State Government.
In either undertaking is run by the State and that undertaking is a State transport undertaking within the meaning of section 68C of the Act.
The opinion must necessarily be formed by somebody to whom, under the rules of business, the conduct of the business is entrusted and that opinion, in law, will be the opinion of the State Government.
It is stated in the counter affidavit that all the concerned officials in the Department of Transport considered the draft scheme and the said scheme was finally approved by the Secretary of the Transport Department before the notification was issued.
It is not denied that the Secretary of the said Department has power under the rules of business to act for the State Government in that behalf.
We, therefore, hold that in the present case the opinion was formed by the State transport undertaking within the meaning of section 68C of the Act, and that there was nothing illegal in the manner of initiation of the said scheme.
The second ground urged by counsel for the appellant that the scheme was invalid because the objections to the scheme were heard and the scheme was approved by the Joint Secretary, Judicial Department, who was not lawfully invested with authority in that behalf is for reasons to be presently stated not open to the appellant.
By the first sub section of section 68D which we have already set out persons affected by a transport scheme are entitled to file objections thereto.
By sub section (2), the State Government is authorised to approve or modify, the scheme after considering the objections, if any, and after giving an opportunity of being heard in the matter to the objector or his representatives and the representatives of the State transport undertaking.
Sub section (3) provides for the publication of the 88 approved or modified scheme in the Official Gazette by the State Government and on such publication the scheme becomes final.
It must at once be observed that neither in the petition under article 226 of the Constitution to the High Court, out of which Civil Appeal No. 325 of 1961 arises, nor in the Writ Petition under article 32 (No. 205 of 1961) presented to this Court, was the plea raised that the Joint Secretary to the Judicial Department was not authorised to hear the objection and to approve the scheme.
In the petition (No. 205 of 1961) under article 32 of the Constitution it was averred by the petitioner in para 10 that "the petitioner filed objections under section 68D(1) of the Act, against the scheme of the State Government, and it also heard its own representatives in opposition to the petition" and again it was averred in the same paragraph "at the time of hearing of the petitioner 's objections under section 68 D, Before the State Government it was argued on behalf of the petitioner that the aforesaid scheme was bad. " In the petition under article 226 of the Constitution it was averred in paragraph 25 "That no State Transport Undertaking having been constituted the State Government initiated the scheme and heard its own representatives on 13.8.1960.
The petitioner has bonafide belief that the Joint Secretary to the Government of Uttar Pradesh (Judicial Department) who heard the objections acted with bias against the petitioner.
" Even in the petition for special leave to appeal to this Court, no such objection was raised.
There is also no reference to any such contention in the judgment of the High Court.
The validity of the scheme on this ground is sought to be raised for the first time in this Court, and, according to the settled practice of this Court the appellant except in exceptional circumstances and there are none such in this case is not entitled to raise this argument for the first time at the hearing in this Court.
It was urged in the course of the 89 argument that by Rule 7 of the State Land Transport Services Development Rules 1958, which at the material time read as follows: "(1) The objections received shall be considered by the judicial Secretary to Government of U.P. or an officer of his department, not below the rank of Joint Secretary nominated by the former for the purpose.
x x x x x x x x x x (5) After hearing of such parties as appear, the officer shall give a decision whether the scheme be approved or modified as he may deem proper", no authority was lawfully conferred upon the Joint Secretary, and the proceedings of the Joint Secretary in purported exercise of powers under section 68D (2) were without jurisdiction.
But this is another facet of the same argument, and it is clear from a perusal of the petitions before the High Court and this Court and the judgment of the High Court that it was never raised.
There is no doubt that the scheme has been duly published under section 68D(3) and if the objection to the invalidity of the scheme on the ground that the objection were not heard by an authority competent in that behalf cannot be permitted to be raised in this Court for the first time during the course of the arguments, the statutory consequences prescribed by section 68F must ensue.
It is necessary to bear certain facts and considerations in mind in dealing with the remaining contentions.
By the scheme (cl. 7) the permit of the appellant was cancelled.
The scheme as approved was published in the U.P. Gazette on October 8, 1960, and was to come into operation on October 15, 1960, or thereafter.
A notification was published on November 4, 1960, under section 68F(2) 90 of the Act cancelling the appellant 's permit with effect from November 27, 1960.
The appellant therefore ceased to have any right to ply his vehicles on the route and he had no right to object to the vehicles of the State transport undertaking plying on that route.
If the scheme was validly promulgated and became final within the meaning of section 68D(3), it had the effect of extinguishing all rights of the appellant to ply his vehicles under his permit.
After cancellation of his permit, he could not maintain a petition for writ under article 226 because a right to maintain such a petition postulates a subsisting personal right in the claim which the petitioner makes and in the protection of which he is personally interested.
It is true that the appellant did at the date of the petition filed in the High Court hold a permit which was to enure till the 27th November, 1960.
But if the permit was validly terminated from the date specified, he will not be entitled to relief even if he had on the date of the petition a subsisting right.
Ground No. 2 must therefore fail.
Grounds 3 and 4 of the appellant that the Regional Transport Authority acted illegally in curtailing the period of renewal and that, in any event, it did not apply its mind in dealing with the renewal application but mechanically followed the provisions of the scheme may now be considered.
The Regional Transport Authority was by the terms of the scheme left no discretion in the matter.
It was by the scheme that the right of the appellant was restricted and if the scheme became final and binding the Regional Transport Authority had no authority to permit the appellant to ply his vehicles.
The order passed by the Regional Transport Authority was purely consequential on the scheme, and if the scheme is not open to challenge, orders consequential thereon will not 91 also be open to challenge.
We are supported in this view by the observations of this Court in Abdul Gafoor: Proprietor, Shaheen Motor Service vs The State of Mysore (1) that: "It appears to us that when deciding what action to take under section 68F(1) the authority is tied down by the terms and conditions of the approved scheme and his duty is merely to do what is necessary to give effect to the provisions of the schemes.
The refusal to entertain applications for renewal of permits or cancellation of permits or modification of terms of existing permits really flow from the scheme.
The duty is therefore merely mechanical and it will be incorrect to say that there is in these matters any lie between the existing operators and the State Transport Authority.
There is no justification therefore for saying that when taking action under section 68F(2) is really independent of the issue of the permits under section 68F(1).
Once the scheme has been approved, action under section 68F(1) flows from it and at the same time action under section 68F(2) flows from the same scheme".
We are bound by the decision.
We are not called upon to consider whether the State owned buses are being validly plied without obtaining permits under section 68F(1) of the Act.
If the right of the appellant to ply his buses is lawfully extinguished, he is not entitled to maintain an appeal challenging the right of the State Transport undertaking to ply their buses with or without permits.
Nor is any fundamental right of the appellant infringed by the State Transport undertaking plying its buses without permits, and a petition under article 32 of the Constitution cannot be maintained unless a fundamental right of the applicant is infringed.
92 Nor is there any substance in the last contention.
The orders passed under.
sections 68F(2)(a) and (b) flow from the publication of the scheme duly approved and the issue of an order, which is not quasi judicial but administrative, by the Secretary on behalf of the Regional Transport Authority is not open to challenge.
It is not the case of the Petitioner in W. P. 209/61 in which alone this contention is raised that the order unauthorised.
what is contended above this contention is raised that the order is being quasi judicial, power to make it cannot be delegated.
But for reasons already set out the order is not quasi judicial; it is purely administrative.
In our view, therefore, the appeal and the petitions must fail, and are dismissed with costs. | The appellant, whose permit for plying stage carriage was shortly to expire, applied for its renewal.
The renewal application was published in the Gazette calling for objections.
The State Government published a notification proposing to nationalise the route.
The permit was renewed for three years for a part of the route but an endorsement was made thereon authorising the appellant to ply on the remaining part of the route for four months.
The appellants filed objections to the proposed scheme for nationalisation.
The objections were heard by the Joint Secretary, Judicial Department, who approved the scheme with certain modifications.
The scheme was published in the Gazette.
Thereafter, a notification was issued under section 68F of the cancelling the appellant 's renewed permit.
Under the Scheme the stage carriages of the State Transport Undertaking could ply on the route without obtaining permits.
The appellant challenged the validity of the scheme and the cancellation of his licence.
^ Held, that the scheme was valid and the appellant 's licence was properly cancelled.
Section 68C of the required the scheme to be initiated by the State Transport Undertaking.
Even though the scheme in the present case was actually initiated by the State Government there was no non compliance with the provisions of section 68C.
There was no difference between an undertaking run by a department of the State Government and that run by the State Government.
In either case the undertaking was run by the State and it was a State transport undertaking within the meaning of section 68C. Initiation of the scheme by the State Government running an undertaking was initiation by the statutory authority i.e., the State Transport undertaking.
The appellant could not be allowed to challenge the validity of the scheme on the ground that the Joint Secretary was not lawfully invested with the authority to hear objections and to approve the scheme as the point was not raised at the proper stage.
77 Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation, [1959] Supp. 1 S.C.R. 319, applied.
The scheme having been validly promulgated and having become final under section 68D(3) it had the effect of extinguishing all rights of the appellant to ply his stage carriage under his permit and he could not maintain a petition under article 226 of the Constitution.
The order passed by the Regional Transport Authority cancelling the appellant 's permit was purely consequential on the scheme and could not be challenged if the scheme was valid.
Once the right of the appellant to ply his stage carriage was validly extinguished he could not question the right of the State transport authority to ply their stage carriages with or without permits.
Abdul Gafoor, Proprietor, Shaheen Motor Service vs State of Mysore, ; , applied. |
il Appeal No. 1870 of 1968.
(From the Judgment and Decree dated 6 3 1967 of the Bombay High Court (Nagpur Bench) in Appeal No. 101/59.) I. N. Shroff and H.S. Parihar, for the appellant.
S.B. Wad and M.N. Shroff, for respondent No. 1.
556 A. section Bobde, G.L. Sanghi, V.K. Sanghi, Miss Rama Gupta and M.S. Gupta, for respondent No. 2.
The Judgment of the Court was delivered by C.J.
This appeal is by certificate from the judgment dated 6 March, 1967 of the High Court of Bombay.
The appellant is the State of Madhya Pradesh.
The first respondent is the State of Maharashtra.
The second respondent is the plaintiff decree holder.
They will be referred to, for short, as Madhya Pradesh, Maharashtra and the plaintiff.
, The trial court passed a decree in favour of the plain tiff.
It was declared that the order dated 9 January, 1954 of the suspension of the plaintiff as well as the.
order of removal of the plaintiff from service passed on 2 February 1956 is illegal, void and inoperative.
The further declara tion was that the: plaintiff shall be deemed to be continu ing in service from 16 September, 1943.
A sum of Rs. 64, 588 2 0 was decreed in favour of the plaintiff and Bombay the predecessor of Maharashtra was ordered to.
pay the same with interest.
Both Madhya Pradesh and Maharashtra were ordered to pay costs to the plaintiff.
Maharashtra preferred an appeal against the decree.
Madhya Pradesh preferred objections against the order of costs.
The High Court confirmed the decree and the declara tions.
The High Court however modified the decree and held Madhya Pradesh liable.
The claim of the plaintiff against Maharashtra was dismissed.
The plaintiff was appointed Assistant Medical Officer in 1938.
In 1939 he was appointed officiating Assistant Surgeon.
He was posted at Elichpur (now Achalpur).
In 1942 he was transferred to Hoshangabad.
In 1943 he ap plied for medical leave for four months.
The Civil Surgeon recommended leave for six weeks.
The plaintiff again ap plied for leave in the month of August, 1943.
The leave was sanctioned by the Civil Surgeon.
The plaintiff then requested the Civil Surgeon in anticipation of sanction of leave by the Government for relief because he was not keep ing good health.
The Civil Surgeon then reported to the Government that the plaintiff absented himself from duty from 10 August, 1943 without leave.
The Government sanc tioned leave for six weeks.
On 28 September, 1943 the plaintiff was suspended by an order with effect from 16 September, 1943.
The plaintiff was served with a notice dated 30 September, 1943 to show cause why he: should not be dismissed from service.
Four charges Were levelled against the plaintiff.
First, that he refused to come to duty at the time of epi demic in August, 1943; Second, that he left his station without permission.
Third, that he refused to attend the Departmental enquiry when ordered to do so.
Fourth, that he wilfully and deliberately acted in total disregard of orders and absented himself from duty though he was declared to be fit to.
resume duty.
557 The Enquiry Officer by report dated 22 February, 1945 gave his findings that the first charge was not proved; that the second charge was proved but mitigated and the third and the fourth charges were technically proved.
On 21 June, 1945 the plaintiff was asked to show cause why he.
should not be dismissed or reduced in rank.
On 18 August, 1945 the Government of Central Provinces and Berar intimated to the plaintiff that the Government accepted the report of the Enquiry Officer and proposed to remove the plaintiff from service with effect from the date of the passing of the final order.
By order dated 7 November, 1945 the Provincial Government passed an order removing the plaintiff from service with effect from that date.
On 10 May, 1945 the plaintiff filed an appeal to the Governor but it was dismissed.
On 6 January, 1949 the plaintiff filed a suit in the court of the Second Additional District Judge, Nagpur.
By judgment dated 31 August, 1953 the District Judge held that the suspension order and the order of dismissal were illegal and declared the plaintiff to.
be deemed to.
continue in service.
The plaintiff was thereafter reinstated in service aS Assistant Surgeon on 12 December, 1953.
He was posted at Rays Hospital, Nagpur on 15 September, 1953.
On 13 January, 1954 the plaintiff was again suspended from service under order dated 9 January, 1954.
The plain tiff handed over charge on 13 January, 1954.
On 1 February 1954 the plaintiff was served with a notice dated 29 Janu ary, 1954 to show cause why he should not be removed from service.
The former report of the Enquiry Officer dated 22 February, 1945 was also given to the plaintiff.
On 2 February, 1956 the plaintiff was removed from service.
He appealed to the Governor.
The appeal was dismissed.
On 6 October, 1956 the plaintiff filed this suit in the court of the Joint Civil Judge, Nagpur against Madhya Pra desh and Maharashtra.
The plaintiff asked for a declaration that the order dated 9 January, 1954 suspending the plain tiff as well as the order dated 2 February, 1956 is illegal.
The plaintiff asked for a declaration that he is deemed to continue in service.
He claimed recovery of Rs. 64,588 2 0 as arrears of salary.
The plaintiff in his suit alleged that both Maharashtra and Madhya Pradesh are "liable to make good the plaintiff 's claim the liability for which is not exclusive but joint and several".
The alternative case.
of the plaintiff in the suit was that "if it will be held that the State of Maha rashtra and not the State of Madhya Pradesh is liable or viceversa the plaintiff will claim the decree ' against such State as would be liable".
The Civil Judge passed the.
decree on 25 April 1959 ' declaring: the order dated 9 January, 1954 suspending the plaintiff as well as the order dated 2 February, 1956 remov ing the plaintiff from service as illegal, void and inopera tive.
The decree further stated that the 558 plaintiff was deemed to continue in service from 16 Septem ber, 1943.
The Civil Judge passed a decree against the State of Bombay with the direction to pay Rs. 64,588 2 0 with 'interest at 6 per cent.
Both Maharashtra and Madhya Pradesh went up in appeal.
The Division Bench of the Bombay High Court placed the matter before a larger Bench and referred these two ques tions for the decision of the Larger Bench.
(1) Whether in the events that have happened which of these two States of Maharashtra and Madhya Pradesh can be compelled to take the plaintiff in service.
(2) Whether both or only one of the two States can be made liable for the payment of ar rears of salary of the plaintiff, if so, which State is liable.
The larger Bench of the Bombay High Court said that the State of Madhya Pradesh is constituted after the States Reorganisation Act referred to as the Act came into.
force on 1 November, 1956 is the principal successor State of the former State of Madhya Pradesh.
The High Court further said that the State of Maharashtra is the successor State of the former Madhya Pradesh inasmuch as certain territo ries, namely, Vidharbha which formed part of the former St. ate of Madhya Pradesh became: a part of the new State of Maharashtra.
The High Court then referred to.
clause (B) of section 88 of the Act and said that Maharashtra would be liable for the claim of the plaintiff only if the cause of action has arisen in its entirety within the territories which formed part of Maharashtra, otherwise initial liabil ity for the plaintiff 's claim will be on the principal successor State Madhya Pradesh under section 88(c) of the Act.
The larger Bench therefore referred the matter to the Division Bench to consider the question whether the cause of action for the plaintiff 's claim arose in its entirety within the territories which formed part of the Maharashtra.
The High Court held that under section 88(c) of the Act Madhya Pradesh is responsible for the claim of the plain tiff.
The High Court further held that the plaintiff was appointed under conditions of service Prescribed for him and accepted by him, and, therefore, the plaintiffs claim for arrears of salary would be governed by section 87 of the Act and not by section 88 of the Act.
The High Court said that the plaintiffs claim for arrears of salary and allowance was based on contract, either express or implied, on the basis of the terms.
of appointment and the conditions of service prescribed by the Government and accepted by the plaintiff.
The High Court also said that at the time of the plaintiff 's appointment in 1939 the plaintiff 's services were available for the then entire Province of Central Provinces and Berar and not only for those districts which formed part of Madhya Pradesh.
Therefore, the High Court said that section 87(b) of the Act would not apply.
Under the residuary clause of section 87(c) of the Act Madhya Pradesh would be liable as the principal successor State because the purpose of the contract were as from the appointed day not exclusively purposes of any of the two successor States.
Madhya Pradesh raised three contentions.
First, the plaintiff did not claim salary and allowances for the period subsequent to 15 September, 1943 in the.
suit filed by the. plaintiff in 1949 and was 559 therefore by reason of the provisions contained in Order 2 Rule 2 of the Code of Civil Procedure precluded from claim ing the salary and allowances for the period of 16 Septem ber, 1943 to 31 August, 1953 in the second suit which was filed on 6 October, 1956.
Second, the plaintiff 's claim in the second suit for salary and allowances prior to 6 October 1953 would be barred by the reason of Article 102 of the Limitation Act 1908.
Third, the liability, if any, would be under section 88(b) of the Act of Maharashtra which succeeded the State of Madhya Pradesh on 1 November, 1956 in so far as Nagpur District of the then existing State of Madhya Pradesh was concerned.
Reference was made to section 8(1) (c) of the Act for the purpose.
Further it is said by the appellant that on or after 1 November, 1956 the plain tiff could continue the suit only against the State of Bombay later known as State of Maharashtra and not against the State of Madhya Pradesh as constituted on or after 1 November, 1956.
Maharashtra contended that the liability was of Madhya Pradesh because of the provisions contained in section 88(c) of the Act.
It was said on behalf of Maharashtra that the plaintiff had been appointed to service in Central Prov inces and Berar which became the principal successor State of Madhya Pradesh.
The order of removal was also by the existing State which became the principal successor State of Madhya Pradesh.
In order to appreciate the rival contentions reference is necessary to two sections of the Act.
Section 87 speaks of liability in the case of contracts. 'Broadly stated, the provisions of section 87 of the Act are that where before the appointed day "1 November 1956" an existing State has made any contract in the exercise of 'its executive power for any purposes of the State, that contract shah be deemed to have been made in the exercise of the executive power (a) if there be only one successor States of the State; and (b) if there be two or more successor States and the purposes of the contract are,as from the appointed day, exclusively purposes of any one of them of that State; and (c) if there be two or more successor States and the purposes of the contract are,contract are, as from that day, not exclusively purposes of any one of them. of the principal successor State: and all rights and liabilities which have accrued or may accrue, under any such contract shall, to the extent to which they would have been rights or liabilities of the existing State be rights or liabilities of the successor State or the principal succes sor State.
The proviso to section 87 of the Act is that where the liability attaches under clause (c) the initial allocation of rights and liabilities made by this sub section shall be subject to such financial adjustment as may be agreed upon between all the successor States concerned, or in default of such agreement, as the central Government may by order direct.
Section 88 of the Act provides that where before the appointed day, an existing State is subject to any liability in respect of an actionable wrong other than breach of contract, that liability shall (a) if there be only one successor State, be a liability of that State; (b) if 560 there be two or more successor ' States and the cause of action arose wholly within the territories which as from that day are the territories of one of them, be a liability of that successor State, and (c) in any other case, be initially a liability of the principal successor State, but subject to such financial adjustment as may be agreed upon between 'all the successor States concerned, of in default of such agreement, as the Central Government may by order direct.
The claim for declaration that the order of suspension as welt as the order of dismissal was void is in respect of an actionable wrong other than breach of contract.
In order to.
determine as to which of the two States would be liable e under section 88 of the '.
1956 Act it has to be found out whether the cause of action arose wholly within the territories of one of the States or arose partly in the territories of one State and partly in the territo ries of the1 other.
The departmental enquiry which was alleged to be illegal was held at Hoshangabad which has all along been a part of the State of Madhya Pradesh only.
final orders which were challenged in the suit were passed at Nagpur which became part of the State of Bombay and later on known as Maharashtra.
The plaintiff 's cause of action comprises of every fact which is necessary to be proved.
The plaintiff based his claim with regard to de partmental enquiry which was held at Hoshangabad and also with regard to impugned order passed at Nagpur.
The appel lant State is the principal successor State of the former State of Madhya Pradesh.
Maharashtra was one of the succes sor States, like Madhya Pradesh.
Section 88(a) of the 1956 Act in the present case has no .application because it speaks of only one successor State.
Section 88(b) of the 1956 Act refers to the State.
where the cause of action wholly arose within the territories of either of the.
successor States.
In the present case, it cannot be said that the cause of action arose wholly within the successor State of Maharashtra.
Therefore, the residuary 'provision contained in section 88(c) of the 1956 Act applies and the liability is of the principal successor State, namely, Madhya Pradesh.
The High Court was right in arriving at the conclusion that Madhya Pradesh is liable.
The plaintiff 's suit in 1949 was only for setting aside the impugned orders.
The plaintiff did not ask for relief for arrears of salary for the obvious reason that the plain tiff in the 1949 suit asked fox ' setting aside of the im pugned orders and an order that the plaintiff was deemed to be continuing in service.
The plaintiff proceeded on the existing law as it stood by reason of the decision in High Commissioner for India vs 1.
M. Lall(1).
The Judicial Committee in that case held that a civil servant was not entitled to.
sue the State for recovering arrears of salary and pay.
Counsel for Madhya Pradesh relied on the decision in Province of Punjab vs Pandit Tara Chand (2) which held that a public servant had a right to bring a suit for ar rears .of pay.
The decision of the Judicial Committee in Lall 's case (supra) takes a contrary view to the decision of the Federal Court in Pandit (1) 75 I.A. 225.
(2) 561 Tara Chand 's case (supra).
It it true that the decision of the Federal Court in Pandit Tara Chand 's case (supra) was not brought to the notice of the Privy Council.
Under section 208 of the Government of India Act 1935 the law declared by the Judgment of the Privy Council had to be followed by all the Courts including the Federal Court.
Therefore, the earlier decision of the Federal Court though not expressly overruled by the Judicial Committee must be deemed to have overruled by implication by the decision of the Judicial Committee in Lall 's case (supra).
This Court in State of Bihar vs Abdul Majid(1) stated that a Government servant could ask for arrears of salary.
Counsel for Madhya Pradesh said that the decision of this Court in Abdul Majid 's case (supra) declared what the exist ing law has been, and, therefore, the plaintiff could not contend that it was not open to him to ask for arrears of salary in the 1949 suit.
It is in that background that Madhya Pradesh contends that the plaintiff not having asked for relief under Order 2 Rule 2 of the Code of Civil Proce dure would not be entitled to claim salary in the 1956 suit.
The contention of Madhya Pradesh cannot be accepted.
The plaintiff will be barred under Order 2 Rule 2 of the Code of Civil Procedure only when he omits to sue for or relinquishes the claim in a suit with knowledge that he has a right to.
sue for that relief.
It will not be correct to say that while the decision of the Judicial Committee in Lall 's case (supra) was holding the field the plaintiff could be said to know that he was yet entitled to make a claim for arrears of salary.
On the contrary, it will be correct to say that he knew that he was not entitled to make such a claim.
If at the date of the former suit the plain tiff is not aware of the right on which he insists in the latter suit the plaintiff cannot be said to be disentitled to the relief in the latter suit.
The reason is that at the date of the former suit the plaintiff is not aware of the right on which he insists in the subsequent suit.
A right which a litigant does not know that he possesses or a right which is not in existence at the time of the first suit can hardly be regarded as a "portion of his claim" within the meaning of Order 2 Rule 2 of the Code of Civil Procedure.
See Amant Bibi vs Imdad Husain(2).
The crux of the matter is presence or lack of awareness of the right at the time of first suit.
This Court in Om Prakash Gupta vs State of Uttar Pradesh(2) considered the prayer for refund of court fees on a claim which was abandoned.
The plaintiff in that case asked for a declaration that the order of dismissal was void and also asked for arrears of salary or in the alternative damages for wrongful dismissal.
In view of the decision in Lall 's case (supra) the plaint in that casewas amended by deleting the claim for arrears of salary and also for damages.
The plaintiff thereupon praved for refund of the court fees which had been paid on arrears of salary for damages.
Both the trial Court (1) (2) 15 I.A. 106, 112.
(3) ; 562 and the High Court rejected the claim for refund of court fees.
This Court also upheld the same view.
The reason given by this Court was that at the time the suit was insti tuted the law as it then stood permitted such a claim to be made.
The decision of the Privy Council made it clear that no such claim could be made.
The decision of the Privy Council clarifying the position was held by this Court not to be a ground for refund of court fee which was paid in accordance with law as it then stood.
The appellant Madhya Pradesh is, therefore, not right in contending that the plaintiff is barred by provisions con tained in Order 2 Rule 2 of the Code of Civil Procedure from asking for arrears of salary in the 1956 suit.
The plain tiff could not have asked for " arrears of salary on the law as it then stood.
The plaintiff did not know of or possess any such right.
The plaintiff, therefore, cannot be said to have omitted to sue for any right.
Another reason why the bar under Order 2 Rule 2 of the Code of Civil Procedure cannot operate is that the plain tiff 's cause of action in the 1956 suit is totally different from the cause of action in the 1949 suit.
See Pavana Reena Saminathan vs Palaniappa(1).
This Court in Jai Chand Sawhney vs Union of India (2) held that in a suit for setting aside the order of dismissal and for arrears of salary a claim for salary for the period prior to three years of the suit would be barred.
The reason given is that when the order of dismissal is set aside the Government servant is deemed to be in service throughout the period during which the order of dismissal remains operative.
Once an order of dismissal is declared bad it is held to be bad from the date of dismissal and salary would be due from the date when the dismissal order was bad.
The same view has been taken by this Court in Sakal Dean Sahai Srivastava vs Union of India(3).
In that case the plaintiff filed a suit on 27 November, 1962 for a declara tion that from 1 July, 1949 the date of illegal reversion up to 30 September, 1959 the date of his retirement he was a railway employee.
Relying on the decision of this Court in Jai Chand Sawhney 's case and Sakal Deep 's case (supra) counsel for Madhya Pradesh contended that the plaintiff would not be entitled to more than three years ' salary.
The present case is not one of setting aside an order of dismissal simpliciter.
When the plaintiff filed a suit in 1949 he could not ask for arrears of salary.
Pursuant to the decree dated 30 August, 1953 in his favour he was reinstated on 12 December, 1953.
Three features are to be borne in mind in appreciating the plaintiff 's case from the point of view of limitation.
First the plaintiff became entitled to salary for the period 16 September, 1943 up to the date of rein statement on 12 December, 1953, only when pursuant to the decree dated 30 August, 1953 there was actual reinstatement of the plaintiff on 12 December, 1953.
Second, the plain tiff was (1) I.A. 142.
(2) (3) ; 563 again suspended on 19 January, 1954 and was dismissed on 23 February 1956.
The Madhya Pradesh Government on 5 March, 1954 decided that during the period of first suspension till his reinstatement on 12 December, 1953 he was not entitled to salary.
Again on 29 January, 1956 the Madhya Pradesh Government decided under Fundamental Rule 54(iii) that during the period of suspension from 16 September 1943 to 12 December 1953 and again from 19 January 1954 to 23 February 1956 he would not be entitled to any payment of allowances.
On these facts two consequences arise in the present appeal.
First, since the plaintiff was under suspension from 16 September, 1943 till 12 December, 1953 when he was rein stated and again suspended from 19 January, 1954 till 23 February, 1956 when he was dismissed, his suit on 6 October, 1956 is within a period of three years from the date of his reinstatement on 12 December, 1953.
Second, during the period of suspension he was not entitled to salary under Fundamental Rule 53.
Further decision to that effect was taken by the Madhya Pradesh Government on 28 January, 1956 under Fundamental Rule 54.
Therefore, the plaintiff 's cause of action for salary for the period of suspension did not accrue until he was reinstated on 12 December, 1953.
The plaintiff 's salary accrued only when he was reinstated as a result of the decree setting aside the orders of sus pension and of dismissal.
The rulings of this Court in Jai Chand Sawhney 's case (supra) and Sakal Deep 's case (supra) do.
not apply to the present appeal because there was no aspect of any suspen sion order remaining operative until the fact of rein statement pursuant to the decree.
The plaintiff 's cause of action for arrears of salary is this.
When the plaintiff was reinstated on 12 December, 1953 pursuant to the decree dated 30 August, 1953 the plain tiff became entitled to salary which was suspended during the period of suspension.
_ The plaintiff was again suspend ed from 19 January, 1954 and he was dismissed from service on 23 February, 1956.
Therefore, when the plaintiff filed the suit on 6 October, 1956 his entire claim for salary is founded first on his reinstatement on 12 December, 1953 pursuant to the decree and second on the order of suspen sion dated 19 January, 1954 and the order of dismissal on 23 February 1956 which the plaintiff challenged as illegal.
The original order of suspension on 16 September, 1943 as welt as the original dismissal dated 7 November, 1945 was declared to be illegal by the decree dated 30 August, 1953.
Therefore, when the plaintiff was reinstated on 12 December, 1953 it is then that the plaintiff 's claim for salary accrued due.
This salary was again suspended from 19 January, 1954.
Dismissal on 23 February, 1956 was at a time when the plaintiff was still under suspension.
The order of suspension does not put an end to his service.
Suspension merely suspends the claim to salary.
During suspension there is suspension allowance.
See Khem Chand vs Union of 2 112 SCI/77 564 India(1) where this Court said that the real effect of the order of suspension is that though he continues to be a member of the service he is not permitted to work and is paid only subsistence allowance which is less than his salary.
Under Fundamental Rule 52 'the pay and allowance of a Government servant who is dismissed or removed from service, cease from the date.
of his dismissal or remov al.
Therefore, there would be no question of salary accruing or accruing due so long as orders of suspension and dismiss al stand.
The High Court was correct in the conclusion that the plaintiff 's claim for salary accrued due only on the order of dismissal dated 23 February, 1956 being set aside.
For the foregoing reasons the appeal is dismissed.
There will be costs only to the plaintiff respondent to be paid by the State of Madhya Pradesh.
M .R. Appeal dismissed. | Dismissing the appeal, the Court, HELD: (1) A litigant will be barred under Order 2 Rule 2 of the C.P.C. only when he omits to sue for or relinquishes the claim in a suit with knowledge that he has a right to sue for that relief.
A right which he does not know that he possesses or a right which is not in existence at the time of the first suit is not a "portion of his claim" within the meaning of Order 2 Rule 2 of the C.P.C. The crux of the matter is presence or lack of awareness of the right at the time of first suit.
[561D E, 562 B] Amant Bibi vs Imdad Hussain 15 I.A. 106 at 112, applied.
Om Prakash Gupta vs State of Uttar Pradesh ; , distinguished.
High Commissioner for India vs I. M. Lall 75 I.A. 225; Province of Punjab vs Pandit Tara Chand ; State of Bihar vs Abdul Majid , referred to.
The bar under Order 2 Rule 2 of the C P.C. cannot oper ate when the litigant 's cause of action in an earlier suit is totally different from the cause.
of action in a later suit.
[562 C] Pawana Reena Saminathan vs Palaniappa 41 I.A.142, applied.
(2) During the period of suspension the plaintiff was not entitled to salary under Fundamental Rule 53.
The cause of action for his salary for such period did not accrue until he was reinstated as a result of the decree setting aside the orders of suspension and of dismissal.
[563C D] Jai Chand Sawhney vs Union of India, and Sakal Dean Sahai Srivastava vs Union of India, ; , distinguished.
(3) Under Fundamental Rule 52 the pay and allowance of a Government servant who is dismissed or removed from service, cease from the date of his dismissal or removal.
Therefore, there would be no question of salary accruing or accruing due so long as orders of suspension and dismissal stand.
[564 B C] Khem Chand vs Union of India, [1963] Supp 1 S.C.R. 229, followed. |
Appeal No. 1827 of 1970.
(From the Judgment and Decree dated 28 4 1970 of the Madhya Pradesh High Court (Gwalior Bench) in First Appeal No. 133 of 1968).
S.N. Andley and Uma Dutta, for the appellants Ram Panjwani and H.S. Harihar, for the respondents.
The Judgment of the Court was delivered by KHANNA, J.
This is an appeal on certificate by Prithvi Raj Taneja (now deceased and represented by his legal repre sentatives) against the judgment of the Madhya Pradesh High Court whereby the High Court partially accepted the appeal filed by the appellant regarding the quantum of compensa tion for the acquisition of land.
A plot of land measuring 27 bighas and 17 biswas situated in Ashok Nagar, district Guna, belonging to the appellant was acquired for the construction o,f a police station and residential quarters for policemen.
A bigha, it is stated, is equivalent to 2,500 square yards.
The land sought to be acquired measured 68,658 square yards.
Notification under section 4 of the Land Acquisition Act for the acquisition of the land was issued on April 7, 1961.
The Land Acquisition Officer as per award dated June 13, 1961 awarded compensation for the land at the rate of Rs. 100 per bigha.
In addition to that, he awarded a sum of Rs. 1,175 for large trees and Rs. 1,380 for small trees standing on the land.
The appellant was also awarded Rs. 1,000 as compensation for a well which had been sunk in the. land, and Rs. 800 for a house standing on the land In all, the appellant was awarded a sum of Rs. 7,616.
including solatium at the rate.
of fifteen per cent by the Land Acqui sition Officer.
The appellant wanted compensation for the land at the rate of Rs. 10 per square yard.
He accordingly had the matter referred to the District Judge.
Learned Additional District Judge determined the market value of the land in question to be Rs. 900 per bigha.
Regarding the well, the Additional District Judge awarded compensation of Rs. 3,000 as against the amount of Rs. 1,000 which had been awarded by the Land Acquisition Officer.
In other respects, the award of the Land Acquisition Officer was upheld.
Computing solatium at the rate of 10 per cent, the.
total amount awarded by District Judge to the appellant was Rs. 32,285 besides interest at the rate of six per cent per annum.
The appellant not being satisfied with the award of the Additional District Judge took the matter in appeal to the High Court.
The High Court awarded compensation to the appellant at the rate of Re. 1.
per square yard for the land in question.
The High Court also awarded Rs. 2,500 for the loss of earnings to the appellant.
The rate of solatium for compulsory acquisition was increased by the High Court from ten per cent to, fifteen per cent.
In all, the appel lant was held entitled to a compensation of Rs. 88,381 besides interest at the rate of six per cent per annum.
The appellant thereupon obtained a certificate of fit ness for appeal to this Court under article 133(1)(a) of the Constitution, as it stood at that time.
In appeal before us, Mr. Andley on behalf of the appel lant has argued that more than half of the land in dispute is within.
the municipal limits of Ashok Nagar Municipality, while the remaining land was also likely to be included within those limits shortly.
It is further stated that the land in question abutts Ashok Nagar Isagarh Road and is situated near the tehsil building and the. railway station.
Learned counsel has also referred to the fact that small plots of land adjoining the land in dispute were sold at rates of Rs. 9 and Rs. 8 per square yard during the years 1958 to 1960.
In this respect, we find that the High Court has considered most of the above circumstances and has come to the conclusion that Re. 1 per square yard represents fair market value of the land in dispute.
The High Court has also referred to the special circumstances under which the small plots were sold and their price was fixed.
We agree with the High Court that the price 635 paid for small plots of land cannot provide a safe criterion for determining the amount of compensation for a vast area of land.
We may in this context refer to a recent judgment in the case of Smt.
Padma Uppal etc.
vs State of Punjab & Ors.
C) wherein this Court observed that it is well settled that in determining compensation the value fetched for small plots of land cannot be applied to the lands covering a very large area and that the large area of land cannot possibly fetch a price at the same rate at which small plots are sold.
Section 23 of the Land Acquisition Act provides that in mining the amount of compensation to, be awarded for the land acquired under the Act, the Court shall take into.
account inter alia the market value of the land at the date of the publication of the notification under section 4 of the Act.
The market value means the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when laid out in the most advantageous manner excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired.
In considering market value the disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded.
There is an element of guess work inherent in most cases involving determination of the market value of the acquired land.
But this in the very nature of things cannot be helped.
The essential thing is to keep in view the relevant factors prescribed by the Act.
If the judgment of the High Court reveals that it has taken into consideration the relevant factors, the assessment of the market value of the acquired land should not be dis turbed (see Thakur Kanta Prasad Singh (dead) by L. rs.
vs State of Bihar(2).
After having been taken through the material on the record, we find no infirmity in the judgment of the High Court as might induce us to disturb its find ing.
The appeal consequently fails and is dismissed but in the circumstances without costs.
Appeal dismissed. | The appellant 's land was acquired and compensation was awarded to him by the Land Acquisition Officer.
Demanding a higher amount, the appellant had the matter referred to the District Judge who increased the award, but still discon tented, the appellant went in appeal.
The High Court also increased the compensation but could not satisfy the appel lant who thereupon obtained leave to appeal to the Supreme Court, contending that small plots of land adjoining his large area were sold at much higher rates.
Dismissing the appeal, the Court, HELD: 1.
The price ' paid for small plots of laud cannot provide a safe criterion for determining the amount of compensation for a vast area of land.
The large area of land cannot possibly fetch a price at the same rate at which small plots are sold.
[635 A B] Smt.
Padma Uppal etc.
vs State of Punjab & Ors.
; , applied.
The essential thing is to keen in view the relevant factors prescribed by the Act.
If the judgment of the High Court reveals that it has taken into consideration the relevant factors, the assessment of the market value of the acquired land should not be disturbed.
[635 D E] Thakur Kanta Prasad Singh (dead) by L. Rs vs State of Bihar ; , applied. |
Appeal Nos.
245 251/72.
From the Judgment and Order dated 21 9 1970 of the Assam and Nagaland High Court in Civil Rules Nos. 105, 106 and 123 to 127/ 66.
A.K. Sen, D.N. Mukherjee and N.R. Choudhary for the Appellant.
Purshottam Chatterjee and S.N. Choudhary for the respond ents.
The Judgment of the Court was delivered by KHANNA, J.
The short question which arises for consid eration in these seven appeals filed on certificate against the judgment of Assam and Nagaland High Court is the scope and validity of the following part of rule 23 of the Assam Agricultural Income tax Rules, 1939 (hereinafter referred to as the rules) framed under section 50 of the Assam Agricul tural Income tax Act (Assam Act 9 of 1939) (hereinafter referred to as the Act): "Where an order apportioning the liability to the tax on the basis of partition has not been passed in respect of a Hindu family hitherto assessed as undivided or joint, such family shall be deemed for the purposes of the Act, to continue to be a Hindu undivided or joint family.
" The High Court held that the facts of this case were covered by the above quoted rule.
The High Court also repelled the challenge to the vires o{ the rule.
The appeals arise out of seven petitions filed under articles 226 and 227 of the Constitution of India by the appellant which were dismissed by a common judgment.
The matter relates to assessment years 1946 47, 1947 48, 1948 49, 1949 50, 1950 51, 1951 52 and 1955 56.
Each writ peti tion related to one of these years.
We may set out the facts relating to the assessment year 1946 47 as it is the common case of the parties that the decision about the writ petition relating to that year would govern the other writ petitions also.
The appellant Sashi Prasad Barooah was the Karta of a Hindu undivided family styled as S.P. Barooah & Others.
The family was governed by Dayabhaga school of Hindu law and consisted of three members.
The family owned certain tea estates and carried on the business of tea plantation.
It was assessed under the Act in respect of its income derived from manufacture and sale of tea.
The case of the appellant is that there was a partition of the family on January 1, 1945 and as a result of that partition, some of the tea estates fell to the share of the appellant and he became exclusive owner thereof from the date of the partition.
A general notice dated April 3, 1946 was published in the Assam Gazette and local newspapers in terms o,f sub section (1) of section 19 of the Act calling upon persons whose agricultural income exceeded 647 the limits of taxable income to furnish returns within the specified time.
On March 24, 1947 the appellant addressed a letter to the Agricultural Income tax Officer praying for extension of ' time for submission of the return.
Another letter dated May 10, 1947 was addressed by the appellant to the Agricultural Income tax Officer stating that he was trying to expedite the submission of the return.
On February 15, 1951 the Agricultural Income tax Officer addressed a communication to the appellant asking him to file the return by March 14, 1951.
The appellant by letter dated March 16, 1951 informed the said officer that he would meet him at Shillong.
In his letter dated July 21, 1951 the appellant informed the Agricultural Income tax Officer that he would file his return as soon as some matters were settled.
On March 25, 1955 the appellant addressed another letter to the Agricultural Income tax Officer stat ing that he had not received the relevant assessment orders made by the Income tax Officer (the income tax officer under the Indian Income tax Act, 1922) relating to the assessment years 1946 47 onwards.
On July 1959 the following two notices were sent by the Agricultural Income tax Officer to the appellant: "I am to inform you that following the dissolution of family business of Sashi Prasad Barua and Others in the year 1945, you are liable to furnish a Return of agricultur al incomes including those from the Tea Es tates under your ownership from the assessment year 1946 47.
Please also note that the Returns along with certified copies of Central Income tax Assessment should reach this office on or before 15 8 59.
In default, you will be liable for summary assessment." "Whereas I have reason to believe that your total agricultural income from sources chargeable to agricultural income tax in the year ending the 31st March, 1947 to 1959 (a) has wholly escaped assessment; (b) I therefore propose (i) to assess the said income that has escaped assessment.
I hereupon require you to deliver to me not later than 15 8 59 or within 30 days of the receipt of this notice, a Return in the attached form of your total agricultural income during the previous year ending the 31st March, 1946 to 1958.
" Accompanying the two notices sent by the Agricultural Income tax Officer was also a notice under section 19(2) and section 30 of the Act.
The appellant failed to submit a return or to furnish certified copies of the Central assess ment orders.
The Agricultural Income tax Officer as per order dated June 22, 1961 assessed the total agricultural income of the appellant for the year 1946 47 to be 648 Rs. 1,45,994.
An amount of Rs. 19,321.44 was held to be recoverable from the appellant.
The appellant filed an appeal against that order but the same was dismissed by the Assistant Commissioner of Taxes on December 27, 1962.
Revision filed by the appellant was dismissed by the Commis sioner of Taxes as per order dated September 28, 1964.
Certificate of public demand showing an amount of Rs. 3,74,087,89 as due from the appellant for the seven years in question was then issued by the Agricultural Income tax Officer.
Proclamation for the sale of the property of the appellant was thereafter issued for the recovery of the amount due from the appellant.
The appellant thereupon filed, as mentioned earlier, seven writ petitions.
Prayer made in the writ petitions was to quash the impugned assess ment orders dated June 22, 1961, the notices of demand dated July 4, 1961 and the proclamation of sale dated December 31, 1964.
Form one of the notices ,addressed by the taxation authorities to the appellant as well as from the return filed on their behalf, it would appear that the taxation authorities were not averse in the event of partition among the members of the Hindu undivided family, to assess the appellant in his individual capacity in respect of the agricultural income arising from those tea estates which had fallen to his share.
Such a course, it seems, was also not acceptable to the appellant.
His stand at the same time was that no assessment could be made in the name of Hindu undivided family as according to him the same had been disrupted as a result of partition.
The appellant thus wanted a complete imunity from payment of agricultural income tax during the years in question even though agricul tural income had arisen from tea estates.
Although a number of grounds were taken in the writ petitions, at the hearing before the High Court only two grounds were pressed on behalf of the appellant.
The first ground was that after the dissolution of the Hindu undivided family, no assessment order could be made under the Act in respect of such disrupted Hindu undivided family.
The second submission advanced on behalf of the appellant was that in case it be held that the matter was covered by rule 23 reproduced above, in that event the said rule was ultra vires the powers of the State Government to frame rules under the Act.
The High Court, as already mentioned, decided on both the points in favour of the revenue and against the appellant.
In appeal before us Mr. Sen on behalf of the appellant has contended that the Hindu undivided family of which the appellant was the Karta was disrupted on January 1, 1945.
It is urged, as was done before the High Court, that after the disruption of that family, it could not be assessed under the Act.
Rule 23 reproduced above, according to the learned counsel, is not attracted in the present case.
In case, however, it be held that the said rule applies to the present case, the State Government, Mr. Sen submits, had no power to make such a rule.
The above contentions have been controverted by Mr. Chatterjee on behalf of the respondents.
The learned coun sel has also emphasised the fact that in none of the commu nications sent by the appellant 649 mentioned above, there was any reference to partition of the Hindu undivided family.
After giving the matter our consideration, we are of the opinion that the two contentions advanced by Mr. Sen on behalf of the appellant are not well founded.
It is conse quently not necessary for us to go into the question as to what is the effect of the omission of the appellant to refer to the partition in the communications sent by him to the Agricultural Income tax Officer.
It may be apposite at this stage to refer to the materi al provisions, as they stood at the relevant time, of the Act which provides for the imposition of tax on agricultural income arising from lands situated in Assam.
According to the definition of "person" as given in section 2(m) of the Act, person includes an undivided or joint Hindu family.
Section 3 is the charging section.
According to this sec tion, agricultural income tax at the rate or rates specified in the annual Assam Finance Acts subject to the provisions of section 6 shall be charged for each financial year in accordance with, and subject to, the provisions of this Act on the total agricultural income of the previous year of every individual, Hindu undivided or joint family, company, firm and other association of individuals.
Section 19 of the Act deals with the return of income and reads as under: "19.
(1) The Agricultural Income tax Officer shall, on or before the first day of May or for the year commencing 1st April, 1939 any later day notified by the Government in each year, give notice by publication in the press and otherwise in the manner prescribed by rules, requiring every person whose agri cultural income exceeds the limit of taxable income prescribed in section 6 to furnish, within such period not being less than thirty days as may be specified in the notice, a return, in the prescribed form and verified in the prescribed manner, setting forth (along with such other particulars as may be required by the notice) his total agricultural income during the previous year: Provided that the Agricultural Income tax Officer may in his discretion extend the date for the delivery of the return in the case of any person or class of persons; (2) In the case of any person whose total agricultural income is, in the opinion of the Agricultural Income tax Officer, of such amount as to render such person liable to payment of agricultural income tax for any financial year the Agricultural Income tax Officer may serve in that financial year a notice in the prescribed form upon him requir ing him to furnish, within the prescribed period, a return in the prescribed manner setting forth his total agricultural income during the previous year.
(3) If any person has not furnished a return within the time allowed by or under sub section (1 ), or sub section 650 (2) or, having furnished a return under either of those subsections, discovers any omission or wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the assessment is made, and any return so made shall be deemed to be made in due time under this section.
" Section 20 provides for the making of an assessment order.
Section 30 deals with income escaping assessment, and its material part reads as under: "If for any reason any agricultural income chargeable to agricultural income tax has escaped assessment for any financial year, or has been assessed at too low a rate, the Agricultural Income tax Officer may, at any time within three years of the end of that financial year, serve on the person liable to pay agricultural income tax on such agricul tural income or, in the case of a company on the prin cipal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 19, and may proceed to assess or reassess such income, and the provi sions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section :" Section 5C) empowers the State Government to make rules.
The material part of that sec tion reads as under ': "50.
(1) The Provincial Government may, subject to previous publication, make rules for carrying out the purposes of this Act, and such rules may be made for the whole of the Province or such part or parts thereof as may be specified.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may (a) . (b) . (c) . (d) . (e) . (f) . (g) . (h) . (i) . (j) prescribe the manner in which the tax shall be payable where the assessment is made on the agricultural income of a Hindu undivided or joint family and a partition of the.
property of such 651 family has been effected after the date of such assessment; (k) . (l) . (m) .
We have set out above the relevant part of rule 23.
The rule clearly states that where an order apportioning the liability to the tax on the basis of partition has not been passed in respect of a Hindu family hitherto assessed as undivided or joint, such family shall be deemed for the purposes of the Act, to continue to be a Hindu undivided or joint family.
It would, therefore, follow that unless an order apportioning the liability to the tax on the basis of partition iS passed in respect of a Hindu undivided family which was hitherto assessed as such undivided family, the said family shall be deemed for the purpose of the Act to continue to be a Hindu undivided family.
Admittedly no order apportioning the liability to the tax on the basis of the alleged partition has been passed in respect of the Hindu undivided family of which the appellant was the Karta.
As such, the aforesaid family shall continue to be treated, for the purposes of the Act, as Hindu undivided family.
We are unable to subscribe to the submission of Mr. Sen that the above rule would apply only in those cases where the Hindu undivided family has already been assessed under the Act and the only thing which remains is the recovery of the tax in pursuance of the said assessment order.
Such cases, in our view, are covered by other part of rule 23.
We are, however, not concerned with that part.
So far as the part of rule 23 which has been reproduced above is concerned, its language is clear and unambiguous.
The language clearly warrants the conclusion that in the absence of an order apportioning the liability to the tax on the basis of parti tion in respect of a Hindu undivided family hitherto assessed as undivided or joint, such family shall be deemed for the purposes of the Act to continue to be a Hindu undi vided family.
As regards the second contention, Mr. Sen submits that the power which has been conferred by clause (i) of sub section (2) of section 50 of the Act is to make rules pre scribing the manner in which the tax shall be payable when the assessment is made on agricultural income of a Hindu undivided or joint family and a partition of the property of such family has been effected after the date of such assessment.
It is urged that apart from that, the State Government has no power to make a rule for assessment of a Hindu undivided family after a partition takes place in such family.
This contention is devoid of force as we are of the opinion that the State Government was competent to make the part of rule 23 reproduced above in exercise of the powers conferred by sub section (1) of section 50.
According to that sub section, the State Government may subject to previ ous publication make rules for carrying out the purposes of this Act.
It has not been disputed before uS that there was previous publication of the rules in question.
The question is whether the 652 part of rule 23 reproduced above can be said to have been made for carrying out the purposes of the Act.
The answer to this question, in our opinion, should be in the affirma tive.
What the rule contemplates is that unless an order was made on the basis of the alleged partition of a Hindu undivided family, such family shall be deemed for the pur poses of the Act to continue to be Hindu undivided family.
The rule thus relates to the working of the Act.
Section 3 of the Act is the charging section and creates liability for tax in respect of the total agricultural income of every individual, Hindu undivided family, firm and other associa tion of persons.
Such a liability having already been created by the above provision, rule 23 reproduced earlier deals with the question as to who should be the person as defined in the Act who should be assessed in respect of the agricultural income arising from property in respect of which Hindu undivided family was assessed hitherto.
The rule provides that such family shall continue to be deemed as Hindu undivided family for the purposes of the Act unless an order is made on the basis of the partition amongst the members of the family.
This is a matter of detail to carry out the purposes of the Act and the State Government, in our opinion, was well within its competence to make the impugned rule in exercise of its powers under sub section (1) of section 50 of the Act.
There is also nothing novel in a Hindu undivided family being taxed as such in spite of a claim of its disruption unless an order on the basis of the partition is made by the taxing authorities.
section (1) of section 171 of the Income tax Act 1961 provides that a Hindu undivided family hitherto assessed as undivided shall be deemed for the purposes of the Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under that section in respect of the Hindu undivided family.
The fact that, unlike the Income tax Act, there is no statutory provision in the Act with which we are concerned and the matter is dealt with by the rules framed under the Act would not make any material differ ence.
The rules would be as much binding as would be the statutory provision in this respect.
The only requirement is that the rules should be validly made.
in exercise of the powers conferred by the Act.
So far as this aspect is concerned, we have already held above that the rule in question was validly made as it was within the competence of the State Government to make such rule.
The proposition is well settled that it is not unconsti tutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be levied the rates at which it is to be charged in respect of different classes of goods and the like [see Pt.
Banarsi Das vs State of Madhya Pradesh(1)].
In that case this Court dealt with the provisions of the Central Provinces and Berar Sales Tax Act, 1947.
The said Act provided for exemption from taxation in res (1) 653 pect of the supply of certain material.
Power was also conferred upon the State Government to amend such exemption by notification.
This Court upheld the validity of that notification.
We may also refer to the case of Powell vs Appollo Candle Company Limited(1) which dealt with section 133 of the Customs Regulation Act of 1879 of New South Wales.
That section conferred a power on the Governor to impose.
tax on certain articles of import.
While repelling the challenge to the constitutional validity of that provision, the Privy Council observed: "It is argued that the tax in question has been imposed by the Governor and not by the Legislature who alone had power to impose it.
But the duties levied under the Order in Council are really levied by the authority of the Act under which the order is issued.
the Legislature has not parted with its perfect control over the Governor, and has the power, of course, at any moment, of withdrawing or altering the power which they have entrusted to him.
In these circumstances, their Lord ships are of opinion that the judgment of the Supreme Court was wrong in declaring section 133 of the Customs Regulations Act of ]879 to be beyond the power of the Legislature.
" In Syed Mohamed & Co. vs The State of Madras(2), the question was as to the vires of rules 4 and 16 framed under the Madras General Sales Tax Act.
Section 5(vi) of that Act had left it to the rulemaking authority to determine at which single point in the series of sales by successive dealers the tax should be levied, and pursuant thereto, rules 4 and 16 had provided that it was the purchaser who was liable to pay the tax in respect of sales of hides and skins.
The validity of the rules was attacked on the ground that it was only the legislature that was competent to decide who 'shall be taxed and that the determination of that question by the rule making authorities was altra vires.
The Madras High Court rejected this contention, and held on a review of the authorities that the delegation of authority under section 5(vi) was within permissible consti tutional Limits.
Powell 's case as well as the case of Syed Mohamed were referred to with approval by this Court in the case of Pt.
Banarsi Das.
The above decisions clearly lend support for the conclusion arrived at by the High Court in the judgment under appeal that the State Government was within its compe tence to make rule 23 reproduced above.
We, therefore, uphold the judgment of the High Court and dismiss the appeals with costs.
One set of fee P.B.R. Appeals dismissed.
(1) (2) 3 S.T.C. 367. | Rule 23 of the Assam Agricultural Income tax Rules, 1939 provides that where an order apportioning the liability to the tax on the basis of partition has not been passed in respect of a Hindu undivided family hitherto.
assessed as undivided or joint, such family shall be deemed, to continue to be a Hindu undivided or joint family.
The assessee was the Karta of a Hindu undivided family, which was assessed to agricultural income tax in respect of income derived from the manufacture and sale of tea.
The assessee contended before the Agricultural Income tax Officer that, since there was disruption of the Hindu undi vided family, no agricultural income tax was payable exen though agricultural income had arisen from tea estates.
This plea was rejected.
His petition under article 226 of the Constitution impugning the validity of r. 23 had been dis missed by the High Court.
In appeal to this Court it was contended that (i) after the dissolution of the family no assessment order could be made under r. 23 in respect of such disrupted Hindu Undi vided family (ii) the State Government had no power to make a rule for the assessment of a Hindu undivided family after a partition took place in the family.
Dismissing the appeals, HELD: (1) The language of r. 23 clearly warrants the conclusion that in the absence of an order apportioning the liability to tax on the basis of partition in respect of a Hindu undivided family hitherto assessed as undivided or joint, such family shall ,be deemed, for the purpose of the Act to continue to be a Hindu Undivided family.
No order apportioning the liability to, tax on ' the basis of the alleged partition having been passed, the family shall continue be treated as a Hindu undivided family.
[651 C F] 2(a) The liability for tax having been created by the charging section, the rule deals with the question as to who should be the person that should be assessed to tax.
This is a matter of detail to carry out the purposes of the and the State Government was well within its competence to make the rule in exercise of its rule making power.
[652 C D] (b) The fact that.
unlike the Income tax Act, there is no statutory provision in the Act and the matter is dealt with by the rules, would not make any material difference.
The rules would be as much binding as would be statutory provision in t,his respect.
[652 E F] (c) It is well settled that it is not unconstitutional for the legislature to leave it to the executive to deter mine the details relating to the working of taxation laws.
such as selection of persons on whom the tax is to be levied.
the rate at which it is to be charged in respect of different classes of goods and the like.
[652 G H] Pt.
Banarsi Das vs State of Madhya Pradesh [1959] S.C.R. 427, followed.
Powell vs Appollo Candle Company Limited [1885] 10 A.C. 282 and Syed Mobgreed & Co. vs The State of Madras 3 S.T.C. 367, referred to. 646 |
Civil Appeal No. 1763 of 1968.
(From the Judgment and Decree dated the 28th July, 1964 of the Kerala High Court in Appeal Suit No. 843 of 1960).
T.C. Raghavan, Sardar Bahadur Saharya and V.B. Saharya, for the appellant.
T.S. Krishnamoorthy Iyer and M.R. Pillai,.
for Respondent No. 1.
T.S. Krishnamoorthy, P.K. Pillai and N. Sudhakaran, for Respondent No. 2.
638 The Judgment of the Court was delivered by BEG, J.
This is a defendent 's appeal by Certificate granted by the Kerala High Court under Article 133(1)(a) of the Constitution as a matter of course before its amendment because the High Court had modified a decree in a partition suit and the subject matter satisfied the requirements of the unamended Article 133.
The parties to the partition suit are descendants of Narayana Prabhu (hereinafter referred to as 'Narayana ').
Krishna, the plaintiff (now dead) was the 3rd son of Nara yana.
The defendant appellant, Venkateswara, was the eldest of the four sons of Narayana.
The partition suit related to 72 items mentioned in schedule 'A ' to the plaint claimed by the plaintiff to be joint family property.
It appears that there was no dispute with regard to certain items, but, the defendant appellant claimed other items as his exclusive property on the ground that they had been purchased from his personal income.
due to his own enter prise and exertions and ability in carrying on business.
The Trial Court had accepted the case of the defendant appellant that all items, except No. 35 and a part of item No. 52 which belonged, to the 3rd defendant, were the self acquired properties of the defendant appellant.
The High Court re versed this finding on the ground that there was "little reliable: evidence on record as to.
the exact source of the. fund with which the first defendant started the trade".
The High Court rejected the submission of the defendant appel lant that, when the Tobacco business under consideration was started, Narayana being the Karta of the family, the fact that the eldest son, Venkateswara, the defendant appel lant, was carrying on the business, raised a presumption that it was the separate or self acquired business of Venka teswara.
The High Court relying on certain documentary evidence, including the letter heads showing the business as that of "P. N. Venkateswara Prabhu & Brothers" held that the business was joint family business.
The partition suit was filed originally in another Court but was sent to the Court of the Second Additional Sub Judge of Alleppey in 1957, and the preliminary decree was passed on 5th August, 1960.
The High Court allowed the appeal, modifying the decree to the extent that 3/4th share of items 4 to 72 of the schedule, except item 35 and part of 52 standing in the name of the 3rd defendant, were held to, be partible properties as part of Joint family business, but it excluded assets which came into.
existence after the filing of the. partition suit which operated as a clear unequivocal expression of intention to separate.
It also, left the extent of mesne profits of landed properties to be decided in proceedings for the passing of the final decree.
It appeals that the defendant appellant had also filed a money suit in the Court of the Munsif only against defendant No. 3, one of the four brother 's, but all of them were impleaded in the partition suit.
The money suit was, howev er, transferred to the file of the Additional Sub Judge and tried together with the partition suit and was also de creed by the Additional Sub Judge of Alleppey on the same date as the partition suit.
The plaintiff respondent had appealed against both the decrees in the High Court.
The two appeals were heard and decided together by the High Court.
The High Court, after pro 639 nouncing judgment in the partition suit, proceeded to give judgment, under a new heading and number of the appeal in the money suit.
It said, in this separate judgment: "The suit that gave rise to.
this appeal has been instituted by the respondent against the appellant for money due on 14 10 1123 on account of tobacco delivered to the latter 's shop.
The defence was that the trades run by both the brothers were parts of the joint family trade, and not separate to foster such a claim by the respondent on the appellant.
The court below, having found in the other suit the shops run by the parties to belong to the concerned individuals, has decreed the suit.
As we have reversed that finding in A.S. No. 843 of 1960 and found the shop stand ing in the name of each brother to be a branch of the joint family trade.
in tobacco and directed ascertainment of the assets and liabilities of the entire trade to be settled as on 2 3 1124, the date of that partition suit, this suit has to be dismissed".
The judgments were, therefore, two.
separate ones given in one continuation but under ' separate headings.
Separate decrees were prepared in each appeal relating to a separate case.
As the defendant appellant did not seek leave to file any appeal against the High Court 's judgment and decree in the money suit and there is no appeal before us against the decree in the money suit, a preliminary objection is taken on the ground that the defendant 's appeal now before us is barred by res judicata.
Learned Counsel for the defendant appellant urges that the two suits were different in nature and were filed in different Courts originally so that the Court trying the partition suit and the Court in which the money suit was triable were not Courts of coordinate jurisdiction.
It was also.
objected that the partition suit was earlier and the money suit having been filed sixteen days later could not be deemed to be a suit decided earlier.
Furthermore, it was pointed out that the judgment was common.
It was also urged that.
all the four brothers were parties to the parti tion suit but the money suit was only between two brothers.
It is true that the appeals against both the decrees of the Trial Court were heard together in the High Court, and, although, the appeal in the money suit is decided under a separate.
heading and the short judgment in it appears to be practically consequential on the judgment in the partition suit, yet, the judgments in the two appeals decide a common issue and resulted in two decrees.
It is urged that, whereas the defendant appellant had.
filed an appeal on the strength of a certificate granted to him as a matter of right, following upon the modification of the decree of the Trial Court by the High Court, the defend ant appellant had no such right of appeal in this Court.
Hence, it was submitted that neither in law nor in equity could the.
defendant appellant be.
barred from putting forward his objections to the decree in the partition suit.
640 Certain decisions were relied upon by learned Counsel for, the defendant appellant Venkateswara in support of the contention that the plea of res Judicata is not available as a preliminary objection to the respondent to the hearing of the appeal before us in the circumstances of this case.
We proceed to consider these cases.
Narhari & Ors.
vs Shankar & Ors.
,(1) is no doubt the judgment of the Supreme Court of India, although it was, if one may so put it, "the Hyderabad Wing" of it in a transi tional period when a learned Judge of this Court, Mr. Jus tice Mehr Chand Mahajan, presided over a bench of which the other two Members were formerly Members of His Exalted Highness the Nizam 's Judicial Committee.
Technically, however, it was this Court 's judgment.
In that case, Naik, J. had followed a decision of the Judicial Committee of the Hyderabad State and held that, when there was only one suit and the appeals had been disposed of by the same judgment, it was not necessary to file two separate appeals.
It elaborated the ratio of the decision as follows (at p. 757 758): "It is now well settled that where there has been one trial, one finding, and one decision, there need not be two appeals even though two decrees may have been drawn up.
As has been observed by Tek Chand J. in his learned judgment in Mst.
Lachmi vs Mst.
Bhuli (AIR mentioned above, the determining factor is not the decree but the matter in controversy.
As he puts it later in his judgment, the estoppel is not created by the decree but it can only be created by the judgment.
The question of resjudicata arises only when there are two suits.
Even when there are two suits, it has been held that a decision given simultaneously cannot be a decision in the former suit.
When there is only one suit, the question of res Judicata does not arise at all and in the present case, both the decrees are in the same case and based on the same judgment, and the matter decided concerns the entire suit.
As such, there is no question of the application of the principle of res judicata.
The same judgment cannot remain effective just because it was appealed against with a different number or a copy of it was attached to a different appeal.
The two decrees in substance are one".
It seems to us that to be fair to confine the ratio deci dendi of the Hyderabad case to cases where there is only one suit.
In the case now before us, not only were the decrees different but the suits were different.
The mere fact that the judgments in the two suits were given togeth er or in continuation did not matter.
In fact, even in form.
the judgment in the appeal relating to the money suit was separate from the rest of the judgment.
And, in any case, there were two separate decrees.
(1) ; 641 We think that Section 11 Civil Procedure Code enables the party to raise the statutory plea of res judicata if the conditions given therein are fulfilled.
The principle embodied in the statute is not so much the principle of "estoppel by record", which the British Courts apply, as one of public policy, based on two maxims derived from Roman jurisprudence: firstly, interest reipublicoe ut sit finis litium it concerns the State that there be an end to law suits; and, secondly, "nemo debet bis vexari pro una et eadem cause" no man should be vexed twice over for the same cause.
Sir Lawrence Jenkings pointed out, in Sheoparsan Singh vs Ramnandan Prasad Singh(1), that the rule of res judicata "while rounded on ancient precedent, is dictated by a wisdom which is for all time".
Litigation which has no end or finality defeats its very object.
This object is decision of disputes or an end to each litigation.
But, if there is no finality to it, the dispute cannot be said to be really decided at all.
It is the duty of the State to see that disputes brought before its judicial organs by citizens are decided finally as early as possible.
Hence, Section 11 of our Civil Procedure Code contains in statutory form, with illuminating explanations, a very salutary principle of public policy.
An "estoppel", even if it be "by record", rests on somewhat different grounds.
Even such an estoppel savours of an equity or justice created by actions of par ties the results of which have become recorded formally behind which they are not allowed to go.
Reliance was also placed on Govind Bin Lakshmanshet Anjorlekar vs Dhondba 'Ra 'V Bin Ganba ' Ra 'F 'Ta 'Mbye(2), on behalf of the appellant.
Here, it was held that decisions in previous suits of the nature of small cause suits in which there was no right of second appeal could not oper ate as res judicata in suits before Courts in which ques tions were elaborately litigated and decided in cases which could go to the High Court in second appeal.
We were also referred to a Full Bench decision of the Madras High Court in Avanasi Gounden & Ors.
vs Nachamal(3), where it was similarly held that: "A decision in a previous suit of a small cause nature, in which no second appeal is allowed by law, is no bar to a subsequent suit, in the same Court, which, not being of a small cause nature, is open to second appeal".
We have to remember that Small Cause juris diction is a limited one exercisable only in specified matters.
Decisions given beyond Jurisdiction to try an issue cannot operate as res ]udicata.
Our attention was drawn to explanation II of section 11, on behalf of the respondents.
It reads: "Explanation II.
For the purposes of this Section, the competence of a Court shall be determined irrespective of any provision as to a right of appeal from the decision of such Court".
(1) A.I.R. 1961 P.C. 78=43 I.A. 91.
(2) I.L.R. Vol.
XV Bombay 104.
(3) I.L.R. 29 Madras 195.
642 It seems to us that section 11 itself refers to.
a Court which actually tries the, two suits.
We think that, in the circumstances of the case before us, the incompetence of the Court, in which the money suit was initially filed, to try the partition suit did not matter when the actual hearing of both the cases took place in the same Court.
That Court was, obviously, competent to try both the suits.
After the money suit had been transferred from the Court of the Munsif, the Second Additional Sub Judge actually tried and decided both of them.
This was enough to make the differ ence in the jurisdictions of the Courts, in which the suits were initially filed, quite immaterial.
Similarly, the High Court was competent to hear appeals from judgments in both.
It heard and decided the two appeals together.
So far as the question of appeal to this Court is con cerned, it is true that no appeal lay as a matter of right against the judgment in the appeal in the money suit, but, we think that the learned counsel for the respondents is correct in submitting that the question Whether there is a bar of res judicata does not depend on the existence of a right of appeal of the same nature against each of the two decisions but on the question whether the same issue, under the circumstances given in section 11, has been heard and finally decided.
That was certainly purported to be done by the High Court in both the appeals before it subject, of course, to the rights of parties to appeal.
The mere fact that the defendant appellant could come up to this Court in appeal as of right by means of a certificate of fitness of the case under the unamended Article 133(1)(c) in the parti tion suit, could not take away the finality of the decision so far as the High Court had determined the money suit and no attempt of any sort was made to question the correctness or finality of that decision even by means of an application for Special Leave to appeal.
Learned counsel for the respondents appears to us to have rightly relied upon Bhugwanbutti Chowdhrani vs A.H. Forbes(1), where it was held that "in order to make a matter res judicata it is not necessary that the two suits must be open to appeal in the same way".
He also relied on Lonan kutty vs Thomman & Anr.(2), a recent decision of three Judges of this Court, where Chandrachud, J., observed (at p. 1650): "Respondents did not file any further appeal against the decree passed by the Dis trict Court in the appeals arising out of their suit.
They filed a second appeal in the High Court only as against the decree passed by the District Court in A.S. 66 of 1958 which arose out of the decree passed by the trial ' Court in the appellant 's suit.
Thus, the decision of the District Court rendered in the appeal arising out of the respondent 's suit became final and conclusive".
It was also observed there: "The decision of the District Court was given in an appeal arising out of a suit which, though instituted subse (1) I.L.R. (2) ; Supp.
S.C.R. 74.
643 quently, stood finally decided before the High Court disposed of the second appeal.
The decision was, therefore, one in a 'former suit ' within the meaning of section 11, Explanation I, Civil Procedure Code".
The expression "former suit" according to explanation I of section 11, Civil Procedure Code, makes it clear that, if a decision is given before the institution of the pro ceeding which is sought to be barred by res judicata, and that decision is allowed to become final by operation of law, a bar of res judicata would emerge.
This as learned counsel for the respondents rightly submits, follows from the decision of this Court in Lonankutty 's case (supra).
The only other point which we need consider is whether the fact that the money suit was only between the defendant appellant and one of his brothers, who was also a respondent in the partition suit, makes any difference to the applicability of the principle of res judicata in this case.
Learned Counsel for the appellant submits that the defendant appellant could not come within the ambit of Explanation VI of section 11, Civil Procedure Code which provides as follows: "Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigat ing".
On the other hand, learned counsel for the respondent sub mits that the case of the respondents fully covered by this explanation and relies on Kumaravelu Chettiar & Ors.
T.P. Ramaswamy Ayyar & Ors.
C) where it was held: "Explanation 6 is not confined to cases covered by O. 1, R. 8 but extends to include any litigation in which apart from the Rule altogether, parties are entitled to represent interested persons other than themselves".
We think that the submission made by the learned counsel for the respondents is sound.
In a partition suit each party claiming that the property is joint, asserts a right and litigates under a title which is common to others who make identical claims.
If that very issue is litigated in another suit and decided we do not see why the others making the same claim cannot be held to be claiming a right "in common for themselves and others".
Each of them can be deemed, by reason of Explanation VI, to represent all those the nature of whose claims and interests are common or identical.
If we were to hold otherwise, it would neces sarily mean that there would be two inconsistent decrees.
One of the tests in deciding whether the doctrine of res judicata applies to a particular case or not is to determine whether two inconsistent decrees will come into existence if it is not applied.
We think this will be the case here.
(1) A.I.R. 1933 P.C. 183.
7 112SCI/77 644 We need not deal with other cases of this Court cited, including Sheodan Singh vs Smt.
Daryao Kunwar(1), which supports the respondents ' submissions, and Raj Lakshmi Bai & Ors.
vs Banamali Sen & Ors.( ), which is not directly ap plicable inasmuch as that was a case in which the general principles of res judicata, and not section 11 Civil Proce dure Code, were applied.
The preliminary objection in the case before us is fully supported, for the reasons given above, by section 11, Civil Procedure Code read in the light of the Explanation mentioned above.
Consequently, the preliminary objection must prevail.
Learned counsel for the appellant, conscious of the difficulties in his way, filed after the hearing of the appeal was begun before us, an application for condonation of delay in applying for leave to appeal against the judg ment of the High Court in the money suit.
He submits that, in view of the uncertain position in law, we should try to extend equities as much as possible in his client 's favour.
On the other hand, learned counsel for the respond ents points out that the objection based on the bar of res judicata was taken as long ago as 1968 by the respondents.
It seems to us that the delay in waking up to the existence of the bar on the part of the appellant is much too long to be condoned.
Moreover, we also find that the judgment of the High Court, based on the admissions of the appellant, does not disclose any error of law so as to deserve grant of special leave to appeal.
Indeed, in so far as we could express any opinion at all upon the merits of the judgment of the High Court, based as it is upon documents containing admissions of the defendant appellant, it seems to us that the appellant would have a very uphill task indeed in argu ing his appeal even in the partition suit.
We may mention here that the partition suit was instituted as long ago as 1947 and was only given a new number in 1957.
If there is a case in which the principle that litigation should have an end ought to be applied, it is this on the face of facts of the case apparent to us.
We, therefore, reject the Civil Miscellaneous Petition No. 8585 of 1976, the application for condonation of delay in the filing the Special Leave Peti tion.
We dismiss the Civil Miscellaneous Petition No. 8586 of 1976 as well as the over delayed special leave petition No. 2816 of 1976.
The result is that this appeal must be and is hereby dismissed, but, in the circumstances of the case, the par ties will bear their own costs.
P.B.R. Appeal dismissed. | Explanation II to section 11 C.P.C. provides that for the purposes of the section, the competence of a Court shall be determined irrespective of any provision as to a right of appeal from the decision of such Court.
Explanation VI provides that where persons litigate bona fide in respect of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section be deemed to claim under the per sons so litigating.
The respondents and the appellant were brothers.
The respondents filed a suit for partition of the family proper ties in the Court of Additional Sub Judge of competent jurisdiction.
The appellant on the other hand filed a money suit against one of the brothers in the Court of a Munsiff in which he impleaded his other brothers.
Ultimately, the money suit was transferred to the Court of the Additional Sub Judge, where the partition suit was Rending and both the suits were tried together.
In appeal, the High Court heard and decided both the appeals together and pronounced sepa rate judgments in continuation but under separate headings and a separate decree was prepared in each appeal.
The appellant filed an appeal in this Court under article 133(1)(a) of the Constitution before its amendment, as a matter of right, against the judgment of the High Court in the parti tion suit.
A preliminary objection was taken by the respondents in this Court that the appeal was barred by res judicata in that the appellant did not file an appeal against the judgment and decree in the money suit.
The appellant on the other hand contended that neither in law nor in equity was he barred by res judicata because he filed the appeal in the partition suit as a matter of right, which was not available to him in the money suit.
Dismissing the appeal, HELD: The preliminary objection is supported by section 11 of the Code of Civil Procedure read in the light of Explana tions II and VI.
[644 B] 1(a) Section 11 enables a party to raise the statutory plea of res Judicata if the conditions given therein are fulfilled.
Section 11 contains, in statutory form, with explanations, a very salutary principle of public policy.
[641 C D] In the instant case, the incompetence of the Court, in which the money suit was initially filed, to try the parti tion suit did not matter when the actual hearing of both the cases took place in the same Court.
That Court was compe tent to try both the suits.
After the money suit had been transferred, the second Additional Sub Judge actually tried and decided both of them.
That was enough to make the difference in the jurisdiction of the Court in which the suits were initially filed, quite immaterial.
Similarly the High Court was competent to hear the appeals from judgments in both cases.
It heard and decided the appeals together.
[642 A C] Narhari & Ors.
vs Shankar & Ors. ; distin guished.
Lortankutty vs Thomman & Anr., ; Supp.
S.C.R. 74 followed.
637 Sheoparsan Singh vs Ramnandan Prasad Singh, .AIR 1916 PC 78=43 I.A. 91, Govind Bin Lakshmanshet Anjorlekar vs Dhondba 'Ea ' V Bin Ganba ' RA '17 ' 'V ' Ta ' Mbve, ILR Vol.
XV Bombay 104 and Avanasi Gounden & Ors.
vs Nachammal, ILR 29 Madras 195 referred to.
Bhugwanbutti Chowdhrani vs A.H. Forbes ILR ap proved.
(b) The expression "former suit" in Explanation I of section 11 makes it clear that, if a decision is given before the institution of the proceeding which is sought to be barred by res judicata, and that decision is allowed to become final or becomes final by operation of law, a bar of res judicata would emerge.
[643 B] (c) One of the tests in deciding whether the doctrine of res judicata applies to a particular case or not is to determine whether two inconsistent decrees will conap into existence if it is not applied.
In a partition suit each party claiming that the property is joint asserts a right and litigates under a title which is common to others who make identical claims.
If that very issue is litigated in another suit and decided, there is no reason why others making the same claim cannot be held to be claiming the right in common for themselves and others.
Each of them can be deemed, by reason of Explanation VI, to represent all those the nature of whose claims and interests are common or identical.
To hold otherwise would mean that there would be two inconsistent decrees.
[643 G H] In the instant case, the fact that the other suit was a money suit between the appellant and one of his brothers, who was also the respondent in the partition suit, does not make any difference to the applicability of the principle of res judicata.
[643 C] Kumaravelu Chettiar & Ors.
T.P. Ramaswamy Ayyar & Ors, A/R followed.
Sheodhan Singh vs Smt.
Daryao Kunwar, [1966] 3 S.C R. 300 and Bai Lakshmi Rani & Ors.
vs Banamali Sen & Ors., ; referred to.
The question whether there is a bar of res judicata does not depend on the existence of a right of appeal of the same nature against each of the two decisions, but on the question whether the same ' issue, under the circumstances given in section 11, has been heard and finally decided.
[642 C D] In the instant case, the High Court heard and finally decided both the appeals before it.
The mere fact that the appellant could come up to this Court in appeal as of right by means of a certificate of fitness under the unaa mended article 133(1)(c) in the partition suit, could not take away the finality of the decision so far as the High Court had determined the money suit and no attempt was made to question the correctness or finality of that decision even by means of an application for special leave.
[642 D E] 3.
The appellant 's application for condonation of delay in applying for leave to appeal against the High Court 's judgment in the money suit must be dismissed.
His delay in waking up to the existence of the bar of res judicata is much too long to be condoned.
The judgment of the High Court based on the admissions of the appelant, does not disclose any error of law so as to deserve the grant of special leave to appeal.
The partition suit was instituted as long ago as 1947.
If there is a case in which the prin ciple that litigation should have an end ought 'to be applied, it is this.
[644 C F] |
Appeal No. 2128 of 1969.
From the Judgment and Order dated 4th May, 1968 of the Madhya Pradesh High Court in First Appeal No. 88/67.
M.S. Gupta for the Appellants.
Ram Panjwani and H.S. Parihar for Respondent.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal on certificate is directed against a judgment, dated May 4, 1968, of the High Court of Madhya Pradesh.
It arises out of these facts: The appellants were owners of 7.35 acres of land being a part of Khasra No. 47/1 in the area of village Manglipeth District Seoni, Madhya Pradesh.
On November 4, 1963, a notification under section 4 read with Sub section
(1) of section 17 of the Land Acquisition Act, 1894 (to be hereinafter referred to as the Act) was published in the Government Gazette stating that this land was needed by the State Government for imple mentation of Seoni Water Supply Scheme.
The declaration under section 6 of the Act was published on December 18, 1963, and notices under section 9 of the Act were issued by the Collec tor on December 28, 1963.
In response to that notice, the appellants filed a claim 758 that they were willing to accept compensation in respect of this land at the rate of Rs.1500/ per acre, "as the lands adjoining this land and situated in a lesser advantageous position are sold at this rate".
The Collector made his award on August 17, 1964, whereby he awarded compensation for this land at the rate of Rs.450/ per acre.
The total amount awarded for this piece of land after adding solatium at the rate of 15%, was Rs.2,904/ .
He also awarded inter est at the rate of 4% from September 19, 1964, on which date, the Collector had taken over possession of the land.
Dissatisfied with the Collector 's award, the appellants made an application under section 18 of the Act for reference to the District Court for enhancement of the compensation.
The Collector accordingly made a reference.
The Additional District Judge, Seoni, who heard the reference, enhanced the compensation to Rs.11,000/ per acre.
In this way, after adding solatium, he awarded to the appellants, herein, a total amount of Rs.80,850/ together with interest at the rate of 6%.
Against that judgment, dated May 2, 1967, of the Additional District Judge, an appeal was preferred by the Collector, to the High Court.
The High Court accepted the appeal, set aside the award of the Additional District Judge and restored that of the Collector.
The High Court however, granted a certificate under Art; 133 of the Constitution.
The first contention of Shri M.S. Gupta, appearing for the appellants, is that the appeal flied in the High Court against the award of the Additional District Judge was not an appeal in the eye of law inasmuch as the Collector, who flied it, was not competent to do so.
It is stressed that no appeal was filed by the State as such, and consequently, the incompetent appeal fired by the Collector should have been dismissed summarily on this preliminary ground without entering upon the merits.
This objection was raised before the High Court, also.
The High Court fully considered it against the background of this case, and found no substance in it.
In the interests of justice we are not disposed to interfere with that find ing.
On merits, we find, in agreement with the High Court, that the District Judge was palpably wrong inasmuch as he awarded compensation at a rate far higher than what had been claimed by the appellants themselves, pursuant to the notice under section 9 of the Act.
The learned Additional District Judge acted contrary to the legislative mandate contained in section 25 (1) of the Act, according to which, the Court "shall not award" compensation to an applicant in excess of the amount claimed by him pursuant to any notice under section 9.
The only question that remains for our decision is, whether the High Court was right in scaling down the compen sation to Rs.450/ per acre ? 759 Mr. Gupta contends that the High Court was not right in holding that there was no evidence to show that the land in question had potential value as building sites.
It is submitted that the High Court has simply ignored that evi dence.
In this connection Counsel has referred to the evidence on record showing that the appellants had before the acquisition, paid diversion charges to the Government, at the rate of Rs.500/ per acre in respect of the adjoining land, for bringing it into use as building sites.
Counsel has further referred to the evidence showing that the land in question is close to a built up quarter of the town, and is within the Municipal limits.
Shri Ram Panjwani, appearing for the Respondent, submits that this evidence was much too insufficient to establish the potential value of the land as building sites, because the existing buildings in the vicinity of this land are old buildings, and the deposit of Rs.500/as diversion charges for the adjacent land made by the appellants, was only a speculative investment with an eye on the distant future In support of his contention, Shri Panjwani has referred to the decision of this Court in R.N. Singh vs
U.P. Government(1).
In our opinion, there is evidence on the record which unmistakably shows that from the view point of a willing purchaser, at the relevant time, this land had potential value as building sites.
Firstly, it was admitted even by Gokul Prasad who was examined by the Respondents as their Witness No. 1, that in front of the land in question there are buildings which are being used as the office of the Range Officer and as residential quarters for the employees of that Department.
Adjoining the Range Office is the house of Dewan Najaf Ali in which the Additional District Judge was residing.
The witness further admitted that the land in dispute abutts on Seoni Chhindwara Road.
Dadu Yogendra Nath Singh, appellant, testified in the witnessstand that apart from the office and the quarters of the Forest Department, there were other buildings also, near this land.
At a short distance was the bungalow of Shri Bhargava, Barrister.
The Municipal Octroi Post was adjacent to this land.
The land in question is within the Municipal limits of Seoni.
The appellant further stated that he intended to parcel out this land into plots and sell the same as building sites and that was why for the adjacent land, he had obtained for that purpose, the permission of the Government by depositing diversion charges at the rate of Rs.500/ per acre.
He added that negotiations for the sale of two plots had already been completed at the rate of 12 annas per foot.
He also cited other instances of sales of land in the vicinity at rates ranging from 4 annas per foot to 6 annas per foot.
The oral evidence of Dadu Yogendra Nath Singh with regard to the fact that the adjoining land had been laid out into plots for building purposes, receives full corrobo ration from unimpeachable documentary evidence on record, which shows that the appellants had (1)[1967] 1 S.C.R 489.
760 before this acquisition, in 1963, made an application to the Sub Divisional Officer, Seoni, for permission to bring 6.16 acres of agricultural land out of Kh.
No. 47/1, "in non agricultural use viz., for construction of houses".
The order of the officer concerned was that such permission.
was granted to him on depositing diversion charges in respect of that area at the rate of Rs.500/ per acre.
It is signifi cant to note that this piece of 6.16 acres was also a part of Khasra No. 47/1, out of which Khasra, the land, admeasur ing 7.35 acres, is in question.
This circumstance unerring ly indicates that the land in question was suitable for being used as building sites, and had for that purpose, a potential value substantially in excess of Rs.500/ per acre.
The High Court has not at all discussed this evi dence.
It is difficult to accept the argument advanced on behalf of the respondent that the appellant had paid Rs.500/ per acre as diversion charges for the adjacent land, merely as speculative business in the hope of making money in the remote future.
No prudent person would make such an investment if there was no reasonable chance of a good return over that investment in the present, or immedi ate future.
In our opinion this circumstance coupled with the other facts, namely, that the land in question is within the Municipal limits and is located just on the edge of an inhabited locality of the town, having other buildings in the immediate vicinity, was sufficient to establish its potential value as building sites.
The observations made by this Court in R.N. Singh vs U.P. Government (supra) do not advance the case of the respondent.
In that case, Shelat J. quoted these observa tions from an earlier decision, in N.B. Jeejabhoy vs The District Collector, Thana (C.A. Nos. 313 to 315 of 1965 decided on August 30, 1965): "A vendor willing to sell his land at the market value will take into consideration a particular potentiality or special adapt ability of the land in fixing the price.
It is not the fancy or the obsession of the vendor that enters the market value, but the objective factor namely, whether the said potentiality can be turned to account within a reasonably near future.
The question there fore turns upon the facts of each case.
In the context of building potentiality many questions will have to be asked and answered, whether there is pressure on the land for building activity, whether the acquired land is suitable for building purposes, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has extended and within what time, whether build ings have been put up on lands purchased for building purposes, what is the distance be tween the built in land and the land acquired and similar other questions will have to be answered.
It is the over all picture drawn on the said relevant circumstances that affords the solution.
" What has been extracted above are broad guidelines and not immutable absolutes.
The essence of the whole thing is in the sentence which has been underlined.
It shows that in the ultimate 761 analysis, the question, whether or not a land has potential value as building site, is primarily one of fact.
in the present case, the circumstance that the appellants had voluntarily paid Rs.500/ per acre as diversion charges, for laying out the adjoining land into plots as building sites, was of a clinching character, and taken in conjunction with the other facts, noticed above, conclusively showed that its potential value as building sites was much more than the rate of Rs.450/ per acre awarded by the Collector and the High Court.
In their application dated 17 10 1964, under section 18 of the Act, the appellants stated that similar land in the immediate vicinity had been sold at the rate of Rs.1,250/ per acre and another plot at the rate of Rs.1,350/ per acre.
These lands are close to the area for which they had paid the diversion charges at the rate of Rs.500/ per acre.
They filed a map also, showing the location of those lands.
On an over all view, after taking into account the potential value of the land, we think it will be reasonable to award compensation to the appellants at the rate of Rs.1,250/ per acre with interest at 6% per annum till payment, from the date on which the possession was taken over by the Collec tor.
The appellants shall also be entitled to solatium at 15% on the compensation amount awarded for the land.
Accordingly, we allow the appeal with proportionate costs and modify the decree of the High Court to the extent indicated above.
M.R. Appeal allowed. | Responding to a notice under section 9 of the Land Acquisi tion Act, 1894, the appellants flied a claim for Rs.1500/ per acre at which rate the adjoining lands were sold.
The Collector awarded compensation at the rate of Rs.450/ per acre.
At the instance of the appellants under section 18 of the Act, the matter was referred to the District Judge who enhanced the compensation to Rs.11,000/per acre.
An appeal by the Collector was allowed by the High Court on the ground that the District Judge had acted contrary to the mandate contained in section 25(1) of the Act, by awarding compensation in excess of the amount claimed.
The appellants contended that their land had building potentiality and its value was substantially more than Rs.500/ per acre, which had been paid by them to the Government as diversion charges for permission t.o use the adjoining land for building houses.
Allowing the appeal by certificate, the Court, HELD: The circumstance that the appellants had volun tarily paid Rs.500/per acre as diversion charges, for laying out the adjoining land into plots as building sites, taken in conjunction with the other facts, namely, that the land in question is within the municipal limits and is located just on the edge of an inhabited locality of the town, having.
other buildings in the immediate vicinity, show that its potential value as building sites is much more than the rate of Rs.450/ per acre, awarded by the Collector and the High Court.
[760 C D, 761 A B] |
Appeal No. 265 of 1972.
From the Judgment and Order dated the 24th August, 1971 of the Kerala High Court in I.T.R.No.
25 of 1969.
G.B. Pai, K.J. John for M/s Dadabhanji & Co., for the Appel lant.
B.B. ,Ahuja and R.N. Sachthey for Respondent.
The Judgment of the Court was delivered by GUPTA, J.
The question for decision in this case is whether the money contributed by the assessee, public limit ed company, for the construction of a new road in the area where its factory is located to improve transport facilities is capital expenditure or revenue expenditure.
The assess ment year in question is 1964~65, the relevant accounting period being the financial year ended March 31, 1964.
The assessee company is engaged in the manufacture of chemicals; it had been receiving and despatching materials required for and produced in its factory through lorries.
The assessee along with three, 716 other public undertaking approached the Government of Kerala for laying a new road from kalamasseri to Udyogamanndal; this area where the assessee 's factory is situate was not at the material tune served by pucca roads.
It was agreed that the Government of Kerala would bear the cost of the acquisition of the land and 25 per cent of the cost of construction.
The total cost to be shared by the four companies was Rs. 1,04,550/ and the assessee 's share came to Rs. 26,100/ .
The assessee company sought to deduct this amount from its total income c/aiming this as revenue expenditure for the year in question.
The Income tax Officer disallowed the claim holding that the assessee 's contribution was capital expenditure.
The Appellate As sistant Commissioner took the same view.
The Appellate Tribunal, mainly relying on the decision of the Calcutta High Court in Commissioner of Income tax vs Hindustan Motors Limited,(1) held that the assessee was entitled to deduct the amount as revenue expenditure.
At the instance of the Commissioner of Income tax, Kerala, Ernakulam, the Tribunal referred the following question to the High Court of Kerala under section 256(1) of the Income Tax Act,1961: "Whether, on the facts and in the circum stances of the case, the Appellate Tribunal was legally justified in allowing the expendi ture of Rs. 26,100/ being the respondent 's contribution to government for constructing a road as a permissible deduction under section 37(1) 0f the Income Tax Act, 1961." The High Court held that the assessee in this case ob tained an advantage of an enduring nature by the construc tion of the road and, therefore, the amount contributed was capital expenditure.
The High Court accordingly answered the question in negative and against the assessee.
In this appeal, brought on a certificate under section 261 of the Income Tax Act, 1961, the assessee challenges the correct ness of the answer given by the High Court to the question.
The authorities both in this country and in England have pointed out the difficulties in formulating precise rules for distinguishing capital expenditure from revenue expendi ture.
The line of demarcation has been found to be very thin.
Certain broad tests have however been laid down, and of them the test suggested by viscount Cave, L. C., in Atherton vs British Insulated and Helsby Cables Limited(2) appears to have been largely accepted in this country.
This Court in Assam Bengal Cement Company Limited vs Commis sioner of Income tax, West Begnal(3); Sitalpur Sugar Works Limited vs Commissioner of Income tax, Bihar and Orissa( ') and a number of other decisions has adopted the test as laid down in Atherton 's case: to refer again to these often quoted lines from Viscount Cave 's Judgment "when an expendi ture is made, . . with a view to bringing into existence an asset or an advantage for the enduring benefit of a (1) (2) (1925) 10 Tax Cases 155.
(3) (4) 717 trade, I think that there is very good reason (in the ab sence of special circumstances leading to an opposite con clusion) for treating such an expenditure as properly at tributable not to revenue but to capital".
Referring to Atherton 's case and certain other authorities on the dis tinction between capital expenditure and revenue expenditure and the tests to be applied, this Court in Assam Bengal Cement Company Limited vs Commissioner of Income tax(1) observed: "If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure.
If on the other hand it is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure.
If any such asset or advantage for the enduring benefit of the business is thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital of the income of the concern or whether tire payment was made once and for all or was made periodically.
The aim and object of the expenditure would determine the character of the expenditure whether it is a capital ex penditure or a revenue expenditure.
The source or the manner of the payment would then be of no consequence.
It is only in those cases where this test is of no avail that one may go to the test of fixed or circulating capital and consider whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital.
If it was part of the fixed capital of the business it would be of the nature of capital expenditure and if it was part of its circu lating capital it would be of the nature of revenue expenditure.
" In the case before us, the High Court applied viscount Cave 's test and found that the expenditure made by the assessee brought into existence an advantage for the endur ing benefit of the assessee 's trade and accordingly held that this was capital expenditure.
Each case turns on its own facts.
It is not disputed here that the correct test has been applied.
Did the money spent by the assessee on construction of the new road secure for it an enduring benefit, or was it necessary for running its business? On the facts of the case the position seems to be clear enough not to merit an elaborate consideration, that by having the new road constructed for the improvement of transport facilities, the assessee acquired an enduring advantage for its business. The High Court rightly pointed out that the decision of the Calcutta High Court in Commis sioner of Income tax vs Hindustan Motors Ltd.(2) on which the appellate tribunal relied, is clearly distinguishable on facts; that was a case where the expenditure incurred was for repair of an existing road which is different from the case where a new road is laid out for the purpose of the assessee 's (1) (2) (1968)68 I.T.R. 301.
718 business.
Mr. Pai, learned counsel for the appellant, has relied on the decision of this CoUrt in Lakshmiji Sugar Mills Company Private Limited vs Commissioner of Income tax, New Delhi(1), to contend that even the expenditure on the construction of roads could be revenue expenditure and not expenditure of a capital nature.
In Lakshmiji Sugar Mills case the assessee was a private limited company carrying on the business of manufacture and sale of sugar.
Under the provisions of the U.P. Sugarcane Regulation of Supply and Purchase Act, 1953, the assessee company was obliged to contribute certain amounts for the development of roads which were originally the property of the government and remained so even after the improvement had been made.
Apart from the fact that in this case the expenditure incurred was under a statutory compulsion, there was no finding that the roads were newly made.
On the facts of that case this Court was satisfied that the development of the roads was meant for facilitating the carrying on of the assessee 's business.
Lakshmiji Sugar Mills(1) case is quite different on facts from the one before us and must be con fined to the peculiar facts of that case.
On the facts of the instant case, we have no doubt that the expenditure incurred by the assessee was of a capital nature.
The appeal accordingly fails and is dismissed but in the circumstances of the case without any order as to costs. | The appellant assessee is a public limited company who spent Rs.26,100/ for the construction of a new road for improving transport facilities in the area where its factory is located and sought to deduct this amount from its total income claiming this as revenue expenditure for the year.
The claim was disallowed by the Income tax Officer and the Appellate Assistant Commissioner.
The Appellate Tribunal held that the amount could be deducted as revenue expendi ture but at the instance of the respondent referred the matter to the High Court under section 256(1) of the Income Tax Act, 1961, where it was decided against the appellant.
Dismissing the appeal, the Court, HELD: The line of demarcation between capital expendi ture and revenue expenditure has been found to be very thin.
According to the test suggested in Atherton 's case by Vis count Cave, L.C. by having the new road constructed for the improvement of transport facilities, the assessee acquired an enduring advantage for its business.
The expenditure incurred was, therefore of a capital nature.
F II & 718 D] Atherton vs British Insulated and Helsby Cables Ltd. [1925] 10 Tax Cases 155: Assam Bengal Cement Co. Ltd. vs Commissioner of Income Tax, West Bengal and Sitalpur Sugar Works Ltd. vs Commissioner of Income Tax.
Bihar and Orissa , applied.
Commissioner of Income tax vs Hindustan Motors Ltd. and Lakshmiji Sugar Mills Co. (P) Ltd. vs Commissioner of Income tax, New Delhi , distinguished. |
vil Appeal No. 41819 of 1989.
From the Judgment and Order dated 29.4.1988 of the Gujarat High Court in F.A. Nos.
848 849 of 1986.
V.B. Patel, D. Patel, T.H Pandey and R.P. Kapur for the Appellant.
Soli J. Sorabjee, Atul Setalwad, N.J. Mehta, P. Shah, S.K. Sharma, section Sharma and P.H. Parekh for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an application for leave to appeal under Article 136 of the Constitution from the judgment and order of the High Court of Gujarat dated 29th April, 1988.
To appreciate the questions involved herein, few facts have to be emphasized.
In 1978, the State Government of Gujarat undertook a scheme known as 'Bhavnagar City Water Supply Scheme '.
The 322 Scheme was divided into two parts: (i) Raising Main; and (ii) Gravity Main.
Raising Main was divided into two sec tions, namely, 10.1 k.ms.
and 7.4 k.ms.
steel welded pipe line.
On or about 15/16th December, 1978, the State Govern ment issued letter of approval to the bargain between the parties on certain terms.
On 12th January, 1979, two contracts were awarded to the respondent No. 1 for Rs. 1,29,39,691 and Rs.94,30,435 which provided the dates of completion as February 1979 and the 3rd week of September, 1980 respectively.
On 29th March, 1981 the respondent No. 1 filed the Civil Suit No. 588 of 1981 in the City Civil Court with regard to measurements recorded by the Deputy Engineer and alleged underpayments.
On 4th June, 1981, the respondent No. 1 gave notice to the State Government and the petitioner Board requesting for reference of the alleged disputes to the arbitrator under clause 30 of the agreement.
On or about 8th July, 198 1 the respondent No. 1 gave notice under Section 8 of the Arbitra tion Act, 1940 (hereinafter called 'the Act ') calling upon the petitioner to concur in the appointment of one Shri G.G. Vaidhya.
On 21st July, 1981, he withdrew the Civil Suit No. 588 of 1981.
On 6th August, 1981, the respondent No. 1 filed Civil Miscellaneous Application No. 231 of 1981 in the Court of Civil Judge, (SD), Ahmedabad for appointment of the said Shri G.G. Vaidhya as the sole arbitrator.
On 7th November 1981, the petitioner filed reply contesting the arbitrabili ty of the various claims made in the application and inter alia contending that the application was not maintainable.
On or about 15th December, 1981 the learned Civil Judge appointed Shri G.G. Vaidhya as the sole arbitrator with a direction that he should first decide as to which disputes fell within the purview of clause 30 of the agreement.
On 5th May, 1982, Shri Vaidhya gave an interim award holding that the claims at section Nos.
10(g) and 10(1) only were not arbitrable and further that the other claims were arbitra ble.
A petition was filed in High Court which was dismissed and then there was an application to this Court under Arti cle 136 of the Constitution which was disposed of by consent on 30th November, 1983.
The said order inter alia provided that the parties had agreed to settle the matter amicably and one Shri Mohanbhai D. Patel, Retired Secretary, Public Works Department, Gujarat and at that time Sitting Member of the petitioner Board was appointed as the sole arbitrator in place of Shri Vaidhya to decide all disputes between the parties relating to the following works: "i) providing, fabricating, laying and joint ing 1000 mm dia.
10,000 M long steel welded pipe line under Bhavnagar 323 Emergency Water Supply Scheme based on She trunji Dam Agreement No. 5/2 1 of 1978 79.
ii) providing, fabricating laying and jointing 1000 mm dia 7,400 M long steel welded pipe line under Bhavnagar Emergency Water Supply Scheme based on Shetrunji Dam Agreement No. B 2/2 of 1978 79.
" It was further provided that all disputes concerning the said two works in question should be referred to the sole arbitrator and the Board could also be entitled to put counter claims before him.
The consent terms also provided the following terms: "That the arbitration proceedings shall be started de novo meaning thereby that the earlier appointment and proceedings before the Sole Arbitrator Shit G.G. Vaidhya shall be inoperative and void.
That the Board shall have a right to agitate all points both in fact and in law before the Sole Arbitrator as per the terms and condi tions of the contract including the question of arbitrability within the meaning of clause 30 of the contract.
Both parties shall have a right to be repre sented by an Advocate and/or their representa tives.
The expenses of arbitration shall be borne by .both the parties as per rules of Govern ment in this behalf.
That both parties shall agree to extend time as and when necessary for competition of arbitration proceedings.
That a formal agreement for arbitration shall be executed between the parties defining the scope of Arbitration.
_ That the provisions of the Indian shall apply to the proceedings before this Sole Arbitrator." On 31st March, 1984, Shri M.D. Patel was appointed as the sole arbitrator jointly by the parties, and on 2nd April, 1984 he accepted his appointment and directed the parties to file their claim statements within 15 days.
Thereafter, the respondent No. 1 filed claim to the tune of Rs.4,92,20,683 and a counter claim to the extent of 324 Rs.26,87,217.40.
On 22nd August, 1984 the parties appeared before the arbitrator after filing of claims and counter claims.
On 1st October, 1984 the petitioner filed an application before the arbitrator praying that preliminary issues be raised and decided first as to which of the disputes were arbitrable under clause 30 Of the agreement.
On 8th July, 1985, a lumpsum award was made by the arbitrator, and on 19th July, 1985 the parties were informed about the signing of the award.
On the same day the award filed by the re spondent No.1 's Advocate which was dated 8.7.1985 was regis tered as Civil Miscellaneous Application No. 144/85.
There after, notice was issued on the same day and served on the petitioner also on the same day.
The petitioner filed objec tions to the award and the Objection Petition was registered as Civil Miscellaneous Application No. 158/85.
Reply to the objections was filed by the respondent No. 1.
On 17th June, 1986, however, the learned Civil Judge directed that decree be passed in terms of the award.
Two appeals were filed by the petitioner.
On the 29th April, 1988 the High Court by a judgment dismissed the petition challenging the award and upheld the award.
Aggrieved thereby, the petitioner has moved this Court as mentioned hereinbefore.
Various grounds were urged in support of this applica tion.
It was contended, firstly, that there was an error apparent on the face of the award and that the award was bad.
It was submitted that the arbitrator had committed an error of law in not deciding or disclosing his mind about the arbitrability of claims or counter claims, more so when the Board 's application for deciding the same, was pending before the arbitrator.
Before the learned Trial Judge the Board had submitted an application to the arbitrator seeking to raise a preliminary issue regarding arbitrability of the claims.
As noted by the learned Trial Judge, it appears that the third meeting specifically mentioned that the claims were placed before the arbitrator and their contentions about the arbitrability were considered.
So, these issues were gone into and it appears that the parties had agreed and proceeded on the basis that the claims may be examined and it was not necessary to decide preissue of arbitrability and it was agreed that aH the claims be decided claimwise.
So, it cannot be said that the arbitrator had acted arbi trarily in discussing all the questions raised before him without first deciding the question of arbitrability or non arbitrability of an issue as such.
The Court in its judgment has discussed the conduct of the parties.
It appears that the Court found that the par ties themselves had 325 agreed that the arbitrator should decide claimwise and on merit.
The Court so found, and in or opinion, rightly.
The arbitrator so proceeded.
There was no error committed by the arbitrator in so conducting himself.
It was, secondly, contended that out of the numerous claims before the arbi trator, some of which, according to the petitioner, were ex facie not arbitrable and some were withdrawn including the claims for interest of Rs.54,61,073 and compound interest of Rs.82,26,039.
and in the award no basis or indication was given as to which claim was rejected and further of the amount which was awarded as claim and what amount towards element of interest.
It was, thirdly, contended that there was an error apparent on the face of the award inasmuch as the basis on which interest has been awarded has not been disclosed and whether the interest has been awarded from the date of the institution of the proceedings.
It was, fourth ly, contended that granting of interest pendente lite was contrary to the decision of this Court.
It was, lastly, contended that non speaking award had resulted in great prejudice inasmuch as against the claim of Rs. 1 lakh, Rs.57 lakhs have been awarded.
The scope and extent of examination by the Court of the award made by an arbitrator has been laid down in various decisions.
It has to be noted that there is a trend in modern times that reasons should be stated in the award though the question whether the reasons are necessary in ordinary arbitration awards between the parties is pending adjudication by the Constitution bench of this Court.
Even, however, if it be held that it is obligatory for the arbi trator to state reasons, it is not obligatory to give any detailed judgment.
An award of an arbitrator should be read reasonably as a whole to find out the implication and the meaning thereof.
Short intelligible indications of the grounds should be discernible to find out the mind of the arbitrator for his action even if it be enjoined that in all cases of award by any arbitrator reasons have to be stated.
The reasons should not only be intelligible but should also deal either expressly or impliedly with the substantial points that have been raised.
Even in a case where the arbitrator has to state reasons, the sufficiency of the reasons depends upon the facts and the circumstances of the case.
The Court, however, does not sit in appeal over the award and review the reasons.
The Court can set aside the award only if it is apparent from the award that there is no evidence to support the conclusion or if the award is based upon any legal proposition which is erroneous.
See the observations of this Court in Indian Oil Corporation Ltd. vs Indian Carbon Ltd.; , 326 In the instant case, the arbitrator by virtue of the terms mentioned in the order of this Court had to decide which of the disputes were arbitrable and which were not.
It is true that the arbitrator has not specifically stated in the award that he had to decide the question of arbitrabili ty.
The arbitrator has rested by stating that he had heard the parties on the point of arbitrability of the claim and the ,counter claim.
He has further stated that after 'con sidering all the above aspects ' and 'the question of arbi trability or non arbitrability ' he had made the award on certain aspects.
Reading the award along with the preamble, it appears clear that the arbitrator had decided the arbi trability and the amount he has awarded was on the points which were arbitrable.
The contention that the arbitrator had not decided the question of arbitrability as a prelimi nary issue cannot also be sustained.
A reference to the arbitrator 's proceedings which were discussed in detail by the High Court in the judgment under appeal reveal that the procedure adopted by the arbitrator, i.e., that he will finally decide the matters, indicated that the parties had agreed to and the arbitrator had proceeded with the consent of the parties in deciding the issues before him and in not deciding the question of arbitrability as a separate, dis tinct and preliminary issue.
The arbitrator has made his award beating all the aspects including the question of arbitrability in mind.
It was contended before us that the arbitrator has made a non speaking award.
It was obliged to make a speaking award, it was submitted by terms of the order of this Court.
We cannot sustain this submission because it is not obligatory as yet for the arbitrator to give reasons in his decision.
The arbitrator, however, has in this case indicated his mind.
It appears to us that the point that the non speaking award is per se bad was not agitated before the High Court.
We come to that conclusion from the perusal of the judgment under appeal though, howev er, this point has not been taken in the appellant 's appeal.
It is one thing to say that an award is unintelligible and is another to say that the award was bad because it was a non speaking award.
The point taken was that the award was unintelligible and not that it was non speaking.
But there was nothing unintelligible about the award.
We were invited to refer the matter to the Constitution Bench and await the disposal of this point by the Constitu tion Bench.
The contract in this case was entered into in 1978.
The proceedings for initiation of arbitration started in 1981.
The matter had come up to this Court before which resulted in the order dated 30th November, 1983.
Pursuant thereto, the award has been made and no grounds specifically were urged though they were taken in the appeal in the High 327 Court in the arguments before the High Court about the award being bad because it is non speaking.
In those circum stances, it will not be in consonance with justice for us to refer the matter to the Constitution Bench or to await the disposal of the point by the Constitution Bench.
It was further submitted before us that the award was unreasonable and that the arbitrator had awarded a large amount to money but the original claim was not so large and as such the award was disproportionate.
This contention, as it is, it appears from the judgment of the High Court, was not urged and canvassed before the High Court.
The claim and the counter claim together in its totality, in our opinion, does not make the award amount disproportionate.
Reasonableness as such of an award unless the award is per se preposterous or absurd is not a matter for the court to consider.
Ap praisement of evidence by the arbitrator is ordinarily not a matter for the court.
It is difficult to give an exact definition of the word 'reasonable '.
Reason varies in its conclusions according to the idiosyncrasy of the individual and the times and the circumstances in which he thinks.
The word 'reasonable ' has in law prima facie meaning of reasona ble in regard to those circumstances of which the actor, called upon to act reasonably, knows or ought to know.
See the observations on this point in Municipal Corporation of Delhi vs M/s. Jagan Nath Ashok Kumar & Anr., ; Judged by the aforesaid yardstick the award cannot be condemned as unreasonable.
There is, however, one infirmity in the award which is apparent on the face of the award which in the interest of justice as the law now stands declared by this Court, we should correct, viz., the question of interest pendente lite.
The right to get interest without the intervention of the Court and the powers of the court to grant interest on judgment have been examined by this Court in Executive Engineer (Irrigation) Balimela and Ors.
vs Abhaduta Jena & Ors., [1988] 1 SCC 418 which observations were also followed by this Court in State of Orissa & Ors.
vs Construction India, [1987] Supp.
SCC 709.
In accordance with the princi ples stated therein and the facts in this case, it appears that the principal amount awarded is Rs.57,65,273.
This is confirmed.
In this case, 2nd April, 1984 is the date of the reference to arbitration, on 22nd August, 1984 the arbitra tor entered upon the reference.
8th July, 1985 is the date of the award and 19th July, 1985, is the date of the publi cation of the award.
The interest awarded, in the instant case, covers three periods: (i) 6th August, 1981 to 21st August, 1984 prior to the commencement of the arbitration proceedings; (ii) 22nd August, 1984 to 19th July, 328 1985 pendente lite; and (iii) 19th July, 1985 to 17th June, 1986 (date of award to date of decree).
Having regard to the position in law emerging from the decision of this Court in Executive Engineer (Irrigation) Balimela & Ors.
(supra) and section 29 of the and section 34 of the Code of Civil Procedure, we would modify the grant of interest in this case.
The arbi trator has directed interest to be paid at 17% per annum from 6.8.1981 upto the date of decree viz., 17.6.1986.
Since in this case the reference to arbitration was made after the commencement of the , the arbitrator under section 3(1)(a) of the said Act was entitled to award inter est from 6.8.1981 till 21.8.1984 in view of this Court 's decision in Abhaduta Jena 's case (supra).
In the light of the same decision, he could not have awarded interest for the period from 22.8.1984 till the date of the publication of the award viz. 19.7.
So far as interest for the period from the date of the award (19.7.1985) till the date of the decree is concerned, the question was not specifical ly considered in Abhaduta Jena 's case (supra) but special leave had been refused against the order in so far as it allowed interest for this period.
We think interest should be allowed for this period, on the principle that this Court can, once proceedings under sections 15 to 17 are initiated, grant interest pending the litigation before it, i.e., from the date of the award to the date of the decree.
It may be doubtful whether this can be done in cases arising before the in view of the restricted scope of section 29 of the .
But there can be no doubt about the court 's power to grant this interest in cases governed by the as section 3(1)(a) which was applied by Abhaduta Jena to arbitrators will equally apply to enable this Court to do this in these proceedings.
In this connection, it is necessary to consider whether the date of commencement of the arbitration proceedings should be taken as the date of the reference or the date on which the arbitrator entered upon the reference as the date of the calculation of interest.
In this case, the proceed ings commenced on 2nd April, 1984 and the arbitrator entered upon the reference on 22nd August, 1984.
Having regard to the facts and the circumstances of the case, it is neces sary, in our opinion, to take 22nd August, 1984 as the date.
It is also necessary to consider whether the date of award should be taken as the date of its making or its publica tion.
The award was made on 8th July, 1985 and it was pub lished on 19th July, 1985, and, therefore, the latter date would be taken as the date of the award.
329 We would, however, delete the interest awarded by the arbitrator for the period from 22.8.1984 till the date of the award and confine the interest on the principal sum of Rs.57,65,273 to interest at 9 per cent from 6.8.1981 till 21.8.1984 (which has been worked out at Rs.29,82,443).
However, in exercise of our powers under section 3 of the and section 29 of the , we direct that the above principal sum or the unpaid part thereof should carry interest at the same rate from the date of the award (19.7.1985) till the date of actual pay ment.
The appeals are disposed of in the above terms.
N.V.K. Appeals disposed of. | In 1978 the State Government undertook the construction of the 'Bhavnagar City Water Supply Scheme ', and on 12th January, 1979, two contracts in respect thereof were awarded to respondent No. 1.
On 29th March, 1981, respondent No. 1 filed a civil suit with regard to measurements recorded by the Deputy Engineer and alleged underpayments.
On 14th June, 1981, he gave notice to the State Government and the peti tioner Board requesting for reference of the disputes to an arbitrator as provided for under clause 30 of the Agreement, and gave notice under section 8 of the calling upon the petitioner to concur in the appointment of one Shri G.G. Vaidhya.
On 6th August, 1981 respondent No. 1 filed a civil miscellaneous application for appointment of the said Shri G.G. Vaidhya as the sole arbitrator after withdrawing the civil suit.
The petitioner contended that the application was not maintainable.
The Civil Judge howev er appointed the said Shri G.G. Vaidhya as sole arbitrator.
The arbitrator gave an interim award holding that only two claims were not arbitrable and that the other claims were arbitrable.
The High Court having dismissed the appeal, a further appeal was filed in this Court.
This appeal was, however, disposed of by con 319 sent on 30th November, 1983 to the effect that a retired Secretary, Public Department who was at that time sitting member of the petitioner Board be appointed as the sole arbitrator to decide all the disputes between the parties.
On 8th July, 1985, this sole arbitrator made a lump sum award.
The Civil Judge directed that the decree be passed in terms of the award, rejecting the objections of the peti tioner.
The High Court by a common judgment dismissed the two appeals of the petitioner challenging the award.
In the appeals to this Court by special leave, it was contended: (1) that the arbitrator had committed an error of law in not deciding or disclosing his mind about the arbi trability of the claim or counterclaims, (2) in the award no basis or indication was given as to which claim was reject ed, and further what amount was awarded as claim and what amount towards element of interest, (3) there was an error apparent on the face of the award inasmuch as the basis on which interest had been awarded had not been disclosed and whether the interest has been awarded from the date of the institution of the proceedings, (4) that the granting of interest pendente lite was contrary to the decision of this Court and (5) that the non speaking award had resulted in great prejudice to the petitioner inasmuch as against the claim of Rs.1 lakh, Rs.57 lakhs had been awarded.
Disposing of the appeals, the Court, HELD: 1(a) There is a trend in modern times that reasons should be stated in the award though the question whether the reasons are necessary in ordinary arbitration awards is pending adjudication by the Constitution Bench of this Court.
Even if it be held that it is obligatory for the arbitrator to state reasons, it is not obligatory to give any detailed judgment.
[325E] 1(b) An award Of an arbitrator should be read reasonably as a whole to find out the implication and the meaning thereof.
Short intelligible indications of the grounds shall be discernible to find out the mind of the arbitrator for his action.
[325F] l(c) The Court does not sit in appeal over the award and review the reasons.
The Court can set aside the award only if it is apparent from the award that there is no evidence to support the conclusion or if the award is based upon any legal proposition which is erroneous.
[325G H] 320 Indian Oil Corporation Ltd. vs Indian Corbon Ltd., ; , referred to.
l(d) It is one thing to say that an award is unintelli gible and it is another thing to say that the award was bad because it was a nonspeaking award.
[326F] In the instant case, the arbitrator, in pursuance to the order of this Court had to decide which of the disputes were arbitrable and which were not.
Reading the award along with the preamble, it appears clear that the arbitrator had decided the arbitrability and the amount which he has award ed was on the points which were arbitrable.
In such circum stances it will not be in consonance with justice to refer the matter to the Constitution Bench or to await the dispos al of the point by the Constitution Bench.
[326B, G] 2.
Reasonableness as such of an award unless per se preposterous or absurd is not a matter for the Court to consider.
Appraisement of evidence by the arbitrator is ordinarily not a matter for the Court.
It is difficult to give an exact definition of the word 'reasonable '.
The word 'reasonable ' has in law, prima facie meaning of reasonable in regard to those circumstances of which the actor, called upon to act reasonably, knows or ought to know.
The award in the instant case cannot be condemned as unreasonable.
[327C D] Municipal Corporation of Delhi vs M/s. Jagan Nath Ashok Kumar & Anr., ; referred to.
The grant of interest pendente lite is however one infirmity in.
the award which is apparent on the face of the award which in the interest of justice should be corrected.
[327E] Executive Engineer (Irrigation) Balimela and Ors.
vs Abhaduta Jena & Ors., [1988] 1 SCC 418 and State of Orissa & Ors.
vs Construction India, [1987] Supp.
SCC 709 referred to.
In the instant case, April 2, 1984 is the date of the reference to arbitration, on August 22, 1984 the arbitrator entered upon the reference.
July 8, 1985 is the date of the award and July 19, 1985 the date of publication of the award.
The latter date should be taken as the date of the award.
Since the reference to arbitration was made after the commencement of the the arbitrator under section 3(1)(a) of the said Act was entitled to award inter est from August 6, 321 1981 till August 21, 1984.
He could not have awarded inter est for the period from August 22, 1984 till the date of publication of the award viz. July 19, 1985.
[327G H; 328A] 4.
So far as interest for the period from the date of the award (July 19, 1985) till the date of the decree is concerned, interest should be allowed for this period, on the principle that this Court can, once proceeding under sections 15 to 17 are initiated, grant interest pending the litigation before it, i.e. from the date of the award to the date of the decree.
It may be doubtful whether this can be done ln cases arising before the in view of the restricted scope of section 29 of the .
[328D E] 5.
The interest awarded by the arbitrator for the period from August 22, 1984 till the date of award is deleted; and the interest on the principal sum is confined to 9% from August 6, 1981 till August 21, 1984.
However, exercising powers under section 3 of the and section 29 of the , the Court directed that the principal sum or unpaid part thereof should carry interest at the same rate from the date of the award (July 19, 1985) till the date of actual payment.
[329A B] |
Appeal No. 527 of 1976.
Appeal by Special Leave from the Judgment and Order dated the 26 3 1976 of the Allahabad High Court in Civil Misc.
Writ No. 6277 of 1974.
866 L.N. Sinha, Sol.
General, S.C. Agarwala and V.J. Francis for the Appellant.
Yogeshwar Prasad and (Miss) Rani Arora for Respondent No. 1.
O.P. Rana for Respondent No. 2.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by special leave is directed against the judgment of the Allahabad High Court dated March 26, 1976.
It relates to the validity of the imposition of octroi with effect from July 15, 1950, on certain goods brought within the Maunath Bhanjan Municipality, hereinaf ter referred to as the Board.
The challenge to the imposition was made by the Swa deshi Cotton Mills Company Ltd., hereinafter referred to, as the Company.
The Company started constructing a textile factory, a part of which, at any rate, fell within the area of the Board.
It applied for and obtained exemption from the levy of octroi on its building material on the ground that it was a new concern.
It however started bringing more articles within its premises, and the Octroi Superin tendent made a demand for a payment octroi on June 25, 1969.
The Company tried to avoid the levy on the basis of the order of exemption, but the Executive Officer of the Board repeated the demand on May 30, 1970 and June 16, 1970.
The Board also wrote to the State Government for permission to realise octroi from the Company.
The Government gave the permission to realise the tax.
The Company thereupon challenged the levy of the octroi in the High Court by a writ petition.
The High Court took the view that the initial imposition of the octroi was illegal, allowed the writ petition, and issued a mandamus directing the Board not to realise the tax.
The Board feels aggrieved and has come up in appeal to this Court.
It appears that the Company took four grounds for challenging the levy of octroi, but the High Court examined only the following ground, as it took the view that it was enough for the Company 's success in the petition, and did not examine the other grounds, "that the procedure prescribed for the imposition of taxes by municipal boards under sections 131 to 135 of the U.P. Municipalities Act, 1916, was not fol lowed by the Municipal Board.
" Counsel for the parties have accordingly confined their arguments to the finding of the High Court in favour of the Company on this ground.
As the ground on which the Company has succeeded is quite general and vague, we asked counsel for the parties to refer to.
the precise plea in that respect, in the writ petition.
They could however only invite our attention to3 ground No. 6 of the writ petition where the Company has merely stated that the imposition of octroi was void and illegal "because mandatory provisions for imposition of octroi tax as provid ed in the U.P. Municipalities Act has not been followed.
" It is therefore obvious, and has not been disputed before us, that the 867 Company took a very vague ground to challenge the validity of the imposition of octroi, and left it to the High Court to embark on a roving and fishing inquiry, on the off chance of finding some violation of the so called "mandatory provi sions for the imposition of octroi.
" It has not been disput ed before us that the High Court undertook such an inquiry and struck down the imposition on the following ground, (1) The draft rules for the levy of the tax were not published, and only the rates of octroi were published, so that there was violation of the provisions of section 23 of the General Clauses Act and sections 134(1) and 300 of the Act.
(2) The order of the District Magistrate, which was equivalent to the special resolution of the Board under sub section (2) of section 134 was invalid as it was passed on June 20, 1950, while the rules were finalised and pub lished on July 15, 1950.
(3) There was no "foundation or basis" of the notification under section 135(2) and no such notification was published.
Counsel for the Company however strenuously argued that there was no compliance with the provisions of sections 131 to 133 also, and made a reference to the decisions in Munic ipal Board, Hapur vs Raghuvendra Kripal and others(1) and Raza Buland Sugar Co. Ltd. vs Municipal Board, Ratnpur(2), for the purpose of showing that parts of sections 131 to 134 were mandatory, and had to be followed.
We find that the High Court has.categorically stated that the Company did not assert that sub sections (2) and (3) of section 131 had not been complied with, and that there was "no dispute regarding compliance with the provisions of section 131.
" The High Court has also stated that the COmpany "has not asserted.
that any of the provisions of section 132 has not been followed.
" It has further stated that there was "no complaint of non compliance with the provisions of section 133 also.
" There was thus no challenge to the validity of the imposition of octroi on the, ground that there was no compliance with the provisions of sections 131, 132 and 133 and we are not called upon to examine the argument that there was non compliance with the provisions of those sec tions.
There was also no dispute in the High Court that "the Municipal Board was competent to impose octroi tax.
" We shall accordingly examine the three grounds, on which the High Court has held the imposition of octroi as invalid, in this background.
Ground No. 1.
The High Court has held that there was no previous publication of the draft rules for the levy of octroi and that only the rates of octroi were published.
So that there was breach of the provisions of sections 134(1)and 300 of the United (1) ; (2) ; 868 Provinces Municipalities Act, 1916, hereinafter referred to as the Act, and section 23 of the General Clauses Act.
It will be recalled that the High Court has found that the Company had not challenged the imposition of octroi on the ground that there was non compliance with the provisions of sections 131 to 133.
It cannot therefore be disputed that the draft rules were published as required by sub section(3) of section 131.
Moreover we find from the affidavit which has been filed on behalf of the Board that its Officer incharge wrote to the prescribed Authority on January 9, 1950, that the draft rules had been published in the "San sar" on November 1, 1949, and may be sanctioned.
A copy of that letter has been placed on the record.
It may also be mentioned that the Officer Incharge wrote to the Commission er intimating that only two objections had been received which were for reduction of the tax, and that after consid ering them the rate of the tax had been reduced from Rs.1/8/ to Re. 1/ per maund, and the necessary amendment had been made in the rate chart.
An objection was also received from the Shoe Makers ' Association, and the Commis sioner directed that if the Board wanted to make any modification, it may again publish the modified proposals.
This was done on February 14, 1950, but as only the rates had been reduced, and the rules had not been modified, it was not necessary to republish the draft rules.
The Pre scribed Authority accordingly sanctioned the same on April 1, 1950, under section 133.
The rules were forwarded to the Prescribed Authority on April 26, 1950, and were published in the State Gazette dated July 7, 1950.
It was stated in the notification that the rules were published under section 300 of the Act, which required their previ ous publication, but there can be no doubt that it was a notification under sub section (2) of section 135 as it was issued after receipt of the Board 's special resolution in pursuance of the sanction of the Prescribed Authority, and it was directed that the rules shall take effect from July 15, 1950.
It is therefore futile to contend that the rules were not made in accordance with the provisions of sections 134(1) and 300 of the Act and section 23 of the General Clauses Act which requires certain conditions to be ob served in regard to the making of rules after previous publication.
Ground No. 2.
It is not in dispute that the special resolution for the imposition of the tax was sent by the Officer Incharge of the Municipal Board on June 20, 1950, stating that July 15, 1950.
had been fixed for the levy of the tax.
It is true that the rules were published under the notification dated July 7, 1950, but that would not neces sarily lead to the conclusion that the resolution dated June 20, 1950, was rendered nugatory, or that it was necessary for the Board to pass another resolution.
The notification shows that the authority concerned not only published the resolution by its notification dated July 7, 1950, but also stated that they shall take effect from July 15, 1950, which was the date fixed by the resolution dated June 20, 1950, for the imposition of the tax.
There was therefore no justification for taking the view that the resolution dated June 20, 1950 could not authorise the= imposition of the tax from July 15, 1950, merely because it was passed before the publication of the rules.
At any rate any techni cal defect in the date of the resolution could not have 869 the effect of making the imposition void in the facts and circumstances of this case.
Ground No. 3.
As has been shown, the notification dated July 7, 1950, which was published under section 300 of the Act, was, in fact and substance, issued under the authori ty of sub section (2) of section 133, and it would not matter if it did not make a specific reference to that sub section and made a reference to section 300 instead.
The High Court therefore erred in thinking that there was no notification under sub section (2) of section 135 at all.
It is the nature of the notification which is decisive of the section under which it has been issued, and we have no doubt that the impugned notification was really issued under sub section (2) of section 135.
We have thus no doubt that the notification had really been issued in compliance with the requirement of sub sec tion (2) of section 135 of the Act.
That would attract the application of sub section (3) of that section which provides as follows, "135(3) A notification of the imposition of a tax under subsection (2) shall be conclusive proof that the tax has been imposed in accord ance with the provisions of this Act.
" So when a probative effect had been given by law making the notification of the imposition of the tax as "conclusive proof" that the tax had been imposed "in accordance with the provisions of the Act", no evidence could be allowed to combat that fact, and we have no hesitation in holding that the imposition was according to the law.
It is not disputed that Maunath Bhanjan is an industrial town, and its Board was collecting octroi since July 15, 1950.
The Company started the construction of its factory in 1968 69, and, as has been stated, it applied for and obtained exemption from the levy of octroi on its building material on the ground that it was a new concern.
The Board granted the exemption on July 21, 1967, for a period of 10 years, and that fact was acknowledged in the Company 's letter dated August 18, 1967.
The Company prayed for the continuance of the exemption even after that time limit.
The State Government however granted the exemption for five years.
The Company started "importing" certain other articles, and the State Government ultimately gave permis sion to the Board on April 2, 1973 to realise octroi from the Company with effect from May, 1974.
The Company once again applied for further exemption on August 14, 1973, but without success.
It is thus clear that, far from having any doubts about the validity of the imposition and levy of octroi, the.
Company accepted the validity thereof and prayed for exemption.
It availed of that exemption, for some years, and applied for its extension until as late as August 14, 1973.
It was only when further exemption was refused, that the Company thought of filing the writ peti tion.
As has been shown, the Company did not, even then venture to point out any reason why the imposition could be said to be invalid, and merely stated that the 870 "procedure" prescribed under sections 131 135 had not been followed.
That was far too vague a plea to justify investi gation and interference in the exercise of the extraordinary jurisdiction of the High Court under article 226 of the Constitution.
The appeal is allowed, the impugned judgment of the High Court dated March 26, 1976, is set aside, and the writ petition is dismissed with costs.
M.R. Appeal allowed. | In 1968 69 the respondent was constructing a textile factory within the area of the appellant Board, and obtained exemption from the levy of octroi on its incoming building material on the ground that it was a new concern.
It then started bringing more articles within its premises with the result that octroi was demanded from it.
The Board got permission from the State Government for realising the same.
In a writ petition by the respondent to challenge the levy, the High Court struck down the imposition of octroi on three grounds: I.
The provisions of Ss. 134(1) and 300 of the Act and section 23 of the General Clauses Act were violated owing to publication only of the tax rates and not the draft rules for the levy of octroi.
The resolution of the Board u/s 134(2) could not authorise the imposition of tax as it was passed before the publication of the rules.
No notification was published as required u/s 135 (2).
Allowing the appeal by special leave, the Court HELD: 1.
The draft rules were once published as required by sub section
(3) of section 131, and as only the rates had been reduced and the rules had not been modified, it was not necessary to re publish them.
[868 A F] Municipal Board, Hapur vs Raghuvendra Kripal & Ors. ; and Raza Butand Sugar Co. Ltd. vs Municipal Board, Ramput, ; , referred to.
The Resolution dated June 20, 1950, could authorise the imposition of the tax from July 15, 1950, although it was passed before the publication of the rules.
The resolu tion was not rendered nugatory and it was not necessary for the Board to pass another one.
[868 G H] 3.
It is the nature of the notification which is deci sive of the section under which it has been issued and it would not matter if it did not make a specific reference to sub section (2) of section 135 and made a reference to Section 300 instead.
[869 B] |
Appeal No. 1988 of 1968.
Appeal by Special Leave from the Judgment and Decree dated 21/22 3 1968 of the Gujarat High Court in First Appeal No. 760/60.
S.T. Desai, I. N. Shroff and H.S. Parihar for the Appel lants.
J. B. Nagarsett and A. G. Ratnaparkhi for the Respondents.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by the legal representa tives of the defendant in the suit by special leave against the judgment and decree of the High Court of Gujarat.
The suit was filed by Manilal Lallubhai and his widow Bai Mani against Nanabhai Fakirchand for partition and allotment of one half share of the suit house and the moveable properties mentioned in the plaint.
One Fakirchand had three sons, Nathubhai, Lallubhai and Nanabhai.
Nanabhai is the defend ant whose legal representatives are the present appellants in this Court.
Lallubhai 's son, Manilal, was the first plaintiff and his mother and widow of LaIIubhai, Bai Mani, was the second plaintiff.
The second plaintiff is since dead and his legal representatives are respondents 2(b) and 2(c) in this appeal.
Nathubhai, Lallubhai and Nanabhai were originally the members of a joint Hindu family.
The case of the plaintiffs, respondents in this appeal, is that the three brothers Nathubhai, Lallubhai and Nanab hai were members of a joint undivided Hindu family and when they were joint in the year 1940 Nathubhai died leaving his widow Bai Kashi.
Subsequently in the year 1942 Lallubhai died.
On 24th January, 1956 Bai Kashi, the widow of Nathubhai, died while the family continued to be a joint undivided Hindu family.
According to the respondents the properties were never partitioned though the three brothers were staying and messing separately and each branch carried on its business separately.
The family immoveable and moveable properties were never divided.
The respondents also questioned the validity of a sale deed executed by Bai Kashi on 25th April, 1955 in favour of the appellants of her share in the immoveable property as it was not for legal necessity.
In the written statement the appellants denied that the three brothers were members of a joint family.
They pleaded that the brothers were separated and each branch used to do its own business keeping their earnings separately and messing separately.
So far as the suit house was concerned it was divided though not by metes and bounds and the 922 brothers lived in separate portions of the house.
The appellants claimed that they were entitled to 2/3 share in the house as Bai Kashi the widow of Nathubhai had sold her share by registered deed 25th April, 1955 to the appellants.
On these pleadings 9 issues were framed of which three are relevant for the purpose of this appeal.
They are: (1) Does the defendant prove that he and his two brothers Nathubhai and Lallubhai had separated and the suit house was also divided (through not by metes and bounds) at the time of the.
death of Nathubhai ? (2) Does he further prove that the sale deed executed by Bai Kashi in respect of the one third share of the suit house was for legal necessity anti to satisfy her debts ? and (3) Do the plaintiffs prove that after Bai Kashi 's death they become entitled to.
a one half share in the whole of the suithouse ? The trial court found that the three brothers had become separate in status before the deaths of Nathubhai and Lallubhai.
It also found that the defendant and his broth ers had separated and the suit house was also divided as alleged by the defendant and recorded the finding in favour of the defendant.
Regarding the second issue it found that the defendant had failed to prove that there was legal necessity for Bai Kashi to sell away the share in the suit house.
On the third issue the trial court recorded a find ing that after Bai Kashi 's death the respondents became entitled to 1/2 share in the whole of the suit house.
On appeal the High Court confirmed the findings or the trial court on three issues and dismissed the appeal.
The findings of both the courts below that the defendant and his two brothers had separated and the suit house was also divided by metes and bounds was not challenged before us by the counsel for the respondents.
So also the finding that the sale deed executed by Bai Kashi in respect of her 1/3 share of the suit house was not proved to have been for legal necessity.
The only point that was raised by the counsel for the appellants is that the respondents ' plea that the three brothers were joint and the share of Bai Kashi was inherited by the remaining two branches by survi vorship having been negatived by the courts below the suit ought to have been dismissed and that the courts erred in finding a new case of succession to the property of Bai Kashi without the necessary pleadings.
It may be observed that on the accepted finding of the courts below that the sale in favour of the appellants by Bai Kashi is not sup ported by legal necessity if on the death of Bai Kashi the other two branches i.e. that of the appellants and the respondents, are entitled to share equally the decree grant ed by courts below would be right even though the claim to the 1/2 share is not based on succession.
The contention of the counsel for the appellants is that the courts below have found an entirely new case on the basis of succession which is contrary to the claim made in the plaint.
The averment in the plaint is that on 24th January, 1956 Bai Kashi the widow of Nathubhai died and Nanabhai continued as the member of the joint Hindu family.
923 There is no alternate claim that in the event of the parti tion being negatived the plaintiff would be entitled to 1/2 share of Bai Kashi by succession.
The 3rd issue that was raised was whether on Bai Kashi 's death the appellants became entitled to 1/2 share in the whole suit house.
The trial court on that issue found that Bai Kashi became enti tled to 1/2 share of her husband in the suit house under the Hindu Women 's Rights to Property Act, 1937.
As her interest was only a limited interest known as Hindu Women 's Estate when Bai Kashi died in January 1956 she had not become the full owner of the share under the .
On this basis the trial court was of the view that on the death of Bai Kashi her share would go to the reversion ers.
On the question as to who the heirs of Nathubhai are at the time of the death of Bai Kashi the trial court held that as the parties were in Gujarat the Mayukh school will govern the inheritance and in Gujarat the Mayukh school overrules the Mitakshara school and therefore full broth ers inherit along with sons of full brothers who are dead and therefore after the death of Bai Kashi the defendant and plaintiff No. 1 would inherit together to the share of Nathubhai.
The court held that the claim of the plaintiff for 1/2 share should be decreed though there is no specific claim on the plea of separation and heirship.
The defend ant, present appellants, in their appeal to the High Court submitted that the trial Judge erred in saying that the Kashi had only a widow 's estate when she died and that the trial court failed to appreciate that no issue was framed as to who were the heirs of the deceased Bai Kashi and that the parties to the suit had not gone to the trial on the basis of the succession.
The High Court has not dealt with this issue satisfactorily.
The High Court after referring to the pleadings observed that the plaintiffs claimed 1/2 share in the suit properties on the ground of survivorship and that at the time of the arguments it was contended before the trial court that even if the brothers had separated the defendant and the plaintiff No. 1 inherited together to Nathubhai after Bai Kashi 's death and therefore the plain tiff would be entitled to 1/3 share.
After making these observations the High Court has referred to the plea in the written statement that the three brothers were separated and has observed that the trial Judge had framed the issue as to whether the defendant proves that he and his two brothers Nathubhai and Lallubhai had separated and the suit house was divided and concluded that this issue which was raised by the learned trial Judge clearly arose out of the contention which was raised by the defendant to the plaintiff 's suit and a specific issue was raised on that point by the learned trial Judge and therefore there is no prejudice to any of the parties because the issue was framed and evidence was led by both the parties on that point.
This reference, we are afraid, does not relate to issue No. 3 which is about the succession to Bai Kashi 's share after her death.
In the Memorandum of Grounds in the appeal to the High Court as well as in the special leave petition the ground that is taken specifically is that the plaintiff has not proved how he became entitled to the share of Bai Kashi.
In fact, the contention is that on the death of Nathubhai his widow Bai Kashi inherited under the Mayukh law Nathub hai 's 1/3 share in the suit house absolutely.
It was also contended before the High Court that the trial Judge was in error in saying that Mayukh school of Hindu law would 11 206SCI/77 the Mitakshara school in Gujarat.
We find that the question 924 that arose mainly whether the respondents are entitled to succeed to Bai Kashi 's 1/2 share on her death has not been satisfactorily dealt with by the High Court especially when the point was specifically raised on behalf of the appel lants.
While we agree with the concurrent finding of the trial court and the High Court that the family became separated and that the sale deed by Bai Kashi in favour of the appellants is not for legal necessity we are satisfied that the claim of the respondents for partition and allot ment of 1/3 share by metes and bounds cannot be resisted.
Though the brothers became separate admittedly there was no division by metes and bounds.
There is also no dispute that the respondents are entitled to.
1/3 share in the house.
Therefore though they became separated in status the suit house was not divided by metes and bounds and therefore they will be entitled to division and separate possession of 1/3 share in the house.
To this extent the decree of the courts below will be modified.
But so far as the 1/3 share of Bai Kashi is concerned as the courts below have not considered the appellants ' plea that the respondents are not entitled to succeed to Bai Kashi 's 1/2 share the question is remitted to the High Court for consideration.
The High Court will consider as to.
whether the respondents are entitled to succeed to 1/2 of the 1/3 share of Bai Kashi and pass a decree accordingly.
To this extent the appeal is allowed and the decree of the trial court and the High Court modified.
The parties will bear their own costs in this appeal.
P.H.P. Appeal allowed. | The respondent plaintiffs filed a suit for partition and allotment of one half share of the suit house and the move able properties.
One Faqir Chand had 3 sons, Nathubhai, Lallubhai and Nanabhai.
Nanabhai was the defendant in the suit whose legal representatives are appellants.
Lallub hai 's heirs are the plaintiffs.
According to the plain tiffs the three brothers were members of a Joint Undivided Hindu Family.
According to the respondents the properties were never partitioned though the three brothers were stay ing and messing separately and each branch carried on its business separately.
The respondents also challenged the validity of the sale deed executed by Bai Kashi the widow of Nathubhai in favour of the appellants on the ground that the sale was not for legal necessity.
The appellants contended that the three brothers were separate and each branch used to do its business separately.
That as far as the suit house was concerned it was divided though not by metes and bounds and that the brothers lived in separate portions of the house.
The appellants claimed that they were entitled to 2/3 share on the house.
The Trial Court found that the 3 brothers had separated before the deaths of Nathubhai and Lallubhai.
It also found that the defendant and his broth ers had separated and the suit house was also divided as alleged by the defendant.
It came to the conclusion that the defendant had failed to prove that there was any legal necessity for Bai Kashi to sell the share in the suit house and that after Bai Kashi 's death the respondent was entitled to one half share in the suit house.
The Trial Court found that Bai Kashi became entitled to one ' half share of her husband in the suit house under the Hindu Women 's Rights to Property Act, 1937.
As her interest was only a limited interest known as Hindu Women 's Estate when Bai Kashi died in January 1956, she had not become the full owner of the share under the .
The court was of the view that on the death of Bai Kashi her share would go to the reversioners.
The court held that the parties were governed by Mayukh school which over rules the Mitakshara school and, therefore, after the death of Bai Kashi the defendant and plaintiff No. 1 would inherit together to the share of Nathubhai.
The court held that the claim of the plaintiff for one half share should be decreed though there was no specific claim on the plea of separation and heir ship.
The High Court dismissed the appeal and confirmed the findings of the Trial Court.
In an appeal by Special Leave the appellants contended that the respondents ' plea that the 3 brothers were joint and the share of Bai Kashi was inherited by the remaining two branches by survivorship having been negatived by the courts below the suit ought to have been dismissed and that the court erred in making out a new case of succession to the property of Bai Kashi without necessary pleadings.
Allowing the appeal partly, HELD: 1.
On the question whether the respondents are entitled to one half share on her death has not been dealt with by the High Court.
This Court agreed with the concur rent findings of the Trial Court and the High Court that the family was separate and that the sale deed by Bai Kashi in favour of the appellants was not for legal necessity.
However, the claim of the respondent for partition and allotment of 1/3 share by metes and bounds 921 cannot be resisted.
Though the brothers became separate admittedly there was no division by metes and bounds.
There is also no dispute that the respondents are entitled to 1/3 share in the house.
[924 A C] 2.
The High Court did not deal satisfactorily with the contention of the defendant that the Trial Judge erred in saying that Bai Kashi had only a widow 's estate when she died in the absence of any issue as to who were heirs of the deceased Bai Kashi.
On the question whether respondents are entitled to succeed to Bai Kashis 1/2 share, the Court remitted the matter to the High Court for consideration.
[924 C D] |
Civil Appeal No. 9 of 61.
Appeal from the judgment and order dated May 7, 1959, of the Punjab High Court in L.P.A. No. 86 of 1956.
M.C. Setalvad, Attorney General of India, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the appellants.
section M. Sikri, Advocate General, Punjab, B.K. Khanna and P.D. Menon, for the respondents.
915 1961.
December, 5.
The Judgment of Sinha C.J., Hidayatullah, Shah and Mudholkar JJ., was delivered by Hidayatullah, J. Kapur, J., delivered a separate judgment.
HIDAYATULLAH, J.
The appellants are a firm of general merchants which sells, among other goods manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 (12 of 1954), which came into force in the State of Punjab from April 1, 1954.
The firm is also a registered dealer under section 7 of the East Punjab General Sales Tax Act, 1948 and till the end of March, 1954, was paying sales tax on manufactured tobacco also.
Indeed, the firm paid sales tax on manufactured tobacco, also for the next quarter ending on June 30, 1954, but did not pay in the succeeding quarter in view of certain events, to which a detailed reference will be made presently.
On September 27, 1954, the State Government issued a Notification (No. 4556 E & T (Ch) 54/957) by which the schedule of exemptions under section 6 of the Sales Tax Act was amended by the inclusion of item 51, which reads as follows: "51.
Manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954.
" This Notification was preceded by a Notification of May 7, 1954 (No. 427 E & T (Ch) 54/369), by which the State Government had given notice, as required by law, of its intention to add the said item in the schedule of exemptions.
In June, 1954, the State Government issued a Press Note by which it was intended to convey to the dealers that though the Tobacco Vend Fees Act had come into force from April 1, 1954, it was not intended to levy both the sales tax as well as the fee for any period.
The Press Note reads as follows: "There is some misapprehension in the minds of dealers in manufactured tobacco as to whether sales tax is also chargeable in respect of manufactured tobacco after the 916 1st April, 1954, in addition to the license fees under the Tobacco Vend Fees Act.
Government would like to make it clear that although the Tobacco Vend Fees Act has come into force with effect from 1st April, 1954, no license fees for dealers have yet been prescribed under the Act.
Therefore, the levy of sales tax continues till the Vend Fee licences come into operation.
It is to be clearly understood that the Vend Fee will be proportionately reduced for the current financial year to adjust the period for which sales tax will have been charged.
Manufactured tobacco will be exempted from sales tax simultaneously with the enforcement of the Vend Fees." On August 2, 1954, the State Government issued another Press Note, in which the decision was altered.
The Press Note said: "Government recently announced through a press note that the levy of Sales Tax on manufactured tobacco would be continued till the Vend Fee Licences came into operation and that the Vend Fee would be proportionately reduced for the current financial year in respect of the period for which Sales Tax would have been charged.
In order to avoid double taxation, Government have since reconsidered the matter and have, in supersession of the previous decision, decided that the Sales Tax, if any, recovered from the dealers would be refunded and that no Sales Tax would be charged during the current financial year in respect of sales of tobacco which fall under the Tobacco Vend Fees Act.
Tobacco Vend Fees will be recovered at full rates for the whole year as and when rules under the Punjab Tobacco Vend Fees Act are finalised.
" It appears that the Rules under the Tobacco Vend Fees Act were not promulgated; nor were the forms 917 and licences prescribed during the financial year ending on March 31, 1955.
In the meantime, the appellants, as already stated, paid sales tax on sales of manufactured tobacco for the first quarter ending June 30, 1954, and the Notification exempting manufactured tobacco from sales tax was issued on September 27, 1954.
The appellants had made enquiries from the Excise and Taxation Commissioner, Punjab, about the Press Note of August 2, 1954, and had been assured that the Notification as printed in the Newspapers was accurate, and that Government intended implementing the Press Note.
On January 23, 1956, the appellants received a notice from the Excise and Taxation Officer, Rohtak, calling upon them to produce their account books.
The appellants as well as other dealers of manufactured tobacco similarly affected, made representations on the basis of the Press Note of August 2, 1954, but without success.
The appellants then filed on February 8, 1956 a petition under article 226 of the Constitution for substantially three reliefs.
They were: (a) a declaration that the levy of sales tax on manufactured tobacco upto September 26, 1954 was illegal; (b) refund of the sales tax paid by it for the quarter ending June 30, 1954; and (c) an order in the nature of a writ of Prohibition against the proposed levy of sales tax till September 26, 1954.
It remains to mention that the sales tax authorities were acting in conformity with a Press Note issued in August, 1955, by which the State Government went back upon the policy declared in August, 1954 and reaffirmed the policy stated in the Press Note of June, 1954.
The following extract from the Press Note of August, 1955 may be read here: "2.
In conformity with the press note issued in June, 1954, and in view of the facts explained above, Government have now decided that sales tax on tobacco shall be levied for the year 1954 55 before the 27th September, 1954 918 only, the date on which tobacco was included in the schedule of exemptions appended to the General Sales Tax Act.
This amounts to a handsome concession to the dealers and Government except that, in return, every cooperation shall be shown by the dealers of the assessing authorities in the matter of the assessment of the tax.
" The petition under article 226 was heard by a learned Single Judge of the Punjab High Court, who held that the orders of Government were entirely in accordance with law, that the East Punjab Sales Tax Act, in so far as it related to the sale of manufactured tobacco was not repealed by the Tobacco Vend Fees Act, and that sales tax on manufactured tobacco was payable from April 1, 1954 to September 26, 1954, in view of the fact that the exemption was made on September 27, 1954, and would operate from the latter date.
Against the decision of the learned Judge dismissing the writ petition, an appeal under Letters Patent was filed.
The Divisional Bench, which heard the appeal, agreed with the judgment appealed from, and dismissed the appeal.
A certificate was, however, granted to the appellants and the present appeal has been filed.
Two contentions were raised in the forefront before the High Court, by the appellants.
The first was that the Punjab Tobacco Vend Fees Act had pro tanto repealed the East Punjab General Sales Tax Act, and that sales tax on manufactured tobacco could not be levied after April 1, 1954.
The second was that the State Government by its assurance in the Press Note of August, 1954, had estopped itself from reversing its policy and claming the sales tax up to the date of the Notification.
These points were not seriously pressed upon us, because there can be two taxes on the same commodity or goods without the one law repealing the other.
No repeal can be implied, unless there 919 is an express repeal of an earlier Act by the later Act, or unless the two Acts cannot stand together.
The first argument was, therefore, rightly rejected in the High Court.
The second argument is also without force.
There can be no estoppel against a statute.
If the law requires that a certain tax be collected, it cannot be given up, and any assurance that it would not be collected, would not bind the State Government, whenever it choose to collect it.
The question which is now raised, and of which there is but a trace in the High Court is the real one to decide, and it may be formulated thus; Did the exemption in the Notification issued on September 27, 1954 have effect from that date, or from the beginning of the financial year ? We are not concerned with the question whether, in the absence of rules and forms, the Punjab Tobacco Vend Fees Act, 1954 could operate from April 1, 1954.
Whether it did or did not, can make no difference to the sale tax, because the Punjab Tobacco Vend Fees Act, 1954 did not abrogate the Sales Tax Act.
If sales Tax was not payable, it would be because of the exemption, and the only question thus is when the exemption began to operate.
The Notification does not say from what date the exemption operates.
Taking the Notification by itself, it cannot be said that it comes into force from an earlier date.
Both sides have thus called in aid provisions of the East Punjab General Sales Tax Act and the Rules to determine the date from which the exemption can be said to operate.
Reference was made by the appellants to a decision of this Court in The Commissioner of Sales Tax, U.P. vs The Modi Sugar Mills Ltd.(1), where a notification increasing sales tax on edible oils issued in the middle of the year 1948 was held not to apply to the assessee in that year, inasmuch as its liability to tax had become fixed on April 1, earlier, as it had elected to pay tax on the turnover of the previous 920 year.
The scheme of taxation under the U.P. Sales Tax Act, 1948 (15 of 1948) and the Rules under that Act is so vastly different from the East Punjab General Sales Tax Act and the Rules under it, that a detailed reference to that case may not be necessary.
The question thus must be viewed in the setting of the East Punjab Sales Tax Act and the Rules under it.
We shall refer to them shortly as the Act and the Rules in the rest of this judgment.
The Act was passed in 1948, and came into force on November 15, 1948.
Previous to this, sometimes licence fee under an earlier Tobacco Vend Fees Act and sometimes sales tax also under an earlier Sales Tax Act had been levied but not side by side in the Province.
The history of these earlier Acts was brought to our notice during the course of the argument, but nothing turns upon it.
The sales tax under the Act continued to be levied up to April 1, 1954, and none has disputed that it could be levied.
On that date, the Punjab Tobacco Vend Fees Act came into force.
We have already said that the latter Act did not repeal pro tanto the earlier.
The liability for sales tax in this appeal is for two quarters ending June 30, 1954, and September 30, 1954.
There is no dispute that after September 27, 1954 sales tax could not be levied, in view of the inclusion of item 51 in the schedule exempting manufactured tobacco from the operation of the Act.
We must now examine those provisions of the Act which are claimed by the rival parties to indicate the moment of time from which the exemption granted by the Notification began to operate.
"Turnover" has been defined in the Act to include the aggregate of the amounts of sales and parts of sales actually made by any dealer during the given period, less certain allowances, and "year" means the financial year.
Sections 4 and 5 read together are the charging sections, the first dealing with the incidence of the tax, and the second, with its rate.
Section 6 (1) provides for exemptions on the sale of 921 goods which are specified in schedule to the Act.
Under section 6 (2), the State Government has been given the power to add to or delete from that schedule.
Section 10 deals with the making of returns and payment of the tax.
Section 27 empowers the State Government to make rules for carrying out the purposes of the Act.
This is the general scheme of the Act, in so far as we are concerned; but a somewhat detailed examination of these sections is necessary to understand the rival contentions.
Section 4 consists of five sub sections.
Sub Section (1), which is a subject to the provisions of sections 5 and 6, says that every dealer, except one dealing exclusively in goods declared tax free under section 6, whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum, shall be liable to pay tax under the Act on all sales effected after the coming into force of this Act.
A proviso is added, which is not relevant.
Sub section (2) says that every dealer who is liable to pay tax under the first sub section shall be liable to pay it on the expiry of 30 days after the date on which his gross turnover first exceeds the taxable quantum.
Sub sections (3) and (4) deal with the continuance of the liability of the dealer under certain circumstances, and are not relevant here.
Sub section (5) then defines "taxable quantum" in relation to different kinds of dealers, and fixes a certain amount as the lowest limit.
Since, in the present case, the taxable quantum is above the limit applicable to the appellants and they are also admittedly dealers, a detailed reference to the provisions of sub section
(5) is unnecessary.
Section 5, which deals with the rate of tax, is made subject to the other provisions of the Act, and the first sub section says that there shall be levied on the taxable turnover every year of a dealer a tax at such rates (not exceeding two pice in a rupee) as the State Government may by notification direct.
"Taxable turnover" 922 is then defined by the second sub section to mean that part of a dealer 's gross turnover during any period which remains after deducting therefrom, inter alia his turnover during that period of tax free sales, sales to registered dealers, sales to any undertaking supplying electrical energy, sales to dealers outside Punjab and other sales, as may be prescribed.
With none of these deductions we are concerned in this case.
Now, the appellants emphasise the words "gross turnover during the year" in s.4 (1) and the words "taxable turnover every year of a dealer" in section 5 (1), and argue that the tax is computed year wise, and the exemption must, therefore, operate for the whole of the year in which it is made, irrespective of the date on which the Notification is made.
The respondents, on the other hand, emphasise the words "gross turnover during any period" and "his turnover during that period" occurring in section 5, and contend that the tax is not year wise but accrues, so to speak, from day to day or at least from period to period within a year, and the exemption thus operates not from the whole of the year, but for the period within which it is granted, and refer in aid of this argument, to sections 6 and 10.
Sections 4 (1) and 5 (1) are subject to section 6, section 5 (1), to other sections of the Act and so, section 10, and we have to see what they provide.
Section 6 (1) is brief, and may be quoted in extenso.
It reads: "6 (1).
No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule, subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column there of and no dealer shall charge Sales Tax on the sale of goods which are declared tax free from time to time under this section.
" The respondents emphasise the words "from time to time" in the first sub section, and say that 923 they also show that exemptions may be given, withdrawn, or given again and again several times during the year in respect of the same goods, and the exemptions, therefore, begin to operate when they are given and cease, when they are withdrawn.
But, the appellants contend that these words merely indicate that the power may be exercised as often as needed, and do not indicate the time from which the operation of the exemption commences and the period during which it lasts.
Section 10 (1) provides that the tax payable under the Act shall be paid in the manner provided at such intervals, as may be prescribed.
Two Rules framed under section 27 provide for such intervals.
Rule 20 reads: "Every registered dealer other than those referred to in rules 17, 18 and 19, shall furnish returns in Form S.T.VIII or S.T. XXIII, if so permitted quarterly within thirty days from the expiry of each quarter." (words underlined were introduced on June 28, 1955).
Rule 23: "Notwithstanding the provisions of rules 20 and 21, the appropriate Assessing Authority may, for reasons to be recorded in writing, fix monthly returns for a dealer, who would otherwise be required to furnish quarterly or annually under these rules.
" Section 10 and Rules 20 and 23 clearly provide that returns may be made annually, quarterly or monthly.
The forms, section T. VIII and S.T. XXIII, also are forms of returns of sales tax payable for the year, quarterly or monthly.
It is thus possible that some dealers pay tax annually some, quarterly, and some, monthly.
The contention of the appellants is that s.10 read with Rules 20 and 23 merely provides for making of returns at prescribed intervals and the 924 collection of tax is for a period falling between those intervals, but the tax is the tax appropriate to the whole year 's result.
The respondents contend that the effect of the section and the two Rules is that the tax due for the period of the return is separate from any other tax for any other period.
Each period, according to them, must be viewed separately and not as part of a year.
Thus, if exemption is granted during the second quarter, according to the respondents it affects that quarter and subsequent quarters but not the first quarter, because tax is payable on the turnover of a period and at such intervals, as may be applicable to an assessee.
We cannot help saying that the Act and the Notification could have been framed to obviate such unnecessary questions by providing clearly in them the time from which such exemptions would begin to operate.
Similarly, if the rules under the Punjab Tobacco Vend Fees Act had been framed in time and the Tobacco Vend Fees Act together with the Rules under it and the exemptions under the Sales Tax Act were brought into force together, a considerable amount of time to the Department and the Courts would have been saved, as also trouble to the tax payer.
The Rules under the Punjab Tobacco Vend Fees Act were not framed during the whole of the financial year, 1954 55.
Contradictory Press Notes were issued, which showed that the State Government itself was not sure of the true legal position, thus causing great confusion and distrust in the minds of the tax payers.
There is no doubt that the tax is a yearly tax.
It was payable, in the first instance, by a dealer whose gross turnover during the financial year immediately preceding May 1, 1949, was above the taxable quantum.
The tax is to be levied on the taxable turnover of a dealer every year.
The difference between gross turnover and taxable turnover is this, that to arrive at the taxable turnover of 925 any period some deductions have to be made for the same period.
This clearly shows that the tax is for a year.
The method of collection allows collection of tax at intervals; in some cases, the tax is collected at the end of the year; in some others, the tax is collected quarterly and in still other cases, even monthly.
If the exemption can be said to operate for that period for which the tax is payable according as it is annually, quarterly or monthly, the tax would be different for different persons.
Those who are paying the tax annually would get exemption for the whole year; but those who are paying it quarterly or monthly would get benefit in the quarter or the month of the Notification but not for earlier quarters or months.
It could not have been intended that the exemption was to operate differently in the case of dealers with different intervals of assessment.
The exemption thus must operate either from the date of the Notification or from the commencement of the financial year.
Here, the nature of the tax, as disclosed in sections 4 and 5, is decisive.
In section (5), the tax is made leviable "on the taxable turnover every year of a dealer".
The divisions of the year and the taxable turnover into different parts are to make easy the collection of tax, and form part of the machinery sections.
If the tax is yearly and is to be paid on the taxable turnover of a dealer, then the exemption, whenever it comes in, in the year for which the tax is payable, would exempt sales of those goods throughout the year, unless the Act said that the Notification was not to have this effect, or the Notification fixed the date for the commencement of the exemption.
In the present case, the Notification did not fix the date from which the exemption was to operate, probably because the Act omitted to make such provision, enabling the State to do so, and the exemption must, therefore, operate for the whole year, during which it was granted.
926 The case of this Court, to which we have referred earlier, dealt with an Act under which the taxpayer could elect to pay the tax on the turnover of either the previous year or the year of assessment.
A notification in the middle of the assessment year was considered, and was held inapplicable in those cases where a dealer had elected to pay tax on the turnover of his previous year.
The majority view on that occasion pointed out that it was not possible to divide the assessment year in two portions, in which the tax was levied at one rate in one part and another rate in another part.
The case was confined to a dealer who had elected to pay the tax for a year different from that in which the exemption was granted.
Those facts do not exist here; but if the case is considered at all relevant, it supports the appellants rather than the respondents.
In the result, the appeal succeeds, and is allowed with costs.
KAPUR, J.
The facts of this case have been set out in the judgment of my learned brother Hidayatullah J., which I have had the advantage of reading and as I am unable to agree with the conclusion that the effect of the exemption given by Notification No. 34556 E & T. (CH)54/957 dated September 27, 1954, issued under s.6(2) of the Punjab General Sales Tax Act (Act 16 of 1948), hereinafter called the "Act", on unmanufactured tobacco becomes effective as from the beginning of the financial year, I proceed to give my reasons for the same.
The period in regard to which the disputed amount of sales tax is sought to be levied was from April. 1, 1954 to September 27, 1954.
Previous to the issuing of the notification of September 27, 1954, the Punjab Government issued a notification required under s.6(2) of the Act for the purpose of information of persons likely to be affected thereby 927 and to give them an opportunity to file any objections or suggestions in regard to the same.
A press note was issued on August 4, 1954 stating that no sales tax will be leviable on manufactured tobacco for the financial year 1954 55.
In order to resolve the controversy as to whether the exemption is effective from the commencement of the financial year or from the date of the notification it is necessary to refer to the scheme of the Act and the rules made thereunder.
The East Punjab General Sales Tax Act (Act 46 of 1948) as amended, made provision for the levy of general sales tax on the sale of goods in the Punjab and repealed the General Sales Tax Act of 1941.
Section 2 of the Act gives definitions and cl.(d) defines a "dealer" as a person. engaged in the business of selling or supplying goods.
In cl.(i) "Turnover" was defined to include "the aggregate of the amount of a sale and parts of the sale actually made by any dealer during the given period less any sum allowed as cash discount according to ordinary trade practice. " Sections 4 and 5 are the charging sections, the former makes the tax leviable prospectively and the latter prescribes the rate of tax.
The relevant portions of these sections when quoted are as follows: S.4(1) "Subject to the provisions of sections 5 and 6, every dealer except one dealing exclusively in goods declared tax free under section 6 whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming into force of this Act.
(2) Every dealer to whom sub section (1) does not apply or who does not deal exclusively in 928 goods declared to be tax free under section 6 shall be liable to pay tax under this Act on the expiry of 30 days after the date which his gross turnover first exceeds the taxable quantum." "Taxable quantum" mentioned in sub section (2) is defined in sub section (5) of section 4.
Thus a dealer is liable to sales tax if his sales in the year preceding the commencement of the Act are more than the taxable quantum (section 4.(1) or subsequently becomes so during any year.
section 5.(1) "Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer a tax at such rates not exceeding two pice in a rupee as the State Government may by notification direct: Provided that Government may by notification in the Official Gazette declare that in respect of any goods or class of goods the dealer may pay such lump sum by way of composition of the tax payable under this Act as the Government may notify from time to time.
(2) In this Act the expression "taxable turnover" means that part of a dealer 's gross turnover during any period which remains after deducting therefrom.
(a) his turnover during that period on (i) the sale of goods declared tax free under section 6; (ii). . . . . .
(iii). . . . . " Section 6 which makes provision for giving exemption is as follows: S.6(1) "No tax shall be payable under this act on the sale of goods specified in the first column 929 of the Schedule subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof, and no dealer shall charge Sales Tax on the sale of goods which are declared tax free from time to time under this section.
(2) The State Government, after giving by notification not less than three months ' notice of its intention so to do, may by like notification add to or delete from the Schedule and thereupon the Schedule shall be deemed to be amended accordingly.
" Section 10 deals with payment of taxes of returns.
Clause (1) of section 10 provides: S.10 (1) "Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed.
" Section 11 is the section dealing with assessments.
It provides that if the Assessing Authority is satisfied that the returns furnished are correct and complete he shall assess the amount of tax due and if he is not so satisfied he can require the production of evidence which may be necessary and provision is also made for default in carrying out the notice issued.
Section 27 gives the Government the power to make rules.
The relevant portions of this section are clauses (h) and (i) which were as follows: (h) "the return to be furnished under sub section (3) of section 10, and dates by which and the authority to which, such returns shall be furnished; (i) the date by which returns for any period are to be furnished and the procedure to be followed for assessment under section 11." Under the rule making power rules have been framed by the Punjab Government and reference may be made to Rules 20 and 23.
Under the 930 former rule every registered dealer is required to furnish returns in Form ST VIII or ST XXIII if so permitted quarterly within thirty days from the expiry of each quarter.
Under the latter the Assessing Authority is given the power to tax the returns to be made monthly in the case of a dealer who would otherwise be required to furnish them quarterly or annually.
It was argued that the tax under s.5 was a yearly tax and therefore whenever the exemption may be given during a financial year the effect of the exemption will become operative as from the beginning of the financial year and emphasis was laid on the words "there shall be levied on the taxable turnover every year of a dealer a tax. " The argument was that it was a yearly tax on the turnover and not that every year a tax was to be levied on the taxable turnover i.e. aggregate of the sales made during a given period.
It was also argued that if the exemption of the turnover was to operate for the quarter in which the exemption was notified, the consequence will be absurd as those who pay the tax on quarterly returns or monthly returns will not be able to get the advantage of the exemption whereas those who pay on yearly returns will be so entitled.
I am unable to agree that the effect of the collection of the words in section 5 and particularly of the words "shall be levied on the taxable turnover every year. a tax" is what was argued by the appellants i.e. it was a yearly tax like the income tax.
Section 6 which provides for exemption specifically envisages the declaration from time to time of exemption of goods which are to be tax free.
The use of the words "tax free from time to time", in my opinion, means that the exemption may be given at any time during the year but it does not suggest that the exemption will operate from the beginning of the year and not from the time that the exemption is given.
If this were not so the the imposition of sales tax by excluding an 931 article exempt from tax from the schedule say about the end of the financial year would render the dealer liable to sales tax for the whole year even though he may not have collected any sales tax from his customers which under the law he would be entitled to do if the article is not in the schedule.
It will be an imposition which is not envisaged by the general scheme of the Sales Tax Act because the tax is exigible on taxable turnover in every return made monthly or quarterly or yearly as the case may be.
It appears that it is for that reason that in the definition of the word "turnover" the legislature has chosen the word "during the given period" i.e. the period for which the tax is leviable and is levied.
Similarly in subsection (2) of section 5 where sales tax is levied on the taxable turnover of a dealer the use of the word "during any period" is again repeated and in cl.(a) of that section reference is made to deduction from his turnover during that period of the sale of goods declared tax free under section 6 and that is for a good reason because section 6 itself mentions the declaration of tax free goods from time to time indicating that whenever during the year or at any time during the year when goods are notified to be tax free.
That the intention of the legislature was to give exemption from the date of the notification or such date as is mentioned in the notification is further supported by the provisions of sections 10 and 11 of the Act.
Under section 10 a dealer may be required to furnish his return at such intervals as may be prescribed and when he makes a return it must necessarily be of the goods on which during that period sales tax was exigible.
Under sub s.(4) of s.10 the dealer is required to pay into the Government treasury the full amount of tax according to his return.
Under section 11 the assessment of the tax either on the acceptance of the return or after production of such evidence as may be required is to be made.
From the provisions of a 11, it does 932 not appear that returns are to be scrutinised at the end of the year like in income tax cases and assessment made on the income of the year preceding the assessment year.
It is to be made in regard to each return whenever according to the rules the return has to be and is made.
The tax is also paid for that period i.e. on the taxable turnover for the period for which the return is made and which becomes the subject matter of assessment.
When the assessment has been made and the tax assessed is paid the assessment for that period is completed and all proceedings and liabilities and subjected to what is stated as to escaped periods.
This is further clear from the rules which have been made in regard to registration and furnishing of returns.
In the registration certificate it has to be mentioned as to what goods are free of tax.
Returns are required to be made in the Forms which are given i.e. Form VIII or Form XXIII.
A return under Form VIII may be monthly, quarterly or yearly.
A return to be made also provides for mentioning the turnover of tax free goods and goods which are exempted from sales tax.
If the contention of the appellants is correct, then after all the returns have been filed, the amount of sales tax according to the returns assessed and payments made, there will have to be proceedings for reassessment, remission or refund as the case may be in regard to those periods, if any goods are added to the schedule exempting them from sales tax after the assessment or any goods are deleted from the schedule thus making them liable for sales tax and that will be for the periods of which the assessment had already been completed and finished.
That does not seem to be the scheme of the Act.
It does not envisage reassessment for the purpose of refunding the tax assessed and paid on articles which were assessable at the time the assessment was made but became exempt later nor is it envisaged in the case of 933 articles excluded from the schedule.
Section 11(6) which deals with reassessments at the relevant time provided: "If upon information which has come into his possession the Assessing Authority is satisfied that any dealer has been liable to pay tax under this Act in respect of any period has failed to apply for registration, the Assessing Authority shall. . assess to the best of his judgment the amount of tax. .due from the dealer.
" The scheme of the Act and the rules made thereunder do not, in my opinion, show that the exemption becomes operative for the whole year whenever during the year the notification of exemption is issued even though it may be on the last day of the financial year.
I would therefore dismiss this appeal with costs.
By Court.
In accordance with the judgment of the majority, the appeal stands allowed with costs. | Section 6(1) of the East Punjab General Sales Tax Act, 1948, provided that no tax shall be payable on the sale of goods specified in the Schedule to the Act and that no dealer shall charge sales tax on the sale of goods which were "declared tax free from time to time".
Sub section (2) of section 6 empowered the State Government by notification to add or to delete from the Schedule.
On September 27, 1954, the State Government issued a notification under section 6 (2) 914 adding item 51 relating to manufactured tobacco to the Schedule.
The appellant contended that sales tax was a yearly tax and hence the exemption, whenever given during the financial year, became operative as from the beginning thereof.
^ Held, (per Sinha, C. J., Hidayatullah, Shah and Mudholkar JJ., Kapur, J., dissenting) that the exemption operated for the entire financial year.
The tax was a yearly tax levied on the taxable turnover of a dealer every year though it was collected in some cases at the end of the year, in some cases quarterly and in other cases monthly.
If the exemption operated for the period for which the tax was payable according as it was annually, quarterly or monthly the tax would be different for different persons; those paying annually would get exemption for the whole year but those paying quarterly or monthly would get the benefit in the quarter or month of the notification and not for earlier quarters or months.
This could not have been intended.
The exemption whenever it came in, in the year for which the tax was payable, exempted sales throughout the year, unless the notification fixed the date for the commencement of the exemption.
Commissioner of Sales Tax, U. P. vs The Modi Sugar Mills Ltd., ; , referred to.
Per Kapur, J. The exemption became operative only from the date of the notification.
The tax was not a yearly tax.
The use of the words "tax free from time to time" in section 6 (1) showed that the exemption could be given at any time during the year and that it would operate from the date of the notification and not from the beginning of the financial year.
Otherwise, an exemption given or an imposition made near the end of the year will both operate from the beginning of the year.
This was never intended |
ivil Appeal No. 1252 of 1976.
Appeal by special Leave from the Judgment and Order dated 13 8 1975 of the Allahabad High Court in Second Appeal No. 179/ 75.
K. Gupta, for the Appellant.
S.T. Desai and R.B. Datar for the Respondent.
SHINGHAL, J.
This appeal, by special leave, is directed against the summary dismissal of defendant Piarey Lal 's second appeal on August 13, 1975.
As the leave has been limited to the question of interpretation of clauses (a) and (b) of section 30 of the U.P. Consolidation of Holdings Act, 1953, (hereinafter referred to as the Act), "for the pur pose of deciding whether the liability of the petitioner to specifically perform the contract of sale of the old hold ing was transferred to the new 'chak ' allotted to him on consolidation," it will be enough to state the facts which bear on it.
916 Respondent Hori Lal raised the suit for specific per formance of an agreement dated March 6, 1966, for the sale of six plote of land measuring nine high and six biswas in village Hathiawali, Tehsil Gannaur.
It was alleged in the plaint that Rs. 3000/ were paid by the plaintiff Hori Lal in advance, and the balance of Rs. 2000/was to be paid at the time of the execution of the sale deed, within one year of the agreement.
It was also pleaded that as defendant Piarey Lal refused to execute the ' sale deed, the plaintiff was driven to the necessity of filing the suit for specific performance of the agreement for sale and, in the alterna tive, for the recovery of Rs. 3000/which had been paid as advance.
Defendant Piarey Lal denied the execution of the agreement for sale and the receipt of Rs. 3,000/ , and pleaded that as new plots had been allotted as a result of the consolidation of his holding under the Act, he could not perform the agreement for sale.
The trial court framed issues, inter alia, on questions relating to the execution of the agreement for sale, payment of Rs. 3000/ to the defendant, and the inability of the defendant to perform the contract.
That court held that the plaintiff had proved the agreement for sale and the payment of Rs. 3000/ ' .
It also held that the agreement for sale could be "enforced for plots allotted to the defendant in lieu of plot mentioned in the agreement in consolidation.
" It therefore decreed the suit for specific performance by its judgment dated August 23, 1973.
The Second Additional District Judge, Badaun, upheld the decree, and as the High Court has dismissed the second appeal as aforesaid, defendant Piarey Lal has come to this Court for a redress of his grievance by special leave.
As has been stated, the limited question for considera tion in this Court is whether the defendant was liable to specifically perform the contract for sale of his old hold ing even after its consolidation and the allotment of a 'chak ' ?
It appears that there was controversy in the Allahabad High Court on the question whether an agreement for sale, in the circumstances of a case like this, was rendered void under section 56 of the Contract Act because of the order of consolidation allotting new plots for the earlier plots in respect of which the agreement for sale had been executed.
A Single Judge of that Court took the view in Sugna and another vs Kali Ram and others(1) that the agreement became void and impossible of performance, and was not saved by section 30 of the Act.
A different view was however taken by another Single Judge in Chetan Singh and others vs Hira Singh and others(1).
The matter was re ferred to a Division Bench in Shanti Prasad vs Akhtar and another.(2) One of the Judges in the Division Bench was the Judge who had given the decision in Chetan Singh 's case.
The Bench held that the duty of the seller to execute the conveyance of the property agreed to be sold, was a liabil ity recognised by law and was enforceable as the liability "relates to the land mentioned in the agreement" and was "transferred to the new 'chak '" under section 30(b) of the Act.
The decision in Shanti Prasad 's case formed the basis of the decision of the first appellate (1) (2) (3) 917 court in this case, and that appears to be the reason why the High Court has dismissed the second appeal summarily.
The controversy therefore turns on the proper interpretation of section 30 of the Act which deals with the consequences which ensue on exchange of possession as a result of the allotment of a 'chak ' to the tenure holder.
Clauses (a) and (b) of section 30 of the Act provide as follows, "30.Consequences which shall ensue on exchange of possession.
With effect from the date on which a tenure holder enters, or is deemed to have entered into possession of the chak allotted to him, in accordance with the provi sions of this Act, the following consequences shall ensue (a) the rights, title, interests and liabili ties (i) of the tensure holder entering, or deemed to have entered, into possession, and (ii) of the former tenure holder of the plots comprising the chak, in their respective original holdings shall cease; and (b) the tenure holder entering into pos session, or deemed to have entered into pos session, shall have in his chak the same rights, title, interests and liabilities as he had in the original holdings together with such other benefits of irrigation from a private source, till such source exists, as the former tenure holder of the plots compris ing the chak had in regard to them.
" It would thus appear that while clause (a) deals with the rights, title, interests and liabilities of the tenure holder entering into possession of the 'chak ', as well as of the former tenure holder of the plots comprising the 'chak ', in their respective original holdings, and provides that those rights, title, interests and liabilities shall "cease", clause (b) provides that the tenure holder entering into possession of the 'chak ' shall have, in that 'chak ', the same rights, title, interests and liabilities "as he had in the original holdings.
" The expression 'chak ' has been defined in section 3(1 A) of the Act to mean "the parcel of land allotted to a tenure holder on consolidation."
The two clauses therefore are quite simple and clear, and ' do not raise any real problems of interpretation, but the question is whether there is justification for the argument, in the facts and circumstances of this case, that the expression "liabilities" would cover the liability of the seller (i.e. the defendant), under the aforesaid agreement for the sale of his original holding ?
As is obvious, clause (a) of section 30 does not bear on the question in controversy because it only provides for the cessation of the rights, title, interests and liabilities both of the tenure holder to whom the 'chak ' has been allot ted, and of the former tenure holder 918 of the plots comprising the 'chak ' in their respective original holdings".
There is no controversy that this was so in the present case.
It is also no body 's case that the rights, title, and interests of the tenure holder entering into possession of his 'chak ' have any bearing on the con troversy relating to the specified performance of the agree ment for sale, for all that has been urged before us is that the defendant, as the tenure holder of the new holding or 'chak ' had the same "liabilities" in that 'chak ' as he had in the original holding.
What therefore remains for consider ation is whether, on the defendant 's entering into posses sion of his new land or 'chak ', there was the same liability "in" the new land as "in" the original holding.
It there fore to be examined whether, by virtue of the agreement for sale, any liability accrued "in" the original holding ? A cross reference to section 54 of the Transfer of Property Act shows that a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It has however been specifically provided in ' the section that such a contract "does not, of itself, create any interest in or charge on such property.
" It would therefore follow that the agreement for Sale in the present case did not give rise to any interest "in" the original holding of the defendant as the tenure holder.
That being so, there could be no occasion for the transfer of any such "liability in" the new land or 'chak ' of the defendant so aS to attract clause (b) of section 30 of the Act.
In fact what the defendant, was bound to do under section 55(1)(d) of the Transfer ' of Property Act was to execute a proper conveyance of "the property" which was the subject matter of the contract for sale, and not of any other property.
So when he lost that property as a result of the scheme of consolidation and his rights, title, interests ceased in that property by virtue of clause (a) of section 30 of the Act, the agreement for sale became void within the meaning of section 56 of the Contract Act, and it is futile to urge that they were saved by clause (a) or clause (b) of section 30 of the Act.
We have gone through the decision in Shanti Prasad 's case (supra), but we find that while the High Court took note of the fact that the right 's, title, interests and liabilities of the tenure holder "in" his original holdings ceased, and he acquired the same rights, title, interests and liabilities "in" the 'chak ' allotted to him, it lost sight of the significance of the word "in", and the afore said provisions of section 54 of the Transfer of Property Act, and disposed of the controversy before it by raising the other question whether "the tenureholder" was subject to any liability "in respect of" his old holding.
That was why it fell into the error of holding that a liability was created in the original holding of the defendant, and was transferred his 'chak ' on his entering into its possession.
As has been shown, that was an erroneous view which has to be rectified.
It may be mentioned that counsel for the respondent tried to argue that the defendant was bound to execute a proper conveyance of his original holding, which was the subject matter of the agreement of sale, because, that holding had been substituted" by the 'chak '.
919 He also tried to argue that the 'chak ' allotted to the defendant by way of consolidation of his holding was the same as his original holding so that there was no occasion to invoke section 30 of the Act.
Counsel could not however support his argument by reference to the law, or the facts of the case.
Moreover he was unable to show how he could raise any such argument when the special leave had been limited to the interpretation of clauses (a) and (b) of section 30 of the Act.
It would thus appear that the plaintiff respondent 's suit for specific performance of the agreement for sale was liable to dismissal, and the High Court as well as the courts below erred in taking a contrary view.
Counsel for the appellant has however frankly stated at the bar that the appellant would be willing to refund the sum of Rs. 3000/ along with interest at 6 per cent per annum from the date of payment.
The appeal is allowed with costs, the impugned judgment of the High Court is set aside, and the suit of plaintiff respondent Hori Lal is dismissed in so far as it relates to specific performance of the agreement for sale.
It is however ordered that the defendant shall repay Rs. 3000/ to the plaintiff, along with interest at 6 per cent per annum from the date of payment, within three months from today.
M.R. Appeal allowed. | The appellant Piarey Lal had agreed to sell his original holding to Hori Lal but later refused to do so on the ground that his property which was the subject matter of the con tract had been consolidated under the U.P. Consolidation of Holdings Act, 1953, and it was impossible to perform the agreement.
Hori Lal filed a suit for specific performance contending that the agreement for sale had created a liabil ity for Piarey Lal for the purpose of section 30(b) of the Act, and the same was transferred to the new plot or "chak" allotted to him as a result of the consolidation.
The suit was decreed by the Trial Court and Piarey Lal 's appeals before the District Court and the High Court were dismissed.
Allowing the appeal by Special Leave the Court, HELD: By virtue of section 54 of the Transfer of Property Act, the agreement for sale did not give rise to any inter est "in" the original holding of the defendant as the ten ure holder.
There could thus be no occasion for the transfer of any such , 'liability" in his new land or "chak" so as to attract clause (b) Of section 30 of the Act.
When he lost that property as a result of the scheme of consolida tion, the agreement for sale became void.
[918 C E] Sagna & Anr.
vs Kali Ram & Ors. , approved.
Shanti Prasad vs Akhtar & Anr.
and Chettan Singh & Ors.
vs Hira Singh & Ors. overruled. |
Appeal Nos. 1298 and 1299 of 1969.
Appeal from the Judgment and Decree dated the 9th Au gust, 1966 of the Punjab and Haryana High Court in Regular First Appeals Nos. 134 and 120 of 1963.
N.H. Hingorani for the Appellant.
O.P. Sharma for Respondent.
The Judgment of the Court was delivered GOSWAMI, J.
These appeals are by certificate of the High Court of Punjab and Haryana.
Civil Appeal No. 1299 of 1969 is concerned with the appellant 's suit for declaration of his dismissal order dated October 21, 1959, as void and illegal.
Civil Appeal No. 1298 of 1969 arises out of his suit for arrears of salary.
Both the matters were heard together in the.
High Court and the judgment out of which Civil Appeal No. 1299 of 1969 arises is the principal judg ment following which a short order was passed by the High Court dismissing the other suit of the appellant for arrears of salary.
The High Court granted certificates in both the appeals.
It will be sufficient to deal with Civil Appeal No. 1299 of 1969 in this judgment as the decision therein will govern the other appeal.
The facts may now be briefly stated: The appellant who was the plaintiff in the court below was appointed as a Clerk in the Patiala State some time in July 1948.
On the formation of the new State of Punjab on November 1, 1956, with the 958 merger of the erstwhile Pepsu and Punjab States the appel lant was integrated in the service of the new State of Punjab as permanent Assistant in the grade of Rs. 150 10 300/ and was actually getting Rs./70/ per month on October 21, 1959, the date of his dismissal in the office of the Financial Commissioner, Punjab.
The appellant instituted a suit in March 1962 challeng ing his order of dismissal dated October 21, 1959, as void and unconstitutional praying for a declaration that he continued to be in service of the Punjab State.
In June 1962 he instituted a second suit as pauper claiming a decree for about Rs. 8,689/ as arrears of his ' salary and allowances and also a further decree for Rs. 278/12/ per mensem from 5.6.1962 to 4.7.1962 and Rs. 290/ per mensem from 5.7.1962 upto the date of the decree.
Both the suits were decreed by the trial court.
According to the plaint, the appellant, due to serious illness of his mother, proceeded from Simla where he was working to Patiala on casual leave on 8th July, 1958, with the.
sanction of the competent authority.
He obtained extension of leave on account of illness of his mother, wife and daughter.
Meanwhile the appellant himself became seriously iII and prayed for leave from 1.11.1958 to 28.2.1959 0n the basis of a medical certificate granted by Dr. Inder Singh Sodhi,, Retired Civil Surgeon, Pepsu, Patia la.
The authorities declined to sanction the leave.
The appellant also.
continued to be seriously ill and was unable to attend his duties.
When he.
recovered he reported for duty at Simla on March 2, 1959 and he was permitted to resume his duty on furnishing.
a certificate of fitness granted by the aforesaid Retired Civil Surgeon.
On January 27, 1959, the appellant was served with a chargesheet by the Financial Commissioner (Development) Punjab asking him to show cause why he should not be dismissed from Government service for his wilful absence from duty after the expiry of the earned leave sanctioned to him upto October 31, 1958, which was described as "misbeha viour".
The chargesheet, inter alia, stated: "(1) .
You deliberately deed the orders and again applied for extension of leave upto the 31st December, 1958 reigning yourself to be iII, and also threatened that in case leave was not allowed, you might be granted interview with the Revenue Minister . " X X X X (2) That on the one hand you have been applying for grant of extension of leave on account of your own illness and on the other, you have requested that you may be allowed to appear in B.A. Examination to be held in April, 1959.
This, therefore, clearly shows that you are not actually ill but are malin gering, and have knowingly defied Government orders.
959 (3) That your wilful absence from duty after the expiry of earned leave sanctioned to you upto the 31st October, 1958, is a misbehaviour".
The appellant submitted his explanation on March 11, 1959.
There was an enquiry by the Deputy Secretary (Development) in May 1959.
He was served with a second show cause notice on August 14, 1959, enclosing the report of the Enquiry Officer.
The appellant submitted his representation to.
the said notice on October 6, 1959.
On October 21, 1959, the Financial Commissioner (Revenue) passed the order of dis missal.
As already stated, two suits were filed by the appellant in 1962.
The Subordinate Judge, First Class, Patiala, decreed both the suits on January 15, 1963.
The State Government appealed to the High Court and the same was allowed on August 9, 1966 and both the suits were dismissed.
That is how these appeals came before us on certificates.
We are concerned in these appeals with only one point which, if it is held in favour of the appellant, will con clude the matter and it will not be necessary to deal with the other questions with reference to the illegalities in the course of the departmental enquiry alleged by the appel lant.
It is submitted on behalf of the appellant that the order of dismissal is invalid on account of violation of Article 311(1) of the Constitution.
The following facts are relied upon by the appellant in order to sustain his submission.
It is admitted by the respondent that the appellant initially joined service in the State of Patiala in 1948 as a Clerk and he was confirmed as an Assistant in the Pepsu Civil Secretariat by an order dated October 31, 1956, of His Highness the Rajpramukh, which is the previous day of the 'appointed day ' under the State Reorganisation Act, 1956.
Thus he was integrated in the new State of Punjab as a confirmed Assistant.
Before his integration in Punjab he was governed by the Patiala and East Punjab States Union Civil Services (Punishment and Appeal) Rules, 1953 (briefly the Pepsu Rules) which were made in exercise of the powers conferred by the proviso to Article 309 of the Constitution.
By a Notification of the Punjab Government No. 976GII 87/2499, dated February 9, 1957, these Pepsu Rules continue to apply as from 1st November, 1956, to the corresponding services, posts and personnel of the new State of Punjab till further orders.
Rule 6 of the Pepsu Rules provides as follows : "6.
Authority to impose punishment.
Subject to the provisions of clause (1) of Article 311 of the Constitution of India, the authorities competent to impose any of the penalties specified in rule 4 upon the persons to whom these rules apply, shall be such as may be prescribed.
by Government in the rules regulating the appointment and conditions of service of such persons".
Dismissal is one of the penalties provided under rule 4 (see rule 4 (vii).
As provided under Rule 6 above men tioned, the Rajpramukh 960 under Article 309 of the Constitution by a notification in the Pepsu Gazette of Juno 27, 1954, made appropriate rules on 14th June, 1954, determining the authorities competent to impose penalties on members of certain services and holders of certain posts in connection with the affairs of the State.
Item No. 14 in the Schedule to these rules mentions "Members of Class III and IV Services in Sectt." and.
the punishing authority for dismissal of such employees is the State Government.
It is, therefore, clear that under the Pepsu Rules which governed his conditions of service the State Government alone was competent to impose the punishment of dismissal.
Under the Pepsu General Clauses Act, 1953, "State Government shall mean, in relation to anything done or to be done after the commencement of the Constitution, the Rajpramukh".
(See section 2(46).
As noted earlier, factually, the appellant was con firmed and necessarily appointed by the Rajpramukh.
Under the Pepsu Rules the Rajpramukh alone was the appointing authority.
The appellant therefore, cannot be removed from service by any authority subordinate to the Governor in Punjab.
The coordinate authority in Punjab is the State Government.
The Governor of Punjab alone, therefore, was competent to pass the order of dismissal of the appellant.
The Financial Commissioner (Revenue) is an authority subor dinate to the Governor.
He was, there, not competent to pass the order of dismissal.
The order of dismissal is violative of Article 311 (1) of the Constitution and is, therefore, invalid and is liable to be struck down.
Mr. Sharma, on behalf of the respondent, submits that there is no violation of Article 311 (1) of the Constitu tion.
The appointing authority for a post held by the appellant in the State of Punjab is the Financial Commis sioner (Revenue).
He submits that the appointing authority of the appellant before his integration into the State of Punjab does not come into the picture.
He adds that this submission of his is in consonance with the provisions of section 116 of the (brief ly the Act).
We may, therefore, read section 116 of the Act: "116(1) Every person who immediately before the appointed day is holding or discharging the duties of any post or office in connection with the affairs of the Union or of an existing State in any area which on that day falls within another existing State or a new Part A State or a Part C State shall, except where by virtue or in consequence of the provisions of this Act such post or office ceases to exist on that day, continue to hold the same post or office in the other existing State or new Part A State or Part C State in which such area is included on that day, and shall be deemed as from that day to have been duly appointed to such post or office by the Government of, or other appropriate authority in, such State, or by the Central Government or other appropriate authority in such Part C State, as the case may be 961 (2) Nothing in this section shall be deemed to prevent a competent authority, after the appointed day, from passing in relation to any such person any order affecting his continuance in such post or office".
Mr. Sharma submits, relying upon the provisions of section 116(1), that since the appointing authority for an Assistant in the State of Punjab is the Financial Commissioner (Revenue) it follows that he is the appropriate authority under section 116(1) to impose the penalty of dismissal.
This submission follows from what the High Court accepted in the impugned judgment in the following words: "Our attention has not been drawn on behalf of the learned counsel for the respond ent to any rule according to which the Gover nor of Punjab, as is contended, is the proper authority for the appointment of Assistants.
Indeed, it is not disputed that if the plain tiff had been appointed as Assistant in the State of Punjab, then the Financial Commis sioner (Revenue) would have been the appropri ate authority competent to enquire into the petitioner 's conduct and impose the penalty of dismissal; in other words, in that case, the appointing authority could not have been higher in rank than the Financial Commissioner (Revenue).
It is certainly not the plain tiffs respondent 's case that appropriate authority for appointing Assistants in the State of Punjab is the Governor".
We are unable to appreciate the above line of reasoning of the High Court.
Section 116(1) is very clear.
To concretise the appellant 's case in terms of section 116(1), it is sufficient to state that the appellant who, immediate ly before the appointed day, was holding the post of an Assistant in the former State of Pepsu, shall continue to hold the same post in the new State of Punjab and shall be deemed as from that day to have beer/duly appointed to such post by the Government of Punjab.
We are not concerned in the instant case about the appointment being deemed to be made by " 'other appropriate authority" in the State of Punjab since the appellant had been appointed by the Rajpra mukh of Pepsu which is equivalent to the State Government of Pepsu and the coordinate authority in the new State of Punjab is the Governor of Punjab.
The argument that in the new State of Punjab the Financial Commissioner (Revenue) is the appropriate authority for appointing Assistants is absolutely irrelevant in the context of section 116(1) which enables the status quo ante to continue except where the post ceases to exist under the provisions of the Act.
It is also important to bear in mind the provisions of section 115(7) of the Act where under the proviso thereto "the conditions of service applicable immediately before the appointed day to the case of any person referred to in sub section (1) or sub section (2) shall not be varied to his disadvantage except with the previous approval of the Cen tral Government".
One of the conditions of service of the appellant was that having been appointed by the State Government of Pepsu he could be only dismissed by the State Government of Pepsu if he had continued there.
962 Under section 116 when he is integrated in the new State of Punjab he carries with him 'that condition of service with regard to his termination of employment and it cannot be.
varied to his disadvantage, under section 115(7) of the Act except with the previous approval of the Central Gov ernment.
(See Takhatray Shivdatray Mankad vs State of Gujarat(1)and Bholanath J. Thakar vs The State of Saurashtra(2).
No such approval of the Central Government in the instant case is produced before us.
It is, there fore, clear that an authority subordinate to the Governor of Punjab was not competent to pass the order of dismissal of the appellant.
Mr. Sharma submits that the Punjab Financial Commis sioner 's Office (State Service Class III) Rules, 1957, are applicable in the instant case.
Therefore, under rule 4 thereof the Financial Commissioner is the appointing author ity for Assistants, the category to: which the appellant belongs.
He adds that even though these Rules may be disad vantageous to the appellant he cannot complain on account of the approval of these Rules by the Central Government under section 115(7) of the Act.
Mr. Sharma submits that these Rules received the approval of the Central Government as will appear from the general circular dated May 11, 1957, to all the State Governments.
He further submits that in N. Raghavendra Rao vs Deputy Commissioner,South Kanara, Mangalore(a) and in a recent decision in Mohammad Shujat Ali & Ors.
vs Union of India & Ors. etc.
,(4) this Court referred to that circular of May 11, 1957, and held that that circular amounted to general approval under the proviso to section 115(7) of the Act.
We are, however, unable to see how this memorandum of May 11, 1957 can be called in aid as 'previous approval ' under section 115(7) of the Act when the Punjab Financial Commissioner 's Office (State Service.
Class III).
Rules, 1957 were already promul gated on February 28, 1957.
Approval under section 115(7) is previous approval and not subsequent ratification.
The above decisions, therefore, do not come to the aid of the respondent.
Mr. Sharma also drew our attention to a decision of this Court in Rajvi Amar Singh vs The State of Rajasthan(5) which is clearly diStinguishable on facts.
This Court was not called upon in that case to consider the provisions of the State Reorganisation Act.
Our attention has been drawn by the appellant to.
an unreported judgment of this Court in Mysore State and Road Transport Corporation, etc.
vs Mirja Khasim Beg & Anr.
etc.(6) pronounced on December 1, 1976.
This Court had to deal with a similar question although appertaining to: the "competent authority" under section 116(2) of the Act in the background of Article 311(1) of the Constitution.
The following passage from that decision will make the. point clear: (1) ; (2) A.I.R. 1954 S.C. 680.
(3) ; (4) ; (5) [1958] S.C.R.1013.
(6) C.A.S. Nos.
1601 1609 & 2402 2405 of 1968 dated 1 12 1976.
963 "In the instant cases, the first re spondents were undeniably appointed by the Superintendent of the Traffic Department of the erstwhile State of Hyderabad who was the head of the Road Transport Department of that State.
On the coming into force of the , on November 1, 1956, they were to be deemed by virtue of sub section (1) of section 116 of the to.
have been appointed with effect from that date to the posts held by them on that date by the appropriate au thority in the new State of Mysore which could not in the context mean an authority other than the one equivalent to or coordinate in rank with the aforesaid authority in the erstwhile State of Hyderabad.
The authority equivalent to or coordinate in rank with the aforesaid authority on the relevant date being the General Manager of the Mysore Government Road Transport Department according to.
the appellants ' own admission as contained in answer to the aforesaid interrogatories served on them by the first respondents, he alone could be considered to be the 'compe tent authority ' in terms of sub section (2) of section 116 of the .
The fact that there was no post of Superintendent of the Traffic in the Mysore.
Government Road Transport Department in the State of Mysore is of no consequence.
Such being the position, the first respondent could not have been dismissed from service by an authority lower or subordinate in rank to the General Manager of the Transport Department as it would tantamount to deprivation of the guarantee enshrined in Article 311 of the Constitution read with section 115(7) of the . ".
In the result both the judgments of the High Court are set aside and the judgments and decrees of the Subordinate Judge, First Class, Patiala, stand restored.
The appeals are allowed with costs.
We are thankful to Mr. Hingorani for his assistance as amicus curiae in these appeals.
P.H.P. Appeals allowed. | The appellant was appointed as a clerk in the Patiala State in 1948.
On the formation of the new State of Punjab in 1956, the appellant was integrated in the service of the new State of Punjab as permanent Assistant.
The appellant overstayed leave and.
therefore, after holding an enquiry the Financial Commissioner.
Punjab dismissed him from serv ice in October, 1959.
Appellant filed two suits, one for a declaration that his dismissal order was void and illegal second for arrears of salary on the basis that the dismissal was illegal.
The trial Court decreed both the suits.
The High Court in appeal reversed the decrees of the trial Court and dismissed the suits.
In the appeals by certificate the appellant contended that the appellant was confirmed in the State of Patiala by the order of the Raj Pramukh.
Before its integration he was governed by the Patiala and East Punjab States Union Civil Services (Punishment and Appeal) Rules 1953 which were made in exercise of powers conferred by proviso to article 309 of the Constitution.
By a notification of the Punjab Govern ment dated 9 2 1957 the said 1953 Rules were made applicable to the corresponding services from 1st November, 1956 on wards till further orders in the new State of Punjab.
Under the 1953 Rules, the State Government was the appropriate authority for dismissing members of Class Iii and IV.
Under section 2(46) of the Pepsu General Clauses Act, 1953.
State Government means the Rat Pramukh.
The appellant, therefore, contended that he cannot be removed from service by any authority subordinate to the Governor of Punjab and since the Financial Commissioner is an authority subordinate to the Governor.
he was not competent to pass the order of dismissal.
The respondent contended that the appointing authority for the post held by the appellant in the State of Punjab is the Financial Commissioner and, therefore.
he is the appro priate authority under section 116(1 ) of the States Reorganisa tion Act, 1956 to impose the penalty of dismissal.
Second ly, in the present case the Punjab Financial Commissioner 's Office (State Services Class III) Rules.
1957, apply.
Although the said rules are more disadvantageous to the appellant since they have received the approval of the Central Government by the General Circular dated 11 5 1957, the appellant was rightly dismissed by the Financial Commis sioner.
Allowing the appeals.
HELD: 1.
Section 116(1) merely provides that the appel lant shall continue to hold the same post in the new State of Punjab and shall be deemed to have been duly appointed to such post by the Government of Punjab.
The fact that in the new State .of
Punjab the Financial Commissioner is the appropriate authority for appointing Assistants is absolute ly irrelevant.
Under section 115(7) of the States Reorganisation Act the conditions of service applicable to 957 a civil servant immediately before the appointed day cannot be varied to his disadvantage except with the previous approval of the Central Government.
One of the condition of service of the appellant on the appointed day was that since he was appointed by the State Government of Pepsu he could only be dismissed by the State Government of Pepsu if he had continued there.
[961 H, 962 A] 2.
The Memorandum of 11 5 1957 cannot be called in aid as previous approval because the Punjab Financial Commis sioner 's Office Rules 1957 were promulgated on 28 2 1957 before the Circular dated 11 5 1957 was issued.
No approval of the Central Government has been produced.
Therefore, authority subordinate to the Governor of Punjab was not competent to pass an order of dismissed of the appellant.
[962 D E] The Court set aside the judgment and decrees of the High Court and restored those of the trial Court.
[963 E] Takhatray Shivdatray Mankad vs State of Gujarat ; and Bholanath J. Thaker vs The State of Saurashtra AIR 1954 SC 680, followed.
N. Raghavendra Rao vs Deputy Commissioner, South Kamara, Mangalore ; and Mohammad Shujat Ali & Ors. etc.
vs Union of India & Ors. etc.
; , distinguished.
Rajvi Amar Singh vs The State of Rajasthan, , distinguished.
Mysore State and Road Transport Corporation etc.
vs Mirja Khasim Ali Beg & Anr.
C. As.
1601 1609 and 2402 2405 of 1968 dt. 1 12 1976 followed. |
: Criminal Appeals Nos. 418 419 and 484 485/76.
(From the Judgment and Order dated 6 7 1976 of the Andhra Pradesh High Court in Writ Petition Nos.
1865, 1870 of 1976 respectively.) P. Parmeswara Rao, G. Narayana Rao and A. K. Ganguli, for the appellants in Crl.
Appeals Nos. 418 419/76 and respondents in Crl.
Appeals Nos. 484 485/76.
R.K. Jain, fox the appellant in Crl.
A. No. 484/76 and respondent in Crl.
A. No. 418/76.
section Lakshminarasu, for the appellant in Crl.
A. No. 485/76 and for respondent in Crl.
A. No. 419/76.
The Judgment of the Court was delivered by GUPTA, J.
These are a group of four appeals from a common Judgment of the Andhra Pradesh High Court partly allowing two writ petitions, writ petition No. 1865 of 1976 filed by A.V. Rao, and writ petition No. 1870 of 1976 made by N.V. Krishnaiah.
The High Court rejected the petition ers ' prayer for setting off under section 428 of the Code of Criminal Procedure, 1973 the periods during which they were in preventive detention against the term of imprisonment imposed on them on their conviction in a sessions trial, but accepted their contention that they were entitled to the benefit of the remission system under the for the period during which they were in jail as under trial prisoners before their conviction: Criminal Ap peals Nos. 418 and 419 of 1976 by State of Andhra Pradesh are directed against the part of the High Court 's Judgment granting the writ petitioners the benefit of the remission system under the treating for this purpose the period of undertrial detention on the 'same footing as a term of imprisonment on conviction.
Appeal No. 418 arises out of writ petition No. 1865 of 1976 filed by A.V. Rao and Appeal No. 419 is from writ petition No. 1870 of 1976 made by N.V. Krishnaiah.
The writ petitioners have also filed appeals against the part of the.
Judgment disallowing their prayer for set off under section 428 of the Code of Criminal Procedure.
Criminal Appeals Nos.
484 and 485 of 1976 are by A.V. Rao and N.V. Krishnaiah respectively.
All the four appeals are on certificate of fitness granted by the High Court.
The relevant facts are as follows.
A.V. Rao, appel lant in appeal 484 of 1976 and respondent in appeal 418 of 1976, was in detention under the Preventive Detention Act when on December 18, 1969 a first information report was filed naming him among others as an accused in a case involving offences under section 121A and 120B read with section 395, and section 120B read with section 447 of the Indian Penal Code, 'which gave rise to sessions cases Nos. 106 of 1970 and 6 of 1971 on the of the Additional Sessions Judge, Hyderabad.
The detention order under 9 the preventive detention law was revoked by the State Gov ernment on April 11, 1970 and Rao was released on the next day, April 12.
He was then produced before the magistrate in connection with the sessions cases on April 13, 1970; there is some doubt about this date because the record at some places mentions the date as April 18, but the discrepancy is not of any significance on the questions arising for decision in these appeals.
On April 10, 1972 Rao. was convicted along with others and sentenced to various terms of imprisonment for the offences charged against him; the maximum sentence was rigorous imprisonment for four years.
The sentences were directed to run con currently.
His appeal against the order of conviction was.
dismissed by the High Court on November 28, 1975.
He filed writ petition 1865 of 1976 asking for an order on the Government of Andhra Pradesh to set off under section 428 of the Code of Criminal Procedure, 1973 the time between December 19, 1969 and April 13, 1970 against his term of imprisonment treating the said period as the period of detention undergone by him as undertrial prisoner, and to take into account the entire period during which he was in detention for the purpose of remission of his sentence under the .
The petitioner further claimed that had he been free at the time when the F.I.R. was lodged on Decem ber 18, 1969, he would have surrendered immediately and would have been produced before the court for remand on the next day as some of the co accused in the case had been it was submitted that if the "concerned authority" who could but did not "take immediate and necessary steps to produce the petitioner" before the magistrate, the petition er should not be made to suffer.
The facts of N.V. Krishnaiah"s case are similar.
Krish naiah, appellant in appeal No. 485 and respondent in appeal No. 419, was also an accused in the sessions cases 106 of 1970 and 6 of 1971 with A.V. Rao and others.
lie however was not in detention when the F.I.R. was lodged.
He was arrested in connection with the sessions cases on December 19, 1969 and was in detention on remand from December 21, 1969 to April 9, 1972.
He was also convicted by the Addi tional Sessions Judge on April 10, 1972 and the maximum sentence in his case too was rigorous imprisonment for four years.
He also preferred an appeal to the High Court against the order of conviction.
The High Court granted him bail and he was released on bail on April 29, 1972.
He was arrested under the on June 26, 1975.
The High Court dismissed the appeal on November 28, 1975.
A warrant of arrest issued by the Additional 'Sessions Judge on December 1, 1975 was served on him on December 30, 1975, on which date the detention order under the was also revoked.
On these Krishnaiah in his writ petition sought an order on the State of Andhra Pradesh to treat the "period from June 26 1975 to November 28, 1975 as remand period" and to set off under section 428 of the Code of Criminal Proce dure this period during which he was under preventive deten tion, against the term of imprisonment imposed on him on conviction in the sessions cases.
It was also contended that the warrant issued by the Additional Sessions judge on December 1, 1975 should have been served on him immediately, 10 that it was no fault of his that "the concerned authority" chose to serve the warrant on December 30, 1975, and that during this period of one month he should be deemed to have been serving the sentence imposed on him.
, A further prayer was made that the entire period during which he was under detention be taken into account for remission of his sentence under the , The question for consideration in appeals 418 and 419 of 1976, preferred by the State of Andhra Pradesh is, whether the period of detention undergone by the two writ petition ers in connection with the sessions cases before their conviction could be treated as a part of the period of imprisonment on conviction so as to entitle them to remis sion of their sentences under the .
The , as its preamble shows.
, is an Act to "amend the law relating to prisons" and to provide rules for the regula tion of such prisons Section 3(5) of the Act defines "remission system" as the "rules for the time being in force regulating the award of marks to, and the consequent short ening of sentences of, prisoners in jail".
Section 59 of the provides that the State Government may make rules consistent with the Act in respect of the various matters specified in clauses (1) to (28) of the section; under clause (5) of section 59 the State Government is authorised to make rules "for the award of marks and the shortening of sentences".
In their writ petitions both the petitioners speak of remission under the "prison rules" without specifying any rule under which relief is sought.
The High Court viewed the question in this way: Sec.
428 Crl.
P.C. clearly ordains that the remand detention shall be set off against the term of imprisonment imposed on the accused person on conviction.
The section further clarifies that the liability of such person to undergo, imprisonment on such conviction shall be restricted to the remainder, if any, of the term of imprisonment imposed on him.
In other words, the statute equates the under trial detention or remand detention with imprison ment on conviction.
The provision, in so many words, treats the remand ' detention as part of the period of imprisonment after conviction.
If remissions are given for imprisonment after conviction, there is no plausible or understandable reason.
, why it should be denied to the remand period when the statute equates both of them." The High Court accordingly held that all the remissions that are available or permissible to the two petitioners in regard to imprison ment on conviction are available to them oven in respect of the remand period and directed the authorities "to work out these remis sion and give the benefit to the petitioners".
We do not consider the view taken by the High Court on this point as correct.
Section 428 of the Code of Criminal Procedure.
1973 is in these terms: Period of detention undergone by the accused to be set off against the sentence of imprisonment. "428.
Where an accused person has, on conviction, been sentenced to imprisonment for a term, the period of deten 11 tion, if any, undergone by him during the investigation, inquiry or trial of the same case and before the date of such conviction, Shall be set off against the term of imprison ment imposed on him on such conviction, and the liability of such person to undergo im prisonment on such conviction shall be re stricted to the remainder, if any, of the term of imprisonment imposed on him." Section 428 provides that the period of detention of an accused as an undertrial prisoner shall be set off against the term of imprisonment imposed on him on conviction.
The section only provides for a "set off", it does not equate an "undertrial detention or remand detention with imprisonment on conviction".
The provision as to set off expresses a legislative policy, this does not mean that it does away with the difference in the two kinds of detention and puts them on the same footing for all purposes.
The basis of the High Court 's decision does not, therefore, seem to be right.
Apart from that, the does not confer any right upon the prisoner to claim remission.
It was pointed out in G.V. Godse vs State of Maharashtra(1) that" . the does not confer on any authority a power to commute or remit sentences, it provides only for the regula tion of prisons and for the treatment of prisoners confined therein.
Section 59 of the confers a power on the State Government to make rules, inter alia, for rewards for good conduct.
Therefore, the rules made under the Act should be construed within the scope of the ambit of the Act.
" It was explained that the rules under the do not substitute a lesser sentence for a sentence awarded by the court.
The rules enable a prisoner to earn remis sions but, as held in G.V. Godse 's case, the question of remission is exclusively within the province of the appro priate Government.
If the Government decides to remit the punishment to which a person has been sentenced, the remis sion may be worked out according .to the rules framed under the .
This being the position, appeals 418 and 419 of 1976 must succeed.
The remaining two appeals, 4.84 and 485 of 1976, preferred respectively by Rao and Krishnaiah, may now be taken up for consideration.
The claim in both these appeals is that the period of detention undergone by each appellant under the preventive detention law should be set off under section 428 of the Code Criminal Procedure against the term of imprison ment imposed on them on their conviction in the aforesaid sessions cases.
The argument is that the 'expression "period of detention" in section 428 includes detention under the Preventive Detention Act or the .
It is true.
that the section speaks of the "period of detention" undergone by an accused person, but it expressly says that the detention mentioned refers to the detention during the investigation, enquiry or trial of the case in which the accused person has been convicted.
The section makes it clear that the period of detention which it allows to be set off against the term of imprison ment (1) ; , 446.
12 imposed on the accused on conviction must be during the investigation, enquiry or trial in connection with the "same ease" in which he has been convicted.
We therefore agree with the High Court that the period during which the writ petitioners were in preventive detention cannot be set off under section 428 against the term of imprisonment imposed on them.
There is however substance in the other point raised by the writ petitioners regarding the computation of the period during which the writ petitioner in each ease should be held to have suffered imprisonment on conviction.
In A.V. Rao 's case (W.P. 1865/76), he was already in detention under the 2Preventive Detention Act when the First Information Report was lodged on December 18, 1969 in connection with the sessions eases.
Some of the co accused in these cases were arrested and produced before the magistrate for remand on December 19, 1969, but Rao was produced before the magis trate sometime in April, 1970 after he was released from preventive detention.
It was argued that he also could have been produced before the magistrate for remand on December 19, 1970.
On behalf of the respondent, State of Andhra Pradesh, it was contended that as ' Rao was already in deten tion under the Preventive Detention Act, it was not possible to produce him before the magistrate for remand until the period of preventive detention was over, we do not find any justification in law for the position taken up by the State.
Rao being already in custody, the authorities could have easily produced him before the magistrate when the First Information Report was lodged.
Nothing has been pointed out to us either in the preventive detention law or the Code of Criminal Procedure which can be said to be a bar to such a course.
That being so we think that the claim that the entire period from December 19, .1969, when many of the co accused were produced before the magistrate to April 18, 1970 should be treated as part of the period during which Rao was under detention as an under trial prisoner, must be accepted as valid.
A.V. Rao 's Appeal No. 484 of 1976 is allowed to this extent.
In the case of N.V. Krishnaiah, the Additional Sessions Judge, Hyderabad, issued a warrant on December 1, 1975 after his appeal against conviction was dismissed by the High Court on November 28, 1975.
The warrant, however, was.
served on him only on December 30, 1975 on which date the order under maintenance of Internal Security Act was revoked.
It is claimed ' that the warrant could have been served immediately on that dismissal Of the appeal on November 28, 1975 and the accused was not responsible if the authority concerned chose to serve the warrant on him on December 30, 1975.
In this case also, the argument on behalf of the State of Andhra Pradesh is that it was not possible to forward Krishnaiah to jail consequent on his conviction in the session cases until the period of his detention under the was over.
We do not see why that should be so.
Section 418 requires the court passing the sentence .to forthwith for ward a warrant to the jail or other place in which he (accused) is, or is to be, confined, and, unless the ,ac cused is already confined in such jail or other 13 place, shall forward him to such jail or other place, with the warrant".
Section 418 thus does not exclude a case where the warrant concerns an accused who is already in detention On behalf of the State it was sought to be argued that if the warrant was served on Krishnaiah immediately after his conviction was upheld by the High Court in appeal, the position would have been anomalous, because then he would have been in detention both under the preventive detention law and as a convicted accused in a criminal case.
We have not been referred to any provision either in the Code of Criminal Procedure or in the Maintenance of Internal Securi ty Act which requires the service of the warrant to be delayed until after the period of preventive detention is over.
As regards the alleged anomaly of a man having to suffer two kinds of detention at the same time, one preven tive and the other punitive, we do not find this to be a valid objection.
The position is not different from the case where a man is sentenced on different counts to a term of rigorous imprisonment and another term of simple impris onment, and the sentences are directed to run concurrently.
Counsel for the State referred us to the decision in Harad han Saha and another vs The State of West Bengal & others,(1) in support of his contention.
In our opinion this case does not help him at all.
What was held in this case was, inter alia that the nature of preventive detention is entirely different from punitive detention, and there is no bar to a man being detained under the preventive deten tion law when a criminal proceeding for the offences on which the preventive detention is based is pending.
If that be so, there can be no bar to the preventive and punitive detentions continuing simultaneously.
We therefore allow appeal No. 485 of 1976 to the extent that Krishnaiah should be taken to have serving the sentence imposed on him from December 1, 1975.
In the result the criminal appeals Nos. 418 and 419 of 1976 by the State of Andhra Pradesh are allowed, and the appeals Nos. 484 and 485 of 1976 preferred respectively by A.V. Rao and N.V. Krishnaiah are allowed to the extent indicated above.
M.R. Appeals al lowed. | The cross appeals arose from two writ petitions filed by A.V. Rao and N. V. Krishnaiah in the High Court.
A.V. Rao 's case was that while he was already in preventive detention.
on December 18.
a First Information Report was lodged against him in connection with some Sessions cases.
Some of the co accused in ' these cases were produced before the Magistrate on December 19, 1969 for remand, but Rao was produced before him only in mid April, 1970 after his release from preventive detention.
The accused in the Sessions cases were thereafter convicted and sentenced, and Rao.
filed a writ petition asking for an order on the State Government to set off u/s , the time between December 19, 1969 and April 13, 1970, against his term of imprisonment, treating the said period as the period of detention undergone by him as an undertrial prisoner, and also to take the same into account, for the purpose of remission of his sentence under the Prisons Act.
Rao con tended that he could have been produced before the Magistrate for remand on December 19, 1969.
The State Government contended that Rao could not be produced before the Magistrate for remand until the period of preventive detention was over.
In the case of Krishnaiah, he was in detention under the MISA, when his appeal against conviction in a criminal case was dismissed by the High Court, and a warrant was issued against him on December 1, 1975, but was served on him only on December 30, 1975, when the order against him under the MISA was revoked.
The High Court rejected the petitioners ' contention regarding set off under section 428 Cr.
P.C. but accepted their contention regarding the benefit of remission.
Allowing the appeals by the State, and partly allowing the appeals by the original writ petitioners, the Court, HELD: (1) Section 428 of the Cr. P.C., 1973 only pro vides that the period of detention of an accused as under trial prisoner shall be set off against the term of impris onment imposed on him on conviction.
It does not equate an "undertrial detention or remand detention with imprisonment on conviction" or do away with the difference in the two kinds of detention and put them on the .same footing for all purposes.
[11B C] G.V. Godse vs State of Maharashtra, ; ; 446, referred to.
(2) section 428 expressly says that the "period of detention" mentioned, refers to the detention during the investigation, enquiry or trial in connection with the "same case" in which the accused person has been convicted.
The period during which the writ petitioners were in preventive detention cannot be set off under section 428 against the term of imprisonment imposed on them.
[11G, 12 A B] (3) Section 418 does not exclude a case where the war rant concerns an accused who is already in detention.
We have not been referred to any provision either in the Cr.
P.C. or in the MISA which requires the service of the war rant to be delayed until after the period of preventive detention is over.
There is no bar to the preventive and punitive detention continuing simultaneously.
[13A B, C] 2 240SCI/77 8 Haradhan Saha & Anr.
vs State of West Bengal & Ors.
; , referred to. |
Civil Appeals Nos. 2208, 2209 of 1968.
From the Judgment and Decree dated the 10th/llth August.
1965 of the Bombay High Court (Nagpur Bench) in First Appeal Nos. 120 and 123 of 1965.
S.T. Desai, D.N. Mishra and B.N. Mohta, for the appellant M.N. Phadke, .4.
G. Ratnaparkhi, for respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The two appeals, measured by their legal merits or factual dimensions, may.
not justify their longevity from June 23, 1949 to February 1977 the former being the date of birth of the suit and the later the termi nation, at long last, of the cases in this Court.
The subject matter is a relatively small money claim which, perhaps, is less than the amount each side has spent on the forensic scrimmage.
Before, we narrate the facts and discuss the law, we permit ourselves a pensive reflection about our processual justice.
If we (law makers and law yers) tarry any longer to forge a speedy and radical juris prudence of remedies in action, the long quest for the fruits of rights may tempt suitors into the traditional quagmire of processual legalistics where from extrication may prove an expensive futility.
The story which hopefully comes to.
a close with this judgment, among many others like this, bears testimony to the crying need for serious reform not oblique by pass of the court system by an aware legislature, lest the considerable social cost of pursuing judicial remedies stultify and disenchant seekers of legal justice.
The facts, when unfolded, will validate this obiter intended to alert the law maker.
The High Court, thanks to the then rule of valuation under Art, 133 (1)(a) of the Constitution, granted a certif icate of fitness.
The appellant plaintiff, as kartha of a joint Hindu family, Was running a business in the name and style of Jasraj Inder Singh with two shops, 975 one in Khamgaon and the other in Bombay.
(The trade name for the Bombay Shop was slightly different.) The respondent defendant had been having dealings with the plaintiff at both places between October 1947 and May 1948.
The accounts between the parties fluctuated from time to time, since deposits, advances, withdrawals and entrustment of silver, castor, cotton and the like for sale as agents and crediting the prices in the accounts were a running feature of the mutual dealings.
The plaintiff isolated the transactions which took place in Khamgaon and brought a suit claiming a sum of Rs. 11,401 7 9 which represented the net balance due on the Khamgaon khata to him from the defendant on May 12, 1948.
Interest was also demanded on an alleged agreed rate.
It is noteworthy that the plaintiff 's initial folly as Shri Desai, for the appellant frankly admitted, was in excluding from the suit claim the amounts due one way or the other from the Bombay branch of the business.
The contracting parties were identical, the dealings were simi lar and on any fair basis either could get from the other the net amount legally due from both the shops together.
But legal sense and commonsense were abandoned by the plaintiff out of the oblique motive of claiming a larger sum than would be due in case a joint balance was struck.
This dubious device, as will be seen presently, has backlashed on the plaintiff whose disaster in the High Court has been largely courted by this motivated cleverness.
To revert to the litigative narrative, the defendant urged in defence that the demand was untenable since he bad deposited six bars of silver with the Khamgaon shop of the plaintiff to be sold through his Bombay branch and if the sale proceeds thereof were taken into account in the Khamgaon khata a larger sum would be due to him.
(We bypass, for the time being, the fight over this claim being a set off under order VIII, rule 6 C.P.C., or a counter claim in the nature of a substantive relief for the balance).
This counter claim was met by the plaintiff in an additional pleading wherein he urged that the sale of silver bars was a matter for the Bombay shop and should not be mixed up with the Khamgaon dealings which were the basis of the action.
What falls for regrettable comment is that even at this stage the plaintiff did not invoke the obvious argument that the Khamgaon and the Bombay shops both belonged to the same owner and since the transactions were between the same parties (in differ ent places though) when a suit for (or on) final accounts were filed, all the items in the twin places should figure in the resultant decree.
If this straight forward plea were taken the facts tend to show the plaintiff would still have got a decree, may be for a lesser sum.
Oftentimes, obdurate legal obscruantism of litigants, leads to protraction of proceedings, projection of intricate procedural punctilios and the phyrric processual victory forensically won being a potent source of perverting truth, draining resources and undoing justice.
This sombre scenario of the case we are deciding proves how on account of the correct curial ap proach being blinded by the cantankerousness of the plain tiff, conveniently concurred in by the other side, revision and appeal, remand and appeal, and attendant decades of delay and disproportionate litigative spending by both and two friendly businessmen, thanks to this feud, turning into foes, followed at once a disaster to both and detriment to the business community.
And some pre trial conciliation activism by the court at an 976 early stage might well have sorted out the dispute, bettered their relations and pre empted this cock fight.
Doing justice is a noble behest which blesses all; deciding the lis within a judicative pyramid, provocative of appeals and revisions, bleeds both and unwittingly incites the.
bitter persistence in the struggle to win (and lose 1).
We are courts of justice guided by law and the signature tune of the indicature is Fiat Justitia.
We gently suggested, in this spirit, whether the parties would be disposed to com pose their quarrel.
Counsel as often happens, constructive ly helped, but the purchase of peace at this late stage was difficult and we gave up.
Of course, adjudication on the .law and the facts cannot and shall not be influenced by this extra curial excursion.
We pick up the story of the suit where we left it.
In the dog fight that followed, a question of court fee was raised and decided.
That was taken up to the High Court and returned.
A preliminary decree for accounts of the Bombay khata was passed and that too leapt to the High Court re sulting in a remand, fresh issues and so on.
Then a decree was passed and both sides challenged it in appeal and crossobjections and the last lap of the tiring race is this court where the vanquished plaintiff is the appellant.
We proceed to decode the justice and the law of the cause.
We may state that the plaintiff 's obstinate attitude in treating the Bombay shop and Khamgaon shop as two different persons each being entitled to sue the defendant without reference to the amounts due to the latter from the former in inter connected business dealings is a legal fallacy and cute perversity.
However we may repeat that the defendant also proceeded on that 'shop autonomy ' theory but only urged that the silver bars were wrongfully omitted from the Khamgaon khata.
Shops are not persons although suits may be filed in trade names.
The trial court took a commonsense view in commingling the business account of the same par ties.
This was good law.
A plurality of shops owned by the same person does not proliferate into many shop persons.
At an intermediate stage of the many involved interlocutory skirmishes, the plaintiff did allege: "The alleged silver bars were sold by the defendant Suwalal through the said Bombay shop and naturally the sale proceeds of that quantity of silver are credited in the defend ant 's Khata in the Bombay shop.
The plain tiff, therefore in reply to the defendant 's claim of Rs. 17000/ has to file the extracts of accounts of the Bombay shop to put the full picture of transactions before the court.
As the Bombay shop shows the balance of Rs. 4535 12 0 as due to the defendants, the said fact has been so mentioned by the plaintiff in his statement.
" In passing, we may mention that the counter claim led to a demand for court fee and the High Court affirmed this order but reduced the sum on which such fee was payable.
Later, issues were framed by the trial Court which reflected the integrated nature of the dealings between the two par ties in the shops at Khamgaon and Bombay.
The 977 learned District Judge, not obsessed by the wrong headed pleadings, took the view that the shops, though located at different places, were owned by the same family and the claims were so inter connected that, in equity and law, set off was permissible and the net sum due to the plaintiff less than what he had sued for should be de creed.
We may mention the relevant issues framed at the first round even here since we may have to refer to them later when dealing with a supportive submission of Shri Phadke for the defendant.
Issues 5 and 7 may be reproduced here: "5.
Whether the Bombay & Khamgaon shops owned by plaintiff 's partners are so connect ed with each other that a composite account of the entries in the two shops can be made by the Defendants ? * * * * 7.
Whether on making an account of the two shops of the Plaintiff of Bombay and Khamgaon, the Defendants are entitled to a set off thereafter to a sum of : (a) Rs. 17,000/ as claimed by the Defendants or to a set off.
(b) Rs. 4,535 12 0 as stated by the Plaintiff ?" Later, amended pleadings led to amended issues of which issues 4 to 6 are meaningful and are set out below with the findings thereon; "4.
Whether the Bombay and Khamgaon shops owned by plaintiff 's partners are so connected with each other that a composite account of the entries in two shops can be made by the defendants ? Yes 5.
(a) Whether a sum of Rs. 44,697/10 is debited to the defendants in the account of the Bombay shop ? Yes .
(b) Are these entries proper and correct ? Yes.
(c) And in time ? Yes.
Whether on making an account of the two shops of the plaintiff of Bombay and Khamgaon the defendants are entitled to a set off and thereafter to a sum of (a) Rs. 17,000/ as claimed by the defendants or to a set off No.
(b) Rs. 4,535/12/ as stated by the plaintiff ? Yes.
The plain fact emerges that the two parties were having dealings with each other, that the dealings in Khamgaon and Bombay were inter related and not totally different transac tions, dissociated in nature and divorced in period.
The trial judge treated the totality of transactions as a com posie account and the suit as one on accounts.
He ' granted a decree on these terms 978 "The Plaintiff shall render an account of the Bombay shop to the defendant, who shall be entitled to falsify and surcharge.
A preliminary decree for accounts under order 20, rule 16 CPC shall be drawn up.
After making an account and the necessary adjust ment, the eventual liability inter se shall be determined.
Costs shall abide the result.
" The plaintiff appealed and the defendant filed cross objec tions.
After a 'study of O.8, r. 6 CPC, the High Court felt that the Bombay accounts should not have been gone into and the defendant 's claim by way of set off alone was available for adjudication.
Since it had been held that the silver bars were an item in the Khamgaon shop accounts, the direc tion for rendition of the Bombay account was illegal.
The Court observed: "The learned lower Court was thus in error in converting the claim of set off into a claim for rendering accounts by the plain tiff to the defendants in respect of the deal ings made in the Bombay shop.
The lower Court was bound in terms of Order 8 Rule 6, to treat this claim of set off as a money claim in respect of the ascertained amount and to find whether such amount was due to the defendants from plaintiff.
If such amount was found due to the defendants from the plaintiff, then the defendants would be entitled to set off that amount as against the claim of the plaintiff.
The decree as passed by the learned lower Court will, therefore, have to be set aside.
It is necessary for the trial Court to decide as to, what amount was due to the defendants from the plaintiff.
The issue was framed and parties have led evidence.
The tower Court shall decide the issues left undecided for final decree.
The learned lower Court will decide whether it is proved on the facts that the defendants have to recover Rs. 17,000/ from the plaintiff, and if so found, will adjust the eventual liability inter se, and if it is found that any of the parties has to recover any amount from the other, a decree should be accordingly passed.
The case is, therefore, sent back to the trial Court who will decide as to what amount is due to the defendants from the plaintiff.
Thereafter whatever amount is found due to the defendants shall be adjusted towards the proved claim of the plaintiff in respect of the deposits in the Khamgaon shop.
The Court shall pass a decree in favour of the party in whose favour the.
balance will be found due.
" It is true that the High Court 's observations inhibited the Bombay accounts being generally reopened but when the case was remanded for fresh decision, the trial Court, apparently pressed by the injustice of amputating the composite deal ings, went on to hold that while the plaintiff was right in his demand vis a vis the Khamgaon Khata, the defendant was entitled to a sum of Rs. 4,535/12/ from the Bombay accounts and awarded to the plaintiff a decree for the net balance of 979 Rs. 7,464/4/ .
This he did in purported compliance with the High Court 's direction.
He was bound by it and to act contrary to a higher court 's order is to be subversive of the discipline that the rule of law enjoys in our hierarchi cal justice system.
The trial Judge, in recording findings on all the issues, did a comprehensive investigation of the Bombay accounts since the silver bars, although entrusted to the Khamgaon shop,. were sold in Bombay and rightly credited in the Bombay Khata.
To pick out a single true item which had been inextrica bly got enmeshed in the skein of entries and cross entries was to tear up the fabric of the whole truth.
In a finer sense, harmony is the beautiful totality of a whole sequence of notes and the concord of sweet sounds is illtuned into disjointed discord if a note Or two is unmusically cut and played.
Truth, ' like song, is whole and half truth can be noise: Justice is truth, is beauty and the strategy of healing injustice is discovery of the whole truth and harmo nising human relations.
Law 's finest hour is not in medi tating on abstractions but in being the delivery agent of full fairness.
This divagation is justified by the need to remind ourselves that the grammar of justice according to law is not little litigative solution of isolated problems but resolving the conflict in its wider bearings.
Let us pick up the threads of the litigation.
Even the interrogatories served and the answers elicited made it clear that while there were two shops in two different venues, the dealings between the plaintiff and the defendant were closely connected rather, integrated.
That furnished the justification for the trial Judge to examine the Bombay accounts between the parties and he came to the factual conclusion: 'I see absolutely no reason to doubt the cor rectness of any of the entries in these extracts of plain tiffs account book (exht.
P 23).
I answer issues 5 (a) and (b) in the affirmative.
exhibit P. 23 contains on the credit side the sale proceeds of defendant 's silver which was sold in Bombay.
A plea had been feebly raised by the defendants that some of the items in the Bombay account were barred by limitation and the plaintiff could not claim credit for them.
This plea was also examined by the trial Court and negatived with the observation: 'I hold that in view of the credit and debit entries in exhibit P. 23 all the debit entries were within time at the material period.
I answer issue 5(c) in the affirmative '.
Thus there was no denial of fairness in the trial be cause the Bombay accounts in their entirety were put in issue, and focused on by both sides in the evidence followed by appropriate findings.
The upshot of this process was, in the language of the trial Court: 'Thus all things consid ered plaintiff is entitled to Rs. 12,000/ minus Rs. 4,535/12/ i.e., Rs. 7,464/4/ from the defendants '.
The court denied costs to both since neither came with clean hands.
Both sides were guilty of not playing cricket and, in this game of over reaching each other, the Court 's penal ty is denial of costs.
This rule was adopted by the trial Court.
980 When the case went up in appeal, the High Court harked back to the order of the Nagpur Bench in the same case in a revision filed against the order of payment of court fee for the counter claim.
It is true the High Court had then held that only a specific sum relating to the sale of silver bars was the basis of the counter claim and the entire accounts of the Bombay shop was not at large before the Court.
The High Court referred again to the decree first passed by the trial Court to render an account of the Bombay shop to the defendant on the footing that the accounts in Bombay and Khamgaon were so interconnected as to warrant a composite understanding of the entries in the two shops.
This ap proach of the trial Court in passing a preliminary decree for rendition of accounts was set aside by the High Court in appeal at the first round on the score that the plea the defendant was confined to one of set off under O.8, r. 6 Therefore, argued the High Court, "A mere liability to account cannot be an answer by way of set off to the claim of the plaintiff.
In fact, the defendants in their written statement, claimed by way of set off such ascertained sum of money which, according to, them, was Rs. 17,000/ .
It is because such ascertained sum was claimed by way of set off that the claim was entertained for investigation by the lower Court.
Therefore, the only question that was before the learned lower Court was to find out what amount was due to the plaintiff from the defendants in respect of the deposits of amounts made in the Khamgaon shop and also to find out what amount was due to the defendants from the plaintiff in respect of the silver transactions made in the Bombay shop.
The question of rendering accounts by the plain tiff to the defendants could not arise on the facts of the case.
" The remand order was undoubtedly binding on the lower Court and had directed a limited enquiry and passing of a decree 'in favour of the party in whose favour the balance will be found due '.
The High Court held that after the remand the learned trial Judge had no jurisdiction to look into the Bombay accounts as a whole and on account of the misapprehension of the observations of the remand order an illegal decree had been passed in favour of the plaintiff.
What was the misapprehension about? While directing a remand, the High Court ordered that issue 6 should be decid ed by the trial Court and this issue has been set out earli er by us.
Naturally, the trial Court took the view that the High Court, having ordered an adjudication of issue No. 6, vested it with the jurisdiction to enquire into the Bombay accounts in taro and pass the decree that woe have already indicated, viz., a deduction of the surplus due to the defendant from the Bombay accounts from the amount due to the plaintiff from the defendant according to the Khamgaon accounts.
The arithmetic is not in dispute and, indeed, while both the counsel have taken us through the evidence in the case we are satisfied that if both the Khamgaon and the Bombay accounts had to be gone into, 981 the decree passed was correct both regarding the quantum and on the issue of limitation.
This we affirm because Shri Phadke had feebly pressed before us that in any case his client should be given a fresh opportunity to make out his case regarding the various entries in the Bombay Khatha.
We are not satisfied that the defendant has not had a full say and we are therefore disinclined to accede to this request.
The surviving question before us is whether it was in order for the trial Court to have investigated the accounts in the two shops together as if they were transactions between the same two persons or whether the remand order of the High Court at the first round had lettered the trial Court 's hands in doing justice in this comprehensive way.
The suit is for a sum due on accounts.
The parties are the same.
There are two shops belonging to the same owner.
The return of the income from the two shops, for income tax pur poses, is a consolidated one.
In short, there was only one person who owned two shops and it is wrong to construe the situation as if there were two juristic entities or person al.
Secondly, the defendant, who dealt with the plaintiff in the two shops, was the same person.
He had no dual charac ters to play.
The dealings were either in one or in the other shop.
They were business dealings between two busi nessmen, during the same period, and even inter related, to such an extent that sometimes advances were made from one shop and realisations were made in the other shop.
In short an artificial dissection of these transactions could not square up with the reality of the situation.
Shri Phadke urged that one contract was one transaction and a set of contracts need not be necessarily brought up in the same action between the same parties.
We consider that the true nature of the action here is a suit on accounts for the sum due on striking a balance.
That itself is the cause of action.
Such a suit is not unfamiliar and such a cause of action may be made up of various minor transactions.
Viewed at the micro level each may be a single contract.
But viewed at the macro level as a suit on accounts, it is a single cause of action.
If the present action is one on accounts and if the various entries in the two shops at Khamgaon and Bombay involve transfusion of funds and goods, there is no reason why we should not accept as sound the approach made by the trial Court that the entirety of accounts in the two shops should be viewed as a composite one.
It reduces litigation; it promotes the final financial settlement as between the parties it has the stamp of reali ty.
Otherwise it would be an odd distortion to grant a decree for the plaintiff for, say Rs, 10,000/ on the strength of the Khamgaon accounts while he owes.the defend ants Rs. 50,000/ according to the Bombay accounts.
Order 8, rule 6, CPC deals with a specific situation and does not prevent the Court, Where the facts call for wider relief, from looking into the accounts in both places to do ultimate justice between the parties.
Procedure is the.
handmaid and not the mistress of justice and, in this spirit, the trial Court 's adjudication cannot be faulted.
Be that as it may, in an appeal against the High Court 's finding, the Supreme Court is not bound by what the High Court might have 982 held in its remand order.
It is true that a subordinate court is bound by the direction of the High Court.
It is equally true that the High Court, hearing the matter on a second occasion or any other court of co ordinate authority hearing the matter cannot discard the earlier holding, but a finding in a remand order cannot bind a higher Court when it comes up in appeal before it.
This is the correct view of the law, although Shri Phadke controverted it, without reliance on any authority.
Nor did Shri S T Desai, who asserted this proposition, which we regard as correct, cite any precedent of this Court in support.
However, it tran spires that in Lonankutty vs Thomman(1) this proposition has been affirmed.
Viewed simplistically, the remand order by the High COurt is a finding in an intermediate stage of the same litigation.
When it came to the trial court and esca lated to the High Court, it remained the same litigation.
The appeal before the Supreme Court is from the suit as a whole and, therefore, the entire subject matter is available for adjudication before us.
If, on any other principle of finality statutorily conferred or on account of res judicata attracted by a decision in an allied litigation the matter is concluded, we too are bound in the Supreme Court.
Other wise, the whole lis for the first time comes to this Court and the High Court 's finding at an intermediate stage does not prevent examination of the position of law by this Court.
Intermediate stages of the litigation and orders passed at those stages have a provisional finality.
After discussing various aspects of the matter, Chandrachud J., speaking for the Court in Lonankutty (supra) observed: "The circumstance that the remanding judgment of the High Court was not appealed against, assuming that an appeal lay therefrom, cannot preclude the appellant from challenging the correctness of the view taken by the High Court in that judgment." The contention barred before the High .Court is still available to be canvassed before this Court when it seeks to pronounce finally on the entirely of the suit.
Shri Desai cited before us the decision of the Bombay High Court, in Ratanlal(2), as Fart of his argument.
There in it is laid down that a remand order will not operate as res judicata and preclude the remanding court from reopening it at the subsequent stage of the same continuing proceeding when the law underlying the remand order is differently interpreted by a larger Bench or by the Supreme COurt.
Such an order or finding recorded at the stage of remand happens to be interlocutory and cannot terminate the cause finally so that when the litigation comes up before the remanding court, the previous remand order would ordinarily be conclu sive and binding like any other interlocutory order.
But exceptions there are where a re consideration of such an order is necessitated either by discovery of fresh matter or of unforeseen development subsequent to the order or change of law having retrospective effect.
We do not make any comments on this argument of Shri Desai and leave it at that.
(1) ; (2) 983 The trial Court 's judgment has therefore to be restored.
It accords with justice and with law.
There will thus be a decree in favour of the plaintiff in a sum of Rs. 7,464/4/ .
Even truthful cases urged through unveracious forensic processes must be visited with the punitive curial displeas ure of denial of costs and discretionary interest.
Here the plaintiff sued for a sum of Rs. 12,000/ and gets a decree for less than Rs. 8,000/ .
We deny him costs for the amount decreed in his favour but allow costs for the defendant to the extent he has succeeded (viz., for Rs. 4,535/12/ ).
The equities of the situation are such, especially having regard to the long lapse of time and.
the dubious attitude of the plaintiff and litigative prolixity, that we do not award interest on the amount decreed at all.
P.B.R. Appeal al lowed. | The appellant (Plaintiff) had two shops, one in his village and the other in a city.
The respondent (defendant) had dealings of various kinds with the appellant at both the places.
The plaintiff filed a suit claiming a certain sum representing the net balance due to him from the respondent (defendant) on the village account.
The defendant on the other hand claimed that, had the city account been taken into account, it was he who would be entitled to a larger sum from the plaintiff.
The plaintiff claimed that the accounts of the village and city should not be mixed up.
The trial Court held that, though the shops were located at different places, they were owned by the same person and in equity and law, set off was Permissible and it accordingly granted a decree.
On the plaintiff 's appeal, the High Court held that rendition of city accounts was illegal and remanded the case to the trial Court.
On remand, the trial Court held that while the plaintiff was right in his demand vis a vis the village shop the defendant was entitled to a certain sum from the city account and awarded a decree to the plaintiff m respect of the net balance.
In appeal, the High Court held that after remand the trial Court had no jurisdiction to look into the city accounts as a whole and on account of a misapprehension of the observations of the remand order, an illegal decree had been passed in favour of the plaintiff.
Restoring the trial Court 's order, HELD: The true nature of the action in this case was a suit on account to: the sum due on striking a balance.
That itself was the cause of action.
[981E] 1.
The trial Court 's view that the entirety of account in the two shops could be viewed as a composite one, was sound.
The parties are the same.
There was only one person who owned the two shops and it is wrong to construe the situation as if there were two juristic entities.
The defendant who dealt with the plaintiff in the two shops was the same person.
The dealings were either in one or the other shop.
The artificial dissection of the transactions could not square up with the reality of the situation.
[981C D] In the instant case there was no misapprehension on the part of the trial Court of the observations made by the High Court in its remand order.
While directing remand, the High Court ordered that issue No. 6, namely, whether on making an account of the two shops of the plaintiff the defendants were entitled a set off and thereafter to certain sums, should be decided by the trial Court.
The trial Court natu rally took the view that the High Court having ordered an adjudication of the issue, vested it with jurisdiction to enquire into the city accounts in toto and pass a decree.
If the village and city accounts had to be gone into, the decree passed was correct.
[980G H] 2.
Order 8, rule 6 CPC deals with a specific situation and does not prevent the Court.
where the facts call for wider relief, from looking into the accounts in both places to do ultimate justice between the parties.
[981 H] 974 3.
(a) After remand by the High Court, the subordinate Court is bound by the direction of the High Court, the same High Court hearing the matter on a second occasion or any other Court of co ordinate authority hearing the matter, cannot discard the earlier holding.
Both a finding in a remand order cannot bind a higher Court when it comes in appeal before it. [982A B] (b) The remand order by the High Court is a finding at an interreed are stage of the same litigation.
When it came to the trial Court and escalated to the High Court, it remained the same litigation.
The appeal before the Supreme Court is from the suit as a whole and, therefore, the entire subject matter is available for adjudication before the Supreme Court.
[982C D] (c) The circumstance that the remanding judgment of the High Court was not appealed against, assuming that an appeal lay therefrom, cannot preclude the appellant from challeng ing the correctness of the view taken by the High Court in that judgment.
[982E] Lonankutty vs Thomman ; , followed. |
Appeal No. 284 of 1972.
(From the Judgment and Order dated 3 5 1971 of the Delhi High Court in I.T. Case No. 6 D of 1964) A.K. Sen, V.S. Desai and Bishamber Lal, for the appellant.
G.C. Sharma and S.P. Nayar, for the respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
This is an appeal by special leave direct ed against the Judgment of the Delhi High Court answering in favour of the Revenue a question which was directed to be referred by the Tribunal under section 66(2) of the Indian Income Tax Act, 1922.
The controversy between the parties arises out of an assessment made on the assessee as a Hindu Undivided Family for the assessment year 1948 49, the corre sponding accounting year being the financial year 1947 48.
The assessee was at the material time a Hindu Undivided Family with one Roshan Lal as its manager and karta.
Till June 1947 the assessee was carrying on business in gold and jewellery at Chowk Surjan Singh in Lahore.
In view of the impending partition of India Roshan Lal decided to move out of Lahore and accordingly he transferred a sum of Rs. 12,094/ from the account of the assessee with the Lahore Branch of the Punjab National Bank Ltd. to the New Delhi Branch of that bank in June 1947.
He also transferred from the Lahore 156 Branch of the punjab National Bank Ltd. to the branch of that bank at New Delhi two sums of Rs. 13,000/ and Rs. 6,000/ , the former in his own name and the latter in the name of his wife and obtained fixed deposit receipts for these two amounts from the New Delhi Branch of the Bank in July 1947.
He left Lahore in June 1947 and proceeded to Mussoorie but on his way he stopped at Amritsar for a few days.
He opened an account with the Amritsar Branch of the Imperial Bank of India by depositing a sum of Rs. 300/ with a view to obtaining a locker in the safe deposit vault where he could deposit for sale custody a trunk which he had brought with him from Lahore containing gold ornaments, jewellery and cash.
It seems that a locker was not avail able and hence he deposited the trunk in a sealed condition with the Amritsar Branch of the Imperial Bank of India on 25th june, 1947.
The sealed trunk, according to the asses see, contained gold ornaments of the value of Rs. 1,19,320/ , gold rawa of the value of Rs. 1,69,020/ and stones of the value of Rs. 4,000/ .
Roshan Lal then went to Mussoorie via Haridwar and stayed at Mussoorie until about October 1947.
The case of the assessee was that during this period Roshan Lal did not carry on any business nor did he have any other means of income.
In October 1947 Roshan Lal came over to Delhi and rented a house in Kinari Bazar with a view to settling down in Delhi.
He started looking for suitable premises for commencing business and it was only in February 1948 that he succeeded in securing suitable prem ises at Dariba Kalan in Delhi.
He then started gold and jewellery business in these premises in the name and style of Roshan Di Hatti on 30th March, 1948.
The business was joint family business of the assessee and the first entry made in the books of account of the assessee was dated 30th March, 1948 and it was as follows: Gold Ornaments Rs. 1,19,320/ Gold Rawa Rs. 1,69,020/ Stones Rs. 4,000/ Bank balance with the Imperial Bank of India, Delhi Rs. 35,053/ Bank balance with Hindustan Commercial Bank, Delhi Rs. 221/ Cash Rs. 2,800/ .
The assessee thus brought in an aggregate capital of Rs. 3,33,414/in the business on 30th March, 1948.
It appears that the assessee prospered in this gold and jewellery business of Roshan Di Hatti but it did not file any return of income nor paid any income tax.
It came to the notice of the Income Tax Officer some time in the beginning of 1957 that the assessee had made considerable income in its gold and jewellery business but had failed to pay any tax on such income and hence the Income Tax Officer issued a notice to the assessee under section 34(1)(a) of the Indian Income Tax Act, 1922 for bringing the income of the assessee for the assessment year 1948 49 to tax.
The assessee filed its return of income and in the course of the assessment pro ceedings, the Income Tax Officer, called upon the assessee to explain the nature and source of the capital of Rs. 3,33,414/ brought by it into the business on 30th March, 1948.
The assessee pointed 157 out that gold rawa, ornaments and cash representing this capital were brought by Roshan Lal when he migrated from Lahore and they were kept in a sealed trunk with the Amrit sar Branch o[ the Imperial Bank of India and when Roshan Lal came over to Delhi in October 1947, he.
deposited the same in a locker in the safe deposit vault of Hindustan Commer cial Bank at Delhi and when the business of the assessee was commenced, he surrendered the locker and brought the entire gold, jewellery and cash into the business.
It was empha sised by the assessee as a supportive fact that after Roshan Lal migrated from Lahore in June 1947 until the assessee started the business of Roshan Di Hatti on 30th March, 1948, neither the assessee nor Roshan Lal had any other business or means of income from which the assets of Rs. 3,33,414/ could have been earned.
This explanation was given in the course of various statements made by the asses see from time to time before the Income Tax Officer.
The assessee also examined Hira Lal, Father in law of Roshan Lal and filed affidavits of Mulk Ram, Bills Mal, Dalai, Wazir Chand, Devidas Mehra and Panna Lal before the Income Tax Officer for the purpose of showing that the assessee was having a large gold and jewellery business in Lahore before migration and that it did not carry on any business in India before starting the business of Roshan Di Hatti on 30th March, 1948.
The Income Tax Officer also examined Prem Nath and Kishan Chand, brothers of Roshan Lal.
The statement of Prem Nath was to the effect that their father was a man of ordinary means who was almost reduced to penury by about 1940 and that he had given a sum of Rs. 2000/ to his son Roshan Lal for starting gold and jewellery business in 1935 and he had also subsequently lent some monies to Roshan Lal at nominal interest.
Prem Nath deposed that for the purpose of the business of the assessee, Roshan Lal was occupying a shop belonging to his father but he was not paying rent though demanded on the ground that he did not have sufficient income to pay the rent It was also stated by Prem Nath that before the partition of the country the standard of living of Roshan Lal and his family was no higher than that of Prem Nath who was getting a salary of Rs. 150/ per month.
The statement of Prem Nath was clear ly directed towards showing that the assessee did not have any flourishing business or large income prior to partition.
The Income Tax Officer, on the basis of this material before him, rejected the explanation offered by the assessee and came to the conclusion that it was not possible to believe that the assessee had been able to accumulate capital to the extent of Rs. 3,33,414/ out of income from the business carried on by it in Lahore and since the nature and source of the capital of Rs. 3,33,414/ credited in the books of account of the business on 30th March, 1948 was not satis factorily explained, the Income Tax Officer, gave credit only for a sum of Rs. 20,000/ and treated the balance of Rs. 3,13,414/ as income of the assessee from undisclosed sources.
The assessee appealed against this order of the Income Tax Officer and on appeal, the Appellate Assistant Commis sioner took the view that, on the facts as disclosed by the material placed on record in the proceedings, a much larger allowance should have been made in respect of the capital brought by the assessee from Lahore and he allowed a further sum of Rs. 80,000/ .
The reason given by the Appellate 158 Assistant Commissioner for taking this view are a little material and they may be reproduced as follows: "There is documentary evidence to show that assessee transferred an amount of Rs. 12,094/ from the Punjab National Bank account at Lahore to the same bank in New Delhi in June 1947.
It is also seen that he also transferred two amounts Rs. 13,000/ in his own name and Rs. 6,000/in his wife 's name from the Punjab National Bank, Lahore, to the same Bank at Minto Road, New Delhi and fixed deposit receipts were taken for this total sum of Rs. 19,000/from the Delhi Bank in July 1947.
All these monies including the realised fixed deposits later on went into the asses see 's account with the State Bank of India which reveals a credit balance of Rs. 35,053/ as on 30 3 1948.
This at least shows that the assessee was not a man of very small means while he was at Lahore.
He was having four accounts in different banks at Lahore.
The particulars, however, are not available and it is also stated that most of these accounts were very small; but even then a man of very modest means would not normally have so many bank accounts.
Moreover, while at Lahore Shri Roshan Lal had taken life insur ance Policies Rs. 22,000/ .
A number of letters and receipts regarding business trans actions in Lahore were also filed which indi cate that the Lahore business was not as small as the Income Tax Officer has taken it to be.
There are some papers which relate to deals worth Rs. 10,000/ or more at one time.
There are also several vouchers relating to adver tisement charges paid at Lahore All these things together with the fact that the asses see was in position to transfer a sum of Rs. 31,000/ approx.
through banks indicate that he was doing fairly well in the business at Lahore.
How he could have managed to evade tax at Lahore for all these years, is a mys tery; but from the circumstances of the case it appears that the assessee had certainly assessable incomes while he was doing business there during the pre partition period.
There is another factor which has also to be given its due weight.
While leaving Lahore and coming over to India in JUne 1947, the assessee stopped for few days at Amritsar.
There on the 25th June, 1947 he deposited a sealed box with the State Bank of India Amritsar Branch.
This box was withdrawn by him on the 20 10 47.
These facts are corroborated by the bank certificate.
The assessee claims that he had considerable amount of jewellery and gold etc.
(part of his trading stock in Lahore) as well as cash, in this box that is why he did not take the risk of carrying.
it with him on his way to Mussoo rie, but kept in deposit with the State Bank at Amritsar till such time.
as he was able to settle down in India.
The contents of the seated box are unknown to the bank and so it is not possible to ascertain what the box actually contained.
But it is reasonable to 159 presume that there must have been something quite valuable in the box as otherwise the assessee would not have kept it in the custody of a bank like State Bank of India.
It must also be noted that as early as June, 1947, the assessee hired a locker in the Hindustan Commercial Bank Ltd., New Delhi.
It is clear therefore, that when in June, 1947, the asses see was leaving Lahore he must have had with him quite a substantial amount either in the form of jewellery etc., or cash, as otherwise he would not have taken the precaution of either depositing the sealed box with the State Bank of India at Amritsar or opening a locker in a New Delhi Bank.
Considering all the evidence discussed above, I am of the opinion that the Income Tax Officer 's allowance of Rs. 20,000/ only as capital brought over from Pakistan is too low.
It is true that the capital disclosed in the books as on 30 3 1948 is mostly unverifiable and even assuming that the assessee was doing reasonably well in his business at Lahore, there are hardly any reasons to believe that he could have accumulated so much capital and could have brought all that capital safely into India; but the circumstances of the case do in my view justify a much larger allowance for old capital than has been allowed by the Income Tax Officer.
In my opinion, a reduction of the. assessment by Rs. 80 '000/will meet the requirement of the case.
" The Appellate Assistant Commissioner thus reduced the figure undisclosed income of the assessee to Rs. 2,33,414/ .
But this relief was not enough and the assessee pre ferred a further appeal to the Tribunal.
When the appeal came to.
be heard by the Tribunal, Roshan Lal, who was present at the hearing, was asked by the Members of the Tribunal as to how he had brought gold and jewellery from Lahore and he stated that it was brought in train in a box of the size of 2 1/2 'x l1/2 'x 1 ' and he was then asked what was the weight of the box, to which he replied stating that the weight of the contents of the box was about eight seers.
The Tribunal then, after hearing the arguments of the par ties, rejected the appeal.
The main arguments which weighed with the Tribunal in negativing the appeal of the assessee were: first, if the weight of the contents of the box was only eight seers, the value of gold and jewellery in the box could not be more than Rs. 66,000/ at the then current rate of gold at Rs. 90/ per tola; secondly, the Government of India had issued a Press Note in January 1952 requiring all evacuees to declare the amounts of money brought by them from Pakistan and assuring them that in case they did so, no further enquiries would be made from them as to how they had earned the same and whether they had paid any tax on it and yet the assessee had not declared 'before the Revenue au thorities until the commencement of the assessment proceed ings in 1957 that it had brought the capital of Rs. 2,33,414/ from Pakistan; thirdly, the assessee claimed to have a flourishing business in Lahore in the course of which it was supposed to have earned enough to enable it to save a capital of Rs. 3,33,414/ and yet it had not filed 160 any income tax return nor was it ever assessed to income tax in Lahore and fourthly, the depositions of Mulk Ram, Billa Mal, Dalai, Wazir Chand, Devidas Mehra and Panna Lal were vague and based on hearsay and they had no evidentiary value in the absence of contemporaneous primary evidence.
The Tribunal, accordingly, held that the assessee could not have brought assets worth more than Rs. 1,00,000/ from Lahore and the estimate made by the Appellate Assistant Commissioner did not call for any interference and in this view, the Tribunal confirmed the assessment of the bal ance of Rs. 2,33,414/ as the undisclosed income of the assessee for the assessment year 1948 49.
The assessee applied to the Tribunal for referring to the High Court the question of law arising out of its order but the Tribunal declined to make a reference on the ground that in its opinion no question of law arose out of its order.
This led to the making of an application to the High Court under section 66(2), but the High Court also took the same view and rejected the application.
The assessee there upon preferred an appeal to this Court by special leave and in the appeal, an order was made by this Court referring the following question for the opinion of the High Court: Whether there was material for coming to the conclusion that Rs. 2,33,414/ , out of the capital of Rs. 3,33,414/credited in the books of account of the assessee on 31st March, 1948, represented income from undis closed source ? Pursuant to this order the Tribunal stated a case for the opinion of the High Court and the High Court answered the question referred to it in favour of the Revenue by holding that there was material on the basis of which the Tribunal could come to the conclusion that Rs. 2,33,414/ represented the undisclosed income of the assessee.
Hence the present appeal by the assessee with special leave ob tained from this Court.
Now, the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him.
If he disputes the liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provi sions of the Act.
In the absence of such proof, the Revenue is entitled to treat it as taxable income.
This was laid down as far back as 1958 when this Court pointed out in A. Govindarajulu Mudaliar vs Commissioner of Income tax (1) that "there is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the ac counting year, the Income Tax Officer is entitled to draw the inference that the receipts are of an assessable nature".
To put it differently, where the nature and source of a receipt, whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open to the Revenue to hold that it is the income of the assessee and no further burden lies on the Revenue to show that that income is from any particular source.
Vide Com missioner of Income Tax, U.P. vs Devi Prasad Vishwanath Prasad(2).
Here, (1) (2) 161 in the present case, the assessee introduces in the books of account of its business on 30th March, 1948, capital of Rs. 3,33,414/ which consisted of gold rawa, gold ornaments, stones and cash.
The burden of accounting for the receipt of these assets was clearly on the assessee and if the assessee failed to prove satisfactorily the nature and source of these ' assets, the Revenue could legitimately hold that these assets represented the undisclosed income of the assessee.
The assessee offered the explanation that these assets had been brought by Roshan Lal when he migrated from Lahore in June 1947 and they represented the entire savings of the assessee in Pakistan.
This explanation was disbe lieved.
by the Tribunal which took the view that, on the material on record, it was not possible to hold that the assessee must have brought more than Rs. 1,00,000/ from Lahore and hence the Tribunal added the balance of Rs. 2,33,414/ as undisclosed income of the assessee.
This conclusion reached by the Tribunal was clearly a finding of fact and hence it could be assailed only if it was shown that the Tribunal had acted without any material or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicial ly and properly instructed as to the relevant law would have come to that determination.
Vide Mehta Parikh & Co. vs Commissioner of Income Tax, Bombay(1).
Let us consider what were the primary facts established by the material on record.
The assessee was admittedly carrying on the business of Roshan Di Hatti in Lahore from 1935 until June 1947 when Roshan Lal migrated from Lahore.
It is true that the assessee was not paying any Income tax in Lahore but, as pointed out by the Appellate Assistant Commissioner in his order, a number of letters and receipts regarding business transactions in Lahore were filed by the assessee which showed that the business in Lahore was not small and there were documents and papers which referred to.
dealings involving Rs. 10,000/ or more at a time and there were also several vouchers produced by the assessee relating to advertising charges paid at Lahore.
The busi ness carried on by the assessee at Lahore was, therefore, a reasonably large business though its extent could not be verified by any reliable material produced by the assessee.
The assessee undoubtedly filed affidavits of Mulk Ram, Billa Mal, Dalai, Wazir Chand, Devidas Mehra and Panna Lal, but, as commented upon by the Tribunal, these affidavits were vague and could not be regarded as having much evidentiary value.
Still they did go to show that the Lahore business of the assessee was a fairly large business.
The Tribunal was no doubt right in commenting that primary evidence with regard to the extent of the Lahore business of the assessee was not forthcoming, but it must be remembered that the assessee was being called upon to prove the extent of its business in a territory from which the members of the Hindu Undivided Family had to flee for their lives and from where it was totally impossible to produce any primary evidence.
Be that as it may, it was found as a fact by the Appellate Assistant Commissioner and this finding was not disturbed by the Tribunal that the assessee "was doing fairly well in the business in Lahore".
Roshan Lal, in anticipation of the partition of the country which was soon to follow, decided to move out of Lahore in June 1947 at a time when massacre and holocaust had not yet started 162 and he was in a position to remove his belongings.
He migrated from Lahore with all his belongings and came over to Amritsar and he brought with him a trunk which he wanted to keep in a locker in Safe Deposit Vault of the Imperial Bank of India.
He could not obtain a locker and hence he deposited the sealed trunk with the Amritsar Branch of the State Bank of India instead of carrying it with him to Mussoorie.
There is no documentary evidence to show as to what were the contents of the sealed trunk but, as pointed out by the Appellate Assistant Commissioner and not dissented by the Tribunal, "it is reasonable to presume that there must have been something quite valuable in the box as otherwise the assessee would not have kept the custo dy of a bank like the State Bank of India".
There can be no doubt, as observed by the Appellate Assistant Commissioner, and not disputed by the Tribunal that the assessee "must have had with him quite a substantial amount either in the form of jewellery etc.
or cash, or otherwise he would not have taken the precaution of either depositing the sealed box with the State Bank of India, Amritsar opening a locker in a New Delhi Bank".
The clear finding of the Appellate ASsistant Commissioner, affirmed by the Tribunal, therefore, was that Roshan Lal did bring ornaments, jewellery and cash with him when he migrated from Lahore in June 1947 and kept the same in a sealed trunk with the Amritsar Branch of the State Bank of India.
If that be so, then on what material could it be said that the ornaments, jewellery and cash brought by the assessee and kept in the sealed trunk were of the value of only Rs. 1,00,000/ and no more.
What were the materials on the basis of which the claim of the assessee that Roshan Lal had brought gold, ornaments and cash of the value of Rs. 3,33,414/ could be rejected ? The only materials relied upon by the Tribunal was that the assessee had never filed any income tax return nor ever paid any tax on the income of its business in Lahore and the presumption must, therefore, be that the assessee did not earn any assessable income before migration from Lahore.
Now, it is true that where an assessee has not paid income tax, the presumption ordinarily must be that the assessee had no assessable income, but here the fact remains that the assessee transferred no less than an aggregate sum of Rs. 31,094/ from Lahore to New Delhi and also brought sub stantial amount either in the form of jewellery etc.
or cash" and deposited the same in a sealed trunk with the Imperial Bank of India, Amritsar Branch in June 1947.
obviously the assessee could not have done unless it had a reasonably large business in Lahore and, therefore, the fact that the assessee did not pay income tax in Lahore cannot have much evidentiary value.
All that it would show is that, as pointed out by the Tribunal, "the assessee has not been very straightforward in his dealings with the income tax departments".
The Tribunal also relied upon certain answers given by Roshan Lal when he was questioned by the Members of the Tribunal at the hearing of the appeal.
It must be pointed out straight away that 163 these answers given by Roshan Lal could not be relied upon by the Tribunal for the purpose of coming to any conclusion adverse to the assessee, because there is a procedure pre scribed in Rules 29. 30 and 31 of the Income Tax Appellate Tribunal Rules for taking additional evidence before the Tribunal and if the Members of the Tribunal wanted to exam ine Roshan Lal on any aspects of the case they should have followed this procedure.
But unfortunately the Members of the Tribunal, disregarding the prescribed procedure, put questions to Roshan Lal in an informal manner unauthorised by the Rules.
The answers given by Roshan Lal could not in the circumstances form part of the record and the Tribunal was not entitled to reply upon the same in arriving at its findings of fact.
It may be noted that the High Court also took the view that the procedure adopted by the Tribunal was irregular and the answers given by Roshan Lal should be left out of account.
One other circumstance on which the Tribunal relied was that notwithstanding the Press Note issued by the Government of India in January 1952 the assessee did not declare that.
it had brought assets of the value of Rs. 3,33,4/4/ from Pakistan and this circumstance, according to the Tribunal, cast considerable doubt on the version put forward by the assessee.
Now, the Press Note of Government of India was not produced before us but we will assume that it did promise a certain concession to the evacuees.
who declared the assets brought by them from Pakistan.
Even so, we fail to see how it could be utilised as a circumstance militating against the explanation of the assessee.
Both according to the Appellate Assistant Commissioner as well as the Tribunal, the assessee did bring assets worth Rs. 1,00,000/ from Lahore in June 1947 and these assets were admittedly not disclosed by the assessee despite the Press Note issued by the Government of India.
Then, how could any inference be drawn from the non disclosure of the assets by the assessee that the assessee must not have brought assets represent in the balance of Rs 2,33 414/ 9 Whether the assets brought by the assessee were Rs 1,00,000/ or Rs. 3,33,414/ the fact remains that they were not disclosed by the assessee despite the Press Note of the Government of India and hence no adverse reference could be drawn from the fact of non disclosure of the assets by the assessee.
It will, therefore, be seen that there was no mate rial on the basis of which the Tribunal could come to the conclusion that though the assessee had a fairly large business in Lahore and had brought its entire ornaments, jewellery and cash from Lahore and deposited the same in a sealed trunk with the Amritsar Branch of the Imperial Bank of Inaia, these ornaments, jewellery and cash were worth not more than Rs. 1,00,000/ .
One may also ask the question that if the assessee did not bring assets worth more than Rs. l,00,000/ from Lahore, where and how did it get the remaining assets of the value of Rs 2 33 414/ ? Roshan Lal had come away from Lahore as a refugee and conditions in post partition India were also highly unsettled and the clear and undoubted evidence was that neither Roshan Lal nor the assessee had any business or other means of 164 income in India until 30th March, 1948.
In this situation, it is impossible to believe that the assessee could have earned such a huge amount of profit as Rs. 2,33,414/ within a few months, even if it be assumed that some business was started by it in October 1947 when Roshan Lal came down to Delhi.
The utter improbability, amounting almost to, impossibility, of the assessee having earned such a large amount of Rs. 2,33,414./ as profit within a few months in the disturbed conditions which then prevailed in India was a circumstance which ought to have been taken into account by the Tribunal but which the Tribunal unfortunately failed to do.
It may be pointed out that it was not the case of the Revenue that the books of account of the business were subsequently written up and the entry crediting the capital of Rs. 3,33,4.14/ on 30th March, 1948 was not a genuine entry and the undisclosed profits of the subsequent years were sought to be concealed by the showing a bogus entry of Rs. 3,33,414/ as capital contribution on 30th March, 1948.
If such had been the case, the present argument as to the improbability of the assessee having earned such a huge amount of Rs. 2,33,414/ within a few months, would not have been available to the assessee.
But the Revenue did not dispute the correctness of the entry and accepted that assets worth Rs. 3,33,414/ were introduced in the business on 30th March, 1948 and sought to include the amount of Rs. 3,33,414/ representing the value of these assets as undis closed income of the assessee for the assessment year 194849.
The only question could, therefore, be whether these assets were brought by the assessee from Lahore in June 1947 or they represented the concealed income earned by the assessee during the period June 1947 to 30th March, 1948.
The impossibility of the assessee having earned such a huge amount of profit within a a few months immediately after migration to India in the disturbed and unsettled conditions which then prevailed must, therefore, necessarily support the inference that the assessee must have brought these assets from Lahore.
We are, therefore, of the view that in reaching the conclusion that out of the capital of Rs. 3,33,414/ I credited in the books of the assessee on 30th March, 1948, assets of the value of Rs. 2,33,414/represented undisclosed income of the assessee for the assessment year 1948 49, the Tribunal acted without any material or in any event, the finding of fact reached by the Tribunal was unreasonable or such that no person acting judicially and properly instruct ed as to the relevant law would come to such finding.
We accordingly allow the appeal, set aside the order of the High Court and answer the question referred by the Tribunal in the negative.
The 'Commissioner will pay the costs of the appeal to the assessee.
P.H.P. Appeal allowed. | The assessee, a Hindu Undivided Family, was carrying on business in gold and jewellery in Lahore till June 1947.
In view of the impending partition of India Roshan Lal decided to move out of Lahore and accordingly transferred sums of Rs. 12,094/ , Rs. 13,000/ and Rs. 6,000/ from Lahore Banks to New Delhi Banks.
He left Lahore and pro ceeded to Mussoorie in June, 1947.
On his way, he stopped at Amritsar for a few days and opened an account with the Imperial Bank of India with a view to obtaining a locker in the Safe Deposit Vault but a locker was not available and hence he deposited a trunk which he had brought from Lahore containing gold ornaments, jewellery and cash with the Imperial Bank of India.
The assessee came to Delhi in October, 19.,7.
and rented a house.
In February, 1948.
he succeeded in securing business premises and started busi ness on 30.3.1948.
The first entry in the books of account on 30.3.1948 showed gold ornaments of Rs. 1,19,320/ , Gold Rawa Rs. 1,69,020/ Stones worth Rs. 4,000/ Bank balance with the Imperial Bank of India, Delhi Rs. 35,053/ Bank Balance with Hindustan Commercial Bank.
Delhi Rs. 221/ and Cash of Rs. 2.800/.
The assessee thus brought in an aggre gate capital of Rs. 3,33,414/ in the business on 30.3.1948.
in 1957.
it came to the notice of the Income Tax Officer that the assessee had made considerable income in his gold and jewellery business but had failed to pay any tax on such income and hence issued a notice to the assessee under section 34(1)(a) of the Indian Income Tax Act, 1922, for bringing the income of the assessee for the assessment year 1948 49 to tax.
The assessee flied his return.
In the course of the assessment proceedings the I.T.O. called upon the assessee to explain the nature and source of the capital of Rs. 3,33,414/ .
The assessee contended that he brought the gold Rawa, ornaments and cash representing the capital when he migrated from Lahore and they were kept in a sealed trunk with the bank at Amritsar and thereafter brought over to Delhi and deposited in the Safe Deposit Vault of Hindustan Commercial Bank at Delhi.
When the business of the asses see was commenced,he surrendered the locker and brought the entire gold, jewellery and cash into the business.
The assessee observed that till he started his business in March 1948, neither the ,assessee nor Roshan Lal had any other business or means of income from which the amount of Rs. 3,33,414/ could have been earned.
The assessee examined some witnesses.
The ITO also examined the broth ers of Roshan Lal who stated that the father of Roshan Lal was a man of ordinary means who was almost reduced to penury by about 1940 and that he had given a sum of Rs. 2000/ to his son Roshan Lal for starting gold and jewellery business in 1935 and he had also subsequently lent some tooroes to Roshan Lal on nominal interest.
The Income Tax Officer rejected the explanation offered by the assessee and came to the conclusion that it was not possible to believe that the assessee had been able to accumulate capital to the extent of Rs. 3.33,414/ out of income from the business carried on.
The Income Tax Officer gave credit for a sum of Rs. 20,000/ and treated the balance of Rs. 154 3,30,414/ as income of the assessee from undis closed source.
On appeal,the Appellate Assistant Commis sioner allowed a further sum of Rs. 80,000./ on the follow ing grounds: (1) That the assessee transferred a sum of Rs.12,004/ ,Rs./3,000/ and Rs. 6,000/ from Banks as Lahore to the Bank at New Delhi.
This shows that the assessee was not a man of very small means while he was at La hore.
(2) He was having accounts in 4 different Banks and a man of very modest means would not have normally so many Bank accounts.
(3) While at Lahore.
Roshan Lal had taken Life Insurance Policies worth Rs. 22.000/ .
A number of letters and receipts regarding business transactions in Lahore Indicated that the Lahore business was not as small as the Income Tax Officer had taken it to be.
The assessee stopped at Amritsar and opened an account and took Safe Deposit Vault where he deposited a sealed box.
It is reasonable to presume that there must have been something quite valuable in the box.
A further appeal filed by the assessee to the Tribunal failed.
The tribunal, when the appeal came to be heard, put a question to Roshan Lal as to how he had brought gold and jewellery from Lahore and enquired about the weight of the box.
The Tribunal after hearing the arguments of the parties rejected the appeal.
The main arguments which weighed with the Tribunal were: (1) that the weight of the box was too less: (2) that the assessee did not disclose his assets under the scheme of the Government of India published in the Press Note in January 1952, requiring all evacuees to declare the amounts of money brought by them from Paki stan.
(3) that the assessee did not file any income tax returns in Lahore.
The High Court con firmed the finding of the Tribunal in the reference.
Allowing the appeal, HELD: (1) The law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him.
[160 E] A A.Govindaralulu Mudaliar vs Commissioner of Income Tax and Commissioner of Income Tax, U.P. vs Devi Prasad Vishwanath Prasad followed.
(2) The conclusion of the Tribunal on a finding of fact can be assailed only if it is shown that the Tribunal had acted without any matenal or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law would have come to that determination.
[161 C D].
Mehta Parikh & Co. vs Commissioner of Income Tax Bombay , followed.
(3) The Tribunal was right in commenting that primary evidence with regard to the extent of the Lahore business of the assessee was not forthcoming but it must be remem bered that the assessee was being called upon to prove the extent of his business m a territory from which the member of the Hindu undivided family had to .flee for their lives and from where it was totally impossible to produce any primary evidence. The.
finding of the AAC that the assessee was doing fairly well m the business m Lahore was not disturbed by the Tribunal. The .AAC found that it was reasonable to presume to at there Was something.
quite valuable m the box .and this finding was also not dissented by the Tnbunal.
There was no material to show that the orna 155 ments, jewellery and cash brought by the assessee and kept in the sealed trunk were of the value of only Rs. 1 lac and not more.
The circumstances that the assessee had not filed any Income Tax return could be of no avail to the Revenue because admittedly the assessee had brought substan tial amount from Lahore.
[161 D G] (4) The Tribunal was wrong in relying upon certain answers given by Roshan Lal, about the weight of the sealed box when he was questioned by the Tribunal at the hearing of the appeal.
It must be pointed out straightway that the answer given by Roshan Lal could not be relied on by the Tribunal because there is a procedure prescribed in rules 29.
30 and 31 of the Income Tax Appellate Tribunal Rules for taking additional evidence before the Tribunal and if the members of the Tribunal wanted to examine Roshan Lal on any aspects of the case.
they should have followed this procedure.
The answers given by Roshan Lal disregarding the perscribed procedure could not form part of the record and the Tribunal was not entitled to rely upon the same.
[162 H, 163 A C] (5) The Tribunal erred in relying on the Press Note be cause admittedly the assessee had brought a sum of Rs. 1 lac to India and even that was not declared to the Government of India.
[163 E F] (6) There was no material on the basis of which the Tribunal could come to the conclusion that the ornaments.
jewellery and cash were not worth than Rs. 1 lac.
It was not proved that Roshan Lal or the assessee had any business or other means of income in India until 30.3.1948.
The genuineness of the entry of March 1948 was also not chal lenged.
It is utterly improbably amounting almost to impossibility that the assessee could have earned such a large amount of Rs. 2.33.414/ as profit within a few months in the disturbed conditions which then prevailed in India.
[164 B E] (7) The Tribunal acted without any material and in any event, the finding of fact reached by the Tribunal was unreasonable or such that no person acting judicially and properly instructed as to the relevant law would come to such finding.
[164 F G] |
iminal Appeal No. 62 of 1954.
Appeal by special leave from the Judgment and 0rder dated the 10th June 1953 of the Punjab High Court at Simla in Criminal Revision No. 86 of 1953 arising out of the Judgment and Order dated the 7th January 1953 of the Court of Sessions Judge, Karnal in Criminal Appeal No. 355 of 1952.
N. C. Chatterjee, (Vir Sen Sawhney and Rajinder Narain, with him) for the appellant.
Gopal Singh and P. G. Gokhale, for the respondent.
1014 1955.
November 24.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
The appellant was a candidate for election to the House of the People from the Karnal Reserved Constituency during the last General Elections.
The proviso to section 33(3) of the Representation of the People Act (XLIII of 1951), omitting what is not material, enacts "that in a constituency where any seat is reserved for the Scheduled Castes, no candidate shall be deemed to be qualified to be chosen to fill that seat unless his nomi nation paper is accompanied by a declaration verified in the prescribed manner that the candidate is a member of the Scheduled Castes for which the seat has been so reserved and the declaration specifies the particular caste of which the candidate is a member and also the area in relation to which such caste is one of the Scheduled Castes".
Rule 6 of the Election Rules provides that the declaration referred to in the above proviso shall be verified by the candidate on oath or solemn affirmation before a Magistrate.
Schedule If contains the form of nomination paper to be used, with the terms in which the declaration is to be made by the candidate and verified by the Magistrate.
On 5 11 1951 the appellant signed two nomination papers, each containing the following declaration: "I hereby declare that I am a member of the Balmiki Caste which has been declared to be a Scheduled Caste in the State of Punjab".
The Balmiki Caste is one of the castes declared to be a Scheduled Caste under the "Constitution (Scheduled Castes) Order, 1950".
The above declaration was made on solemn affirmation before the First Class Magistrate, Karnal, and the nomination paper& with the above declaration were filed before the District Magistrate, Karnal, who was the returning officer.
One Jai Ram Sarup, a member of the Chamar caste, which is one of the Scheduled Castes, was also a candidate for the seat, and he raised the objection that the appellant was not a Balmiki by caste, and that he was therefore not qualified to stand for election to the re served Constituency.
Acting on the declaration afore 1015 said, the returning officer overruled the objection, and accepted the nomination paper of the appellant as valid.
At the polling, the appellant got the majority of votes, and on 6 3 1952 he was declared duly elected.
On 27 8 1952 Jai Ram Sarup filed the application out of which the present appeal arises, under sections 476 and 195 of the Code of Criminal Procedure before the District Magistrate, who functioned as the returning officer.
He therein alleged that the declaration made by the appellant that he belonged to the Balmiki caste was false, that, in fact, be was born a Muslim and had been converted to Hinduism, and that therefore "in the interests of justice" and "for safeguarding the interests of the Scheduled Castes", proceedings should be taken for his prosecution.
In his counter affidavit the appellant stated: "I am not a Muhammadan by birth.
On the other hand, I was born in Balmiki Hindu family.
I am a Hindu".
The District Magistrate held an enquiry in which one Prith Singh Azad, President of the Depressed Classes, Delhi, gave evidence that the appellant was a Muslim of the name of Khaliq Sadiq, that in 1938 he applied to the Suddhi Sabha to be converted to Hinduism, that be was so converted, and that thereafter he came to be known as Virindar Kumar.
In cross examination, he stated that the appellant bad admitted before him that he was a Muslim by birth.
He added that he bad two Muslim wives living at the time of the conversion.
The applicant, Jai Ram Sarup, also produced ten letters stated to be in the handwriting of the appellant in proof of the above facts.
On 17 9 1952 the Magistrate passed an order that there was a prima facie case for taking action, and on 29 9 1952 he filed a complaint before the First Class Magistrate, Karnal, charging the appellant with offences under sections 181, 182 and 193 of the Indian Penal Code.
Against this order, the appellant preferred an appeal to the Court of the Sessions Judge, Karnal, who dismissed the same on the ground that the returning officer was not a Court,, that the proceedings before 1016 him did not fall under section 476, and that there fore no appeal lay under section 476 B.
The appellant took the matter in revision before the High Court, Punjab, and that was heard by Harnam Singh, J., who held, differing from the Sessions Judge, that the returning officer was a Court, and that his order was therefore appealable.
He, however, held that on the merits there was no case for interference, and accordingly dismissed the revision.
It is against this order that the present appeal by special leave is directed.
On behalf of the appellant Mr. N. C. Chatterjee argues that having held that the order of the returning officer was appealable, the learned Judge ought to have remanded the case for hearing by the Sessions Judge on the merits, and that his own disposal of the matter was summary and perfunctory.
The contention of Mr. Gopal Singh for the respondent is that the view of the Sessions Judge that the returning officer was not a court and that his order was not, therefore, appealable was correct ', and that further the order of the High Court in revision declining to inter fere on the merits was not liable to be questioned in special appeal in this Court.
The first question that arises for our decision is whether the order of the District Magistrate passed on 17 9 1952 as returning officer is open to appeal.
The statutory provisions bearing on this point are sections 195, 476 and 476 B of the Code of Criminal Procedure.
Section 195(1)(a) provides that no court shall take cognizance of any offence punishable under sections 172 to 188 of the Indian Penal Code except on the complaint in writing of the public officer concerned or of his superior.
Section 195(1)(b) enacts that no Court shall take cognizance of the offences mentioned therein, where such offence is committed in, or in relation to, any proceeding in any Court, except on the complaint in writing of such Court or a Court to which it is subordinate.
The offence under section 193 is one of those mentioned in section 195 (1) (b).
Section 476 prescribes the procedure to be followed where a Court is moved to lay a complaint, and that applies 1017 only to offences mentioned in sections 195(1) (b) and 195(1) (c) and not to those mentioned in section 195(1) (a).
Section 476 B provides for an appeal from an order passed under section 476 to the appropriate Court.
The result then is that if the complaint relates to offences mentioned in sections 195(1) (b) and 195(1) (c), an appeal would be competent, but not if it relates to offences mentioned in section 195(1) (a).
Now, the order of the Magistrate dated 17 9 1952 directs that the appellant should be prosecuted for offences under sections 181, 182 and 193.
There is no dispute that the order in so far as it relates to offences under sections 181 and 182 is not appealable, as they fall directly under section 195(1) (a).
The controversy is only as regards the charge under section 193.
Section 193 makes it an offence to give false evidence whether it be in a judicial proceeding or not, and it likewise makes it an offence to fabricate false evidence for use in a judicial proceeding or elsewhere.
If the offence is not committed in a judicial proceeding, then it will fall outside section 195(1)(b), which applies only when it is committed in or in relation to a proceeding in Court, and there is in consequence no bar to a complaint being made in respect thereof unaffected by the restrictions contained in section 195(1) (b).
But if the offence under section 193 is committed in or in relation to a proceeding in Court, then it will fall under section 195 (1) (b), and the order directing prosecution under section 476 will be appealable under section 476 B.
The point for decision therefore is whether the returning officer in deciding on the validity of a nomination paper under section 36 of the Act can be held to act as a Court.
The question thus raised does not appear to be covered by authority, and has to be decided on the true character of the functions of the returning officer and the nature and the extent of his powers.
"There has been much difference of opinion as to the precise) character of the office of a returning officer, viz., as to whether he is a judicial or ministerial officer", says Parker on Election Agent and Returning Officer, Fifth Edition, page 30.
The true 1018 view, according to him, is that he partakes of both characters, and that in determining objections to nomination papers, he is a judicial officer.
That is also the view taken in Indian decisions.
But before we can hold that the proceedings before a returning officer resulting in the acceptance or rejection of a nomination paper fall within section 195(1)(b) of the Code of Criminal Procedure, it must be shown not merely that they are judicial in character but that further he is acting as a Court in respect thereof.
It is a familiar feature of modern legislation to set up bodies and tribunals, and entrust to them work of a judicial character, but they are not Courts in the accepted sense of that term, though they may possess, as observed by Lord Sankey, L.C. in Shell Company of Australia vs Federal Commissioner of Taxation(1), some of the trappings of a Court.
The distinction between Courts and tribunals exercising quasi judicial functions is well established, though whether an authority constituted by a particular enactment falls within one category or the other may, on the provisions of that enactment, be open to argument.
There has been considerable discussion in the Courts in England and Australia as to what are the essential characteristics of a Court as distinguished from a tribunal exercising quasi judicial functions.
Vide Shell Company of Australia vs Federal Commissioner of Taxation(1), R. vs London County Council(2), Cooper vs Wilson(3), Huddart Parker and Co. vs Moorehead(4), and Rola Co. vs The Commonwealth(5).
In this Court, the question was considered in some fulness in Bharat Bank Ltd. vs Employees of Bharat Bank Ltd.(6).
It is unnecessary to traverse the same ground once again.
It may be stated broadly that what distinguishes a Court from a quasi judicial tribunal is that it is charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive judgment.
To decide in a judicial manner involves that the parties are entitled as (1) ,296.
(3) (5) ; (2) (4) ; (6) ; 1019 a matter of right to be heard in support of their claim and to adduce evidence in proof of it.
And it also imports an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law.
When a question therefore arises as to whether an authority created by an Act is a Court as distinguished from a quasi judicial tribunal, what has to be decided is whether having regard to the provisions of the Act it possesses all the attributes of a Court.
We have now to decide whether in view of the principles above stated and the functions and powers entrusted to the returning officer under the Act, be is a court.
The statutory provision bearing on this matter is section 36.
Under section 36(2), the returning officer has to examine the nomination paper and decide all objections which may be made thereto.
This power is undoubtedly judicial in character.
But in exercising this power, he is authorised to come to a decision "after such summary enquiry, if any, as he thinks necessary".
That means that the parties have no right to insist on producing evidence which they may desire to adduce in support of their case.
There is no machinery provided for summoning of witnesses, or of compelling production of documents in an enquiry under section 36.
The returning officer is entitled to act suo motu in the matter.
When one compares this procedure with that prescribed for trial of election petitions by the Election Tribunal under sections 90 and 92 of the Act, the difference between the two becomes marked.
While the proceedings before the Election Tribunal approximate in all essential matters to proceedings in civil courts, the proceedings under section 36 present a different picture.
There is no lis, in which persons with opposing claims are entitled to have their rights adjudicated in a judicial manner, but an enquiry such as is usually conducted by an ad hoc tribunal entrusted with a quasi judicial power.
In other words, the function of the returning officer acting under section 36 is judicial in character, but he is not to act judicially in discharging it.
We are of opinion that the returning officer deciding on 129 1020 the validity of a nomination paper is not a Court for the purpose of section 195 (1) (b) of the Code of Criminal Procedure, and the result is that even as regards the charge under section 193, the order of the Magistrate was not appealable, as the offence was not committed in or in relation to any proceeding in a Court.
In this view, the learned Sessions Judge was right in dismissing the appeal as incompetent, and the question argued by Mr. N. C. Chatterjee that the learned Judge of the High Court ought to have remanded the case for hearing by the Sessions Judge on the merits does not arise.
It was next argued for the appellant that as the application for initiating prosecution under section 193 was made under section 476 on the assumption that the returning officer was a court, the order passed thereon must, in the view that he was not a Court, be quashed as without jurisdiction.
But then, it should be noted that the application was presented under section 195 also, and it was necessary to move the returning officer under section 195(1)(a) with reference to the offences under sections 181 and 182, and there could be no question of quashing the order as without jurisdiction.
Even as regards section 193, the position is this: It has no doubt been held that section 476 must be taken to be exhaustive of all the powers of a Court as such to Jay a complaint, and that a complaint filed by it otherwise than under that section should not be entertained.
But there is abundant authority that section 476 does not preclude the officer presiding over a Court from himself preferring a complaint, and that the jurisdiction.
of the Magistrate before whom the complaint is laid to try it like any other complaint is not taken away by that section.
Vide Meher Singh vs Emperor(1) , Emperor vs Nanak Chand(2), Har Prasad vs Emperor(3) and Channu Lal vs Rex(4).
There is thus no legal impediment to a returning officer filing a complaint under sections 181 and 182 as provided in section 195 (1) (a) and charging the accused therein with also an offence (1) A.I.R. 1933 Lah. 884.
(3) A.I.R. 1947 All. 139.
(2) A.I.R. 1943 Lah. 208.
(4) 1021 under section 193.
In this connection, it should be mentioned that the appellant himself took the objection before the Magistrate that qua returning officer he was not a Court and that the proceedings under section 476 were incompetent, and that that was overruled on the ground that it was an enabling section.
There is, therefore, no ground for holding that the order dated 17 9 1952 was without jurisdiction.
It was finally contended that the Magistrate was under a misapprehension in stating that the appellant had declared that he was born a Balmiki, whereas, in fact, he only declared that he was a Balmiki by caste.
But it was the appellant himself who pleaded in his counter affidavit that he was not a Muslim by birth, and was born in a Balmiki Hindu family, and the observation of the Magistrate has ob vious reference to what was pleaded and argued by the appellant.
And it should also be noted that no objection was taken either in the grounds of appeal to the Sessions Court or in revision to the High Court with reference to the above remark.
Moreover, the charge as laid in the complaint is that the declaration of the appellant in the nomination paper that he "was a member of the Balmiki caste" was false.
There is accordingly no substance in this contention.
It must be emphasised that in the view that the order of the Magistrate dated 17 9 1952 was final, this appeal being really directed against that order there must be exceptional grounds before we can interfere with it in special appeal, and none such has been established.
On the other hand, whether action should be taken under section 195 is a matter primarily for the Court which hears the application, and its discretion is not to be lightly interfered with in appeal, even when that is competent.
But where, as here, the legislature does not provide for an appeal, it is preposterous on the part of the appellant to invite this Court to interfere in special appeal.
This appeal is accordingly dismissed. | Held that a Returning Officer acting under se. 33 and 36 of the Representation of the People Act, 1951 and deciding on the validity or otherwise of a nomination paper is not a court within the meaning of sections 195(1)(b), 476 and 476 B of the Code of Criminal Procedure.
Shell Co. of Australia vs Federal Commissioner of Taxation ([1931] A.C. 275 at 296), B. vs London County Council ([1931] 2 K.B. 215), Cooper vs Wilson ([1937] 2 K.B. 309), Huddart Parker and Co. vs Moorehead ([1908] ; , Rola Co. vs The Commonwealth ([1944] ; , Bharat Bank Ltd. vs Employees of Bharat Bank Ltd. ([1950] S.C.R. 459), Mehar Singh vs Emperor, (A.I.R. , Emperor vs Nanak Chand (A I.R. , Har Prasad vs Emperor, (A.I.R. 1947 All. 139) and Channu Lal vs Rex ([1950] , referred to. |
Civil Appeal Nos.
42 and 43 of 1961.
Appeals by special leave from the judgments and orders dated September 7, 1960 of the Chief Commissioner, Pondicherry in Appeals Nos.
56 and 57 of 1960.
WITH Petitions Nos. 297 and 298 of 1960.
Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights.
A. V. Viswanatha Sastri R. K. Garg, M.K. Ramamurthy, S.C. Agrawal and D. P. Singh, for the appellants/petitioners (In both the appeals and the petitions.) C. K. Daphtary, Solicitor General of India, B. Sen, B. R. L. Iyengar and T. M. Sen, for the 983 respondent No. 1 (in both the appeals) and respondents Nos. 1 and 2 (in both the petitions).
A. section R. Chari, K. R. Choudhri and R. Mahalingier, for respondent No. 2 (in both the appeals).
R. Gopalakrishnan, for respondent No. 3 (in both the petitions).
December, 8.
The Judgment of Gajendragadkar, Wanchoo and Ayyangar, JJ., was delivered by Ayyangar, J.
The judgment of Sarkar and Das Gupta, JJ., was delivered by Sarkar, J. AYYANGAR, J. The two Civil Appeals are by special leave of this Court and the two Writ Petitions have been filed by the respective appellants seeking the same relief as in the appeals, the relief sought being the setting aside of orders passed by the Chief Commissioner of Pondicherry as the State Transport appellate authority (under the Motor Vehicles Act).
All these four have been heard together because of a common point raised regarding the jurisdiction of this Court to entertain the appeals and the petitions.
It is manifest that the preliminary point about the jurisdiction of this Court should have first to be considered before dealing with the merits of the contentions raised in the appeals and petitions.
It might be convenient to state a few facts to appreciate the context in which the questions debated before us arise and the point concerned in the order now passed.
Sivarama Reddiar the appellant in Civil Appeal 43 of 1961 and the petitioner in Writ Petition 298 of 1960, is a citizen of India and is engaged in the business of motor transport.
By a notification dated December 27, 1958 in the Official Gazette of Pondicherry the State Transport Commission of Pondicherry invited applications for the grant of stage carriage permits to be submitted before February 27, 1959, including the route from Pondicherry to Karaikal, the latter being another 984 former French possession.
In response to this notification, Sivarama Reddiar as well as one Gopal Pillai who is the second respondent to the appeal and the second respondent in the Writ Petition were two of the 19 persons who made applications for the grant of this permit to them.
Before the State Transport Commission dealt with these applications, the Government of India in the exercise of its powers under section 4 of the published a notification in the Official Gazette of Pondicherry extending the provisions of the Indian as in force in Delhi to Pondicherry with effect from June 19, 1959.
Rules 3(4) and 4 of this order promulgated under the provided: "3(4).
Any Court, tribunal or authority required or empowered to enforce the said Act in Pondicherry may for the purpose of facilitating its application in relation to Pondicherry construe the said Act with such alteration not affecting the substance as may be necessary or proper with respect to the matter before the Court, tribunal or authority as the case may be.
" Rule 4 effected a repeal of existing laws in these terms: "Repeal of existing laws: All laws in force in Pondicherry immediately before the commencement of the Order which correspond to the Act and the rules, notifications and 'Orders applied to Pondicherry by this order shall, except in so far as such laws relate to the levy of any fee, cease to have effect save as respects things done or omitted to be done before such commencement.
" On July 21, 1959, the Chief Commissioner of Pondicherry, in exercise of the powers conferred on him by section 44 of the constituted a State Transport Authority for Pondicherry The 985 State Transport Authority, Pondicherry thus created, issued a notification on August 1, 1959 by which it required persons who had applied for Stage Carriage permits in response to the notification dated December 27, 1958 to furnish particulars with regard to a number of matters which were relevant for being considered for the grant of a Stage Carriage permit under the .
Both the appellant petitioner Sivarama Reddiar as well as inter alia the respondent Gopal Pillai furnished the required particulars.
The Particulars supplied by the parties were checked and verified by designated authorities and thereafter the State Transport Authority by an order on April 30, 1960 directed the grant of the permit to the appellant petitioner Sivarama Reddiar rejecting the claims of all others including the respondent Gopala Pillai.
Though the which had been extended to Pondicherry included section 64, whereby persons aggrieved by an order of a State Transport Authority could file appeals against such order, no appellate authority had been constituted by the Chief Commissioner.
This situation was remedied by a notification by the Chief Commissioner dated May 4, 1960 whereby he constituted himself under section 68 of the Act as the appellate authority for the purpose of exercising jurisdiction under section 64 thereof.
Several of the aggrieved operators including Gopala Pillai preferred appeals to the Chief Commissioner.
By an order dated September 5, 1960 the Chief Commissioner, Pondicherry allowed the appeal of the respondent Gopala Pillai, set aside the order of the State Transport Authority granting the permit to the appellant Sivarama Reddiar and directed that the permit for the route Pondicherry to Karaikal be issued in favour of the respondent Gopala Pillai.
Writ Petition 293 of 1960 has been filed to secure the setting aside of this order of the Chief Commissioner on the ground that the order violates the fundamental rights guaranteed to the petitioner by 986 of the Constitution and Civil Appeal No. 43 of 1961 is directed to obtain the same relief.
It is not necessary at this stage to set out the facts of the other appeal and petition by Masthan Sahib, because except that the route is different and so, are the grounds on which the order of the Chief Commissioner is sought to be impugned, the other material facts relevant for the consideration of the preliminary point to which we adverted are exactly the same.
The preliminary objection that is raised to the entertainment of the appeal is shortly as follows: article 136 (1) of the Constitution under which the appellant has obtained special leave reads: "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.
" In order, therefore, that this Court might have jurisdiction to entertain the appeal it is a prerequisite that the Court or tribunal from whose judgment or order the appeal is preferred should be one in the territory of India.
It is urged on behalf of the respondent that Pondicherry is not part of the territory of India, with the consequence that the Chief Commissioner whose order is impugned in the appeal is not "a Court or tribunal in the territory of India.
" The question thus raised is of great political and constitutional significance and it is not disputed that if this area were not part of the territory of India, this Court would have no jurisdiction in the absence of any legislation by Parliament under article 138 (1), and the Civil Appeal would have to be dismissed as incompetent.
It was common ground that this was the position in regard to the maintainability of the appeal 987 but in regard to the Writ Petition Mr. Vishwanatha Shastri learned Counsel for the petitioner sought to sustain its maintainability on slightly different grounds.
He invited our attention to the terms of article 12 of the Constitution which reads: "In this Part, unless the context otherwise requires, "the State" includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India." Learned Counsel pointed out that for the purpose of the exercise of this Court 's powers under article 32 of the Constitution for the enforcement of the fundamental rights its jurisdiction was not limited to the authorities functioning within the territory of India but that it extended also to the giving of directions and the issuing of orders to authorities functioning even outside the territory of India, provided that such authorities were subject to the control of the Government of India.
This submission appears to us well founded and that the powers of this Court under article 32 of the Constitution are not circumscribed by any territorial limitation.
It extends not merely over every authority within the territory of India but also those functioning outside provided that such authorities are under the control of the Government of India.
The power conferred on this Court by Part III of the Constitution has, however, to be read in conjunction with article 142 of the Constitution which reads: "142 (1) The Supreme Court in the exercise of the jurisdiction may pass such decree or makes such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory 988 of India in such manner as may be prescribed by or under any law made by Parliament and until provision in that behalf is so made, in such manner as the President may by order prescribe.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself.
" It would be seen that article 142 brings in a limitation as regards the territory which the orders or directions of this Court could be enforced.
It is manifest that there is an anomaly or a discordance between the powers of this Court under article 32 read with article 12 and the executability or enforceability of the orders under article 142.
It is possible that this has apparently arisen because the last words of article 12 extending the jurisdiction of this Court to authorities "under the control of the Government of India" were added at a late stage of the constitution making while articles 142 and 144, the latter reading: "All authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court".
were taken, in whole or in part, from section 210 of the Government of India Act, 1935 and that no necessary changes were made in article 142 to bring it into line with article 12 as it finally emerged and the powers of this Court under article 32.
But this however offers us no solution to the question which is whether, in view of the limitation imposed by article 142 on the area within which alone the directions or orders of this Court could be directly 989 enforced, the Court could issue a writ in the nature of certiorari or other appropriate writ or direction to quash a quasi judicial order passed by an authority outside the territory of India, though such authority is under the control of the Government of India.
If the order of the authority under the control of the Government of India but functioning outside the territory of India was of an executive or administrative nature, relief could be afforded to a petitioner under article 32 by passing suitable orders against the Government of India directing them to give effect to the decision of this Court by the exercise of their powers of control over the authority outside the territory of India.
Such an order could be enforceable by virtue of article 144, as also article 142.
But in a case where the order of the outside authority is of a quasi judicial nature, as in the case before us, we consider that resort to such a procedure is not possible and that if the orders or directions of this Court could not be directly enforced against the authority in Pondicherry, the order would be ineffective and the Court will not stultify itself by passing such an order.
In these circumstances it becomes imperative that we should ascertain the constitutional and political status of Pondicherry in relation to the Union of India.
Certain documents have been placed before us and in particular an agreement dated October 21, 1954 entered into between the Government of India and of France by which the administration of Pondicherry was ceded to the Government of India.
Mr. Viswanatha Sastri learned Counsel for the appellant petitioner contended that on the terms and conditions contained in this agreement, Pondicherry was a part of the territory of India.
On the other hand, Mr. Chari learned Counsel for the respondents urged that the reservations contained in the agreement were such as to preclude the Court from reaching the conclusion 990 that there had been a transfer of complete sovereignty, which according to him was necessary in order to constitute the area as part of the territory of India.
The learned Solicitor General who appeared in response to the notice to the Union of India, submitted that the Union Government was agreeable to the respective contentions urged by the parties being decided by the Court.
We have considered the matter urged before us with great care and desire to make the following observations: So far as the Constitution of Indian is concerned, we have an express definition of what the phrase "territory of India" means.
article 1 (3) enacts: "1.
(3) The territory of India shall compromise (a) the territories of the States; (b) the Union territories specified in the First Schedule; and (c) such other territories as may be acquired.
" There might be little difficulty about locating the territories which are set out in cls.
(a) & (b) but when one comes to (c) the question arises as to when a territory is "acquired" and what constitutes "acquisition".
Having regard to the subject dealt with, the expression "acquired" should be taken to be a reference to "acquisition" as understood in Public International Law.
If there were any public notification assertion or declaration by which the Government of this country had declared or treated a territory as part and parcel of the territory of India, the Courts would be bound to recognise an "acquisition" as having taken place, with the consequence that that territory would be part of the territory of the Union within Art.1(3)(c).
In the present case, we have this feature that the administration of the territory is being conducted under the powers vested in the Government under the .
The preamble to that Act recites that it was: 991 "An Act to provide for the exercise of certain foreign jurisdiction of the Central Government".
and accordingly the expression "foreign jurisdiction" is defined in its section 2(a) to mean "the jurisdiction which the Central Government has for the time being in or in relation to any territory outside India.
" Thus this would prima facie show that Pondicherry has not been "acquired" but still continues to be outside the territory of India.
In our opinion, however, though this might be very strong evidence that the territory has not been "acquired" and so not part of the "territory of India", it is still not conclusive.
In this state of circumstances two courses would be open to us: (1) to decide for ourselves on the material that has been placed before us in the shape of the agreement between the two Governments etc.
Whether Pondicherry has been "acquired" so as to become part of the territory of India, or (2) to invoke the assistance of the Government of India by inviting them to state whether the territory has been acquired within article 1(3) of the Constitution and whether Pondicherry is thus now part of the "territory of India".
We originally proposed to avail ourselves only of the procedure indicated in s.6 of the which enacts: "6.
(1) If in any proceeding, civil or criminal, in a Court established in India or by the authority of the Central Government outside India, any question arises as to the existence or extent of any foreign jurisdiction of the Central Government, the Secretary to the Government of India in the appropriate department shall, on the application of the Court, ' send to the Court the decision of the Central Government on the question, and that decision shall for the purposes of the proceeding be final.
992 (2) The Court shall send to the said Secretary in a document under the seal of the Court or signed by a Judge of the Court, questions framed so as properly to raise the question, and sufficient answers to those questions shall be returned to the Court by the Secretary and those answers shall on production thereof be conclusive evidence of the matters therein contained." But the learned Solicitor General very properly pointed out that an answer to the question which could be referred under this provision would relate merely to "the existence or extent of jurisdiction" and that information on these points might not be sufficient to solve the problem posed by the preliminary question raised in the appeals and petitions as to whether Pondicherry is a part of the "territory of India" or not.
We agree with the learned Solicitor General that information relating to the "existence or extent" of the jurisdiction exercisable by the Union Government in the territory might not completely solve the question for our decision as to whether Pondicherry is part of the territory of India or not, but still if the extent of the jurisdiction vested in the Union Government by the arrangements entered into between the two Governments virtually amounts to a transfer of sovereignty for every practical purpose, it would be possible to contend that such a transfer or cession was so incompatible with the existence of any practical sovereignty in the French Government as to detract from the surrender or transfer being other than complete.
It is for this reason that we consider it proper to exercise the powers vested in the Court under section 6 of the .
It would be observed from what has been stated above that it would be more satisfactory and more useful for the disposal of the proceedings 993 before us if we ascertain from the Union Government an answer to the question whether they do or do not consider that Pondicherry is part of the territory of India.
We have only to add that on the decisions in England, the Court has jurisdiction to invite the Government to assist it by information as to whether according to Government any territory was part of Her Majesty 's Dominion or not (vide The Fagernes L. R. 1927 Probate 311).
Besides, the learned Solicitor General agreed that the Government would assist us by answering our reference.
In view of the matters set out above we direct that the following questions shall be forwarded to the Union of India under the seal of this Court for the submission of their answers: (1) Whether Pondicherry which was a former French Settlement is or is not at present comprised within the territory of India as specified in article 1(3) of the Constitution by virtue of the Articles of the Merger Agreement dated October 21, 1954 between the Governments of India and France and other relevant agreements, arrangements, acts and conduct of the two Governments.
(2) If the answer to Question 1 is that Pondicherry is not within the territory of India, what is the extent of the jurisdiction exercised by the Union Government over the said territory and whether it extends to making all and every arrangement for its civil administration, its defence and in regard to its foreign affairs.
The Government of India might also state the extent of jurisdiction which France possesses over the area and which operates as a diminution of the jurisdiction ceded to or enjoyed by the Government of India.
On the receipt of the answers to these questions the appeals will be posted for further hearing.
SARKAR J. Four matters came up for hearing together.
Two of these are appeals brought with leave 994 granted by this Court and two are petitions under article 32 of the Constitution.
One appeal and one petition are by one party and the other appeal and petition are by another.
The appeal and the petition by each party challenge an order made by the Chief Commissioner of Pondicherry under the .
Each of the two orders challenged was made on applications for the grant of bus permits.
By one of the orders a permit for a certain route had been given to a person other than one of the parties who has moved us, in preference to him.
By the other order, similarly, the claim of the other party moving us to a permit for a different route was rejected.
All the matters raise substantially the same question concerning the validity of the Chief Commissioner 's orders.
Now, Pondicherry was earlier a French possession administered by the Government of France.
By an agreement between the Governments of India and France, the administration of Pondicherry was transferred to the Government of India as from November 1, 1954.
The Government of India had been exercising power in Pondicherry since, under the .
The Chief Commissioner of Pondicherry is an officer of the Government of India appointed under the powers derived as a result of the agreement.
With regard to the appeals, question arose at the hearing before us as to whether they were competent.
The appeals had been filed with leave granted under article 136 of the Constitution.
It was said that the appeals were incompetent because Pondicherry was outside the Indian territories and under article 136 no appeal from any court outside such territories lay to this Court.
It was, however, contended on behalf of the appellants that since the Indo French agreement or very soon thereafter, Pondicherry became part of the Indian territories as a territory acquired by India and, therefore the appeals who 995 competent.
As the most satisfactory way of deciding the question whether Pondicherry is within India or not is to seek information from the Government on the point, the majority of the members of the bench are of opinion that the Government of India should be approached to enlighten us about it.
The learned Solicitor General, appearing for the Government, has not objected to this procedure being adopted.
With regard to the Petitions under article 32, it was contended that the Chief Commissioner of Pondicherry was a State within the meaning of article 12 of the Constitution as under that article any authority under the control of the Government of India outside the territory of India was a State for the purpose of Part III of the Constitution.
On this basis it was contended on behalf of the petitioners that the petitions under article 32 asking for certain writs to quash the orders of the Chief Commissioner of Pondicherry were also competent.
A further question then arises as to whether in view of article 142 of the Constitution the writs, if issued, could be enforced against an authority under the control of Government of India at Pondicherry, if Pondicherry was outside India and if they could not, whether the Court should issue the writs as it would only be stultifying itself by doing so.
It seems to us that it is unnecessary to decide these questions at this stage, for we are going to ask the Government to inform us whether Pondicherry was at the relevant time part of Indian territories.
If the Government inform us that Pondicherry was part of India, then no question would arise concerning the powers or jurisdiction of this court in any of the matters now before us.
If the information from the Government is that Pondicherry is not within the territories of India, that will, in our opinion, be the 996 proper time to consider whether the Court can still give the petitioners the relief which they ask.
These cases involve other questions of difficulty and importance on which it would be proper, in our view, to make a pronouncement after the Government of India 's answer to our request is received.
As to none of these are indeed any question arising in these cases we express any opinion at this stage.
We wish, however, to observe now that it seems to us exceedingly strange that if this Court finds that a party 's fundamental right has been violated, from which it would follow that that party has a right to move this Court under article 32 and to obtain the necessary writ, this Court could refuse to issue it for the reason that it would thereby be stultifying itself.
If a party is entitled to a writ under article 32, then we are not aware that there is any discretion in the Court to refuse the writ on the ground that the writ cannot be enforced.
Even assuming that in view of article 142 of the Constitution, a writ cannot be enforced outside India as to which we pronounce no opinion now might is not be said with justification that it is not necessary for us to be unduly pressed by considerations of the difficulties of the enforcement of the writ and that if would be reasonable for us to think that the Government of India has sufficient respect for this Court to do all that is in its power to give effect to this Court 's order, whether or not there might be technical difficulties in the way of its enforcement by this Court.
In view of these doubts, we are unable, as at present advised, to concur in the opinion expressed in the Judgment of the majority of the learned Judges constituting the Bench that article 142 stands in the way of this Court issuing a writ under article 32 in this case.
We would reserve our opinion till a later stage and till it becomes necessary to express any opinion at all.
997 BY COURT : We direct that the two questions set out in the majority judgment be forwarded to the Union of India under the seal of this Court for submission of their answers.
On receipt of the answers to the questions the appeals will be posted for further hearing.
The Judgment of Gajendragadkar, Wanchoo and Ayyangar, JJ., was delivered by Ayyangar J. The Judgment of Sarkar and Das Gupta, JJ., was delivered by Sarkar J. AYYANGAR, J.
In compliance with our directions the two questions were forwarded to the Union Government and they submitted their answers to them in the following terms: "Question No. (1) Whether Pondicherry which was a former French Settlement is or is not at present comprised within the territory India as specified in Article 1(3) of the Constitution by virtue of the Articles of the Merger Agreement dated October 21, 1954 between the Governments of India and France and other relevant agreements arrangements, acts and conduct of the two Governments.
Answer The French Settlement (Establishment) of Pondicherry is at present not comprised within the territory of India as specified in clause (3) of Article 1 of the Constitution by virtue of the Agreement dated the 21st October, 1954, made between the Government of France and the Government of India or by any other agreement or arrangement.
By the aforesaid Agreement, dated the 21st October, 1954, the Government of France transferred, and the Government of India took over, administration of the territory of all the French Establishments in India, including Pondicherry, with effect from the 1st November, 1954.
A copy of the Agreement is enclosed.
This is expressed to be a de facto transfer and was intended to be 998 followed up by a de jure transfer.
A treaty of Cession providing for de jure transfer has been signed by the Government of France and the Government of India on the 28th May, 1956, but has not been so far ratified in accordance with the French Law as well as in accordance with the article 31 of the Treaty.
A copy of the Treaty is also enclosed.
The Government of India has been administering Pondicherry under the , on the basis that it is outside India and does not form part of the territory of India.
Question No.(2) If the answer to question 1 is that Pondicherry is not within the territory of India, what is the extent of the jurisdiction exercised by the Union Government over the said territory and whether it extends to making all and every arrangement for its civil administration, its defence and in regard to its foreign affairs.
The Government of India might also state the extent of jurisdiction which France possesses over the area and which operates as a diminution of the jurisdiction ceded to or enjoyed by the Government of India.
Answer The Government of India has been exercising full jurisdiction over Pondicherry in executive, legislative and judicial matters in accordance with .
In doing so it has followed the aforesaid Agreement.
The Government of France has not also exercised any executive, legislative or judicial authority since the said Agreement.
The jurisdiction of the Government of India over Pondicherry extends to making all arrangements for its civil administration.
The administration of the territory is being carried on under the , and in accordance with the French Establishments (Administration) Order, 1954, 999 and other Orders made under sections 3 and 4 of that Act.
The Government of India have been aiming at conducting the administration of Pondicherry so as to conform to the pattern of administration obtaining to in India consistent with the said Agreement.
Accordingly a large number of Acts in force in India have already been extended to Pondicherry.
The Government of India hold the view that the sole responsibility in regard to arrangements for the defence of Pondicherry devolves on themselves.
Pondicherry has no foreign relations of its own.
No claims have been made by the Government of France in this matter nor have the Government of India recognized the existence of any such claim.
The Government of France do not possess any de facto jurisdiction over Pondicherry which would imply any diminution of the jurisdiction exercised by the Government of India.
" The appeals and the writ petitions were thereafter posted for further hearing before us on October 9, 1961.
Mr. N. C. Chatterji learned Counsel for Shri Masthan Sahib, appellant in Civil Appeal No. 42 of 1961 and petitioner in writ petition No. 297 of 1960, urged before us two contentions.
The first was that the answer to the second question clearly established that the French establishments including Pondicherry were part of the territory of India, having been acquired by the Union Government within the meaning of article 1(3)(c) and that in view of this position it was not necessary to consider nor proper for us to accept the views expressed by the Union Government in their answer to the first question wherein they had expressly stated that they did not consider the French "establishments" covered by the agreement between the Union Government and the Government of France dated October 21, 1954 as being within the territory of India within 1000 Art.1(3) of the Constitution of India.
Secondly, a point which was necessarily involved in the first one just set out that this Court was not bound by the statement of the Government of India in its answer to Question No. 1 and that it should disregard such an answer and investigate for itself on the materials placed before it as to whether Pondicherry was part of the territory of India or not.
In support of the first submission Mr. Chatterji placed considerable reliance on the passage in our judgment rendered on April 28, 1961 reading: "Still if the extent of the jurisdiction vested in the Union Government by the arrangements entered into between the two Governments virtually amounts to a transfer of sovereignty for every practical purpose, it would be possible to contend that such a transfer or cession was so incompatible with the existence of any practical sovereignty in the French Government as to detract from the surrender or transfer being other than complete.
" The argument was that the answer to the second question showed (1) positively that the Government of India exercised complete jurisdiction over the territory executive, legislative and judicial, its authority being plenary and extending to the making of laws.
Their execution and the administration of justice with complete power over its defence and foreign affairs and (2) negatively that the Government of France possessed no authority in the territory, so much so that it could not be predicated that there had been any retention of even a vestigial sovereignty to detract from the completeness of the transfer.
In the circumstances, learned Counsel urged that he was justified in inviting us to ignore or disregard the answer to the first question and instead answer the question as to whether these French establishments were within the territory of India or not on the basis of the second question.
1001 Having regard to the nature of this argument it is necessary to state briefly the circumstances in which we felt it necessary to frame the two questions that we did.
At the stage of the hearing of the petitions on the first occasion, notice was issued to the Union Government and the learned Solicitor General appearing in response to the notice did not convey to us any definite views on the part of the Government as to whether Pondicherry was or was not considered by them to be part of the territory of India but invited the Court to decide the question on the materials that might be placed the parties before us.
At that stage therefore we were not quite certain whether Government would be prepared to make a formal statement about their views on this question.
If therefore the Government were inclined still to leave the matter to the Court, we desired to have complete information as to the factual position regarding the government of the territory.
It was in view of that possibility that Question No. 2 was framed.
It was, of course, possible that Government might communicate their views to the Court and with a view to enable this to be done we framed Question No. 1.
In these circumstances nothing is gained by reference to the passage in our judgment dated April 28, 1961.
The passage extracted is certainly not an authority for the position as to whether if Question No. 1 was answered, the Court could properly consider any implications or inferences arising on the answer to Question No. 2.
We shall therefore proceed to consider the principal question that arises at this stage, viz., whether the answer of the Government is reply to a specific and formal enquiry by the Court that it did not consider a particular area to have been "acquired" by the Indian Government and therefore not a part of the territory of India was binding on the Court or not.
A number of decisions of the English and Australian Courts in which the point 1002 has been considered were placed before us and we shall proceed to refer to the more important of them.
In Duff Development Company vs Government of Kelantan(1) the question related as to whether the Sultan of Kelantan was the ruler of an independent sovereign State, such that the Courts in England had no jurisdiction over the Sultan or the Government of that State.
The Secretary of State for the Colonies who was requested by the Court to furnish information as regards the status of the ruler and of the Government stated that the Sultan was the head of an independent sovereign state.
The binding character of this statement was however questioned and it was argued before the House of Lords on foot of certain public documents that Kelantan was merely a dependency of the British Government and not a sovereign State.
On the other side; it was pressed upon the House, that the statement of the Secretary of State was binding and this latter submission was unanimously accepted by the House.
In doing so Viscount Cave observed: "If after this definite statement a different view were taken by a British Court, an undesirable conflict might arise; and in my opinion it is the duty of the Court to accept the statement of the Secretary of State thus clearly and positively made as conclusive upon the point." Viscount Finlay expressed himself thus: "It has long been settled that on any question of the status of any foreign power course is that the Court should apply to His Majesty 's Government, and that in any such matter it is bound to act on the information given to them through the proper department.
Such information is not in the nature of 1003 evidence; it is a statement by the Sovereign of this country through one of his Ministers upon a matter which is peculiarly within his cognizance." Lord Sumner said: "Where such a statement is forthcoming no other evidence is admissible or needed.
" There is one other decision of the House of Lord to which reference may usefully be made Government of the Republic of Spain vs Arantzazu, Mendi.(1) The question for decision was whether it was General Franco 's Government that was the Government in Spain or the Republican Government.
The Secretary of State for Foreign Affairs had, in a formal communication to the Court in reply to a letter forwarded under the direction of Bucknill J., stated that His Majesty 's Government had recognised the Nationalist Government as the Government which had administrative control over a large portion of Spain and particularly over the Basque Provinces wherein the ship, title to which was in question, had been registered.
Lord Wright in his speech said: "The Court is, in my opinion, bound without any qualification by the statement of the Foreign office, which is the organ of His Majesty 's Government for this purpose in a matter of this nature.
Such a statement is a statement of fact, the contents of which are not open to be discussed by the Court on grounds of law.
" No doubt, these decisions were in relation to the status of or recognition by the Government of foreign sovereign and are therefore not ad idem with the point which now arises for consideration viz., whether a particular piece of territory is or is not part of the territory of India.
A statement by Government in relation to a similar question 1004 came up before the Court of Appeal in Fagernes (1) The question for the Court 's consideration was whether the Bristol Channel, particularly at the point where a collision was stated to have taken place, was or was not part of British territory.
Hill J. before whom an action for damage caused by the alleged collision came up held that the waters of the Bristol Channel were part of British territory and therefore within the jurisdiction of the High Court.
The defendants appealed to the Court of Appeal and at that stage the Attorney General appeared and in response to a formal enquiry by the Court as to whether the place where the collision was stated to have occurred was within the realm of England, replied that "the spot where the collision is alleged to have occurred is not within the limits to which the territorial sovereignty of His Majesty extends." On the basis of this statement the Court of Appeal unanimously reversed the judgment of Hill J. An argument was raised before the Court as regards the binding character of the statement by the Attorney General and in regard to this Akin L.J. said: "I consider that statement binds the Court, and constrains it to decide that this portion of the Bristol Channel is not within British jurisdiction, and that the appeal must be allowed.
I think that it is desirable to make it clear that this is not a decision on a point of law, and that no responsibility rests upon this Court save that of treating the statement of the Crown by its proper officer as conclusive." Lawrence L.J. observed: "It is the duty of the Court to take judicial cognizance of the extent of the King 's territory and, if the Court itself is unacquainted with the fact whether a particular place is or is not within the King 's territory, the Court is entitled to inform itself of that fact by making 1005 such inquiry as, it considers proper.
As it is highly expedient, if not essential, that in a matter of this kind the Courts, of the King should act in unison with the Government of the King, this Court invited the Attorney General to attend at the hearing of the appeal and at the conclusion of the arguments asked him whether the Crown claimed that the spot where the collision occurred was within the territory of the King.
The Attorney General in answer to this inquiry, stated that he had communicated with the Secretary of State for Home Affairs, who had instructed him to inform the Court that "the spot where this collision is alleged to have occurred is not within the limits to which the territorial sovereignty of His Majesty extends.
" In view of this answer, given with the authority of the Home Secretary upon a matter which is peculiarly within the cognizance of the Home office, this Court could not, in my opinion, properly do otherwise than hold that the alleged tort was not committed within the jurisdiction of the High Court".
Bankes L.J., though he agreed with his colleagues in allowing the appeal, however struck a slightly different note saying: "This information was given at the instance of the Court, and for the information of the Court.
Given under such circumstances, and on such a subject, it does not in my opinion necessarily bind the Court in the sense that it is under an obligation to accept it" The entire matter is thus summarised in Halsbury 's Laws of England, Third Edition, Volume 7: "There is a class of facts which are conveniently termed 'facts of state '.
It consists of matters and questions the determination of which is solely in the hands of the Crown or 1006 the government, of which the following are examples: (1) . . . . . . . . . (2) Whether a particular territory is hostile or foreign, or within the boundaries of a particular state." Mr. Chatterji, however, invited our attention to certain observations contained in two decisions of the High Court of Australia Jolley vs Mainka and Frost vs Stevenson (2).In both these cases the point involved was as to the status of the territory of New Guinea which Australia was administering as mandatory territory under a mandate from the League of Nations.
There are, no doubt, observations in these cases dealing with the meaning of the word 'acquired ' in section 122 of the Commonwealth of Australia Act, but the point to be noticed however is that there was no statement by the Government of the Commonwealth of Australia as to whether this area was or was not part of the territory of Australia, such as we have in the present case.
We do not, therefore, consider that these observations afford us any assistance for the solution of the question before us.
Both Mr. Chatterji and Mr. Viswanatha Sastri learned Counsel who appeared for Sivarama Reddiar, the appellant and petitioner in the other cases, stressed the fact that what we were called upon to decide was the meaning of the expression 'acquired ' in article 1 (3) (c) of the Constitution and that in the case of a written constitution such as we had to construe, jurisdiction of this Court was not to be cut down and the enquiry by it limited by reasons of principles accepted in other jurisdictions.
In particular, learned Counsel stressed the fact that it would not be 1007 proper for the Court to ignore patent facts and hold itself bound by the statement of Government in cases where, for instance, the Government of the day for reasons of its own desiring to exclude the jurisdiction of this Court denied that a part of territory which patently was within article 1(3) was within it.
It is not necessary for us to examine what the position would be in the contingency visualized, but assuredly it is not suggested that the case before us falls within that category.
The proposition laid down in the English decisions that a conflict is not to be envisaged between the Executive Government and the judiciary appears to us to rest on sound reasoning and except possibly in the extreme cases referred to by the learned Counsel, the statement of the Government must be held binding on the Court and to be given effect to by it.
There is one other matter which was specially pressed upon us during the course of argument to which is necessary to refer.
The submission was that the answer by the Union Government to the two questions were really contradictory and that whereas the answer to the second question made it out that the French establishments had been acquired and were part of the territory of India, the Government had in relation to the first question made a contradictory answer.
We do not consider this argument well founded.
In cases where the only fact available is the de facto exercise of complete sovereignty by one State in a particular area, the sovereignty of that State over that area and the area being regarded as part of the territory of that State would prima facie follow.
But this would apply normally only to cases where sovereignty and control was exercised by unilateral action.
Where however the exercise of power and authority and the right to administer is referable to an agreement between two States, the question whether the territory has become integrated with and become part 1008 of the territory of the State exercising de facts control depends wholly on the terms upon which the new Government was invited or permitted to exercise such control and authority.
If the instruments evidencing such agreements negatived the implication arising from the factual exercise of Governmental authority then it would not follow that there is an integration of the territory with that of the administering power and that is precisely what has happened in the present case.
As annexures to their reply the Union Government have included The Treaty of Cession dated May 28, 1956, which is a sequel to the agreement dated October 21, 1954, transferring the powers of the Government of the French Republic to the Government of the Indian Union.
Under the terms, this Treaty would become operative and full sovereignty as regards the territory of the establishments of Pondicherry, Karikal, Maha and Yanam would be ceded to the Indian Government only when the treaty comes into force.
It is not necessary to refer to all the clauses of this Treaty except the one which stipulates that it would come into force on the day of ratification by the two Governments concerned.
According to the Constitution of France an Act of the France Assembly is required for the validity of a Treaty relating to or involving the cession of French territory.
It is common ground that the Treaty has not been ratified yet.
The resulting position therefore is that by the agreement dated October 21,1954, though complete administrative control has been transferred to the Government of India, this transfer of control cannot be equated to a transfer of territory, that being the common intention of the parties to that agreement.
Unless a ratification takes place there would legally be no transfer of territory and without a transfer of territory there would not be in the circumstances an "acquisition of territory", with the consequence that at present Pondicherry has to be treated as not part 1009 of the territory of India.
It is unnecessary to consider what the position would have been if the Union Government had, notwithstanding the terms of the Treaty, treated the former French establishments as having become part of the territory of India.
There was one minor submission made by Mr. Viswanatha Sastri to which a passing reference may be made.
He suggested that the term "territory of India" in article 142 might not represent the same concept as 'the territory of India ' within article 1(3) and that in the context of article 142 the term 'territory of India might include every territory over which the Government of the Union exercised de facto control.
We are not impressed by this argument.
The term 'territory of India ' has been used in several Articles of the Constitution and we are clearly of the opinion that in every Article where this phraseology is employed it means the territory of India for the time being as falls within article 1(3) and that the phrase cannot mean different territories in different Articles.
We have already dealt with the question as to what the effect on the maintainability of the appeals and the petitions would be if Pondicherry were not part of the territory of India.
In view of Pondicherry not being within the territory of India we hold that this Court has no jurisdiction to entertain the appeals.
The appeals therefore fail and are dismissed.
The writ Petitions must also fail and be dismissed for the reason that having regard to the nature of the relief sought and the authority against whose orders relief is claimed they too must fail.
They are also dismissed.
We would add that these dismissals would not include the petitioners from approaching this Court if so desired, in the event of Pondicherry becoming part of the territory of India.
In the peculiar circumstances of this case we direct that that the parties bear their respective costs.
1010 Before leaving this case, we desire to point out that the situation created by the French establishments not being part of the territory of India is somewhat anomalous.
Thier administration is being conducted by the extension of enactments in India by virtue of the power conferred by the .
We have had occasion to point out that though technically the areas are not part of Indian territory, they are governed practically as part of India.
But so far as the orders of the courts and other authorities judicial and quasi judicial within that area are concerned, the Superior Courts in India have not, subject to what we have stated as regards the limited jurisdiction of the court, any appellate or revisional jurisdiction over them and this might in a large number of cases lead to injustice and a sense of grievance.
There is enough power in Government even at the stage of the de facto transfer to remedy the situation.
By appropriate action under the , or by Parliamentary Legislation under the entry 'Foreign Jurisdiction ' the appellate Jurisdiction of the High Court or of this Court could be enlarged under articles 225 and 138 [1] respectively so as to afford an adequate remedy for the inhabitants of these areas.
To this aspect of the matter we consider that the attention of Government should be drawn.
SARKAR, J.
On the earlier occasion when these cases came up before this Court, we postponed further hearing of them till we received the answers of the Government of India to two questions which we then referred to it.
These questions substantially were, (a) whether Pondicherry is or is not within the territories of India and (b) if it is not, the extent of the jurisdiction exercised by the Union Government over it and the jurisdiction which France still possesses in regard to it.
These questions were put because considerable doubt was felt as to the real status of Pondicherry.
If it 1011 was a foreign territory, no appeal could lie to this Court under article 136 of the Constitution from any tribunal in Pondicherry and two of these matters were such appeals.
The other two matters were petitions asking for writs against certain authorities in Pondicherry and the majority held that no writ could issue to a foreign territory in view of article 142 of the Constitution and therefore for the purposes of these petitions also it was necessary to ascertain the status of pondicherry.
We however then felt some difficulty about the question whether we could refuse to issue writs to an officer of the Government of India outside the territory of India and expressed our inability to concur in the opinion of the majority.
We said that the proper time to discuss that question would be when on receipt of the Government 's answers to our questions, it had to be held that Pondicherry was a foreign territory and reserved our final decision on the question till then.
The Government 's answers to our questions have now been received.
On the basis of these answers, for the reasons hereafter mentioned, it has to be held that Pondicherry is a foreign territory.
We, therefore, now wish to say a few words on the question on which we reserved our opinion on the former occasion.
The opinion of the majority no doubt prevails in spite of what we shall say.
Before we discuss the question which we reserved we desire to observe in regard to the appeals that it must be held that they are not maintainable as Pondicherry is a foreign territory.
Now, the writs are sought to quash the orders of a quasi judicial authority functioning in Pondicherry on the ground that they violate certain fundamental rights of the petitioners This authority however is an officer of the Government of India.
How far writs can be issued under article 32 of the Constitution of India to quash a quasi judicial order even if made in India, itself a 1012 question of considerable difficulty on which there has been a difference of opinion in this Court.
That question was recently discussed before another Bench but the judgment in that case has not yet been delivered.
For the present purpose however we will assume that writs can be issued under article 32 to quash a quasi judicial order.
The First observation that we wish to make is that it has now been finally held by this Court, dealing with an application under article 32 that "the right to move this Court by appropriate proceedings for the enforcement of the rights conferred by Part III of the Constitution is itself a guaranteed right": Kavalannara Kottarthill Kochunni vs The State of Madras.
(1) A right to move this Court by a petition under article 32 is, therefore, a fundamental right.
That being so, a right to obtain a writ when the petition establishes a case for it, must equally be a fundamental right.
For, it would be idle to give a fundamental right to move this Court and not a similar right to the writ the issue of which the petition might clearly justify.
If then a fundamental right to a writ is established, and that is the assumption on which we are examining the present question the party who establishes such right must be entitled ex debito justitiae to the issue of the necessary writ.
There would then be no power in the Court to refuse in its discretion to issue it.
But it is said that if a writ was issued in the present case, it could not in view of article 142 which says that an order of this Court shall be enforced throughout the territory of India, be enforced Pondicherry.
Let us assume that is so.
Then it is said that if the Court were to issue the writ it would only be stultifying itself and should not therefore issue it.
We are unable to accede to this contention.
If a party has been given by the 1013 Constitution a fundamental right to a writ, there is no power in the Court to refuse that right.
Supposed practical considerations of incapacity to in force the writ issued cannot be allowed to defeat the provisions of the Constitution.
No authority has been cited to us in support of the proposition that when a party in entitled as of right to an order, a court can refuse to make that order on the ground that it would thereby be stultifying itself.
So far as we have been able to ascertain orders are refused on this ground when the matter is one for the discretion of the Court.
Such cases have, for instance, frequently occurred in proceedings relating to the issue of injunctions, to grant or not to grant which is well known, in the discretion of the Court.
The discretion has no doubt to be judicially exercised as indeed all discretions have, but none the less the right to the relief is in the discretion of the Court as opposed to a relief to which a party is entitled ex debito justitiae, a distinction which is well understood.
Thus, dealing with a case of the issue of an injunction restraining a person from.
proceeding with an action in a foreign court, Jessel M.R. Observed, in In re International Pulp and Paper Co. Ltd.(1), "Therefore, as to a purely foreign country, it is of no use asking for an order, because the order cannot be enforced".
Take another case.
In England an information in the nature of quo warranto is not issued as a matter of course as a matter of course [R.V. Stacey and therefore the courts there refused to issue it when in information would be futile in its results.
Halsbary Laws of England (3rd ed.) Vol.
11 p. 148.
So in Reg.
v Fox(2) the Court refused to issue the information for the reason that the person sought to be removed by it could be reappointed at once.
These however are cases in which a Court would be inclined not to make 1014 a discretionary order on the ground that the Court would thereby be stultifying itself.
Instances might be multiplied but it is unnecessary to do so.
We do not think that the principle of these cases can be applied where a court has no option but to make the order which we think is the present case.
It would clearly be less applicable to a case like the present where, as we shall immediately show, it would be wrong to think that the order would not be carried out.
Lastly, can we be certain that the Court would be stultifying itself by issuing the writ in this case ? That would be only if our order is sure to be ignored.
We think that this Court would be fully justified in proceeding on the basis that any order made by it would be carried out by any officer of the Government of India to whom it is directed wherever he may be, out of respect for the Constitution and this Court and this without requiring to be forced to do so.
In this connection the case of R.v.
Speyer, R. vs Cassel(1) is of interest.
There Speyer and Cassel had been called upon by the court by rules nisi to show cause why an information in the nature of quo warranto should not be exhibited against them to show by what authority they respectively claimed to be members of His Majesty 's Privy Council for Great Britain.
Speyer and Cassel were naturalised British subjects and the question was whether under certain statutes they were not disqualified from being appointed to the Privy Council.
One of the arguments on behalf of the respondents was that the court would be powerless to enforce a judgment of ouster for it could not prevent the immediate reinstatement of the names of these persons in the roll of Privy Councillors if the King though fit to alter it.
The answer that Reading C.J. gave to this argument was 1015 "Although it may be interesting and useful for the purpose of testing the propositions now under consideration to assume the difficulties suggested by the Attorney General, none of them would in truth occur.
This is the King 's Court; we sit here to administer justice and to interpret the laws of the realm in the King 's name.
It is respectful and proper to assume that once the law is declared by a competent judicial authority it will be followed by the Crown.
" The other members of the Bench also took the same view, Lush J. observing, "The consequences he suggests are argumentative and not real, and we cannot regard them as fettering the exercise of our jurisdiction".
Now this was a case of a discretionary order.
Even so, the Court felt that it would be wrong to stay its hand only on the ground that it could not directly enforce its order.
This salutary principle has been acted upon in our country by Das J. who later became the Chief Justice of this Court, in In re Banwarilal Roy(1) There Das J. issued an information in the nature of quo warranto in spite of the fact that he could not command the Governor of Bengal to comply with his order which might therefore have become futile.
We think it is a very healthy principle and should be followed.
We do not think that we can allow our powers for the protection of fundamental rights to be fettered by considerations of the enforcement of orders made by us; we must assume that the authorities in Pondicherry will willingly carry out our order.
We turn now to the other questions arising on the Government 's answers.
Pondicherry was admittedly a French possession but under an agreement with France, the Government of India is now administering it.
The Government has definitely stated that Pondicherry is not comprised 1016 within the territory of India.
It has also said that it has full jurisdiction over Pondicherry under that agreement, that the liability for defence of Pondicherry is on it and that Pondicherry has no foreign relations.
It has further said that France does not possess any de facto jurisdiction over Pondicherry which would imply a diminution of the jurisdiction exercised by it.
It was contended that we are not bound by the Government 's answer to the first question, namely, that Pondicherry is outside India and that on the basis of the answer to the second question we should hold, in spite of the Government 's view, that Pondicherry is a part of Indian territory.
It was said that since India had admittedly full jurisdiction over Pondicherry and France exercised none, it must be held the India has acquired sovereignty over it and that it had, therefore, become Indian territory by acquisition.
We are entirely unable to accept this contention.
We think that we are bound by the Government 's decision at least in a case where we have referred to it for our guidance.
That is the view taken in England and it is a view which is based on sound principle: see Duff Development Co. vs The Govt.
of Kelantan.(1) Any other view would create a chaos and we cannot be a party to it.
We may say that by a treaty.
as in the present case, India may acquire full jurisdiction over a foreign territory which under the same treaty may nonetheless remain a foreign territory.
It was contended that this would be absolute surrender to the executive Government; that such a view would enable the Government when it so liked, to disown a territory which was patently a part of India so that it might act therein as it liked in complete disregard of the laws and without any check from any court including this Court.
This contention, to use the words of Luch J. in Speyer 's case(2)is "argumentative and not real".
1017 We cannot imagine that in a democracy any Government would ever act in the way suggested and we are sure no Government of this country will ever do so.
Furthermore, the contention has no foundation whatever and is wholly imaginary.
It is the duty of a court to take judicial notice of the extent of the territory of its own State.
Section 57 of the Evidence Act requires that.
Therefore, if the fact is patent that a certain territory is within India, the courts will take judicial notice of it and there will be no occasion to refer to the Government for any information regarding it.
It may however be that in certain circumstances the fact is not patent but even then it appears that it will be the duty of a court to take judicial notice and it does so by requesting the Government to enlighten it on the point.
So Lawrence L. J. said in Fagernes (1), "It is the duty of the Court to take judicial cognisance of the extent of the King 's territory and, if the Court itself is unacquainted with the fact whether a particular place is or is not within the King 's territory, the Court is entitled to inform itself of that fact by making such enquiry as it considers necessary.
" It is only in cases where the Court is not aware of the facts that the question of referring to the Government will arise and therefore no occasion can possible arise where the Government might have the chance of distorting a patent fact.
This is all that we desire to say.
As the majority of the learned Judges of the Bench have taken a different view, the order to be made will follow their decision. | The Supreme Court referred two questions to the Union Government viz (i) whether.
Pondicherry was comprised within the territory of India, and (ii) if not, what was the extent of the jurisdiction exercised by the Union Government and the French Government over the territory.
The answers given were that (i) Pondicherry was not comprised within the territory of India and (ii) the Union Government exercised full jurisdiction over Pondicherry and the French Government did not exercise any de facto jurisdiction over it.
There was a treaty of cession between France and India in respect of Pondicherry but it had not been ratified as required by the French and Indian laws.
The appellant contended that the answer of the Union Government to the second question established that Pondicherry was part of the territory of India and that the Court was not bound by the answer to the first question.
^ Held, that Pondicherry was not comprised within the territory of India as specified in article 1(3) of the Constitution.
The answer of the Union Government on this question was binding on the Court.
There was no conflict between the answers to the two questions.
Though complete administrative control over Pondicherry had been transferred to the Government of India it could not be equated to a transfer of territory.
Unless there was ratification of the Treaty there could legally be no transfer of territory.
Accordingly, no appeal could be entertained by the Court under article 136 of the Constitution against the decisions of the authorities in Pondicherry.
982 Duff Development Company vs Government of Kelantan , Government of the Republic of Spain vs Arantzazu Mendi.
(1939) A. C. 256 and Fagernes 1927 Probate 311, applied.
Jolley vs Mainka ; and Efrost vs Slevenson; , , distinguished.
Per Gajendragadkar, Wanchoo and Ayyangar, JJ.
Having regard to the nature of the relief sought no writ under article 32 of the Constitution could be issued to the authorities in Pondicherry.
Per Sarkar and Das Gupta, JJ The Supreme Court could issue a writ under article 32 to the quasi Judicial authorities in Pondicherry.
Article 32 was a fundamental right and the right to obtain a writ was equally a fundamental right.
If the Constitution gave to a party a fundamental right to a writ the Court could not refuse that right.
The consideration that the writ issued may not be enforced in Pondicherry could not be allowed to defeat the provisions of the Constitution.
Such a consideration is relevant only in the case of discretionary orders.
K. K. Kochunni vs The State of Madras, [1959] Supp. 2 S.C.R. 316, In re International Pulp and Paper Co. Ltd., , Reg vs Fox, ; , R. vs Cassel, (1916) I K B. 595 and In re Banwarilal Roy, , referred to. |
ivil Appeal No. 785 of 1988.
From the Judgment and Order dated 6.3. 1987 of the Bombay High Court in Writ Petition No. 1166 of 1981.
Appellant in person.
Dr. Y.S. Chitale and V.B. Joshi for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
This is an appeal by Special Leave under Article 136 of the Constitution of India from the Judgment of Bombay High Court dated 6th March, 1987 in Writ Petition No. 1166 of 1981.
The appellant, C.D. Tase, joined the college run by Vidhya Prasarak Mandal, Thane, on June 15, 1971 as a lectur er in the pay scale of Rs.300 25 600 prescribed by the Uni versity Grants Commission pursuant to the recommendations made by the Second Pay Commission.
By Government Resolution No. USG 1167 U dated November 6, 1967, the Government of Maharashtra had accepted in principle the Government of India scheme based on the recommendations of the University Grants Commission for improvement of salary scales of uni versity teachers and teachers in affiliated Arts, Science, Commerce and Secondary Training Colleges.
Accordingly, the Government of Maharashtra directed all the Universities in the State to implement the pay scales recommended by the Commission.
The scales recommended were to take effect from April 1, 1966.
Three scales were recommended for lecturers, namely, Rs.300 25 600 (Lecturers, Junior Scale), Rs.400 30 640 40 800 (Lecturers, Senior Scale) and Rs.700 40 1100 (Senior Lecturers).
The Universities in turn directed col leges affiliated to them to implement the recommendations accepted by the State of Maharashtra.
The appellant 's col lege was at the material time affiliated to the University of Pune.
The Additional Director of Education, Maharashtra State by his letter No. S 95/127 A 739 dated January 18, 1968 addressed to the Principals of non Government Arts, Science, Commerce and S.T. Colleges in the State directed the colleges to implement the recommendations made by the Second Pay Commission as approved by the State of Maharashtra.
The University in turn by its letter No. PU/Stat/F.3/A/67 68/236 dated February 7, 1968 directed the Principals of all colleges to implement the new pay scales with effect from April 1, 1966.
Thus, in the category of lecturers (excluding Principals) three scales as stated above were prescribed subject to the condition that the number of senior lecturers and lecturers, senior scale, was not to exceed 1/4th of the total strength of lecturers.
It was left to the Universities to formulate norms which the lecturers must satisfy for being considered for the posts of senior lecturers and/or lecturers, senior scale, as the case may be.
The High Court while disposing of the writ petition filed by the appellant and his two companions, Writ Petition No. 1166 of 1981, observed: "There does not appear to be much dispute that if the report of the Second Pay Commission of University Grants Commission was implemented in letter and spirit, the petitioners would have respectively qualified for the category of Senior Lecturers in the pay scale of Rs.700 40 1100 on 2nd March, 1974, 15th June, 1974 and 15th June, 1975 respectively.
" It is evident from the above observation of the High Court that the appellant was entitled to placement in the senior scale of Rs.700 401100 with effect from June 15, 1975.
In the meantime, sometime in 1978, a decision was taken to implement the Third Pay Commission Report prescribing a running scale of Rs.700 1600 for teachers with effect from January 1, 1973.
All the Universities in the State were directed to implement the new scale of Rs.700 1600 pre scribed for senior lecturers.
This raised the question whether placement of teachers already made after January 1, 1973 in the higher pre 1973 scales would be valid on the implementation of the revised scale w.e.f. January 1, 1973.
By Government Resolution No. USG 1178/24585/XXXII (Cell) dated June 27, 1978, it was clarified that placement of teachers made in one of the higher pre 1973 scales of 400 800 and Rs.700 1100 on or after January 1, 1973 would be considered valid and protected subject to the prescribed conditions.
The High Court points out that if the above clarification is accepted as correct the appellant would be entitled to placement in the high scale of Rs.700 1100.
However, relying on the University of Pune 's subse 740 quent letter of March 10, 1978 whereby the college manage ments were directed to ignore the pay scales prescribed pursuant to the recommendations of the Second Pay Commission in the case of teachers who became entitled to the higher scale after January 1, 1973, it was submitted before the High Court that since the new pay scale of Rs.7001600 was made operative from January 1, 1973, lecturers who were not given the benefit of the revised scale of Rs.700 40 1100 could be fixed in the new scale of Rs.700 1600 with effect from January 1, 1973 as per the Circular No. Aff/Recg/193 of 1977 dated May 19, 1977.
This submission made on behalf of the University authorities found favour with the learned Judges of the High Court as they thought that there was 'nothing very inequitable ' about the decision taken by the university authorities.
The appellant who argued the case in person submitted that the High Court failed to appreciate the fact that the decision of the university authorities was highly prejudi cial to the appellant and others similarly situated, as it resulted in substantial monetary loss.
It must be realised that the. decision to implement the recommendation of the Third Pay Commission w.e.f. January 1, 1973 was taken some time in 1978.
In the meantime, several lecturers of affili ated colleges were placed in the higher scale of Rs.700 1100.
That is why, it became necessary to seek a clarifica tion from the Government whether the placement allowed to such lecturers in the higher scale would be treated as valid having regard to the implementation of the new scale of Rs.700 1600 w.e.f.
January 1, 1973.
As pointed out earlier, the Government by their Resolution of June 27, 1978 clari fied that such placement in the higher scale of Rs.700 1100 was valid subject to the fulfilment of the prescribed condi tions.
The placement of such lecturers in the higher scale of Rs.700 1100 was therefore directed to be protected while bringing them on the revised scale of Rs.700 1600.
It fol lows that if the appellant had been placed in the higher scale of Rs.700 1100 when he became entitled to it on June 15, 1975 his pay would have been protected as per the clari fication while being placed in the revised scale of Rs.700 1600.
The appellant is, therefore, justified in making a grievance that merely because the college/ university au thorities did not place him in the higher scale of Rs.7001100 w.e.f. June 15, 1975 he cannot be made to suffer on the ground that he will get the benefit of two reports simultaneously if he is first placed on the scale of Rs.700 1100 and, thereafter brought on the scale of Rs.700 1600.
It is evident from the letter No. BY/Genl/1981 82 dated January 28, 1982 addressed to all the Principals of Arts, Science and Commerce Colleges by the Administrative Officer of Higher Edu 741 cation Grants, Bombay Region, Bombay that the college au thorities were directed to furnish information in the pre scribed form in respect of teachers who were entitled to the benefit of the pre revised scales of Rs.700 1100 and Rs.400 800.
The Principal of the college forwarded the information to the Administrative Officer under his letter ACC/ TNE/2080 dated March 13/15, 1982 in the prescribed proforma which includes the name of the appellant as one of the persons entitled to the same benefit.
We may incidental ly mention that his two companions in the High Court Dr. M.P. Kendurkar and Professor N. Krishnan were also included in the list of eligible lecturers entitled to the higher scale of Rs.700 1100.
The subsequent Resolution No. USG 1178/ 160692(19) UNI/4 dated April 7, 1983 issued by the State of Maharashtra also stipulates as under: "The question of placement of these teachers was, therefore, under consideration of Govern ment for sometime past.
Government is now pleased to direct that the placement of only those teachers whose names were recommended for placement in the senior lecturers scale of I.S.S. viz. Rs. 1100 and 400 800 to the universities by the respective colleges man agements prior to 4th October, 1975 i.e. the date of issue of Government Resolution assign ing revised University Grants Commission recommended scales but their placement was not effected due to some reason or the other, should be made with effect from the dates the placement is approved by the concerned Univer sities.
" It is evident from the above decision that lecturers whose name were recommended for placement in the higher scale before October 4, 1975 were entitled to such placement before being brought over to the revised scale of Rs. 700 1600.
The appellant was entitled to placement in the higher scale of Rs.700 1600 w.e.f.
June 15, 1975.
The college authorities failed, for no fault of the appellant and his companions, to forward their names to the University in the prescribed proforma for reasons best known to them.
To deny the benefit to which the appellant and his companions were entitled on account of the lapse on the part of the college authorities would be highly unfair and unjust.
The High Court, however took the view that there was 'nothing very inequitable ' about the decision of the University to deny such placement to the appellant and his companions, but it is obvious that if they had been granted placement on the due dates they would have been entitled to higher salary and allowances related to basic salary e.g. dearness allowance which is a certain percentage of basic 742 salary, would have gone up.
In addition they would have earned increments by the time they became entitled to the revised scale of Rs.7001600.
It is, therefore, obvious that the decision of the university not only appears to be 'ine quitable but also discriminatory inasmuch as it sought to treat equals as unequals by protecting those who had secured the placement and denying the same to others whose names the college managements had failed to forward in good time.
We are, therefore, of the opinion that the appellant was enti tled to placement in the higher scale of Rs.700 1100 before being brought over to the revised scale of Rs.700 1600.
For the above reasons, we allow the appeal and set aside the impugned order of the High Court dated March 6, 1987.
We direct the respondents to grant the benefit of placement in the higher scale of Rs.700 1100 to the appellant from the date he became entitled to the same i.e. June 15, 1975 and thereafter fix his pay in the revised scale of Rs.700 1600.
The appellant will be entitled to the monetary benefit accruing to him on the implementation of the above directive which should be worked out and paid to him within three months from today.
The appellant will also be entitled to cost from the University of Bombay which we quantify at Rs.2500.
Before we part, we may mention that the two companions of the appellant who were writ petitioners in the High Court have not approached this Court under Article 136 of the Constitution but we find that they were similarly situated and were entitled to placement in the higher scale of Rs.700 1600 w.e.
L March 2, 1974 and June 15, 1975.
We hope that the authorities will extend the same benefit to them also notwithstanding their failure to approach this Court, perhaps on account of cost constraint.
It would be highly unfair to deny to them the monetary benefits to which they are legally entitled.
We do hope that the concerned authori ties will not drive them to another round of litigation.
G.N. Appeal al lowed. | The appellant joined as a Lecturer in 1971, in a College affiliated to Pune University in the scale of Rs.300 600 prescribed by the University Grants Commission.
Earlier, in 1967 the State Government accepted in principle the Govern ment of India Scheme based on recommendations of the Univer sity Grants Commission for improvement of pay scales of all university and college teachers, and issued directions to all universities in the State.
The Universities in turn directed all the affiliated colleges accordingly.
The new scales were Rs.300 25 600 (Lecturers, Junior Scale), Rs.400 30 640 40 800 (Lecturers, Senior Scale) and Rs.700 40 1100 (Senior Lecturers) and were to take effect from 1.4.1966.
The number of Senior Lecturers and Lecturers (Sr. Scale) was not to exceed 1/4 of the total strength of Lecturers.
Again, in 1978, it was decided to implement the next report, viz, the Third Pay Commissioner 's report which prescribed a running scale of Rs.700 1600 with effect from 1.1.1973.
All the Universities in the State were directed to implement the same.
A question was raised as to whether placement of teachers already made after 1.1.1973 in the pre 1973 scales would be valid on the implementation of the revised scale with effect from 1.1.1973.
The Government clarified that such a placement would be valid and protect ed, subject to the prescribed conditions.
However, the Pune University directed the College Managements to ignore the pay scales prescribed by the earlier Pay Commission in case of teachers who became entitled to the higher scale after 1.1.73.
Against this, the appellant and two others ap proached the High Court by way of a Writ Petition.
However, the High Court felt that there was 737 nothing very inequitable about the decision taken by the University authorities and declined to interfere.
This appeal, by special leave, is against the said judgment of the High Court.
Before the Court, the appellant argued that the High Court failed to appreciate the fact that the decision of the University authorities was highly prejudicial to the appel lant and others who were similarly situated, as it resulted in substantial monetary loss.
Allowing the appeal, HELD: 1.
The decision of the university not only appears to be 'inequitable ' but also discriminatory inasmuch as it sought to treat equals as unequals by protecting those who had secured the placement and denying the same to others whose names the college managements had failed to forward in good time.
The appellant was entitled to placement in the higher scale of Rs.700 1100 before being brought over to the revised scale of Rs.700 1600.
[742B] 2.
The Lecturers whose names were recommended for place ment in the higher scale before October 4, 1975 were enti tled to such placement before being brought over to the revised scale of Rs.700 1600.
The appellant was entitled to placement in the higher scale of Rs.700 1600 w.e.f.
June 15, 1975.
The college authorities failed, for no fault of the appellant and his companions, to forward their names to the University in the prescribed proforma for reasons best known to them.
To deny the benefit to which the appellant and his companions were entitled on account of the lapse on the part of the college authorities would be highly unfair and un just.
The High Court, however took the view that there was 'nothing very inequitable ' about the decision of the Univer sity to deny such placement to the appellant and his compan ions, but it is obvious that if they had been granted place ment on the due dates they would have been entitled to higher salary and allowances related to basic salary e.g. dearness allowance which is a certain percentage of basic salary, would have gone up.
[741F H; 742A] 3.
The respondents are directed to grant the benefit of placement in the higher scale of Rs.700 1100 to the appel lant from the date he became entitled to the same i.e. June 15, 1975 and thereafter fix his pay revised scale of Rs.700 1600.
The appellant will be entitled to the monetary benefit accruing to him on the implementation of the above 738 directive which should be worked out and paid to him within three months.
[742C D] [The Court expressed the hope that the authorities will extend the same benefit also to the two companions of the appellant notwithstanding their failure to approach this Court, perhaps on account of cost constraint, and not drive them to another round of litigation.] [742F] |
Appeal No. 81 of 1977.
(Appeal by Special Leave from the judgment and order dated 6 12 1976 of the Delhi High Court in C.R. No. 248/76).
F.S. Nariman, N.S. Sistani and K.C. Dua for the appellant.
K.K. Jain, S.K. Jain and P. Dayal, for respondent No. 1.
314 The Judgment of the Court was delivered by KRISHNA lYER, J.
Delhi, the home of Power and the nidus of paradoxes, presents many pathological problems to the students of history, social science, politics and law, often inter acting with each other.
We are here concerned with the socio legal malady of accommodation scarcity and the syndrome of long queues of government employees waiting, not knowing for how long, for allotment of government quar ters at moderate rents and the co existence of several well to do officers enjoying, by virtue of their office, State allotted residential accommodation while owning their own but letting them out at lucrative rents, making sub stantial incomes in the bargain.
The law awoke to end this unhappy development and to help the helpless nonallottees get government accommodation.
Such is the back drop to section 14A which, read along with section 25B, of the Delhi Rent Control Act, 1958 (Act LIX of 1958) (for short, the Act), falls for our consideration in the present appeal by special leave.
A deeper understanding of the need for the new provi sions just mentioned and the construction that they bear in the context necessitates stating a little more in detail the social setting.
The seat of the capital of a vast country with varied activities naturally will be honeycombed with government offices, public organisations and growing armies of employees.
The higher echelons in public service, over the decades, have made generous use of the availability of government lands at low prices and of the know how of utilising, to their advantage, the immense developmental potential in the years ahead if buildings were constructed with foresight.
Thus many neatly organised colonies blossomed all around Delhi whose owners were in many in stances officers who had the telescopic faculty to see the prospective spread out of Delhi of the future.
Taking time by the forelock, they wisely invested money (often on soft loans from Government) in buildings which secured ambi tious rents when India 's headquarters did, as it was bound to, explosively expand.
Most of such officials let their premises for high rents to big businessmen, foreign estab lishments, company executives and others of their link.
Where did the officers themselves reside ? The strange advantage of Delhi is that houses, with lawns, servants ' quarters and other amenities, built by government long years back are allotted to government servants on rents which are a fraction of what similar accommodation in the private sector may fetch oftentimes.
The bigger officials according to the hierarchical system (almost perfected into some sort of official castes and sub castes based on status and position in the ministries and not on the heads of their families or office) occupied the classified quar ters, the official `brahmins ', of course, getting the best.
The rents they paid as tenants were negligible compared to the returns they made as landlords.
Indeed, a sociological research into the whole system may perhaps unravel the semi survival of quasifeudal life styles and the unlovely phenomenon of public servants paying little and collect ing large.
The socio economic sequel was worse than this.
An astronomical increase in the number of government servants led to a terrific pressure for accommodation because, most of them particUlarly at the lesser 315 (Krishna lyer, J.) levels had no worthwhile salaries and were priced out of the private sector where rentals had unconscionably rocket ed.
This rack renting abuse can be checked, in some meas ure, by an activist policy of relentlessly enforcing fair rents through penal tags.
That, of course, depends on the will and wisdom of Parliament and Government, and the court may not make any comment.
Anyway, currently, controls in this essential area of human accommodation, in the capital city of our socialist republic, are a statute book virtue.
Similarly, the suggestion, in the course of his submissions, made by counsel for the appellants, that the true solution is for the State to build more accommoda tion for its servants and not eject tenants like his client is commendable as a text book panacea but `a consum mation to be wished ' in practical expectations! Nevertheless, the State took cognizance of the sinister development of several officers owning private residences and occupying government premises and making handsome dividends out of the disparity in rents and, ergo, a large number of less fortunate officials having to wait in a queue for years hoping against hope that some day some government quarters would be allotted! These latter, with broken domestic budgets, huddle together in small private tenements (or even servants ' quarters) paying rents beyond their means.
The politics and economics of scarcity are well known.
Out of this distressing situation was born section 14A of the Act.
A fasciculus of clauses creating substantive and procedur al provisions to meet the evil and advance the scheme in that behalf came in, first by ordinance 24 of 1975 in Decem ber 1975, duly replaced by the Delhi Rent Control (Amend ment) Act, 18 of 1976.
The chronic disease needed dras tic treatment and the legislative draftsmen created a chain of stiff provisions.
Speaking generally, the government, after satisfying itself about the official having let out his residential building and occupying officially allotted quarters, directed the person to vacate government premises but he had quickly to get back his own house.
So a new right (section 14A) was created,accelerated remedial procedures were prescribed (section 25A and 25B).This appeal turns on the meaning of section 14A. The purpose of the project has been explained by Chandrachud J. in Sarwan Singh(1): "The object of Section 14A, as shown by its marginal note, is to confer a right on certain landlords to recover immediate possession of premises belonging to them and which are in the possession of their tenants.
In the sig nificant language of the marginal note, such a right is `to accrue ' to a class of persons.
The same concept is pursued and clarified in the body of Section 14A by providing that in the contingencies mentioned in the section, a right will accrue to the landlord 'to recover immediately possession of any premises let out by him '. " * * * * "Whatever be the merits of that philoso phy, the theory is that an allottee from Central Government or a local (1) Sarwan Singh vs Kasturi Lal, ; , 272 274.
316 authority should not be at the mercy of law 's delays while being faced with instant eviction by his landlord save on payment of what in practice is penal rent.
Faced with a Hob son 's choice, to quit the official residence or pay the market rent for it, the allottee had in turn to be afforded a quick and expedi tious remedy against his own tenant.
With that end in view it was provided that nothing, not even the Slum Clearance Act, shall stand in the way of the allottee from evicting his tenant by resorting to the summary procedure prescribed by Chapter IIIA.
The tenant is even deprived of the elementary right of a defendant to defend a proceeding brought against him, save on obtaining leave of the Rent Controller.
If the leave is refused, by section 25B(4) the statement made by the landlord in the application for eviction shall be deemed to be admitted by the tenant and the landlord is entitled to an order for eviction.
No appeal or second appeal lies against that order.
Section 25B(8) denies that right and provides instead for a revision to the High Court whose jurisdiction is limit ed to finding out whether the order complained of is according to law.
" It is a notorious fact that, vesting a right is long years ' distance away from getting the remedy, thanks to our legal process with its slow motion mood.
A jurisprudence of quick acting and comprehensive remedies, demanding re structuring and streamlining of the judicative apparatus and imparting operational speed and modernisation of the whole adjectival law and practice, is urgent and important an observation we make hoping that Parliament will programme for such a constructive change for the good of the communi ty, in consultation with the Court and the Bar.
That legal instrumentality alone truly sustains the rule of law which delivers justice with inexpensive colority, finality and fullness.
The big right remedy gap is the bane of our system.
We regard it our duty to, mention this dimension of justice and this desideratum of systemic reform so that repetitive litanies to end law 's delays may be intelligently heeded by the law makers instead of joining the chorus against the court.
Back to the statute.
Section 14 A, with a non obstante rider, follows upon and is partly supplemental to section 14 which primarily governs eviction by landlords of tenants.
We may extract a part of section 14 and the whole of section 14A: "14(1) Notwithstanding anything to the contrary 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: Provided that the Controller may, on an application made to him in the prescribed manner make an order for the recovery of possession of the premises on one or more of the following grounds only, namely, (a) to (d) * * * * 317 (Krishna Iyer, J.) (e) that the premises let for residential purposes are required bona fide by the land lord for occupation as a residence for himself or for any member of his family dependent on him, if he is the owner thereof, or for any person for whose benefit the premises are held and that the landlord or such person has no other reasonably suitable residential accom modation: Explanation.
For the purposes of this clause, "premises let for residential pur poses, includes.
any premises which having been let for use as a residence are, without the consent of the landlord, used incidental ly fo.r commercial or other purposes, . " X X X X "14A. Right to recover immediate posses sion of premises to accrue to certain persons. (1) Where a landlord who, being a person in occupation any residential premises allotted to him by the Central Government or any local authority is required, by, or in pursuance of any general or special order made by that Government or authority, to vacate such resi dential accommodation, or in default, to incur certain obligations, on the ground that he owns, in the union territory of Delhi, a residential accommodation either in his own name or in the name of his wife or dependent child, there shall accrue, on and from the date of such order, to such landlord, notwith standing anything contained elsewhere in this Act or in any other law for the time being in force or in any contract (whether express or implied), custom or usage to the contrary, a right to recover immediately possession of any premises let out by him: Provided that nothing in this section shall be construed as conferring a right on a landlord owning, in the union territory of Delhi two or more dwelling houses, whether in his own name or in the name of his wife or dependent child, to recover the possession of more than one dwelling house and it shall be lawful for such landlord to indicate the dwelling house, possession of which he intends to recover.
(2) Notwithstanding anything contained elsewhere in this Act or in any other law for the. time being in force or in any contract, custom or usage to the contrary, where the landlord exercises the right of recovery conferred on him by sub section (1 ), no compensation shall be payable by him to the tenant or any person claiming through or under him and no claim for such compensation shall be entertained by any court, tribunal or other authority: Provided that where the landlord had received, 318 (a) any rent in advance from the tenant, he shall, within a period of ninety days from the date of recovery of possession of the premises by him, refund to the tenant such amount as represents the rent payable for the unexpired portion of the contract, agreement or lease; (b) any other payment, he shall, within the period aforesaid, refund to the tenant a sum which shall bear the same proportion to the total amount so received, as the unexpired portion of the contract or agreement, or lease bears to the total period of contract or agreement or lease; ' Provided further that, if any default is made in making any refund as aforesaid, the landlord shall be liable to pay simple inter est at the rate of six per cent per annum on the amount which he has omitted, or failed to refund." A summary remedy is provided by section 25B which reads: "25.B. Special procedure for the disposal of applications for eviction on the ground of bona fide requirement. (1) Every application by a landlord for the recovery of possession of any premises on the ground specified in clause (a) of the proviso to.
sub section (1) of Section 14, or under Section 14A, shall be dealt with in accordance with the procedure specified in this section.
(2) The ContrOller shall issue summons, in relation to.
every application referred to in sub section (1 ), in the form specified in the Third Schedule.
(3) (a) The Controller shall, in acquisi tion to, and simultaneously with, the issue of summons for service on the tenant, also direct the summons to be served by registered post, acknowledgment due, addressed to the tenant or his agent empowered to accept the service at the place where the tenant or his agent actu ally and voluntarily resides or carries on business or personally works for gain and may, if the circumstances of the case so require, also direct the publication of the summons in a newspaper circulating in the locality in which the tenant is last known to have resided or carried on business or personally worked for gain.
(b) When an acknowledgment purporting to be signed by the tenant or his agent is re ceived by the Controller or the registered article containing the summons is received back with an endorsement purporting to have been made by a postal employee to the effect that the tenant or his agent had refused to take delivery of the registered article, the Controller may declare that there has been a valid service of summons.
319 (Krishna Iyer, J.) (4) The tenant on whom the summons is dully served (whether in the ordinary way or by registered post) in the form specified in the Third Schedule shall not contest the prayer for eviction from the premises unless he files an affidavit stating the grounds on which he seeks to contest the application for eviction and obtains leave from the Controller as hereinafter provided; and in default of his appearance in pursuance of the summons or his obtaining such leave, the statement made by the landlord in the application for eviction shall be deemed to be committed by the tenant and the applicant shall be entitled to an order for eviction on the ground aforesaid.
(5) The Controller shall give to.
the tenant leave to contest the application if the affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for the recovery of possession of the premises on the ground specified in clause (a) of the proviso to sub section (1) of Section 14, or under Sec tion 14A. (6) Where leave is granted to the tenant to contest the application, the Controller shall commence the hearing of the application as early as practicable.
(7) Notwithstanding anything contained in sub section (2) of Section 17, the Controller shall, while holding an inquiry in a proceed ing to which this Chapter applies, follow the practice and procedure of a Court of Small Causes, including the recording of evidence.
(8) No appeal or second appeal shall lie against an order for the recovery of posses sion of any premises made by the Controller in accordance with the procedure specified in this section; Provided that the High Court may, for the purpose of satisfying itself that an order made by the Controller under this section is according to law, call for the records of the case and pass such order in respect thereto as it thinks fit.
(9) Where no application has been made to the High Court on revision, the Controller may exercise the powers of review in accordance with the provisions of Order XL VIX of the first Schedule to the Code of Civil Procedure, 1908 (5 of 1908).
(10) Save as otherwise provided in this Chapter, the procedure for the disposal of an application for eviction on the ground speci fied in clause (e) of the proviso to subsec tion (1) of Section 14, or under Section 14A, shall be the same as the procedure for the disposal of applications by Controllers.
" 320 The landlord respondent No. 1 was a government servant who had let his own building to the .appellant tenant (a company) to carry on business and use part of it for its manager 's residence.
He himself was occupying residential premises allotted by the Central Government and, since he was directed by that Government to vacate, on the ground that he had let out 'residential accommodation ' of which he was owner, he sought refuge under section 14A.
The eviction proceeding was resisted, inter alia, on the score that the ground did not fail within the sweep of section 14A, the premises 'having been let out for a residential cum commercial pur pose to a joint stock company which was carrying on its business . besides using it for the residence of its Managing Director '.
This plea did not cut ice with the Controller who refused leave to contest under section 25B(4).
of the Act.
The refusal would ordinarily have led to an order for eviction but this consequence was intercepted by a writ petition under article 226 of the Constitution and a revision to the High Court, as provided by the proviso to subs.
(8) of section 25B of the Act.
Dismissal of these proceedings has brought the appellant, special leave having been granted, to this Court as the last hope.
Of course, the issue is of some moment, legally and otherwise.
For while solving the twin problems, viz. making more accommodation available to government servants in need and ending the vice of officers gaining by letting their own residential houses, section 14A creates another, viz., the ejectment of tenants by summary procedure on a new ground.
Maybe, as between the two.
hardships Parliament has made the choice and the Court implements the law based on the policy decision of the legislature.
Mr. Nariman sought to expose the weakness of this legislative, policy by stating that nothing in section 14A compelled the officer landlord to occupy the premises after evicting the tenant.
He could still let it for a higher rent, take on lease from the private sector a small house and make a gain flowing from the difference in rents.
While we, as Judges, cannot fail to apply the provision merely because dubious ingenuities can circumvent it, we will later interpret the section eliminating the possible evil pointed out.
The short but insistent submission made by the counsel for the appellant was that the Controller could not shut him out from being heard, as he did, if only a triable issue emerged from the affidavit in opposition filed under 'section 25B(4).
Such an issue (in fact, more than one) was obviously present here, urged counsel.
But we make it plain even at this stage that it is fallacious to approximate (as was sought to be done) section 25B(5) with Order 37, r. 3 of the Code of Civil Procedure.
The social setting demanding summary proceeding, the nature of the subject matter and, above all, the legis lative diction which has been deliberately designed, differ in the two provisions.
The legal ambit and judicial dis cretion are wider in the latter while, in the former with which we are concerned, the scope for opening the door to defence is narrowed down by the strict words used.
The Controller 's power to give leave to contest is cribbed by the condition that the affidavit filed by the tenant dis closes such facts as would disentitle the landlord from obtaining an order for the recovery of posession of the premises on the ground specified in cl.
(e) of the proviso to sub section
(1) of section 14 321 (Krishna lyer, J.) or under section 14A. Disclosure of facts which disentitle recovery of possession is a sine qua non for grant of leave.
Are there facts disentitling the invocation of section 14A ? The thrust of Shri Nariman 's contention is that section 14A does not apply at all, as a matter of construction of the expression 'residential premises '.
This is net something factual but essentially legal and perhaps the question deserves our decision.
For, if we explain, as declaratory of the law, what the true scope of section 14A is, vis a vis the premises involved, the Controller may then proceed on that footing and decide whether there is any fact disclosed which disentitles eviction.
Let us break down section 14A, to the basic components crea tive of the new right to recover possession of premises let to a tenant.
`Premises ', by definition, covers any building or part of a building let for use, residential, commercial or other (section 2(i)).
We confine ourselves to the considera tions relevant to our case.
To attract section 14A, the landlord must be in occupation of `residential premises ' allotted to him by the Central Government.
He must be required by order of that Government to vacate such 'residential accommoda tion '.
These are fulfilled here.
The ground for such order to vacate must be 'that he owns, in the Union Territory of Delhi, a residential accommodation '.
If so, there accures to such landlord the right 'to recover immediately posses sion of any premises let out by him ' (emphasis added).
The bone of contention between the parties is as to whether the premises let out are 'residential accommoda tion '.
It may be a pursuit of subtle nicety to chase the reason for using different expressions like 'residential premises ' and 'residential accommodation ' in the same sec tion.
If at all, 'accommodation ' is ampler than 'premises '.
What is residential accommodation ? If the building in dispute answers that description, the tenant must submit to eviction.
So this is the key question.
Admittedly, the building was let out for commercial purpose also.
Is the purpose of the lease decisive of the character of the accommodation ? For a long time it was used as an office of the tenant 's business, the manager also residing in a part thereof.
Does user clinch the issue ? At present, the main use to which the building is put is as residence of the manager.
The Delhi Development Authority granted the land to the government servant respondent for construction of a residen tial building although he later let it out for non residen tial use, apparently for getting large rents, silencing his compunction about the basis on which he secured the allot ment of the land at low cost.
But can the court conclude from the object of the land assignment whether the building later put up is residential or not ? Marginal relevance there may be in these diverse factors, telling value they do not possess, Law, being 6 436SCI/77 322 pragmatic, responds to the purpose for which it is made, cognises the current capabilities of technology and life style of the community and flexibly fulfils the normative role, taking the conspectus of circumstances in ,the given case and the nature of the problem to solve which the stat ute was made.
LegiSlative futility is to be ruled out so long as interpretative possibility permits.
Residentiality depends for its sense on the context and purpose of the statute and the project promoted.
Guided by this project oriented approach, we reject the rival extreme position 's urged before us by Shri Nariman and Shri Jain.
Residential premises are not only these which are let out for residential purposes as the appellant would have it.
Nor do they cover all kinds of structures where humans may manage to dwell.
If a beautiful bungalow were let out to a businessman to run a show room or to a meditation group or music society for meditational or musical uses, it re mains none the less a residential accommodation.
Otherwise, premises may one day be residential, another day commercial and, on yet a later day, religious.
Use or purpose of the letting is no conclusive test.
Likewise, the fact that many poor persons may sleep under bridges or live in large hume pipes or crawl into verandahs of shops and bazars cannot make them residential premises.
That is a case of reductio ad absurdum.
Engineering skills and architectural designing have advanced far enough to make multi purpose edifices and, by minor adaptations, make a building serve a residential, commercial or other use.
The art of building is no longer ' rigid and the character of a house is not an 'either or '.
It can be both, as needs demand.
It is so common to see a rich home turned into a business house, a dormitory into a factory.
Many small scale industries are run in former living quarters.
To petrify engineering concepts is to betray the law 's purpose.
Whatever is suitable or adaptable for residential uses, even by making some changes, can be designated 'residential premises '.
And once it is 'residen tial ' in the liberal sense, section 14A stands attracted.
Dic tionary meaning, commonsense understanding and architectur al engineering concur in the correctness of this construc tion.
What falls outside the ambit of 'residential purposes ' may be limited but not non existent.
A shop in Connaught Place, a factory in an area prescribed by any municipal regulation for residential use or any structure too patently non residential such as a hothouse for botanical purposes or a bath and toilette or teashop by the road margin are obvi ous instances.
We may visualise other cases but that is not our purpose here.
The house we are considering was built on land given for constructing a residence is being used even now for residence, is suitable otherwise for residence and is being credibly demanded for the respondent 's residence.
Residential suitability being the basic consideration, this building fills the bill.
Nothing said in the affidavit in opposition puts it out of the pale of residential accommoda tion.
A building which reasonably accommodates a residen 323 (Krishna Iyer, J.) tial user is a residential accommodation nothing less, nothing else.
The circumstances of the landlord are not altogether out of place in reaching a right judgment.
The 'purpose test ' will enable officers who own houses to defeat the government by pleading that they do not own 'residential premises ' because the lease is for commercial use, built though it was and stumble ,though it is, for residence.
Similarly, the 'possibility test ' may make nonsense of the provision.
The contrast in the phraseology between section 14(1)(e) and section 14A strengthens our inference.
The legislature has, in the former provision, used the expression 'premises let for residential purposes ', thus investing the purpose of the lease with special signifi cance.
The deliberate omission of such words in section 14A and, instead, the use of the flexible but potentially more com prehensive, though cryptic, expression 'residential accom modation ' cannot be dismissed as accidental.
Shri Nariman argued that the court must have the power to consider whether the order of the government stating that the government servant 's building is residential, is valid or not.
We do not deny that in the last resort it is within the Court 's province to do so.
But it must give due not deadly weight to the decision of the government that the premises owned by its officer is residential.
Perversity and mala fides will, of course, invalidate government orders here, as elsewhere.
They are the exceptions but as a prac tical guideline, the government 's order may be taken as correct.
For, after all, while courts must finally pro nounce, others familiar with the work a day world and en quire before passing orders are not too inexpert or incompe tent to be brushed aside.
The power to render binding decisions vests in the judicial process, not because it is infallible or occult but because it is habitually independ ent and professionally trained to consider contending view points aided by counsel for a adversaries.
The humility that makes for wisdom behoves the judge to show respect for not obedience to the view of an administrative agency.
There remains the conundrum raised by Shri Nariman.
Supposing the landlord, after exploiting the easy process of section 14A, re lets the premises for a higher rent; the social goal boomerangs because the tenant is ejected and the landlord does not occupy, as he would have been bound to do, if he had sought eviction for bona fide occupation under section 141(e).
Section 19 obligates the landlord in this behalf.
In literal terms, that section does not apply to eviction obtained under section 14A.
But the scheme of that section definitely contemplates a specific representation by the petitioner landlord to the Controller that because he has been ordered to vacate the premises where he is residing, therefore he requires immediate possession for his occupa tion.
The non obstante clause, the vesting of a right to immediate recovery, the creation of a summary process under section 25B and the package of connected provisions, all empha size that the amendments have to be viewed as a whole, that the Court cannot be fooled and the statute mocked at.
The law, as Mr. Bumble (in Oliver Twist) said.
`is a ass a idiot ', but today the socio economic project cannot be frustrated by legalistics.
Underlying the whole legislative plan and provision is the fundamental anxiety to recover, for the officer 's occupation, his own premises.
Once we grasp this cardinal point, the 324 officer 's application for eviction under section 14A can be entertained only on his averment that he, having been asked to vacate, must get into possession of his own.
For in stance, if he has a vacant house of his own and, on getting an order to vacate, he moves into his vacant house, he cannot thereafter demand recovery under section 14A.
The cause of action is not only the government order to vacate, but his consequential urgency to recover his own building.
That is the rationale legis.
To interpret otherwise is to vindicate Mr. Bumble ! We hold that Shri Nariman 's apprehen sion is unfounded and section 14A is largely a rider to .s.
14 and the condition indicated in section 19 must, mutatis mutandis, bind the landlord.
Parliament cannot be assumed not to intend the obviouS, or to intend the ludicrous.
Literality not right where absurdity is the result.
The same result is reached by reading into every appli cation for eviction by a landlord a necessarily implied representation to court that for the reason of his being directed to get out he must be given possession of his own residence for his own occupation with the aid of the judi cial process.
If the finale is reached and possession obtained, the Court will not allow a party to reduce its process to a mere make .
believe, or a clever parody, break ing faith with the judicial process itself.
Such paths can be interdicted by the use of the inherent power of the court.
The re letting to someone else or non occupation, even after a reasonable time or without reasonable cause, will be regarded as an abuse of the process of the court and, at the instance of the affected tenant or otherwise, the eviction order cancelled and possession restored.
We affirm this legal position lest overly cute but qualmless landlords should hopefully hoax the court and reduce its decree to a joke.
Every tribunal has the inherent power to prevent its machinery from being made a sham, thereby run ning down the rule of law itself as an object of public ridicule.
It will and must prove any strategem self defeat ing if a party indulges in making the law the laughing stock, for, the court will call him to order.
We are not adventuring into any innovation of legal principle in inhibiting unconscionability in the enforce ment of rights.
Lord Denning M.R. said: "What is the justification for the courts in this or any other case, departing from the ordinary meaning of words ? If you examine all the cases you will, I think, find that at bottom it.is because the clause (relieving a man from his own negligence) is unreasonable or is being applied unreasonably in the cir cumstances of the particular case.
The judges have then, time after time, sanctioned a departure from the ordinary meaning .
Are the courts then powerless ? Are they to permit the party to enforce his unreasonable clause, even when it is unconscionable, or applied so unreasonably as to be unconscion able ? When it gets to this point, I would say, as I said many years ago: `There is the vigilance of the common law which, while allowing freedom of contract, watches to see that it is not abused. '" X X X X 325 (Krishna Iyer, J.) He continued: "I know that the judges hitherto have never confessed openly to the test of reasona bleness.
But it has been the driving force behind many of the decisions.
"(1) We agree that, in the words of Lord Erakine, 'there is no branch of the jurisdiction of this court more delicate than that, which goes to restrain the exercise of a legal right '.
But the principle of unconscionability clothes the court with the power to prevent its proc ess being rendered a parody.
The justice of the law steps in end, the area of eviction of a tenant by a landlord, the tribunal cannot tolerate double dealing or thwarting the real in tendment of the statute.
The same conclusion can be reached through another line of reasoning expressed by Justice Jackson of the Supreme Court of the United States in D ' Cench Duhme:(2) "If the judicial power is helpless to protect a legislative program from schemes for easy avoidance, then indeed it has become a handy implement of high finance .
Once the purpose or effect of the scheme is clear, once the legislative policy is plain, we would indeed forsake a great tradition to any we were helpless to fashion the instruments for appropriate relief.
" The doctrine that the judicial machinery, while enforc ing the law, shall forbid its being misused is another dimension of two deeply rooted, but inter connected maxims.
Actus curiae neminem gravabit (An act of the court shall prejudice no man: Jenk.
118) and Actus legis est damnosus (The act of the law is hurtful to no one: 2 Inst. 287): Actus legis nemini facit in juriam (The act of the law does injury to no one: 5 Coke.
This principle is fundamental to any system of justice and applies to our jurisprudence.
An Afterword The possibility of the power of government to issue orders to vacate being used discriminatorily should be carefully avoided.
If exceptions are made in the case of big officers, naturally the middling and the lesser minions of government may have a grievance.
It may perhaps be proper if government, when allotting good premises for high offi cers who make from their own houses large returns by way of rentals, makes them pay into government coffers some equita ble part of the gain so made, giving consideration to cir cumstances like loans, investments and the like.
This, again, is a matter falling with (1) 39 Mod.
L.R. 379 (1976) (2) Referred to in , at 366 67; Quoted in Univ.
of Pennsylvania Law Review VoL. 117 (1968) p. 1, 63.
326 in the province of the sense of justice of the Administra tion.
But we mention it only to save the legislation from the aspersion of invidiousness in the exercise of the power.
In the view we have already taken, it follows that the appeal must be dismissed and we hereby do so; but the par ties, in the circumstances, will bear their own costs throughout.
P.H.P. Appeal dismissed. | The respondent No. 1 landlord let out his building to the appellant, a company to carry on business and use part of it for its manager 's residence.
The landlord was occupying residential premises allotted by the Central Government.
After the amendment of the.
Delhi Rent Control Act, 1958, by Ordinance 24 of 1975 which was later replaced by Delhi Rent Control (Amendment) Act, 1976, section 14A and 25B were added to the Statute.
Section 14 permits a landlord to evict the tenant if the premises let for residential pur pose are required bonafide by the landlord for occupation as a residence for himself or for any member of his family dependent upon him.
Section 14A provides that where a landlord is in occupation of any residential accommodation ,allotted to him by the Central Government or any local authority and if he is required by order made by that Gov ernment or authority to vacate such residential accommoda tion on the ground that he owns in the Union Territory of Delhi a residential accommodation either in his own name or in the name of his wife or dependent child, there shall accrue to the landlord a right to recover immediately pos session of any premises let out by him.
The said provision has been given effect notwithstanding anything to the con trary in the Delhi Rent Act or any other law or the custom or usage.
Section 25B provides for a summary remedy.
It provides that the Controller shall give to the tenant leave to contest the application if the affidavit filed by the tenant discloses such facts as would disentitle the landlord for obtaining an order for the recovery of possession on the ground specified in section 4(1)(c) or 14A. The re spondent was directed by the Government to vacate the Gov ernment accommodation on the ground that he had let out residential accommodation of which he was owner.
The respondent No. 1 accordingly filed eviction proceedings against the appellant claiming possession under Section 14A. The appellant contended before the Rent Controller that the ground did not fail within the sweep of section 14A since the premises were let out for residential rum com mercial purposes to, a joint Stock Company which was carry ing on business besides using for the residence of its Managing Director.
This plea did not cut ice with the Con troller who refused leave to contest.
The appellant filed a writ petition in the High Court under Art 226 of the Consti tution which was dismissed.
In appeal by special leave, the appellant contended that 1.
Nothing in s.14A compels the landlord to occupy the premises after evicting the tenant.
He could still let it for a higher rent, take on lease from the private sector a small house and make a gain, from the difference flowing in rent.
The Controller could not shut him out from being heard if a triable issue emerged from the affidavit in opposition.
In the present case such issues were present and, therefore, the Rent Controller was not justi fied in refusing leave to contest.
Section 14A does not apply in the present case since the premises were not residential premises as they were let out both for commercial and residential purposes.
313 (Krishna lyer, J.) Dismissing the appeal, HELD: (1) It is fallacious to approximate section 25B(5) with Order 37 rule 3 of the Code of Civil Procedure.
The social setting demanding summary proceeding, the nature.
of the subject matter and above all, the legislative diction which has been deliberately designed, differ in the two provisions.
Disclosure of facts which disentitle recovery of possession is a sine qua non for grant of leave.
[320 F A, 321A] (2) The definition of premises in section 2(i) covers any building or part of the building leased for use, resi dential, commercial or other.
To attract section 14A the landlord must be in occupation of residential premises allotted to him by the Central Government.
He must be required by order of that Government to vacate his residen tial accommodation.
The Delhi Development Authority granted the land to respondent No. 1 for construction of a residen tial building although it was let out for commercial pur pose.
Residential premises are not only plots which are let out for residential purposes nor do all kinds of structures where humans may manage to.
dwell are residential.
Use or purpose of the letting is no conclusive test.
Whatever is suitable or adaptable for residential use, even by making some changes, cart be designated residential premises.
Once it is residential in the liberal sense, section 14A strands attracted.
In the present case the house was built on land given for constructing a residence, is being used even now for residence is suitable otherwise for residence and is being credibly demanded for the respondent 's residence.
Residential suitability being the basic consideration, the building is residential.
The `purpose test ' will enable officers who own houses to defeat the statute that they do not own residential premises though it was suitably built for residence.
The scheme of section 14A definitely contem plates a specific representation from landlord to the Controller that because he has been ordered to vacate the premises where he is residing he requires immediate posses sion for his occupation.
It 's non obstante clause, the vesting of a right to immediate recovery, the creation of a summary process and the package of connected provisions all emphasize that the amendments have to be viewed as a whole, that the court cannot be fooled and the statute mocked at.
The cause of action is not only the Government orders to vacate but consequential urgency to recover his own build ing.
Parliament cannot be.
assumed not to intend the obvi ous, or to.
intend the ludicrous.
Literality is not right where obscurity is the result.
[321 C D, G H 322 C D, 323 A B, G H] Gillespie Brothers & Co. Ltd. vs Roy Bowles Transport Ltd. quoted in 39 MUd.
L.R. 379 (1976) and Anderson vs Abbott ; at 366 67 quoted in Univ.
of Pennsylvenia Law Review Vol. 117 (1968) p. 1, 63, quoted with approval.
(3) Judicial machinery while enforcing the law shall forbid its being misused.
[325 E] (4) The possibility of the power of Government to issue orders to vacate being used discriminately should be care fully avoided.
If exceptions are made in the case of big officers, naturally the.
middling and the lesser minions of Government may have a grievance.
It may ' perhaps be proper for Government when allotting good premises for high offi cers who made from their own houses large returns to pay into the Government coffers some: equitable part of the gain so made, giving consideration to circumstances like loans investment and the like.
[325 G H] |
Appeal No. 1360 of 1968.
(Appeal by Special Leave from the Judgment and Order dated 22 11 1967 of the Andhra Pradesh High Court in Second Appeal No. 804/64).
T.S. Krishnamurthi lyer, R.K. Pillai and R. Vasudev Pillai, for the appellants.
T. V. section Narasimhachari, for the respondents.
The Judgment of P.N. Bhagwati and A.C. Gupta, JJ. was delivered by Bhagwati, J.S. Murtaza Fazal Ali, J. gave a separate opinion.
BHAGWATI, J. We have had the advantage of reading the judgment prepared by our learned brother section Murtaza Fazal Ali and we agree with the conclusion reached by him in that judgment but we would prefer to give our own reasons.
The facts giving rise to the appeal are set out clearly and succinctly in the judgment of our learned brother and we do not think it necessary to reiterate them.
The short question that arises for determination in this appeal is as to whether it is sub section (1) or sub section (2) of section 14 of the that applies where property is given to a Hindu female in lieu of maintenance under an instrument which in so many terms restricts the nature of the interest given to her in the property.
If sub section (1) applies, then the limitations on the nature of her interest are wiped out and she becomes the full owner of the property, while on the other hand, if sub section (2) governs such a case, her limited interest in the property is not enlarged and she continues to have the restricted estate prescribed by the instrument.
The question is of some complexity and it has evoked wide diversity of judicial opinion not only amongst the different High Courts but also within some of the High Courts themselves.
It is indeed unfortunate that though it became evident as far back as 1967 that subsections (1) and (2) of section 14 were presenting serious difficulties of construction in cases where property was received by a Hindu female in lieu of maintenance and the instrument granting such property pre scribed a restricted estate for her in the property and divergence of judicial opinion was creating a situation which might well be described as chaotic, robbing the law of that modicum of certainty which it must always possess in order to guide the affairs of men, the legislature, for all these years, did not care to step in to remove the constructional dilemma facing the courts and adopted an attitude of indifference and inaction, untroubled and un moved by the large number of cases on this point encumbering the files of different courts in the country, when by the simple expedient of an amendment, it could have silenced .judicial conflict and put an end to needless litigation.
This is a classic instance of a statutory provision which, by reason of its inapt draftsmanship, has created endless confusion for litigants and proved a para dise for lawyers.
It illustrates forcibly the need of an authority or body to be set up by the Government or the Legislature which would constantly keep in touch with the adjudicatory 267 authorities in the country as also with the legal profession and immediately respond by making recommendations for suit able amendments whenever it iS found that a particular statutory provision is, by reason of inapt language or unhappy draftsmanship, creating difficulty of construction or is otherwise inadequate or defective or is not well conceived and is consequently counter productive of the result.
it was intended to achieve.
If there is a close inter action between the adjudicatory wing of the State and a dynamic and ever alert authority or body which responds swiftly to the draw backs and deficiencies in the law in action, much of the time and money, which is at present expended in fruitless litigation, would be saved and law would achieve a certain amount of clarity, certainty and simplicity which alone can make it easily intelligible to the people.
Since the determination of the question in the appeal turns on the true interpretation to be placed on sub section (2) read in the context of sub section (1) of section 14 of the , it would be convenient at this stage to set out both the sub sections of that section which read as follows: "14(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner. Explanation.
In this sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheri tance or device, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner what ever, and also any such property held by her as stridharas immediately before the commence ment of this Act.
(2) Nothing contained in sub section (1) shah apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.
" Prior to the enactment of section 14, the Hindu law, as it was then in operation, restricted the nature of the interest of a Hindu female in property acquired by her and even as regards the nature of this restricted interest, there was great diversity of doctrine on the subject.
The Legisla ture, by enacting sub section (1) of section 14, intended, as pointed by this Court in S.S. Munna Lal vs
S.S. Raikumar(1) "to convert the interest which a Hindu female has in property, however, restricted the nature of that interest under the Sastric Hindu law may be, into absolute estate".
This Court pointed out that the is a codifying enactment and has made far reaching changes in the structure of the Hindu law of inheritance, and succession.
The Act confers upon Hindu females full rights of inheritance (1) [1962] Supp. 3 S.C.R. 418. 268 and sweeps away the traditional limitations on her powers of disposition which were regarded under the Hindu law as inherent in her estate".
Sub section (1) of section 14, is wide in its scope and ambit and uses language of great amplitude.
It says that any property possessed by a female Hindu,.
whether acquired before or after the commencement of the Act, shall be held by her as full owner thereof and not as a limited owner.
The words "any property" are, even without any amplification, large enough to cover any and every kind of property, but in order to expand the reach and ambit of the section and make it all comprehensive, the Legislature has enacted an explanation which says that property would include "both movable and immovable property acquired by a female Hindu by inheritance or device, or at a partition, or in lieu of maintenance or arrears of mainte nance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatever, and also any such property held by her as stridhana immediately before the commencement" of the Act.
Whatever be the kind of property, movable or immovable, and whichever be the mode of acquisition, it would be cov ered by subsection (1) of section 14, the object of the Legislature being to wipe out the disabilities from which a Hindu female suffered in regard to ownership of property under the old Sastric law, to abridge the stringent provi sions against proprietary rights which were often regarded as evidence of her perpetual tutelege and to recongnize her status as an independent and absolute owner of property.
This Court has also in a series of decisions given a most expansive interpretation to the language of sub section (1) of section 14 with a view to advancing the social purpose of the legislation and as part of that process, construed the words 'possessed of ' also in a broad sense and in their widest connotation.
It was pointed out by this Court in Gummalepura Taggina Matada Kotturuswami vs Setra Veeravva(1) that the words 'possessed of mean "the state of owning or having in one 's hand or power".
It need not be actual or physical possession or personal occupation of the property by the Hindu female, but may be possession in law.
It may be actual or constructive or in any form recognized by law.
Elaborating the concept, this Court pointed out in Mangal Singh vs Rattno(2) that the section covers all cases of property owned by a female Hindu al though she may not be in actual, physical or constructive possession of the property, provided of course, that she has not parted with her rights and is capable of obtaining possession of the property.
It will, therefore, be seen that sub section (1) of section 14 is large in its amplitude and covers every kind of acquisition of property by a female Hindu including acquisition in lieu of maintenance and where such property was possessed by her at the date of commence ment of the Act or was 'subsequently acquired and possessed, she would become the full owner of the property.
Now, sub section (2) of section 14 provides that nothing contained in sub section (1 ) shall apply to any property acquired by way of gift or under a will or any other instru ment or under a decree or order (1) [1959] supp.
1 S.C.R. 968.
(2) ; 269 of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.
This provi sion iS more in the nature of a proviso or exception to sub section (1) and it was regarded as such by this Court in Badri Pershad vs Smt.
Kanso Devi(1).
It excepts certain kinds of acquisition of property by a Hindu female from the operation of sub section (1) and being in the nature of an exception to a provision which is calculated to achieve a social purpose by bringing about change in the social and economic position of women in Hindu society, it must be construed strictly so as to impinge as little as possible on the broad sweep of the ameliorative provision contained in sub section (1 ).
It cannot be interpreted in a manner which would rob sub section (1 ) of its efficacy and deprive a Hindu female of the protection sought to be given to her by sub section (1 ).
The language of sub section (2) is apparently wide to include acquisition of property by a Hindu female under an instrument or a decree or order or award where the instrument, decree, order or award pre scribes a restricted estate for her in the property and this would apparently cover a case where property is given to a Hindu female at a partition or m lieu of maintenance and the instrument, decree, order or award giving such property prescribes limited interest for her in the proper ty.
But that would virtually emasculate sub section (1), for in that event, a large number of cases where property is given to a Hindu female at a partition or in lieu of mainte nance under an instrument, order or award would be excluded from the operation of the beneficent provision enacted in sub section (1 ), since in ,most of such cases, where property is allotted to the Hindu female prior to the enact ment of the Act, there would be a provision, in consonance with the old Sastric law then prevailing, prescribing limit ed interest in the property and where property is given to the Hindu female subsequent to the enactment of the Act, it would be the easiest thing for the dominant male to provide that the Hindu female shall have only a restricted interest in the property and thus make a mockery of sub section (1).
The Explanation to sub section (1) which includes within the scope of that sub section property acquired by a female Hindu at a partition or in lieu of maintenance would also be rendered meaningless, because there would hardly be a few cases where the instrument, decree, order or award giving property to a Hindu female at a partition or in lieu of maintenance would not contain a provision prescribing re stricted estate in the property.
The social purpose of the law would be frustrated and the reformist zeal underlying the statutory provision would be chilled.
That surely could never have been the intention of the Legislature in enacting sub section (2).
It is an elementary rule of construction that no provision of a statute should be construed in isola tion but it should be construed with reference to the con text and in the light of other provisions of the statute so as, as far as possible, to make a consistent enactment of the whole statute.
Sub section (2) must, therefore, be read in the context of sub section (1) so as to leave as large a scope for operation as possible to sub section (1) and so read, it must be confined to cases where property is ac quired by a female Hindu for the first time as a grant without any pre existing (1) ; 270 right, under a gift, will, instrument, decree, order or award, the terms of which prescribe a restricted estate in the property.
This constructional approach finds support in the decision in Badri Prasad 's case (supra) where this Court observed that sub section (2) "can come into operation only if acquisition in any of the methods enacted therein is made for the first time without there being any pre existing right in the female Hindu who is in possession of the property".
It ' may also be noted that when the Hindu Suc cession Bill 1954, which ultimately culminated into the Act, was referred to a Joint Committee of the Rajya Sabha, clause 15(2) of the Draft Bill, corresponding to the present sub section (2) of section 14, referred only to acquisition of property by a Hindu female under gift or will and it was subsequently that the other modes of acquisition were added so as to include acquisition of property under an instru ment, decree, order or award.
This circumstance would also seem to indicate that the legislative intendment was that sub section (2) should be applicable only to cases where acquisition of property is made by a Hindu female for the first time without any pre existing right a kind of acquisi tion akin to one under gift or will.
Where, however, proper ty is acquired by a Hindu female at a partition or in lieu of right of maintenance, it is in virtue of a pre existing right and such an acquisition would not be within the scope and ambit of sub section (2), even if the instrument, de cree, order or award allotting the property prescribes a restricted estate in the property.
This line of approach in the construction of sub section (2) of section 14 is amply borne out by the trend of judi cial decisions in this Court.
We may in this connection refer to the decision in Badri Parasad 's case (supra).
The facts in that case were that one Gajju Mal owning self acquired properties died in 1947 leaving five sons and a widow.
On August 5, 1950, one Tulsi Ram Seth was appointed by the parties as an arbitrator for resolving certain dif ferences which had arisen relating to partition of the properties left by Gujju Mal.
The arbitrator made his award on December 31, 1950 and under clause 6 of the award, the 'widow was awarded certain properties and it was expressly stated in the award that she would have a widow 's estate in the properties awarded to her.
While the widow was in possession of the properties, the Act came into force and the question arose whether on the coming into force of the Act, she became full owner of the properties under sub section (1) or her estate in the properties remained a restricted one under sub section (2) of section 14.
This Court held that although the award gave a restricted estate to the widow in the properties allotted to her, it was sub section (1) which applied and not sub section (2), because inter alia the properties given to her under the award were on the basis of a pre existing right which she had as an heir off .her husband under the Hindu Women 's Right to Property Act, 1937 and not as a new grant made for the first time.
So also in Nirmal Chand vs Vidya Wanti (dead) by her legal representatives(1), there was a regular partition deed made on December 3, 1945 between Amin chand, a coparcener and (1) C.A. No. 609 of 1965, decided on January 21, 1969.
271 Subhrai Bai, the widow of a deceased coparcener, under which a certain property was allotted to Subhrai Bai and it was specifically provided in the partition deed that Subhrai Bai would be entitled only to the user of the property and she would have no right to alienate it in any manner but would only have a life interest.
Subhrai Bai died in 1957 subse quent to the coming into force of the Act after making a will bequeathing the property in favour of her daughter Vidyawati.
The right of Subhrai Bai to bequeath the property by will was challenged on the ground that she had only a limited interest in the property and her case was covered by sub section (2) and not sub section (1).
This contention was negatived and it was held by this Court that though it was true that the instrument of partition prescribed only a limited interest for Subhrai Bai in the property, that was in recognition of the legal position which then prevailed and hence it did not bring her case within the exception contained in sub section (2) of section 14.
This Court observed: "If Subhrai Bai was entitled to a share in her husband 's properties then the suit proper ties must be held to have been allotted to her in accordance with law.
As the law then stood she had only a life interest in the properties taken by her.
Therefore the recital in the deed in question that she would have only a life interest in the properties allotted to her share is merely recording the true legal position.
Hence it is ' not possible to con clude that the properties in question were given to her subject to the condition of her enjoying it for her life time.
Therefore the trial court as well as the first Appellate Court were right in holding that the facts of the case do not fall within section 14(2) of the Hindu Succession Act, 1955.
" It will be seen from these observations that even though the property was acquired by Subhrai Bai under the instrument of partition, which gave only a limited interest to her in the property, this Court held.
that the case fell within sub section (1) and not sub section (2).
The reason obviously was that the property was 'given to Subbrai Bai in virtue of a pre existing right inhering in her and when the instrument of partition provided that she would only have a limited interest in the property, it merely provided for something which even otherwise would have been the legal position under the law as it then stood.
It is only when property is acquired by a Hindu female as a new grant for the first time and the instrument, decree; order or award giving the property prescribes the terms on which it is to be held by the Hindu female, namely, as a restricted owner, that sub section (2) comes into play and excludes the applicability of sub section (1).
The object of sub section (2), as pointed out by this Court in Badri Persad 's case (supra) while quoting with approval the observations made by the Madras High Court in Rangaswami Naicker vs Chinnammal(1), is "only to remove the disability of women imposed by law and not to interfere with contracts, grants or decree etc.
by virtue of which a woman 's right was restricted" and, there fore, where property is acquired by a Hindu female under the instrument in virtue of a pre existing (1) A.I.R. 1964 Mad.
387. 272 right, such as a right to obtain property on partition or a fight to maintenance and under the law as it stood prior to the enactment of the Act, she would have no more than limit ed interest in the property, a provision in the instrument giving her limited interest in the property would be merely by way of record or recognition of the true legal position and the restriction on her interest being a "disability imposed by law" would be wiped out and her limited interest would be enlarged under sub section (1).
But where property is acquired by a Hindu female under an instrument for the first time without any pre existing right solely by virtue of the instrument, she must hold it on the terms on which it is given to her and if what is given to her is a restricted estate, it would not be enlarged by reason of sub section (2).
The controversy before us, therefore, boils down to the narrow question whether in the 'present case the proper ties were acquired by the appellant under the compromise in virtue of a pre existing right or they were acquired for the first time as a grant owing its origin to the compromise alone and to nothing else.
Now, let us consider how the properties in question came to be acquired by the appellant under the compromise.
The appellant claimed maintenance out of the joint family properties in the hands of the respondent who was her deceased husband 's brother.
The claim was decreed in favour of the appellant and in execution of the decree for mainte nance, the compromise was arrived at between the parties allotting the properties in question to the appellant for her maintenance and giving her limited interest in such properties.
Since the properties were allotted to the appel lant in lieu of her claim for maintenance, it becomes neces sary to consider the nature of the right which a Hindu widow has to be maintained out of joint family estate.
It is settled law that a widow is entitled to maintenance out of her deceased husband 's estate, irrespective whether that estate may be in the hands of his male issue or it may be in the hands of his coparceners.
The joint family estate in which her deceased husband had a share is liable for her maintenance and she has a right to be maintained out of the joint family properties and though, as pointed out by this Court in Rant Bai vs Shri Yadunanden Ram,(1) her claim for maintenance is not a charge upon any joint family property until she has got her maintenance determined and made a specific charge either by agreement or a decree or order of a court, her right is "not liable to be defeated except by transfer to a bona fide purchaser for value without notice of her claim or even with notice of the claim unless the transfer was made with the intention of defeating her right".
The widow can for the purpose of her maintenance follow the joint family property "into the hands of any one who takes it as a volunteer or with notice of her having set up a claim for maintenance".
The courts have even gone to the length of taking the view that where a widow is in possession of any specific property for the purpose of her maintenance, a purchaser buying with notice of her claim is not entitled to possession of that property without first securing proper maintenance for her, vide Rachawa & Ors.
vs Shivayanappa (2) cited with approval in Ranibai 's case (supra).
It is, therefore, clear (1) ; (2) I.L.R. 273 that under the Sastric Hindu Law a widow has a right to be maintained out of joint family property and this right would ripen into a charge if the widow takes the necessary steps for having her maintenance ascertained and specifically Charged in the joint family property and even .if no specif ic charge i.s created, this right would be enforceable against joint family property in the hands of a volunteer or a purchaser taking it with notice of her claim.
The right of the widow to be maintained is of course not a ]us in rein, since it does not give her any interest in the joint family property but it is certainly jus ad rem, i.e., a right against the joint family property.
Therefore, when specific property is allotted to the widow in lieu of her claim for maintenance, the allotment would be in satisfac tion of her jus ad rem, namely, the right to be main tained out of the joint family property.
It would not be a grant for the first time without any pre existing right in the widow.
The widow would 'be getting the property in virtue of her pre existing right, the instrument giving the property being merely a document effectuating such pre existing right and not making a grant of the property to her for the first time without any antecedent right or title.
There is also another consideration which is very relevant to this issue and it is that, even if the instrument were silent as to the nature of the interest given to the widow in the property and did not, in so many terms, prescribe that she would have a limited interest, she would have no more than a limited interest in the property under the Hindu law as it stood prior to the enactment of the Act and hence a provision in the instrument prescribing that she would have only a limited interest in the property would be, to quote the words of this Court in Nirmal Chand 's case (supra), "merely recording the true legal position" and that would not attract the applicability of sub section (2) but would be governed by sub section (1) of section 14.
The conclusion is, therefore, inescapable that where proper ty is allotted to a widow under an instrument, decree, order or award prescribes a restricted estate for her in the property and sub section (2) of section 14 would have no application in such a case.
We find that there are several High Courts which have taken the same view which we are taking in the present case.
We may mention only a few of those decisions, namely, B.B. Patil vs Gangabai(1), Sumeshwar Misra vs Swami Nath Tiwari,(2) Reddayya vs Varapula Venkataraju,(3) Lakshmi Devi vs Shankar Jha (4) N. Venkanegouda vs Hanemangouda,(5) Smt.
Sharbati Devi vs Pt.
Hiralal,(6) Sesadhar Chandra Dev vs Smt.
Tara Sundari Dasi,(7) Saraswathi Ammal vs Anantha Shenoi (8) and Kunji Thomman vs Meenakshi(9).
It is (1) A.I.R. (1972) Bom.
16 (2) A.I.R. (1970) Pat.
(3) A.I.R. (1965) A.P. 66 (4) A.I.R. (1967) Mad.429 (5) A.I.R. (1972) Mys.
(6) A.I.R. (1964) Pub.
(7) A.I.R. (1962) Cal.
(8) A.I.R. (1966) Ker.
(9) I.L.R. 3 436SCI/77 274 not necessary to refer to these decisions since we have ourselves discussed the question of construction of sub sections (1) and (2) of section 14 on Principle and pointed out what in our view is the correct construction of these provisions.
We may only mention that the judgment of Pale kar, J., as he then was, in B.B. Patii vs Gangabai (supra) is a well reasoned judgment and it has our full approval.
The contrary view taken in Gurunadham vs Sundarajulu,(1) Santhanam vs Subramania,(2) section Kachapalava Gurukkal vs I7.
Subramania Gurukkal(3), Shiva Pujan Rai vs Jamuna Missir,(4) Gopisetti Kondaiah vs Gunda Subbarayudu(5), Ram Jag Misir vs The Director Consolidation, U.p.(6) and Ajab Singh vs Ram Singh (7) does not, in our opinion, represent the correct law on the subject and these cases must be held to be wrong ly decided.
In the circumstances, we reach the conclusion that since in the present case the properties in question were acquired by the appellant under the compromise in lieu or satisfac tion of her right of maintenance, it is sub section (1 ) and not sub section (2) of section 14 which would be applicable and hence the appellant must be deemed to have become full owner of the properties notwithstanding that the compromise prescribed a limited interest for her in his properties.
We accordingly allow the appeal, set aside the judgment and decree of the High Court and restore that of the District Judge, Nellore.
The result is that the suit will stand dismissed but with no order as to costs.
FAZAL ALI, J. This is a defendant 's appeal by special leave against the judgment of the High Court of Andhra Pradesh dated November 22, 1967 and arises in the following circumstances.
Venkatasubba Reddy, husband of appellant No. 1 Vaddebo yina Tulasamma hereinafter to be referred to as 'Tulasam ma ' died in the year 1931 in a state of jointness with his step brother V. Sesha Reddy and left behind Tulasamma as his widow.
On October 11, 1944 the appellant Tulasamma filed a petition for maintenance in forma pauperis against the respondent in the Court of the District Munsif, Nellore.
This application was set ex parte on January 13, 1945 bug subsequently the petition.was registered as a suit and an ex parte decree was passed against the respondent on June 29, 1946.
On October 1, 1946 the respondent filled an interlocutory application for recording a compromise alleged to have been arrived at between the parties out of Court on April 9, 1945.
The appellant Tulasamma opposed this application which was ultimately dismissed on October 16, 1946.
An appeal filed by the respondent to the District Judge,Nellore was also dismissed.
Thereafter Tulasamma put the decree in (1) I.L.R. (2) I.L.R. (3) A.I.R. (1972) Mad.
(4) I.L.R. (1947) Pat.
(5) I.L.R. (6) (7) A.I.R. (1969) J & K 92.
275 execution and at the execution stage the parties appear to have arrived at a settlement out of Court which was certi fied by the Executing Court on July 30, 2949 under O. XXI r. 2 of the Code of Civil Procedure.
Under the compromise the appellant Tulasamma was allotted the Schedule properties, but was to enjoy only a limited interest therein with no power of alienation at all.
According to the terms of the compromise the properties were to revert to the plaintiff after the death of Tulasamma.
Subsequently Tulasamma con tinued to remain in possession of the properties even after coming into force of the Hindu Succession Act, 1956 here inafter to be referred to as. 'the 1956 Act, or 'the Act of 1956 '.
By two registered deeds dated April 12, 1960 and May 26, 1961, the appellant leased out some of the proper ties to defendants 2 & 3 by the first deed and sold some of the properties to defendant 4 by the second 'deed.
The plaintiff/respondent filed a suit on July 31, 1961 before the District Munsiff, Nellore for a declaration that the alienation made by the widow Tulasamma were not binding on the plaintiff and could remain valid only till the life time of the widow.
The basis of the action filed by the plain tiff was that as the appellant Tulasamma had got a restrict ed estate only under the terms of the compromise her inter est could not be enlarged into an absolute interest by the provisions of the 1956 Act in view of section 14(2) of the said Act.
The suit was contested by the appellant Tulasamma who denied the allegations made in the plaint and averred that by virtue of the provisions of the 1956 Act she had become the full owner of the properties with absolute right of alienation and the respondent had no locus standi to file the present suit.
The learned Munsiff decreed the suit of the plaintiff holding that the appellant Tulasamma got merely a limited interest in the properties which could be enjoyed during her lifetime and that the alienations were not binding on the reversioner.
Tulasamma then filed an appeal before the District Judge Nellore, who reversed the finding of the Trial Court, allowed the appeal and dismissed the plaintiff 's suit holding that the appellant Tulasamma had acquired an absolute interest in the properties by virtue of the provisions of the 1956 Act.
The learned Judge further held that sub section
(2) of section 14 had no applica tion to the present case, because the compromise was an instrument in recognition of a pre existing right.
The plaintiff/respondent went up in second appeal to the High Court against the judgment of the District Judge.
The plea of the plaintiff/respondent appears to have found favour with the High Court which held that the case of the appel lant was clearly covered by section 14(2) of the Hindu Succes sion Act and as the compromise was an instrument as contem plated by section 14(2) of the 1956 Act Tulasamma could not get an absolute interest under section 14(1) of the Act.
The High Court further held ' that by virtue of the compromise the appellant Tulasamma got title to the properties for the first time and it was not a question of recognising a pre existing right which she had none in view of the fact that her husband had died even before the Hindu Women 's Right to Property Act, 1937.
We might further add that the facts.
narrated above have not been disputed by counsel for the parties.
The appeal has been argued only on the substantial questions of law which turn.
upon the interpretation of sub sections
(1) & (2) of section 14 276 of the .
It is common ground that in this case as also in the.
other connected appeals, the properties in suit were allotted under a compromise or an instrument in lieu of maintenance.
It is also admitted that the appellant Tulasamma was in possession of the properties at the time when the 1956 Act came into force.
Finally it is also not disputed that the compromise did purport to confer only a limited interest on the widow restricting completely her power of alienation.
We have now to apply the law on the facts mentioned above.
Similar points were involved in the other two appeals Nos.
135 of 1973 and 126 of 1972.
We have heard all the, three appeals together and in all these appeals counsel for the parties have confined their argu ments only to the questions of law without disputing the findings of fact arrived at by the Courts below.
Thus the two points that fall for determination in this appeal may be stated thus: .lm18 (1) whether the instrument of compromise under which the properties were given to the appellant Tulasamma before the 1956 Act in lieu of maintenance falls within section 14(1) or is covered by section 14(2) of the 1956, Act and (2) Whether a Hindu widow has a right to property in lieu of her maintenance, and if such a right is conferred on her subsequently by way of maintenance it would amount to mere recognition of a preex isting right or a conferment of new title so as to fall squarely within section 14(2) of the 1956 Act.
There appears to be serious divergence of judicial opinion on the subject and the High Courts have taken con trary views on this point.
Some High Courts, particularly, Bombay, Punjab, Calcutta and Patna have veered round to the view that a right of maintenance claimed by a Hindu widow is a pre existing right and any instrument or document or transaction by which the properties are allotted to the widow in lieu of her maintenance would only be recognition of a pre existing right and would not confer any new title on the window.
Following this line of reasoning the afore said High Courts have held that the properties allotted to the Hindu widow even though they conferred a limited inter est would fall clearly within the ambit of section 14(1) of the 1956 Act by virtue of which the limited interest would be enlarged into an absolute interest on the coming into force of the 1956 Act.
On the other hand the Orissa, Allahabad, Madras and Andhra Pradesh High Courts have taken a contrary view and have held that as the Hindu widow 's right to maintenance is not a right to property, property allotted to her in lieu of maintenance confers on her a right or title to the property for the first time and therefore such Conferment is protected by section 14(2) of the 1956 Act and is not covered by section 14(1).
Unfortunately, however, there is no decision of this Court which is directly in point, though there are some decisions which tend to support the view taken by the Bombay High Court.
277 Before, however, resolving this important dispute it may be necessary to consider the real legal nature of the incident of a Hindu widow 's right to maintenance.
In order to determine this factor we have to look to the concept of a Hindu marriage.
Under the Shastric Hindu Law, a marriage, unlike a marriage under the Mohammadan Law which is purely contractual in nature, is a sacrament a religious ceremony which results in a sacred and a holy union of man and wife by virtue of which the wife is completely transplanted in the household of her husband and takes a new birth as a partner of her husband becoming a part and parcel of the body of the husband.
To a Hindu wife her husband is her God and her life becomes one of selfless service and unstinted devotion and profound dedication to her husband.
She not only shares the life and love the joys and sorrows, the troubles and tribulations of her husband but becomes an integral part of her husband 's life and activities.
Cole brooke in his book 'Digest of Hindu Law ' Vol.
II de scribes the status of wife at p. 158 thus: "A wife is considered as half the body of her husband, equally sharing the fruit of pure and impure acts; whether she ascend "the pile after him, or survive for the benefit of her husband, she is a faithful wife.
" This being the position after marriage, it is manifest that the law enjoins a corresponding duty on the husband to maintain his wife and look after her comforts and to provide her food and raiments.
It is well settled that under the Hindu!Law the husband has got a personal obligation to maintain his wife and if he is possessed of properties then his wife is entitled as of right to be maintained out of such properties.
The claim of a Hindu widow to be main tained is not an empty formality which is to be exercised as a matter of concession or indulgence, grace or gratis or generosity but is a valuable spiritual and moral right which flows from the spiritual and temporal relationship of the husband an wife.
As the wife is in a sense a part of the body of her husband, she becomes co owner of the property of her husband though in a subordinate sense.
Although the right of maintenance does not per se create a legal charge on the property of her husband, yet the wife can enforce this right by moving the Court for passing a decree for maintenance by creating a charge.
This right is available only so long as the wife continues to be chaste.
Thus the position is that the right of maintenance may amount to a legal charge if such a charge is created either by an agree ment between the parties or by decree.
There are a number of authorities which have taken the view that even if the property is transferred and the trans feree takes the property with notice of the right of the widow to be maintained out of the property, the purchaser takes the obligation to maintain the widow out of the property purchased and the wife or widow can follow the property in the hands of the purchaser for the limited purpose of her maintenance.
We shall, however, deal with these authorities a little later.
278 Colebrooke in his 'Digest of Hindu Law Vol.
1I, quotes the.
Mahabharata at p. 121 thus: "Where females are honoured, there the deities are pleased; but where they are unhonoured, there all religious acts become fruitless.
" This clearly illustrates the high position which is bestowed on Hindu women by the Shastric Law.
Again Colebrooke in his book Vol.
II at p. 123, while describing the circumstances under which the maintenance is to be given to the wife, quotes Manu thus: "MANU : Should a man have business abroad, let him assure a fit maintenance to his wife, and then reside for a time in a foreign country; since a wife, even though virtuous, may be tempted to act amiss, if she be distressed by want of subsistence: While her husband, having settled her maintenance, resides abroad, let her continue firm in religious austerities; but if he leave no support, let her subsist by spinning an other blameless articles" This extract clearly shows that there is a legal obligation on the part of the husband to make arrangements for his wife 's due maintenance even if he goes abroad for business purposes.
Colebrooke again quotes Yajnawalkya at p. 243 of his book Vol.
thus: "When the father makes an equal partition among his sons, his wives must have equal shares with them, if they have received no wealth either from their lord or from his father.
If he makes an equal partition among his sons by his own choice, he must give equal shares to such of his wives also as have no male issue.
" This shows that when a partition is effected, the Hindu Law enjoins that the wife must get an equal share with the sons, thus reinforcing the important character of the right of maintenance which a Hindu wife or widow possesses under the Hindu Law.
Similarly Gopalchandra Sarkar Sastri dealing with the nature and incidents of the Hindu widow 's right to mainte nance observes in his treatise 'Hindu Law ' at p. 533 thus: "When the husband is alive, he is per sonally liable for the wife 's maintenance, which is also a legal charge upon his proper ty, this charge being a legal incident of her marital co ownership in all her husband 's property .
But after his death, his widow 's right of maintenance becomes limited to his estate, which, when it passes to any other heir, is charged with the same . .
There cannot be any doubt that under Hindu law the wife 's or widow 's maintenance is a legal charge on the husband 's estate; but the Courts appear to hold, 279 in consequence of the proper materials not being placed before them, that it is not so by itself, but is merely a claim against the husband 's heir, or an equitable charge on his estate; hence the husband 's debts are held to have priority, unless it is made a charge on the property by a decree.
" The view of the author appears to be that the Courts hold that the right of maintenance of a widow does not amount to a legal charge and this is so because proper materials were not placed before the Courts.
In other words, the author seems to indicate that the original Hindu Law contained clear provisions that the right of! maintenance amounts to a charge on the property of her husband and the obligation runs; with the property so that any person who inherits the property also takes upon the obligation to maintain the widow.
Sastri quotes from the original texts various ex tracts regarding the nature and extent of the right of maintenance of the Hindu women some of which may be extract ed thus: "The support of the group of persons who should be maintained, is the approved means of attaining heaven, but hell is the man 's portion if they suffer; therefore he should carefully maintain them.
The father, the mother, the Guru (an elderly relation worthy of respect), a wife, an offspring, poor dependants, a guest, and a religious mendicant are declared to be the group of persons who are to be maintained.
Manu, cited in Srikrishna 's commentary on the Dayabhaga, ii, 23.
It is declared by Manu that the aged mother and father, the chaste wife, and an infant child must be maintained even by doing a hundred misdeeds, Manu cited in the Mitak ' shara while dealing with gifts.
" The last extract dearly shows the imperative nature of the duty imposed on the owner of the property to maintain wife, aged mother, father etc.
even at the cost of perpetrating a hundred misdeeds.
Similarly Sastri in his book quotes Yajnaval kya at p. 523 thus: "Property other than what is required for the maintenance of the family may be given.
" The learned author highlights the importance of the right maintenance as being a charge on the property of the husband and observes as follows: "The ancestral immovable property is the hereditary source of maintenance of the mem bers of the family, and the same is charged with the liability of supporting its members, all of whom acquire a right to, such property from the moment they become members of the family, by virtue of which they are at least entitled to maintenance out of the same.
Such 280 property cannot be sold or given away except for the support of the family; a small portion of the same may be alienated, if not incompat ible with the support of the family.
There is no difference between the two schools as regards the view that the ances tral property is charged with the maintenance of the members of the family, and that no alienation can be made, which will prejudi cially affect the support of the group of persons who ought to be maintained.
Hence heirs are bound to maintain those whom the last holder was bound to maintain.
" The author further points out that under the Mitakshara law the daughter in law does, with her husband, acquire a right to the ancestral property, since her marriage, but she becomes her husband 's co owner in a subordinate sense, and the principal legal incident of this ownership is the right to maintenance, which cannot be defeated by gift or devise made by the holder of such property.
Similar observations have been made by the learned author at p. 528 of the book which may be extracted thus: "According to both the schools, the lawfully wedded wife acquires from the moment of her marriage a right to the property be longing to the husband at the, time and also to any property that may subsequently be acquired by him, so that she becomes a co owner of the husband, though her right is not co equal to that of the husband, but a subor dinate one, owing to her disability founded on her status of perpetual or life long tutelege or dependence.
. . . . . .
This right of the wife to maintenance from her husband is not lost even if the husband renounce Hinduism.
This right subsists even after the husband 's death although her husband 's right as distinguished from hers may pass by suvi vorship or by succession to sons or even to collaterals; these simply step into the posi tion of her husband, and she is required by Hindu law to live under their guardianship after her husband 's death.
" Finally it is pointed out by the learned author at p. 529 of the Book that the right which a woman acquires to her husband 's property subsists even after his death and ob served thus: "According to both the schools, the right which a woman acquires to her husband 's property subsists after his death, whether his interest passes by succession or by survivor ship to the male issue or any other person, and that this right does not depend upon the widow 's not possessing other means of support.
" 281 Summarising the nature of the liability of the husband to maintain his wife, the learned author observed as follows at p. 533 of his Book: "When the husband is alive, he is person ally liable for the wife 's maintenance, which is also a legal charge upon his property, this charge being a legal incident of her marital co ownership in all her husband 's property . .
But after 'his death, his widow 's right of maintenance becomes limited to his estate, which, when it passes to any other heir, is charged with the same . .
There cannot be any doubt that under Hindu law the wife 's or widow 's maintenance is a legal charge on the hus band 's estate; but the Courts appear to hold, in consequence of the proper materials not being placed before them, that it is not so by itself, but is merely a claim against the husband 's heir, or an equitable charge on his estate; hence the husband 's debts are held to have priority, unless it is made a charge on the property by a decree.
" To sump up, therefore, according to.
Sastri 's interpre tation of Shastric Hindu Law the right to maintenance possessed by a Hindu widow is a very important right which amounts.
to a charge on the property of her husband which continues to the successor of the property and the wife is regarded as a sort of co owner of the husband 's property though in a subordinate sense, i.e. the wife has no dominion over the property.
Similarly Mayne in his "Treatise on Hindu Law & Usage", 11th Edn., has traced the history and origin of the right of maintenance of a Hindu woman which according to him arises from the theory of an undivided family where the head of the family, is .bound to maintain the members including their wives and their children.
The learned author observes thus: (p. 813).
"The importance and extent of the right of maintenance necessarily arises from the theory of an undivided family.
The head of such a family is bound to maintain its mem bers, their wives and their children, to perform their ceremonies and to defray the expenses of their marriages;" Again at p. 816 para 684 the author stresses the fact that the maintenance of a wife is a matter of personal obligation on the part of the husband and observes thus: "The maintenance of a wife, aged parents and a minor son is a matter of personal obli gation arising from the very existence of the relationship and quite independent of the possession of any property, ancestral or acquired . . 'It is declared by Manu that the aged mother and father, the chaste wife and an infant child must be maintained even by doing a hundred misdeeds.
" 282 Again it has been observed at p. 818 para 687: "The maintenance of a wife by her hus band is, of course, a matter of personal obligation., which attaches from the moment of marriage." The author points out at p. 821 paragraph 689 that even after the coming into force of the Hindu Women 's Right to Property Act, 1937 which confers upon the widow a right of succession in respect of the non agricultural property, she is still entitled to maintenance from the family property.
The author observes thus: "It cannot, therefore, be said that the reason of the right has ceased to exist and the right is gone.
It was accordingly held that the widow of a deceased coparcener is still entitled to maintenance notwithstanding her right under the Act to a share in.
the non agricultural part of the family estate.
" Furthermore, the author cites the passage of Narada cited in Smriti Chandrika regarding which there is no dispute.
The saying runs thus: "Whichever wife (patni) becomes a widow and ' continues virtuous, she is entitled to be provided with food and raiment.
" At p. 822 para 690 the author points out that the right of a widow to be maintained is taken over even by the heirs of the husband who succeed to his property either by inheri tance or by survivorship.
In this connection the following observations are made: "She is entitled to be maintained where her husband 's separate property is taken by his male issue.
Where, at the time of his death, he was a coparcener she is entitled to maintenance as against those who take her husband 's share by survivorship." The Hindu law is so jealous in guarding the interests .
of Hindu women that the obligation for maintaining the Hindu women falls even on the King when he takes the estate by escheat or by forfeiture.
Similarly Mulla in his book "Hindu Law", 14th Edn., describes the incidents and characteristics of Hindu wife 's right to maintenance and observes thus at p. 597: "A wife is entitled to be maintained by her husband, whether he possesses property or not.
When a man with his eyes open marries a girl accustomed to a certain style of liv ing, he undertakes the obligation of maintain ing her in that style.
The maintenance of a wife by her husband is a matter of personal obligation arising from the very existence of the relationship, and quite independent of the possession by the husband of any property, ancestral or self acquired.
" 283 We might further mention that the Hindu wom en 's right to maintenance finally received statutory recognition and the entire law on the subject was consolidated and codified by the Hindu Married Women 's Right to Separate Maintenance and Residence Act, 1946 hereinaf ter to be referred to as 'the Act of 1946 ' which came into force on April 23, 1946.
Thus there appears to be complete unanimity of the various schools of Hindu law on the important incidents and indicia of the Hindu women 's right to maintenance which has now received statutory recognition and which only shows that the right to maintenance though not an indefeasible right to property is undoubtedly a pre existing right.
We shall now refer to some of the authorities which have dealt with this aspect of the matter.
In Narayan Rao Ramchandra Pant vs Ramabai(1), the Judicial Committee pointed out that the widow 's right to maintenance arises from the common law which developed from time to time.
justice West of the Bombay High Court appears to have entered into a very elaborate discussion of the entire law on the subject in Lakshman Ramchandra Joshi and Anr.
vs Satyabhamabai(2) and observed as follows: "These several authorities, no doubt, afford, in combination, a strong support to the proposition that a widow 's maintenance, especially as against the sons, the a charge on the estate, a right in re in the fullest sense adhering to the property, into whatever hands it may pass.
" These observations were reiterated in a later case in Narba dabai vs Mahadeo Narayan, Kashinath Narayan and Shamabai(3).
The observations of West J., in Lakshman Ramchandra Joshi and Anr 's case (supra) were fully approved by the Judicial Committee in Mst.
Dan Kuer vs Mst.
Sarla Devi(4), where it was observed: "But, apart from this circumstance, the judgment of West J., whose dissertations on Hindu Law must always command great esteem, contains an exposition of the law on this point, and the case is therefore rightly regarded as a leading authority on the ques tion.
In the course of his judgment that learned judge quotes with approval the remarks of Phear J., in Srimati Bhagabati vs Kanailal Mitter (1872) 8 Ben.
L.R. 225 that "as against one who has taken the property as heir, the widow has a right to have a proper sum for her maintenance ascertained and made a charge on the property in his hands.
She may also, doubtless, follow the property for this purpose into the hands of anyone who.
takes it as a volunteer, or with notice of her having set up a claim for maintenance against the heir" and that "when the property (1) L.R. 6 I.A. 114.
(2) I.L.R. (3) I.L.R. (4) L.R. 73 I.A. 208.
284 passed into the hands of a bona ' fide purchaser without notice, it cannot be affected by anything short of an already existing proprietary right; it cannot be subject to that which is not already a specif ic charge, or which does not contain all the elements necessary for its ripening into a specific charge.
" Summarising the entire position the Privy Council enunci ated the law thus: "The true rule of Hindu law in such matters would appear to be as follows: Two, obliga tions confront a joint Hindu family.
(1) The obligation to pay the debts (for instance, of the father) binding on the family; and (2) the moral obligation "to provide maintenance to the widows of the family.
" The latter obligation would, under certain circumstances, ripen into a legal obligation, as, for in stance, when a charge is created on specific property of the family either by agreement or a decree of the court; that, so long as neither of these two obligations has taken the form of a charge on the family property, the obligation to pay the binding debts will have precedence (as, for instance, in the course of the administration of the estate) over mere claims of a female member 's main tenance, but, if either of these two obliga tions assumes the shape of a charge, it would take precedence over the other." In Pratapmull Agarwalla vs Dhanabati Bibi,(1) the Judicial Committee pointed out that while a mother may not be the owner of her share until partition is made and has no pro existing right with regard to the share in the property, but she has a pro existing right for maintenance.
This Court also has made similar observations in a large number of cases regarding the nature and extent of the Hindu women 's right to maintenance.
In Rani Bai vs Shri Yadunandan Ram & Artr (2) this Court, while dealing with a situation where a widow claimed the right of maintenance but refused to hand over possession of the property until she secured her proper maintenance, observed as follows: .lm 15 "It cannot be disputed that the appel lant who is the widow of a pre deceased son of Jangi Jogi was entitled to receive main tenance so long as she did not to marry out of the estate of her father in law.
Although her claim for maintenance was not a charge upon the estate until it had been fixed and specifically charged thereupon her right was not liable to be defeated except by transfer to a bona fide purchaser for value without notice of a claim or even with notice of a claim unless the transfer was made with the intention of defeating her right.
The courts in India have taken the view that where a widow is in possession of a specific proper ty for the purpose of her maintenance a pur chaser buying with notice of her claim is not entitled to (1) L.R. 63 1.A. 33.
(2) ; 285 possession of that property without first securing proper maintenance for her: [vide Rachawa & others vs Shivayogappa I. .
In the present case it is difficult to understand how the appellant could be deprived of the possession of proper ties by a trespasser.
Moreover she was presum ably in possession of these properties in lieu of her right of maintenance and could not be deprived of them even by Jugli Bai without first securing proper maintenance for her out of the aforesaid properties.
" In Sheo Dyal Tewaree vs Judoonath Tewaree, (1) the Calcutta High Court stressed the fact that although the widow may not be the owner of a share but she had a pre existing right of maintenance.
Elucidating the nature and extent of a right of a Hindu wife to maintenance, the Calcutta High Court pointed out in Srinath Das vs Probodh Chunder Das(2) that the right of maintenance is really identified with the husband 's property right though of a subordinate nature.
In Hemangini Dasi vs Kedarnath Kundu Chowdhury(3) the Privy Council held that if the estate remained joint and undivided the maintenance of the mother remained a charge on the whole estate and that any share that the widow took in the property which was equal to the share of a son was really in lieu of maintenance for which the estate was liable.
The position has been very succinctly stated and meticu lously analysed by a decision of the Madras High Court in K.V. Thangavelu vs The Court of Wards, Madras,(4) where, dealing with the entire history of the matter and relying on various original texts of the Hindu jurists, the Madras High Court pointed out that a cogent ground for preferring the widow 's claim is to be found in her qualified or subordinate co ownership in the husband 's property declared by the Mitakshara.
The Court referred to verse 52 of Vyavaharad haya (chapter II) where the Mitakshara refers to Apastam ba 's Dharmasutra as follows: "From marriage arises also jointness (sahatwam) in the holding of property (dravya paragraphestiu)." In an earlier case Sarojinidevi vs Subrahmanyam,(5) the Madras High Court held that even after the coming into force of the Hindu Women 's Right to Property Act, 1937, which did not apply to agricultural lands, the right of the Hindu widow to maintenance stood in tact and the widow was enti tled to maintenance notwithstanding her right under the Act to a share in the non agricultural part of the family es tate.
To the same effect is an earlier decision (1) (2) 11 C.L.J. 580.
(3) I.L.R. (4) (5) I.L.R. 286 of the Madras High Court in Jayanti Subbiah vs Alamelu Mangamma( ') where the High Court pointed out that under the Hindu Law the maintenance of a wife by her husband is a matter of personal obligation arising from the very exist ence of her relationship and quite independent of the pos session by the husband of any property ancestral or self acquired.
We fully agree with this exposition of the law which is supported by a large number of authorities as discussed above.
In Yella 'wa vs Bhimangavda(2), the Bombay High Court was of the view that even the heir of the husband 's property could not be allowed to recover possession from the widow without first making proper arrangements for her mainte nance.
This case was approved by this Court in Rani Bags case (supra).
Thus on a careful consideration and detailed analysis of the authorities mentioned above and the Shastric Hindu Law on the subject, the following propositions emerge with respect to the incidents and characteristics of a Hindu woman 's right to maintenance: (1) that a Hindu woman 's right to maintenance is a personal obligation so far as the husband is ' concerned, and it is his duty to maintain her even if he has no property.
If the hus band has property then the right of the widow to maintenance becomes an equitable charge on his property and any person who succeeds to the property carries with it the legal obliga tion to maintain the widow; (2) though the widow 's right to maintenance is not a right to property but it is undoubtedly pre existing right in property, i.e. it is a jus ad rem not jus in rem and it can be en forced by the widow who can get a charge created for her maintenance on the property either by an agreement or by obtaining a decree from the civil court; (3) that the right of maintenance is a matter of moment and is of such importance that even if the joint property is sold and the purchas er has notice of the widow 's right to mainte nance, the purchaser is legally bound to provide for her maintenance; (4) that the right to maintenance is undoubt edly a preexisting right which existed in the Hindu Law long before the passing of the Act of 1937 or the Act of 1946, and is, therefore, a pre existing right; (5) that the right to maintenance flows from the social and temporal relationship between the husband and the wife by virtue of which the wife becomes a sort I.L.R. (2) I.L.R. 287 of co owner in the property of her husband, though her co ownership is of a subordinate nature; and (6)that where a Hindu widow is in possession of the property of her husband, she is enti tled to retain the possession in lieu of her maintenance unless the person who succeeds to the property or purchases the same is in a position to make due arrangements for her maintenance.
With this preface regarding a Hindu woman 's right to maintenance and the necessary concomitants and incidents of those rights, we now proceed to determine the question of law that arises for consideration in this appeal.
Before taking up that question, I might trace the historical growth of the legislation introducing slow and gradual changes in the Shastric Hindu from time to time.
The exact origin of Hindu Law is steeped and shrouded in antiquity and, therefore, it is not possible to determine the ethics or Justification for assigning a somewhat subordinate position to a Hindu woman in matters of inheritance, marriage and the nature of the limited interest which she took even after inheriting her husband 's property.
It is also strange that the Hindu Law made no provision for divorce at all.
This may be due to 'the fact that during the time of Manu and Yajnav alkya the structure of the Hindu society was quite different 'and there being no social problem of the magnitude that we have today, it was not considered necessary to break up the integrity and solidarity of a Hindu family by allowing ownership rights to the Hindu females.
Another object may have been to .retain the family property within the family in order to consolidate the gains which a particular family may have made.
However, these are matters of speculation.
But one thing is dear, namely, that the Hindu jurists were very particular in making stringent provisions safeguarding the maintenance of the Hindu females either by the husband or even by his heirs after his death.
Perhaps they thought that the property which a widow may receive in lieu of maintenance or the expenses which may be incurred for her maintenance would be a good substitute for the share which she might inherit in her husband 's property.
Nevertheless, the Legislature appears to have stepped in from time to time to soften the rigours of the personal law of Hindus by adding new heirs, conferring new rights on Hindu females and making express provisions for adoption, maintenance etc.
It appears that the question of conferring absolute interest on the Hindu female had engaged the attention of the Legisla ture ever since 1941 but the idea took a tangible shape only in 1954 when the Hindu Succession Bill was introduced and eventually passed in 1956.
This Bill was preceded by a Hindu Code Committee headed by Mr. B. N. Rau who had made a number of recommendations which formed the basis of the 1956 Act.
After the attainment of independence, the entire per spective changed, the nature of old human values assumed a new complexion and the need for emancipation of womanhood from feudal bondage became all the more imperative.
Under the strain and stress of 288 socio economic conditions and a continuous agitation by the female Hindus for enlargement of their rights a new look to the rights of women as provided by the Shastric Hindu Law had to be given.
In pursuance of these social pressures, it was necessary to set up a new social order where the women should be given a place of honour and equality with the male sex in every other respect.
This was the prime need of the hour and the temper of the times dictated the imperative necessity of making revolutionary changes in the Hindu Law in order to abolish the invidious distinction in matters of inheritance between a male and a female.
Similarly it was realised that there should be express provision for divorce on certain specified grounds inasmuch as the absence of such a provision had perpetrated a serious injustice to the Hindu females for a long time.
It seems to me that it was with this object in view that the Legislature of our free country thought it as its primary duty to bring forth legis lation to remove the dangerous anomalies appearing in the Hindu Law.
Even during the British times, there were certain legislation modifying certain provisions of the Hindu Law, e.g., the Hindu Law Inheritance Act which added a few more heirs including some females; the Hindu Women 's Right to Property Act, 1937, which provided that on partition a widow would be entitled to the same share as the sons in the property of her husband.
The Act of 1937, while giving a share to the wife on partition had not disturbed her right to claim maintenance which was preserved in tact and al though she was not permitted to sue for partition she was undoubtedly entiled to sue for maintenance without having recourse to the remedy of partition.
After independence the Parliament passed the Hindu Minority and Guardianship Act, 1956; the ; the Hindu Marriage Act, 1956 which regulated the law of marriage and divorce and ultimately the which provided for intestate succession.
The Hindu Succes sion Act, 1956 was, therefore, undoubtedly a piece of social legislation which fulfilled a long felt need of the nation and was widely acclaimed by the entire people as would appear from the debates which preceded the passing of the Act.
It is in the light of these circumstances that we have now to interpret the provisions of section 14(1) & (2) of the Act of 1956.
Section 14 of the 1956 Act runs thus: "14.
(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.
Explanation.
In this Sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheri tance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase 289 or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the com mencement of this Act.
(2) Nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property." This Court has interpreted the scope and ambit of section 14(1) and the Explanation thereto on several occasions and has pointed out that the object of the legislation was to make revolutionary and far reaching changes in the entire struc ture of the Hindu society.
The word "possessed" used in section 14(1) has also been interpreted by this Court and it has been held that the word has been used in a very wide sense so as to include the st.ate of owning or having the property in one 's power and it is not necessary for the application of section 14 (1) that a Hindu woman should be in actual or physical possession of the property.
It is sufficient if she has a right to the property and the said property is in her power or domain.
In S.S. Munnalal vs
S.S. Rajkumar (1) it was held that mere declaration of the share of the widow passed only an of her share under a preliminary decree would fall within the ambit of section 14(1) and even though the widow did not get actual possession of the property until a final decree is passed she would in law be deemed to be in posses sion of the property.
In that case, the High Court had held that mere declaration of the share of the widow passed only an inchoate interest to her and she never came to possess the share within the meaning of section 14 of the Act and there fore the property remained joint family property.
This Court reversed the judgment of the High Court holding that once a preliminary decree was passed in favour of the widow granting her a share in the property she must be deemed to be in possession of the property in question.
Their Lordships emphasised that the words "possessed by" used in section 14(1) clearly indicated that such a situation was envis aged by the Legislature.
White interpreting the provisions of section 14 the Court also pointed out that the 1956 Act was a codifying enactment which had made far reaching changes in the structure of the Hindu society and the object was to sweep away traditional limitations placed on the rights of the Hindu women.
In this connection, the Court observed as follows: "The Act is a codifying enactment, and has made farreaching changes .in the structure of the Hindu law of inheritance, and succes sion.
The Act confers upon Hindu females full rights of inheritance, and sweeps away the traditional limitations on her powers of dispositions which were regarded under the Hindu law as inherent in her estate . .
Normally a right declared in an estate by a preliminary decree would be regarded as property, and there is nothing in the context in which section 14 occurs or in the phraseology (1) [1962] Supp. 3 S.C.R. 418.
4 436 SCI/77 290 used by the Legislature to warrant the view that such a right declared in relation to the estate of a joint family in favour of a Hindu widow is not property within the meaning of section 14.
In the light of the scheme of the Act and its evolved purpose it would be difficult, without doing violence to the language used in the enactment, to assume that a right declared in property in favour of a person under a decree for partition is not a right to proper ty.
If under a preliminary decree the right in favour of a Hindu male be regarded a.s property the right declared in favour of a Hindu female must also be regarded as proper ty.
Earlier the Court observed in that very case as under: "By section 14 (1) the Legislature sought to convert the interest of a Hindu female which under the Sastric Hindu law would have been regarded as a limited interest into an abso lute interest 'and by the explanation thereto gave to the expression "property" the widest connotation.
The expression includes property acquired by a Hindu female by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage or by her own skill or exertion, or by purchase or by prescription, or in any other manner what soever.
By section 14(1) manifestly it is intended to convert the interest which a Hindu female has in property however restricted "the nature of that interest under the Sastric Hindu law may be into absolute estate.
" The matter was again considered by this Court in Eramma vs Verrupanna (1) where it was held that before a widow can get absolute interest under section 14(1) she must have some vestige of title, i.e. her possession must be under some title or right and not be that of a rank trespasser.
In this connection the Court observed as follows: "The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title whether before or 'after the com mencement of the Act.
It may be noticed that the Explanation to section 14(1 ) sets out the various modes of acquisition of the property by a female Hindu and indicates that the section applies only to property to which the female Hindu has acquired some kind of title however, restricted the nature of her interest may be . .
It does not in any way confer a title on the female Hindu where she did not in fact possess any vestige of title.
It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of a female Hindu and it does not confer any title on a mere trespasser.
In other words, the provisions of section 14( 1 ) of the Act cannot be attracted in the case of .
a Hindu female who is in possession of the property of the last (1) 291 male holder on the date of the commencement of the Act when she is only a trespasser without any right to property.
" In Mangal Singh vs Smt.
Ratno (1) a widow came into posses sion of her husband 's property in 1917 and continued to be in possession of the same till 1954 when she was dispos sessed by a collateral of her husband under the orders of the Revenue authorities.
She filed a suit for recovery of possession and during the pendency of the suit the Act of 1956 came into force.
This Court upholding the judgment of the High Court held that the dispossession of the widow being illegal, she must be deemed to be, in the eye of law, to continue in possession of the properties and acquired an absolute interest with the coming into force of the Act of 1956.
It was not a case where a Hindu female had parted with her right so as to.
place herself in a position where she could in no manner exercise her rights in that property any longer when the Act came into force.
This Court observed as follows: "It is significant that the Legislature begins section 14(1) with the words "any property possessed by a female Hindu" and not "any property in possession of a female Hindu.
" If the expression used had been "in possession of" instead of "possessed by", the proper interpretation would probably have been to hold that, in order to apply this provision, the property must be such as is either in actual possession of the female Hindu or in her constructive possession.
The constructive possession may be through a lessee, mortga gee, licensee, etc.
The use of the expression "possessed by" instead of the expression "in possession of", in our opinion, was intended to enlarge the meaning of this expression.
It is commonly known in English language that a property is said to be possessed by a person, if he is its owner, even though he may, for the time being, be out of actual possession or even constructive possession." "It appears to us that the expression used in section 14(1) of the Act was intended to cover cases of possession in law also where lands may have descended to a female Hindu and she has not actually entered into them.
It would of course cover.
the other cases of actual.
or constructive possession.
On the language of section 14( 1 ), therefore, we hold that this provision will become applicable to any property which is owned by a female Hindu, even though she is not in actual physical or constructive possession of that property." Again, while referring to an earlier case, namely, Eramma Verrupanna (supra), the Court clarified the position thus: "This case also, thus, clarifies that the expression "possessed by" is not intended to apply to a case of mere possession without title, and that the legislature intended this provision for eases where the Hindu female possesses the right of ownership of 'the property in question.
Even (1) ; 292 mere physical possession of the property without the right of ownership will not at tract the provisions of this section.
This case, also, thus, supports our view that the expression "possessed by" was used in the sense of connoting state of ownership and, while the Hindu female possesses the right of ownership, she would become full owner if the other conditions mentioned in the section are fulfilled.
The section will, however, not apply at all to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could,.
in no manner, exercise her rights of ownership in that property any longer." In Sukhram & Anr.
vs Gauri Shanker &.
Another(1) the facts Were as follows: Hukam Singh and Sukh Ram were two brothers.
Chidda, the second appellant was the son of Sukh Ram and thus Chidda, Hukam Singh and Sukh Ram were members of a joint Hindu family governed by the Benares School of Mitakshara Law.
Hukam Singh died in 1952 leaving behind his widow Krishna Devi.
On December 15, 1956, Krishna Devi sold half share of the house belonging to the joint family.
This sale was challenged by the other members of the joint family on the ground that Krishna Devi had merely a life interest.
The question raised .was whether Krishna Devi acquired an abso lute .interest in the properties after coming into force of the .
It was argued before this Court that according to the Benaras School, a male coparcen er was not entitled to alienate even for value his undivided interest in the coparcenary without the consent of other coparceners and, therefore, Krishna Devi could not have higher rights than what her husband possessed.
This Court, however, held that in view of the express words of section 14 of the 1956 Act, once the widow was possessed of property before or after the commencement of the Act, she held it as full owner and not as a limited owner and, therefore, any restriction placed by Shastric Hindu Law was wiped out by the legislative intent as expressed in the Act of 1956.
The Court observed thus: "But the words of section 14 of the are express and explicit; thereby a female Hindu possessed of property whether acquired before or after the commence ment of the Act holds it as full owner and not as a limited owner.
The interest to which Krishna Devi became entitled on the death of her husband under section 3(2) of the Hindu Women 's Right to Property Act, 1937, in the property of the joint family is indisputably her "property" within the meaning of section 14 of Act 30 of 1956, and when she became "full owner" of that property she acquired right unlimited in point of user and duration and uninhibited in point of disposition." (1) ; 293 This case indirectly supports the view that if the intention of the Legislature was.
to confer absolute interest on the widow, no limitation can be spelt out ' either from the old Shastric Law or otherwise which may be allowed to defeat the intention.
This Court went to the extent of holding that the words in section 14(1) are so express and explicit that the widow acquired a right unlimited in point of user, though a male member governed by .the
Benaras school had no power of alienation without the consent of other coparceners.
Under the Act the female had higher powers than the male because the words of the statute did not contain any limitation at all.
On the parity of reasoning, therefore, where once a. property is given to the widow in lieu of maintenance and she enters in_to possession of that property, no amount of restriction contained in the document can prevent her from acquiring absolute interest in the property because the contractual restriction cannot be higher than the old Hindu Shastric Law or the express words the Act of 1956.
In Badri Prashad vs Smt.
Kansa Devi(1) the prepositer died in 1947 leaving behind five sons and a widow.
Soon after his death disputes arose between the parties and the matter was referred to an arbitrator in 1950.
The arbitrator in his award allotted shares to the parties wherein it was stated that the widow would only have widow 's estate in those properties.
While .the widow was in possession of the properties, the Act of 1956 came into force and the question arose whether or not she became full owner of the property or she only had a restricted interest as provided in the grant, namely, the award.
Court held that although the award had given a restricted estate, but this was only a narration of the state of law as it existed when the award was made.
As the widow, however, inherited the property under the Hindu Women 's Right to Property Act, her interest became absolute with the passing of the Act of 1956 and she squarely fell within the provisions of section 14(1) .of the Act.
It was further held that the mere fact that the partition was by means; of an award would not bring the matter within section 14(2) of the Act, because the interest given to, the widow was: on the basis of pre existing right and not a new grant for the first time.
This Court observed as follows: "The word "acquired" in sub section
(1 ) has also to be given the widest possible meaning.
This would be.
so be cause.
of the language of the Explanation which takes sub section
(1) applicable to acquisition of property by inheritance or devise or at a partition or in lieu of maintenance or arrears of maintenance or by gift or by a female 's own skill or exertion or by purchase or prescription or in any manner whatsoever.
Where at the commencement of the Act a female Hindu has a share in joint properties which are later on partitioned by metes and bounds and she gets ' possession of the properties allotted to her there can be No. manner of doubt that she is not only possessed of that property at the time of the coming into force of the Act but has.
also acquired the same before its commencement." (1) ; 294 This Court relied upon two earlier decisions: viz. S.S. Munnalal 's case and Sukhram 's case (supra).
This case appears to be nearest to the point which falls.
for determi nation in this appeal, though it does not cover the points argued before us directly.
Lastly our attention was.
drawn to.
an unreported deci sion of this Court in Nirmal Chand vs Vidya.
Wanti (dead) by her legal representatives(1) in which case Amin Chand and Lakhmi Chand were the owners of agricultural and non agri cultural properties.
The properties were partitioned in the year 1944 and Lakhmi Chand died leaving behind him the appellant and his second wife Subhrai Bai and his daughter by this wife.
There was a regular partition between Amin Chand and Subbrai Bai by a registered document dated Decem ber 3, 1945 under which a portion of the property was allot ted to Subhrai Bai and it was provided in the document that Subhrai Bai would be entitled only to the user of the land and she will have no right to alienate it in any manner but will have only life interest.
Later, Subhrai Bai bequeathed the property in 1957 to her daughter Vidya Wanti.
Subhrai Bai died and Vidya Wanti 's name was mutated in the papers after coming into ,force of the Act of 1956.
The point raised before the High Court was.
that as Subbrai Bai had been given only a limited interest in the property she had No. power to bequeath the property to her daughter as her case was not covered by section 14(1) but fell under section 14(2) of the Act.
This Court pointed out that at the time when the property was allotted to.
Subbrai Bai, the had.
not come into force and according to the state of Hindu Law as it ' then prevailed Subbrai Bai was undoubtedly entitled only to a limited interest.
There was a restric tion in the partition deed that Subhrai Bai would enjoy usufruct of the property only and shall not be entitled to, make any alienation.
It was not a restriction as such but a mere.
statement of law .as it then prevailed.
Such a re striction, therefore, ' would not bring the case of Subhrai Bai under section 14(2) of the Act and, therefore, she would acquire an absolute interest after the passing of the Act of 1956 and was, therefore, competent to execute the will in favour of her daughter.
This Court observed as follows: "If Subhrai Bai was entitled to.
a share in her husband 's properties then the suit properties must be held to.
have been allotted to her in accordance with law.
As the law then stood she had only a life interest in the properties taken by her.
Therefore the recital in the deed in question that she would have only a life interest in the properties allot ted to.
her share is merely recording the true legal position.
Hence it is not possibIe to, conclude that the properties in question were given to her subject to the condition.
of her enjoying it for her lifetime.
Therefore the trial court as well as the first Appellate Court were right in holding that the facts of the case do not fail within section 14(2) of the .
In the light of the above decisions of this Court the following principles appear to be clear: (1) C.A. No. 609 of 1965 decided on Jan. 21, 1969.
295 (1) that the provisions of section 14, of the 1956 Act must be liberally construed in order to advance the object of the Act which is to enlarge the limited interest possessed by a Hindu widow which was in consonance with the changing temper of the times; (2) it is manifestly clear that sub section
(2) of section 14 does not refer to any transfer which merely recognises a pre existing right without creating or conferring a new title on the widow.
This was clearly held by this Court in Badri Parshad 's case (supra).
(3) that the Act of 1956 has made revolution ary and far reaching changes in the Hindu society and every attempt should be made to carry out the.
spirit of the Act which has undoubtedly supplied a long felt need and tried to do away with the invidious distinc tion between a Hindu male and female in matters of intestate succession; (4) that sub section
(2) of section 14 is merely a proviso to.
(1) of section 14 and has to be interpreted as a proviso and not in a manner so ' as to destroy the effect of the main provision.
We have given our anxious consideration.
to the language of section 14(1) & (2) and we feel that o.n a proper interpreta tion of section 14(2) there does not appear to be any real incon sistency between section 14(1),.
the explanation thereto and sub section
To begin with, section 14(1) does not limit the enlargement of the estate of a Hindu widow to any particular interest in the property.
On the other hand the Explanation to section 14(1) brings out the real purpose.
of section 14(1) by giving an exhaustive category of cases where principle of section 14(1 ) has to operate, i.e. to 'cases where a Hindu female would get an absolute interest.
The argument of the learned counsel for the appellant is that as the right of maintenance was a pre existing right, any instrument or transaction by which the property was allotted to the appel lant would not be a new transaction so as to create a new title but would be only in recognition of a pre existing right, namely, the right of maintenance.
On the other hand Mr. Natesan appearing for the respondents submitted that the object of the proviso was to.
validate rather than disturb the past transactions which had 131aced certain restrictions or curbs on the power of a Hindu female and as.
the language of the proviso is very wide there is no warrant for not applying it to cases where pre existing rights are con cerned.
In the alternative, Mr. Natesan argued that the Hindu woman 's right to maintenance is not a legal right.
unless an actual charge is created in respect of the property and is, therefore not enforceable at law.
It is, therefore, not correct to describe a claim of a Hindu fe male 's right to.
maintenance simpliciter as a pre existing right because all the necessary indicia of a legal right are wanting.
After considering various aspects of the matter we are inclined to agree with the contentions raised by Mr. Krishna Murthy Iyer appearing for the appellant.
In the: first place, the appellant 's contention 296 appears to be more in consonance with the spirit and object of the statute itself.
Secondly, we have already pointed out that the claim of a Hindu female for maintenance is undoubtedly a pre existing right and this has been So held not only by various Courts in India but also by the Judicial Committee of the Privy Council and by this Court.
It seems to us, and it has been held as discussed above, that the claim or the right to maintenance possessed by a Hindu female is really a substitute for a share which she would have got in the property of her husband.
This being the position, where a Hindu female who.
gets a share in her husband 's property acquires an absolute interest by virtue of section 14(1) of the Act, could it be intended by the legisla ture that in the same circumstances a Hindu female who could not get a share but has a right of maintenance would not get an absolute interest ? In other words, the position would be that the appellant would suffer because her husband had died prior to the Act of 1937.
If the husband of the appellant had died after 1937, there could be no, dispute that the appellant would have got an absolute interest, because she was entitled to her share under the provisions of the Hindu Women 's Right to Property Act, 1937.
Furthermore, it may be necessary to study the language in which the Explanation to section 14(1) and sub section
(2) of section 14 are couched.
It would be seen that while the Explanation to section 14( 1 ) clearly and expressly mentions "property acquired by a female Hindu" at a partition or in lieu of maintenance or arrears of mainte nance there is no reference in sub section
(2) at all to this particular mode of acquisition by a Hindu female which clearly indicates that the intention of the Parliament was to exclude the application of sub section
(2) to, cases where the property has been acquired by a Hindu female.
either at a partition or in lieu of maintenance etc.
The Explanation is an inclusive definition and if the Parliament intended that everything that is mentioned in the Explanation should be covered by sub section
(2) it should have expressly so stated in sub section
Again the language of sub section
(2) clearly shows that it would apply only to such transactions which. are absolutely independent in nature and which are not in recog nition of or in lieu of pre existing rights.
It appears from the Parliamentary Debates that when the Hindu Succes sion Bill, 1954, was referred to a Joint Committee by the Rajya Sabha, in section 14(2) which was clause 16(2) of the Draft Bill of the Joint Committee, the words mentioned were only gift or will.
Thus the intention of the Parliament was to confine sub section
(2) only to two transactions, namely a gift or a will, which clearly would not include property received by a Hindu female in lieu of maintenance or at a partition.
Subsequently, however, an amendment was proposed by one of the, members for adding other categories, namely, an instru ment, decree, order or award which was accepted by the Government.
This would show that the various terms, viz., gift, will, instrument, decree, order or award mentioned in section 14(2) would have to.
be read ejusdem generis so as refer to transactions where right is created for the first time in favour of the Hindu female.
The intention of the Parliament in adding the other categories to sub section
(2) was merely to ensure that any transaction under which a Hindu female gets a new or independent title under any of the modes mentioned in section 14(2), namely, gift, will, decree, order, award or m instrument which prescribes a restricted estate would not be disturbed and would continue to occupy the field covered by section 14(2).
This 297 would be the position even 'if a Hindu male was to get the property by any of the modes mentioned in section 14(2): he would also get only a restricted interest and, therefore, the Parliament thought that there was no warrant for making any distinction between a male or a female in this regard and both were, therefore, sought to be equated.
Finally, we cannot overlook the scope and extent of a proviso.
There can be no doubt that sub section
(2) of section 14 is.
clearly a proviso to section 14 (1) and this has been so held by this Court in Badri Prasad 's case (supra).
It is well settled that a provision in the nature of a proviso merely carves out an exception to the main provision and cannot be interpreted in a manner so as to.
destroy the effect of the main provision or to render the same nugatory.
If we accept the argument of the respondent that sub section
(2 ) to section 14 would include even a property which has been acquired by a Hindu female at a partition or in lieu of maintenance then a substantial part of the Explanation would be completely set at naught which could never be the intention of the proviso Thus we are clearly of the opinion that sub section
(2) of section 14 of the proviso should be interpreted in such a way so as not to substantially erode section 14(1) or the Explanation thereto.
In the present case we feel that the proviso has carved out completely a separate.
field and before it can apply three conditions must exist: (i) that the property must have been acquired by way of gift, will, instrument, decree, order of the Court or by an award; (ii) that any of these documents executed in favour of a Hindu female must prescribe a restricted estate in such property; and (iii) that the instrument must create or confer a new right, title or interest on the Hindu female and not merely recognise or give effect to a pre existing right which the female Hindu already possessed.
Where any of these documents are executed but no restricted estate is prescribed, sub section
(2) will have no application.
Similarly where these instruments do not confer a new title for the first time on the female Hindu, section 14(1) would have no application.
It seems to me that section 14(2) is a salutary provision which has been incorporated by the Parliament for historical reasons in order to maintain the link between the Shastric Hindu Law and the Hindu Law which was sought to be changed by recent legislation, so that where a female Hindu became possessed of property not in virtue of any pre existing right but otherwise, and the grantor chose to impose certain conditions on the grantee, the legislature did not want to interfere with such a transaction by oblit erating or setting at naught the conditions imposed.
There was some argument at the bar regarding the use of the term " 'limited owner" in section 14(1) and "restricted es tate" in section 14(2).
Not much, however, turns upon this.
I think that the Parliament advisedly used the expression "restricted estate" in section 14(2), because while a limited interest would indicate only life estate, a restricted estate is much wider in its import.
For instance, suppose a donor while giving 298 the property to a Hindu female inserts a condition that she will have to pay Rs. 200/ to donor or to one of his rela tives till a particular time, this would not come within the term "limited interest", but it would be included by the term "restricted estate".
That is the only justification for the difference in the terminology of section 14( 1 ) and (2) of the Act.
Having discussed the various aspects of section 14(1) and (2) we shall now deal with the authorities cited before us by.
counsel for the parties which are by no means consist ent.
We will first deal with the authorities which took the view that we have taken in this case.
In this connection the sheet anchor of the argument of the learned counsel for the appellant is the decision of the Bombay High Court in B.B. Patil vs Gangabai (1) and that of the counsel for the re spondents is the decision of the Madras High Court in Guru nadham vs Sundrarajulu(2) and Santhanam vs Subramania(3).
The latter case was affirmed in appeal by the Division Bench of the Madras High Court in section Kachapalaya Gurukkal vs V. Subramania Gurukkal (4) and the aforesaid Division Bench judgment forms the subjects matter of Civil Appeal No. 135 of 1973 which will be disposed of by us by a separate judg ment.
We will now take up the case of the Bombay High Court relied upon by the learned counsel for the appellant which, in our opinion, lays down the correct law on the subject.
In B.B. Patil vs Gangabai (supra) the facts briefly were that the properties in question were the self acquired properties of Devgonda and after his death in 1902 Hira Bai daughter in law of Devgonda (widow of his son Appa, who also died soon thereafter) came into possession of the proper ties.
Disputes arose between Hira Bai and Nemgonda, the nephew of Devgonda, and the matter having been referred to the arbitrator he gave his award on October 16, 1903 and a decree in terms of the award was passed on October 24, 1903.
Under the decree in terms of the award, 65 acres of land and one house was allotted to Hira Bai out of which 30 acres were earmarked for the provision of maintenance and marriage of the three daughters and the rest of the property was ordered to be retained by Hira Bai for life with certain restrictions.
After her death these prop.reties were to revert to Nemgonda.
The dispute which was the subject matter of the appeal before the High Court was confined to 35 acres of land and the house which was in possession of Hira Bai.
Hira Bai continued to be in possession of these properties right upto February 25, 1967.
Meanwhile Nemgon da had died and his sons defendants 2 to 6 claimed the properties.
After the death of Hira Bai, the plaintiffs, who were two out of the three daughters of Hira Bai, filed a suit for possession claiming entire title to the properties in possession of Hira Bai on the ground that Hira Bai was in possession of the properties as limited owner at the time of the passing of the and (1) A.I.R. [1972] Bom.16.
(2) I.L.R. (3) I.L.R. (4) A.I.R. [1976] Mad. 279.
299 so her limited estate was enlarged into an absolute estate and the plaintiffs were, therefore, entitled to succeed to.
her properties in preference to the reversioners.
The suit was contested by defendants 2 to 6 mainly on the ground that as Hira Bai under the compromise was to retain only a life interest in the properties, her case would be covered by section 14(2) of the Act and after her death the properties would revert to the reversioners.
The Court held that as Hira Bai was put in possession of the properties in lieu of her maintenance, section 14 (2) had no application, because the award merely recognised the pre existing rights of Hira Bai and did not seek to confer any fresh rights or source of title on Hira Bai.
Thus even though the award did provide that Hira Bai would have a limited interest, section 14(2) would have no application and Hira Bai will get an absolute interest after the coming into force of the Hindu Success; on, Act, 1956.
The Court observed: "The explanation, thus, brings under ' its purview all properties traditionally acquired by a Hindu female on which merely by reason of the incidents of the Hindu law she has limited ownership.
In other words, sub section (1 ) read with this explanation provides that any property, howsoever acquired and in possession of a Hindu female after the commencement of the Act shall be held by her as a full owner in all cases where she former ly held merely limited ownership.
As a matter of fact, this sub section proceeds on the basis that there are.
several categories of properties of which a Hindu female, under the provisions of Hindu Law, is merely a limited owner.
By this enactment her rights! are enlarged and wherever under the Hindu Law she would merely obtain limited ownership, she would, after the commencement of the Act, obtain full ownership." "There is consensus of judicial opinion with regard to the ambit of sub section
(2) of section 14 of the Act.
It covers only those cases of grants where the interest in the grantee is created by the grant itself, or, in other words, where the gift, will, instrument, decree, order or award is the source or origin of the interest created in the grantee.
Where, however.
the instruments referred to above are not the source Of inter est created but are merely declaratory or definitive of the right to property anteced ently enjoyed by the Hindu female, sub section (2) has no application; and it matters not if in such instruments it is specifically provided in express terms that the Hindu female had a limited estate or ' that the property would revert on her death to the next reversioner such terms are merely the reiteration of the incidents of the Hindu Law applicable to the limited estate.
" Dwelling on the nature and incidents of the right of the widow ' to maintenance before the Hindu Women 's Right to Property Act, 1937, Palekar, J., speaking for the Court described the various 300 characteristics and incidents of the right of a Hindu female for maintenance (which have already been discussed by us).
Finally, the Judge observed as follows: "It appears to us that in the context of the Hindu widows the right to maintenance conferred under the Hindu Law is distinguisha ble in quality from her right to a share in the family property.
That may well be the reason why the explanation to sub section (1) of section 14 of the Act makes the female allottee of property "in lieu of maintenance" as much a limited owner as when the widow acquires "inheritance" or "at a partition".
And if in the latter two cases it is conceded that sub section (2) does not apply on the ground of antecedent right to the family properties, we do not see any rational justi fication to exclude a widow who has an equally sufficient claim over the family properties for her maintenance." Thus the following propositions emerge from a detailed discussion of this case: .lm10 (1) that the widow 's claim to maintenance is undoubtedly a tangible right though not an absolute right to property so as to become a fresh source of title.
The claim for maintenance can, however, be made a charge on the joint family properties, and even if the properties are sold with the notice of the Said charge, the sold properties will be bur dened with the claim for maintenance; (2) that by virtue of the Hindu Women 's Right to Property Act, 1937 the claim of the widow to main tenance has been crystallized into a full fledged right and any property allotted to her in lieu of maintenance becomes property to which she has a limited interest which by virtue of the provisions of Act of 1956 is enlarged into an absolute title; (3) Section 14(2) applies only to cases where grant is not in lieu of maintenance or in recognition of pre existing rights but confers a fresh right or tide for the first time and while conferring the said title certain restrictions are placed by the grant or transfer.
Where, .however, the grant is merely in recognition o.r in implementation of a pre existing right to claim maintenance, the case.
falls beyond the purview of section 14(2) and comes squarely within the explanation to section 14 (1).
The Court dissented from the contrary view taken by the Orissa and Madras High Courts on this question.
We find that the facts of this case are on all fours with the present appeal, and we are in complete agreement with the view taken and the reasons given by Palekar, J. Once it is recognised that right of maintenance is a pre existing tangi 301.
ble right, it makes no difference whether a Hindu widow died before or after the enactment of Hindu Women 's Rights to Property Act, 1937.
A similar view was taken by an earlier decision of the Andhra Pradesh High Court in Gadem Reddayya vs Varapula Venkataraju and Am, C) where the Court held that the family settlement was only in recognition of the pre existing right of the widow to maintenance and, therefore, was not covered by section 14(2) of the Act of 1956.
In our opinion, this case correctly states the law on the subject.
In Sumeshwar Mishra vs Swami Nath Tiwari, (2) the High Court of Patna appears to have taken the same view, and in our opinion very correctly.
The Patna High Court differed from the decision of the Madras High Court in Thatha Gurunadhan Chetti vs Smt.
Thatha Navaneethamma,(3) and in our opinion rightly.
We are of the opinion, for the reasons that we have already given above, that the.
view of the Madras High Court was not legally correct.
A later deci sion of the Patna High Court in Lakshmi Devi vs Shankar Jha(4) has also taken the same view.
We, however, fully approve of the view expressed by the Patna High Court and Andhra Pradesh High Court referred to above.
Similarly in H. Venkanagouda vs Hanamangouda(5) the Mysore High Court adopted the view of the Bombay High Court in B.B. Patil vs Gangabai (supra) and dissented from the contrary view taken by the Madras and the Orissa High Courts.
In our opinion, this decision seems to have correct ly interpreted the provisions of section 14(2) of the 1956 Act and has laid down the correct law.
The view of the Madras High Court and the Orissa High Court which was dissented fro.m by the Mysore High Court is, in our opinion, legally erroneous and must be overruled.
In Smt.
Sharbati Devi vs Pt.
Hira Lal & Anr.(6) the Punjab High Court clearly held that application of section 14(2) was limited to only those cases.
where a female Hindu ac quired a title for the first time, for otherwise the proper ty acquired in lieu of maintenance even though conferring a limited estate fell clearly within the ambit of explanation to section 14(1) of the Act and would, therefore, become the absolute property of the widow.
Thus the Punjab High Court also fully favours the view taken by the Bombay, Patna, Mysore, Andhra Pradesh and other High Courts discussed above and has our full approval.
The only distinction in the Punjab case is that here the widow got the properties after the coming into force of the Hindu Women 's Rights to Proper ty Act, 1937, but that, as we shall point out hereafter, makes no difference with respect to the legal right which a widow has to maintain herself out of the family property.
(1) A.I.R. 1965 .A.P. 66.
(2) A.I.R. 1970 Pat.
A.I.R. 1967 Mad. 429.
(4) A.I.R. 1074 Pat.
(5) A.I.R. 1972 Mys. 286.
(6) A.I.R. 302 The Calcutta High Court has also taken the same view in Sasadhai Chandra Dev vs Smt.
Sundari Desi (1) which we endorse.
In Saraswathi Ammal vs Anantha Shenoi, (2) the Kerala High Court, after a very detailed discussion and meticulous analysis of the law on the subject, pointed out that the right of a widow to maintenance was not a matter of conces sion but under the Sastri 's Hindu Law it was an obligation on the heirs who inherited the properties of the husband to maintain the widow and any property which the widow got in lieu of maintenance was not one given purely as a matter of concession, but the widow acquired a right in such property.
We fully agree with the view taken by the Kerala High Court in the aforesaid case.
In Kunji Thomman vs Meenakshi(3) although the Kerala High court reiterated its facts of that particular case previous view, on the High Court held that under the family settle ment the widow did not get any right to maintenance but was conferred a new right which was not based on her pre existing right and on this ground the High Court felt that the widow would not get an absolute interest in view of the explanation to section 14 (1).
In Chellammal vs Nallammal(4) the facts were almost similar to the facts of the present case.
A single Judge of the Madras High Court held that.
the case was clearly covered by the Explanation to section 14(1) of the Act and the properties given to the widow in lieu of maintenance became her absolute properties and would not be covered by section 14(2) of the Act.
This decision appears to have been overruled by a later decision of the same High Court in section Kachapalaya Gurukkal vs V. Subramania.
Gurukkal (supra) which is the subjectmatter of Civil Appeal No. 126 of 1972 and we shall discuss the Division Bench 's decision when we refer to the authorities taking a contrary view.
We find ourselves in complete agreement with the view taken by the Single Judge in Chellammal vs Nellammal (supra).
and we overrule the Division Bench decision in section Kachapalaya Gurukkal 's case (supra).
Thus all the decisions discussed above proceed on the right premises and have correctly.appreciated the nature and incidents of a Hindu woman 's right to maintenance.
They have also properly understood the import and applicability of section 14(2) of the 1956 Act and have laid down correct law on the subject.
We now deal with the authorities taking a contrary view.
which, in our opinion, does not appear to.
be the correct view.
In Narayan Patra vs Tara Patrani(5) the Orissa High Court, following a decision of the Andhra Pradesh High Court in G. Kondiah v.G. Subbarayya(6), held that since the widows were given only a (1) A.I.R. 1962 Cal.
(2) A.I.R. 1966 Ker.
(3) I.L.R. (4) (5) [1970] 35 Cuttak L.T. 667=A.I.R. 1970 Orissa 131.
(6) 303 restricted estate their case squarely fell within the ambit of section 14(2) of the Act and their interest would not be enlarged.
Reliance was also placed on a Madras decision in Thatha Gurunadharn Chetty vs Thatha Navaneethamma (supra).
It is obvious that the conclusions arrived at by the High Court are not warranted by the express principles of Hindu Sastric Law.
It is true that a widow 's c/aim for mainte nance does not ripen into a full fledged right to property, but nevertheless it is undoubtedly a right which in certain cases can amount to a right to property where it is charged.
It cannot be sand that where a property is given to a widow in lieu of maintenance, it is given to her for the first time and not in lieu of a pre existing right The claim to maintenance, as also the right to claim proper ty in order to maintain herself, is an inherent right con ferred by the Hindu Law and, therefore, any property given to her in lieu of maintenance is merely in recognition of the claim or right which the widow possessed from before.
It cannot be said that such a right has been conferred on her for the first time by virtue of the document concerned and before the existence of the document the widow had no vestige of a claim or fight at all.
Once it is established that the instrument merely recognised the pre existing right, the widow would acquire absolute interest.
Second ly, the Explanation to section 14(1) merely mentions the various modes by which a widow can acquire a property and the property given in lieu of maintenance is one of the modes mentioned in the Explanation.
Sub section (2) is merely a proviso to section 14(1) and it cannot be interpreted in such a manner as to destroy the very concept of the right conferred on a Hindu woman under section 14(1).
Sub section (2) is limit ed only to those cases where by virtue of certain grant or disposition a right is conferred on the widow for the first time and the said right is restricted by certain conditions.
In other words, even if by a grant or disposi tion a property is conferred on a Hindu male under certain conditions, the same are binding on the male.
The effect of sub section
(2) is merely to equate male and female in respect of grant conferring a restricted estate.
In these circum stances we do not agree with the views expressed by the Orissa High Court .
The other High Courts which have taken a contrary view are mainly the Andhra Pradesh, Allahabad and the Madras High Courts.
In an earlier decision of the Patna High Court in Shiva Pujan Rat and Others vs Jamuna Missir and Others(1) the High Court seems to rally round the view taken by the Madras High Court.
We shall take up the decisions of the Andhra Pradesh High Court.
As already indicated above, the earlier decision of the Andhra Pradesh High Court in Gadam Reddayya vs Vara pula Venkataraju took the same view which was taken later by the Bombay High Court and held that in a case like the present, a Hindu female would get an absolute interest and her case would not be covered by sub section
(2) of section 14 of the 1956 Act.
In Gopisetti Kondaiah vs Gunda Subbarayudu(2) another Division Bench of the same High Court appears to have taken a contrary view.
Jaganmohan Reddy, C.J., speak ing for the Court observed as follows: (1) I.L.R. 47 Pat.
(2) I.L.IR, 304 "In so far as the right of a Hindu woman to maintenance is concerned, it is necessary at this stage to point out one other basic con cept.
A Hindu woman has a right to be main tained by her husband or from her husband 's property or Hindu joint family property.
But that is merely a right to receive maintenance out of the properties without in any way conferring on her any right, title or interest therein.
It is not a definite right, but is capable of being made a charge on specific properties by agreement, decree of Court or award, compromise or otherwise . .
But this indefinite right, to be maintained from out of the properties of a Hindu Joint family, does not, however, create in her a proprietary right in the property . .
But if a restricted estate is given by any such instru ment, even if it be in lieu of maintenance, which is inconsistent with an estate she would get under the Hindu Law, then sub section (2) of section 14 would operate to give her only a restricted estate.
But if it is the latter, notwithstanding the fact that it was trans ferred in lieu of maintenance, if only a restricted estate was conferred by the instru ment, then she would only have the restricted estate.
" While we fully agree with the first part of the observations made by the learned Chief Justice, as he then was.
that one of the basic concepts of Hindu Law is that a Hindu woman has right to be maintained by her husband or from her husband 's property or the joint family property we respectfully disa gree with his conclusion that even though this is the legal position yet the right to receive maintenance does not confer on her any right, title or interest in the property.
It is true that the claim for maintenance is not an enforceable right but it is undoubtedly a pre existing right, even though no charge is made on the properties which are liable for her maintenance.
We also do not agree with the view of the learned Chief Justice that if the property is given to the widow in lieu of maintenance she will get only a restricted estate.
In our opinion, the High Court of Andhra Pradesh has proceeded on wrong prem ises.
Instead of acknowledging the right of a Hindu woman to maintenance as a right to a right or that matter a pre existing right and then considering the effect of the subsequent transactions, the High Court has first presumed that the claim for maintenance is not a tangible right at all and, therefore, the question of a pre existing right does not arise.
This, as we have already pointed out, is against the consistent view taken by a large number of Courts for a very long period.
Furthermore, this case does not appear to have noticed the previous Division Bench decision in Gadam Reddayya 's case (supra) taking the contrary view, and on this ground alone the authority of this case is considerably weakened.
At any rate, since we are satisfied that the claim of a Hindu woman for mainte nance is a pre existing right, any transaction which is in recognition or declaration of that right clearly falls beyond the purview of section 14(2) of the 1956 Act and, there fore, this authority does not lay down the correct law.
We, therefore, do not approve of the view taken in this case and overrule the same.
305 As regards the Madras High Court, the position appears to be almost the same.
There also, while a single Judge took the same view as the Bombay High Court and held that section 14(2) was not applicable, the Division Bench of the Court in an appeal against the order of another Single Judge took the contrary view.
In section Kachupalaya Gurukal vs Subramania Gurukkal (supra) the Court seems to draw an artificial distinction between a claim of a widow for maintenance and a pre existing right possessed by her.
According to the High Court, while a claim for maintenance simpliciter. was not a right at all, the right to get a share in the husband 's property under the Hindu Women 's Right to, Property Act, 1937 was a pre existing right.
The Madras High Court ap pears to have fallen into an error by misconceiving the scope and extent of a Hindu woman 's right to maintenance.
Secondly, it appears to have interpreted the proviso in such a manner as to destroy the effect of the main provision, namely, section 14(1) and the explanation thereto, for which there can be no warrant in law.
The decision of Natesan, J, in Gurunadham vs Sundrarajulu Chetty (supra) which had been affirmed by this judgment also, appears to have taken the same view and had fallen into the same error.
Furthermore, the view of the learned Judge that on the interpretation given and the view taken by the Bombay High Court which we have accepted, section 14 is intended to override lawful terms in contracts, bargains, bequests or gifts etc.
is not correct, because the scope and area of sub section
(2) of section 14 is quite separate and defined.
Such a sub section applies only to such transactions as confer new right, title.
or interest on the Hindu females.
In such cases the titles created under sub section
(2) are left in tact and section 14(1) does not interfere with the titles so created under those instruments.
Thus, in short, these two, decisions suffer from the following legal infirmities: (i) the Madras High Court has not correctly or properly appreciated the nature and extent of the widow 's right to.
maintenance: and (ii) the distinc tion drawn by the Court regarding the share given to the widow under the Hindu Women 's Right to.
Property Act allot ted to her before the passing of the Act in lieu of mainte nance is based on artificial grounds.
In fact the Act of 1937 did not legislate anything new, but merely gave statu tory recognition to the old Shastric Hindu Law by consoli dating the same and clarifying the right of the widow which she already possessed in matter of succession under the, Hindu Law.
This being the position, the Act of 1937 makes no difference.
so far as the legal status of a widow in regard to her right to maintenance was concerned.
The Act neither took away the: right of maintenance nor conferred the same; (iii) the Court appears to, have given an extended meaning to sub section
(2) of section 14 of the 1956 Act which has been undoubtedly enlarged so as to set at naught the express words in the Explanation to sub section
(1) of section 14 which ex pressly exclude the.
property given to a widow in lieu of maintenance or at a partition from the ambit of sub section
In other words, such a property, according to the Explana tion, is a property in which the widow would have undoubted ly a limited interest which by operation of law i.e. force of section 14(1 ) would be enlarged into an absolute interest if the widow is in possession of the property on the date when the Act was passed; (iv) similarly the Court failed to notice that 5 436 SCI/77 306 sub section
(2) of section 14 would apply only where a new right is created for the first time by virtue of a gift, will etc.
or the like executed in favour of the widow in respect of which she had no prior interest in the property at all.
For instance, a daughter is given a limited interest in presence of the widow.
Here the daughter not being an heir in presence of the widow (before the came into force) she had, no fight or share in the property, and if she was allotted some property under any instrument, a new and fresh right was created in her favour for the first time which she never possessed.
Such a case would be square ly covered by section 14(2) of the Act.
In Ram Jag Misir vs The Director of Consolidation, U.P.(1) the same view has.
been taken as the Madras High Court.
case does not discuss the various aspects which have been pointed out by us and proceeds purely on the basis that as the widow acquired a restricted estate under the compromise., section 14(2) would at once apply.
It has not at all considered the decisions of this Court that a mere description of limited interest in a grant or compromise is not a restriction but may just as well as merely a statement of the law as it stood when the grant was made.
The Court has also, not considered the various incidents and charac teristics of the widow 's right to maintenance under the Hindu Law.
Reliance was also placed by the learned counsel for the responderts on a Division Bench decision of the Patna High Court in Shiv Pujan Rai vs Yamuna Missir (supra) where the High Court held that the property given to a widow under a compromise in lieu of her maintenance was covered by sub section
(2) of section 14.
This decision was.
really based on the pecul iar findings of fact arrived at by the Courts of fact.
The High Court in the first place held that on the facts there was nothing to show that the widow acquired any inter est independent of the compromise under which she was given the property.
In these circumstances, it may be that the widow was given a. fresh or a new title under the compromise in which case the matter would be clearly covered by section 14(2) of the 1956 Act.
Even if this case be treated as an authority for the proposition that any property allotted to.
a widow under a compromise in lieu of maintenance would be covered by section 14(2) of the Act, then we dissent from this view, and for the reasons which we have already given we choose to prefer the view taken by the Patna High Court in a later case in Sumeshwar Mishra vs Swami Nath Tiwari (supra), which lays down the correct law on the subject.
Reliance was also placed on a Full Bench decision of the Jammu & Kashmir High Court in Ajab Singh & Ors.
vs Ram Singh and other.(2) In this case also the various aspects which we have indicated and the nature and extent of the Hindu women 's right to maintenance were not considered at all and the Court proceeded by giving an extended meaning to the provisions of sub section
(2) of section 14 which in that case was sub section
(2) of section 12 of the Jammu & Kashmir Hindu Succes sion Act, 1956.
It is true that the leading Judgment was given by one of us (Fazal Ali, J.,) but I must confess that the important question of law that has been argued before us in all its comprehensive aspects was not presented before me in that case and even the counsel O) (2) A.I.R. 1959 J & K 92.
307 for the respondents did not seriously contend that sub section
(2) of section 14 was not applicable.
For these reasons we are not in a position to approve of the Full Bench decision of the Jammu & Kashmir High Court in Ajab Singh 's case which.
is hereby overruled.
Thus on a careful scrutiny and analysis of the authori ties discussed above, the position seems to be that the view taken by the High Courts of Bombay, Andhra Pradesh, Patna, Mysore, Punjab, Calcutta .and
Kerala to the effect that the widow 's claim to maintenance, even though granted to her subject to certain restrictions, is covered by s.14 (1) and not by sub section
(2) is based on the following premises: (1) That the right of a Hindu widow to claim maintenance is undoubtedly a right against property though not a right to property.
Such a right can mature into a full fledged one if it is charged on the property either by an agreement or by a decree.
Even otherwise, where a family possesses property, the husband, or in case of his.
death, his heirs are burdened with the obligation to maintain the widow and, therefore, the widow 's claim for maintenance is not an empty formality but a pre existing right.
(2) Section 14(2) which is in the nature of a proviso to section 14(1) cannot be interpreted in a way so as to destroy the concept and defeat the purpose which; is sought to, be effectuated by section 14(1) in conferring an absolute interest on the Hindu women and in doing away with what was here tobefore known as the Hindu women 's estate.
The proviso will apply only to such cases which flow beyond the purview of the Explanation to section 14(1).
(3) That the proviso would not apply to any grant or transfer in favour of the widow hedged in by limitation or restrictions, where the grant is merely in recognition or declaration of a pre existing right, it will apply only to such a case where a new right which the female .did not possess at all is sought to be conferred on her under cer tain limitations or exceptions.
In fact in such a case even if a conditional grant is made to a male, he would be bound by the condition imposed.
The proviso wipes out the distinc tion between a male and a female in this respect.
The contrary view taken by the Madras, Orissa, Andhra Pradesh, Allahabad and Jammu & Kashmir High Courts proceeds on the following grounds: (1) That a widow 's claim to maintenance is merely an inchoate or incomplete right having no legal status, unless the widow gets a property in lieu of maintenance or unless a charge is created in a particular property the claim for maintenance cannot be legally enforced.
Thus, where under a grant, compromise, transfer or a decree, a property is allotted to the widow in lieu of maintenance, it is not the recognition of any pre existing right but it amounts to conferment of a new right for the first time which in fact did not exist before the said demise.
This view is really based on the provisions of the Hindu Women 's Right to Property Act, 1937, under which the widow has got the right to get a share of his son in lieu of partition and even 308 otherwise she is entitled to her share in the joint Hindu family property on partition.
These High Courts, therefore, seem to be of the opinion that in view of the provisions of the Hindu Women 's Right to Property Act, the widow in claim ing a share in the property has a pre existing right which is recognised by law, namely, the Act of 1937.
The same, however, cannot be said of a bare claim to maintenance which has not been recognised as a legal right and which can mature into a legally enforceable right only under a grant or demise.
This view suffers from a serious fallacy, which is, based on a misconception of the true position of a Hindu widow 's claim for maintenance.
It has been seen from.
the discussion regarding the widow 's claim for maintenance and her status in family that under the pure Sastric Hindu Law the widow is almost a co owner of the properties with her husband and even before the Act of 1937 she was entitled to the share of a son on the death of her husband after parti tion according to some schools of Hindu Law.
The Act of 1937 did not introduce any new right but merely gave a statutory recognition to the old Sastric Hindu Law on the subject.
In this respect the Act of 1937 is very different from the Act of 1956, the latter of which has made.
a revo lutionary change in the Hindu Law and has changed the entire complexion and concept of Hindu women 's estate.
In these circumstances, therefore, if the widow 's claim for mainte nance or right to get the share of a son existed before the Act of 1937, it is futile to dub this! right as flowing from the Act of 1937.
The second fallacy in this view is that the Court failed to consider that the.
claim for maintenance is an important right which is granted to the widow under the Sastric Hindu Law which enjoins the husband to maintain his wife even if he has no, property.
Where he has a property the widow has to be maintained from that property so much so that after the death of her husband any one who inherits that property takes the property subject to.
the burden of maintaining the widow.
Even where the property is transferred for payment of family debts and the transferee has the notice of the widow 's claim for maintenance, he has to discharge the burden of maintaining the widow from the property sold to him.
Thus the nature and extent of the right of the widow to claim maintenance is undoubtedly a pre existing right and it is wrong to say that such a right comes into existence only if the property is allotted to the widow in lieu of maintenance and not otherwise.
Another reasoning given by the courts taking the con trary view is that sub section
(2) being in the nature of a proviso to section 14(1) all grants with conditions take the case out of section 14(1).
This, as we have already pointed out, is based on a wrong interpretation of the scope: and 'ambit of sub section
(2) of section 14.
Lastly, the contrary view is in direct conflict with the observations made by this Court in the cases referred to above, where a grant in lieu of maintenance.
of the widow has been interpreted as being in recognition of a pre exist ing right ' so.
as to take away the case from the ambit of sub section
For these reasons and those given hereto.
before we choose to prefer the view taken by Palekar, J., in B B. Patil vs Gangabai (supra) which appears to be more in conso nance with the object and spirit of 309 the 1956 Act.
We, therefore, affirm and approve of the decisions of the Bombay High Court in B.B. Patil vs Ganga bai; of the Andhra Pradesh High Court m Gadam Reddayya vs Varapula Venkataraju & Anr.;of the Mysore High Court in H. Venkanagouda vs Hanamanagouda; of the Patna High Court in Sumeshwar Mishra vs Swami Nath Tiwari; of the Punjab High Court in Smt.
Sharbati Devi vs Pt.
Hira Lal & Anr and Cal cutta High Court in Sasadhar Chandra Dev vs Smt.
Tara Sund ari Dasi (supra) and disapprove the decisions of the Orissa High Court in Narayan Patra vs Tara Patrani; Andhra Pradesh High Court in Gopisetty Kondaiah vs Gunda Subbarayudu (supra); Madras High Court in section Kachapalaya Gurukkal vs V. Subramania Gurukkal (supra) and Gurunadham vs Sundararaulu; of the Allahabad High.
Court in Ram Jag Missir vs Director of Consolidation, U.P. and in Ajab Singh & Ors.
vs Ram Singh & Ors.
of the Jammu & Kashmir High Court.
Lastly strong reliance was placed by Mr. Natesan counsel for the respondents on a decision of this Court in Smt.
Naraini Devi vs Smt.
Ramo Devi & others(1) to which one of us (Fazal Ali, J.,) was a party.
This case is no doubt directly in point and this Court by holding that where under an award an interest is created in favour of a widow that she should be entitled to rent out the property for her lifetime, it was held by this Court that this amounted to a restricted estate under section 14(2) of the 1956 Act.
Unfortu nately the various aspects, namely, the nature and extent of the Hindu women 's right to maintenance, the limited scope of sub section
(2) which is a proviso.
sub section
(1 ) of section 14 and the effect of the Explanation etc., to which we have adverted in this judgment, were.
neither brought to our notice nor were argued before us in that case.
Secondly, the ground on which this Court distinguished the earlier decision of this Court in Badri Parshad vs Smt.
Kanso Devi (supra) was that in the aforesaid decision the Hindu widow had a share or interest in the house of her husband under the! Hindu Law as it was applicable then, and, therefore,such a share amounted to a pre existing right.
The attention of this Court, however, was not drawn: to the language of the Explanation to section 14(1) where a property given to a widow at a partition or in lieu of maintenance had been placed in the same category, and, therefore reason given by this Court does not appear to be sound.
For the reasons that we have.
already given, after taking an overall view of the situation, we are satisfied that the Division Bench decision of this Court in Naraini Devi 's case (supra) was not correctly decided and is therefore, overruled.
Indeed, if the contrary view is accepted, it will, in my opinion set at naught the legislative process of a part of Hindu Law ' of the intestate succession and curb the social urges and aspirations of the Hindu women, particularly in the International Year of Women, by reviving a highly detestable legacy which was sought to be buried by the Parliament after independence so.
that the new legislation may march with the times.
We would now like to summarise the legal conclusions which we have reached after an exhaustive considerations of the authorities mentioned above; on the question of law involved in this appeal as to the (1) 1976] 1 s.c.c. 574.
310 interpretation of section 14(1) and (2) of the Act of 1956.
These conclusions may be stated thus: (1) The Hindu female 's right to maintenance is not an empty formality or an illusory claim being conceded as a matter of grace and generosity, but is a tangible right against property which flows from the spiritual relationship between the husband and the wife and is recognised and enjoined by pure Shastric Hindu Law and has been strongly stressed even by the earlier Hindu jurists starting from Yajnavalkya to Manu.
Such a right may not be a right to property but it is a right against property and the husband has a personal obligation to maintain his wife and if he or the family has property, the female has the legal right to be maintained therefrom.
If a charge is created for the maintenance of a female, the said right becomes a legally enforceable one.
At any rate, even without a charge the claim for maintenance is doubtless a pre existing right so that any transfer declaring or recognising such a right does not confer any new title but merely endorses or confirms the pre existing rights.
(2) Section 14(1) and the Explanation thereto have been.
couched in the widest possible terms.
and must be liberally construed in favour of the females so as to advance the object of the 1956 Act and promote the socio economic ends, sought to be achieved by this long needed legislation.
(3) Sub section (2) of section 14 is in the nature of a proviso and has a field of its own without interfering with the operation of section 14(1) materially.
The proviso.
should not be construed in a manner so as to destroy the effect of the main provision or the protection granted by section 14(1) or in a way so as to become totally inconsistent with the main provision.
(4) Sub section (2) of section 14 applies to instruments, decrees, awards, gifts etc.
which create independent and new titles in favour of the females for the first time and has no application where the instrument concerned merely seeks to confirm, endorse, declare or recognise preexisting rights.
In such cases a restricted estate in favour of a female is legally permissible and section 14(1) will not operate in this sphere.
Where, however, an instrument merely de clares or recognises a pre existing right, such as a claim to maintenance or partition or share to which the female is entitled, the sub section has absolutely no application and the female 's limited interest would automatically be en larged into.
an absolute one by force of section 14(1) and the restrictions placed, if any, under the document would have to be ignored.
Thus where a property is allotted or trans ferred to a female in lieu of maintenance or a share at partition, the instrument is taken out of the ambit of sub section (2) and would be governed by section 14(1) despite any re strictions placed on the powers of the transferee.
(5) The use of express terms like "property acquired by a female Hindu at a partition", "or in lieu of maintenance" "or arrears of maintenance" etc.
in the Explanation to section 14(1) clearly makes sub section
(2) inapplicable to these catego ries which have been expressly excepted from the operation of sub section
311 (6) The words "possessed by" used by the Legislature in section 14(1) are of the widest possible amplitude and include the state of owning a property even though the owner is not in actual or physical possession of the same: Thus, where a widow gets a share in the property under a preliminary decree before or at the time when the 1956 Act had been passed but had not been given actual possession under a final decree, the property would be deemed to be possessed by her and by force of section 14(1) she would get absolute interest.
in the property.
It is equally well settled that the possession of the widow, however, must be under some vestige of a claim, right or title, because the section does not contemplate the possession of any rank trespasser with out any right or title.
(7) That the words "restricted estate" used in section 4(2) are wider than limited interest as indicated in section 14(1) and they include not only limited interest, but also.
any other kind of limitation that may be placed on the transferee.
Applying the principles enunciated above to the facts of the present case, we find (i) that the properties in suit were allotted to the appellant Tulasumma on July 30, 1949 under a compromise certified by the. Court; (ii) that the appellant had taken only a life interest in the properties and there was a clear restriction prohib iting her from alienating the properties; (iii) that despite these restrictions, she continued to be in possession of the properties till 1956 when the Act of 1956 came into.
force; and (iv) that the alienations which she had made in 1960 and 1961 were after she had acquired an absolute interest in the properties.
It is, therefore, clear that the compromise by which the properties were allotted to the appellant Tulasamma in lieu of her maintenance were merely in recognition of her right to maintenance which was a pre existing right and, there fore, the case of the appellant would be taken out of the ambit of section 14(2) and would fail squarely within section 14 (1) read with the Explanation thereto.
Thus the appellant would acquire an absolute interest when she was in possession of the properties at the time when the 1956.
Act came into force and any restrictions placed under the compromise would have to be completely ignored.
This being the position, the High Court was in error in holding that the appellant Tula samma would have only a limited interest in setting aside the alienations made by her.
We are satisfied that the High Court decreed the suit of the plaintiffs on an erroneous view of the law.
The result is that the appeal is allowed, the judgment and decree of the High Court are set aside, the judgment of the District Judge, Nellore.
is hereby restored and the plaintiffs ' suit is dismissed.
In the peculiar circumstances of this ease and having regard to the, serious divergence of judicial opinion of the various Courts of India, we would make no order as to costs in this Court.
P.B.R. Appeal allowed. | Section 14(1 ) of the pro vides that "any property possessed by a female Hindu, wheth er acquired before or after the commencement of the Act, shall be held by her as full owner thereof and not as a limited owner." According to the explanation to this sub section the term "property" includes both movable and immovable property acquired by a female Hindu in lieu of maintenance or arrears of maintenance or in any other manner whatsoever.
Sub section (2) provides that nothing in sub section
(1) shall apply to any property acquired by way of gift or under a will or any other instrument which prescribes a restricted estate in such property.
At the time of his death, the appellant 's husband, who was the brother of the respondent, lived in a state.
of jointness with the respondent.
On her husband 's death the appellant filed a petition for maintenance.
The re spondent entered into a compromise with her, one of the terms of which was that the appellant should enjoy during her life time certain properties given to her and on her death those properties should revert to the respondent. 'The appellant .sold some of the properties.
The respondent sought a declaration that under 1he terms of the compromise the appellant 's interest, which was a limited one, could not be enlarged into an absolute interest enabling her to sell the. properties.
The District Munsiff decreed the suit.
On appeal, the District Judge held that by virtue of the provisions of the 1956 Act, the appellant had acquired an absolute interest in the properties and that section 14(2) had no application to the case because the compromise was an instrument in recognition of a pre existing right.
The High Court, on the other hand, held that the compromise was an instrument contemplated by s.14(2) and the appellant could not get an absolute inter est, under s.14(1); and that since her husband died even before the Hindu Women 's Right to Property Act, 1937 came into force, she could not be said to have any pre existing right because she had got the right for the first time under the compromise.
Allowing the appeal, (Per Bhagwati and Gupta, JJ) HELD: Since the properties were acquired by the appel lant under the compromise in lieu or satisfaction of her right to maintainance it is section 14(1) and not s.14(2) which would be applicable.
The appellant must be deemed to have become full owner of the properties notwithstanding that the compromise prescribed a limited interest in the properties.
[274 C D] 1.
Under the Sastric Hindu Law a widow has a right to be maintained out of joint family property and this right would ripen into a charge if the widow took the necessary steps for having her maintenance ascertained and specifically charged on the joint family property and even if no specific charge were created, this right would be.
enforceable against joint family property in the hands of a volunteer or a purchaser taking it with notice of her claim.
The right of the widow to be maintained is not a ]us in rem, since it does not give any interest in the joint family property but it is ]us ad rem.
When specific property is allotted to the widow in lieu of her claim for maintenance, the allotment would be in satisfaction of her jus ad rem, namely, the right to be maintained out of the joint family property.
It would not be a grant for the. 262 first time without any pro existing right in the widow, The widow would be getting the property in virtue of her pre existing right, the instrument giving the property being merely a document effectuating such pre existing right.
[273 A C] 2(a) Section 14(1) is large in its amplitude and covers every kind of acquisition of property by:, a female Hindu including acquisition in lieu of maintenance.
Where such property was possessed by her at the date of commencement of the Act or was subsequently acquired and possessed, she would become the full owner of the property.
[268 G] (b) The words "any property" are large enough to cover any and every kind of property but in order to expand the reach and ambit of the, section and make it all comprehen sive, the Legislature has enacted the explanation.
[268 B] (c) Whatever be the kind of property movable or immova ble and whichever be.
the mode of acquisition, it would be covered by sub section
(1 ), the object of the Legislature being to wipe out the disabilities from which a Hindu female suffered in regard to ownership of property under the old Sastric Law, to abridge the stringent provisions against proprietary rights and to recognise her status as an inde pendent and absolute owner of property.
[268 D] (d) In Gummalapura Taggina Matada Kotturuswami vs Setra Veeravva [1959] Supp. 1 SCR 968, this Court construed the words "possessed of" in a broad sense and in their widest connotation to mean as "the state of owning or having in one 's hand or power" which need not be actual or physical possession or personal occupation of the property by the Hindu female, but may be possession in law.
It may be actual or constructive or in any other form recognised by law.
[268 E F] .
(e) Sub section (2), which is in the nature of a proviso to sub s.(1), excepts certain kinds of acquisition of property by a Hindu female from the operation of sub section
[269 B] (f) Sub section (2), must be read in the context of sub s.(1) to.
leave as large a scope for operation as possible to sub s.(1).
So read, it must be confined to cases where property is acquired by a female Hindu for the first time.
as a grant without any pre existing right under a gift, will, instrument, decree, order or award, the terms of which prescribe a restricted estate in the property.
[269 H] (g) The legislative intendment in enacting sub s.(2) was that this subsection should be applicable only to cases where the acquisition of property is made by a Hindu female for the first time without any pre existing right.
Where.
however, property is acquired by a Hindu female at a partition or in lieu of her right to4 maintenance iris in virtue of a pre existing right and such acquisition would not be within the! scope and ambit of sub s.(2) even if the instrument allotting the property prescribes a restricted estate in the property.
Where property is acquired by a Hindu re,male under art instrument in virtue of a preex isting right such as a right to obtain property on partition or a right to maintenance.
and under the law as it stood prior to the enactment of the Act, she should have no more than limited interest in the property a provision in the instrument giving her limited interest in the property would be merely by way of record or recognition of the true legal position and the restriction on her interest being a disa bility imposed by law would be wiped out and her limited interest would be enlarged under sub section
[270 D; 272 A B] In the instant case the appellant claimed maintenance out of the joint family properties in the hands of her deceased husband 's brother, and the claim was decreed and in execution of the decree the respondent entered into a com promise and allotted properties to her in lieu of her claim for maintenance.
The appellant must in the circumstances be deemed to have become full owner of the properties notwith standing that the compromise prescribed a limited interest for her in the properties.
It is sub s.(1) and not sub s.(2) of section 14 which must be held to be applicable on these facts.
S.S. Munna Lal vs
S.S. Raikumar, [1962] Supp. 3 SCR 418 Gummalapura Teggina Matada Kotturaswami vs Setra Verrayva [1959] Supp.
I SCR 968 Mangal Singh vs Ratno, ; Badri Pershad vs Smt.
Kanso Devi 263 ; Nirmal Chand vs Vidya Wanti (dead) by her Legal representatives.
C.A. No. 609 of 1965, decided on January 21, 1969, Rani Bai vs
Shri Yadunandan Ram; , referred to.
B.B. Patil, vs Gangabai, AIR. , Sumeshwar Misra vs Swami Nath Tiwari AIR 1970 Pat.
348, Reddayya vs Varapula Venkataraju AIR 1965 A.P. 66, Lakshmi Devi vs Shankar Jha, AIR. , N. Venkanagouda vs Hanamangouda, AIR 1972 Mys. 286, Smt.
Sharbati Devi vs Pt.
Hiralal AIR , Sesadhar Chandra Dev.
vs Smt.
Tara Sundari Dasi, AIR 1962 Cal.
438, Saraswathi Ammal vs
Anantha Shenoi, AIR 1966 Ker.
66 and Kunji Thomman vs Meenakshi, ILR approved.
Gurunadham vs Sundarajulu, ILR Sentha nam vs Subramania, ILR , section Kachapalaya Gurukkal vs V.Subramani Gurukkal, AIR 1972 Mad. 279 Shiva Pujan Rai vs Jamune Missir, ILR [1947] Pat. 1118 Gopisetti Kondaiah vs Gunda Subbrayudu, ILR , Ram Jag Missir vs The Director of Consolidation, U.P. AIR 1975 All.
151 and ,4lab Singh vs Ram Singh AIR 1959 J&K 92 not ap proved.
(per Fazal Ali, J concurring) The High Court was in error in holding that the appel lant would have only a limited interest and in setting aside the alienations made by her.
The compromise by which the properties were allotted to her in lieu of her maintenance were merely in recognition of her pre existing right ,of maintenance and, therefore, her case would be taken out of the ambit of section 14(2) and would fall within section 14(1) read with the Explanation thereto.
[311 G] The incidents and characteristics of a Hindu woman 's right to maintenance are: (i) that a Hindu woman 's right to maintenance is a personal obligation so far as the husband is concerned, and it is his duty to maintain her even if he has no property.
If the husband has property then the right of the widow to maintenance becomes an equitable charge on his property and any person who succeeds to the property carries with it the legal obligation to maintain the widow.
[286 D] (ii) though the widow 's right to maintenance is not a right to property but it is a pre existing right in proper ty, that is, it is a ]us ad rein and not ]us in rem and it cannot be enforced by the widow who can get a charge created for the maintenance on the property either by an agreement or by obtaining a decree from the civil court.
[286 E] (iii) that the right of maintenance is a matter of moment and is of such importance that even if the joint property is sold and the purchaser has notice of the widow 's right to maintenance, the purchaser is legally bound to provide for her maintenance.
[286 F] (iv) that the right to maintenance is a pre existing right which existed in the Hindu law long before the passing of the Act of 1937 or the Act of 1946, and is, therefore, a pre existing right.
[286 G] (v) that the right to maintenance flows from the social and temporal relationship between the husband and the wife by virtue of which the wife becomes a sort of co owner in the property of her husband, though her co ownership is of a subordinate nature.
[286 H] (vi) that where a Hindu widow is in possession of the property of her husband, she is entitled to retain the possession in lieu of her maintenance unless the person who succeeds to the property or purchases the same is in a position to make due arrangementS for her maintenance [287 A] Digest of Hindu Law, Vol.
II, pp. 121, 123 and 243 by Colebrooke.
Hindu Law by Golyal Chandra Sarkar Sastri, p. 533.
Treatise on Hindu Law & Usage by Mayne, 11th edn.
684, 813, 816, 822, Hindu Law by Mulla, p. 597.
264 Narayan Rao Ramchandra Pant vs Ramabai, L.R. 6 I.A., 114, Lakshman Ramchandra Joshi & anr.
vs Satyabhamabai, I.L.R. , Narbadabai vs Mahadeo Narayan, Kashinath Narayan and Shamabai, I.L.R. , Mst.
Dan Kaur vs Mst.
Sarla Devi, L.R. 73 LA. 208, Prataprnull Agarwalla vs Dhanabati Bibi, L.R. 63 I.A. 33, Rani Bai vs Shri Yadunandan Ram & anr.
; , Sheo Dayal Tewaree vs Judoo nath Tewaree , Srinath Das vs Prabodh Chun der Das, , Hernangini Dasi vs Kedarnath Kundu Chowdhry I.L.R. K.V. Thangavelu vs The Court of Words, Madras , Sarojinidevi vs Sub rahrnanyam I.L.R. , .Jayanti Subbiah vs Alamelu Mangamma I.L.R. and Yellawa vs Bhirnangavda I.L.R. referred to.
An examination of the decisions of this Court estab lishes the following principles of law: (i) that the provisions of section 14 'of the 1956 Act must be liberally construed in order to advance the object of the Act which is to enlarge the limited interest possessed by a Hindu widow which was in consonance with the changing temper of the times; [295A] (ii) it is manifestly clear that sub section
(2) of section 14 does not refer to any transfer which merely recognises a pre existing right without creating or conferring a new title on the widow.
This was clearly held by this Court in Badri Pershad 's case.
[295B] (iii) that the Act of 1956 has made revolutionary and far reaching changes in the Hindu society and every attempt should be made to carry out the spirit of the Act which has undoubtedly supplied a long felt need and tried to do away with the invidious distinction between a Hindu male and female in matters of intestate succession.
[295C] (iv) that sub section
(2) of section 14 is merely a proviso to sub section
(1) of section 14 and has to be interpreted as a proviso and not in a manner so as to destroy the effect of the main provision.
[295D] Thus on a conspectus of the Shastric Hindu Law, the provisions of the 1956 ' Act and the decisions of this Court the following conclusions emerge: 1.
A Hindu female 's right to maintenance is not an empty formality or an illusory claim but is a tangible right against property which flows from spiritual relationship between the husband and the, wife and is recognised and enjoined by pure Shastric Hindu law and has been strongly stressed even by the earlier Hindu jurists starting from Yajnavalkya to Manu.
Such a right may not be a right to property but is a right against property and the husband has a personal obligation to maintain his wife and if he or the family has property the female has the legal fight to be maintained therefrom.
If a charge is created for the main tenance of a female, the said right becomes a legally en forceable one.
At any rate, even without a charge the claim for maintenance is a pre existing right so that any transfer declaring or recognising such a right does not confer any new title but merely endorses or confirms the pre existing rights.
[310 BC] 2.
Section 14(1) and the Explanation thereto have been couched in the widest possible terms and must be liberally construed in favour of the females so as to advance the object of the 1956 Act and promote the socio economic ends sought to be achieved by this long needed legislation.
[310D] 3.
Section 14(2) is in the nature of a proviso and has a field of its own without interfering with the operation of section 14(1) materially.
The proviso should not be construed in a manner so as to destroy the effect of the main provision or the protection granted by section 14(1) or in a way so as to become totally inconsistent with the main provision.
[310 E] 4.
Section 14(2) applies to instruments, decrees, awards, gifts etc., which create independent and new titles in favour of the females for the first time and has no application where the instrument concerned merely seeks to confirm.
endorse, declare or recognise pre existing rights.
In such cases a restricted estate in favour of a female is legally permissible and section 14(1) will not operate 265 in this sphere.
Where, however, an instrument merely de clares or recognises a pre existing right, such as to a claim to maintenance .or partition or share to which the female is entitled, the sub section has absolutely no appli cation and the female 's limited interest would automatically be enlarged into an absolute one by force of section 14(1) and the restrictions placed, if any, under the document would have to be ignored.
Thus where a property is allotted or transferred to a female in lieu of maintenance or a share at partition, the instrument is taken out of the ambit of sub section (2) and would be governed by section 14(1) despite any re strictions placed on the powers of the transferee.
[310F G] 5.
The use of express terms like "property acquired by a female Hindu at a partition", "or in lien of maintenance", "or arrears of maintenance" etc., in the Explanation to section 14(1) clearly makes sub section
(2) inapplicable to these catego ries which have been expressly excepted from the operation of sub section
[310H] 6.
The words "possessed by ', in section 14(1) are of the widest amplitude and .
include the state of owning a proper ty even though the owner is not in actual or physical pos session of the same.
Thus, where a widow gets a share in the: property under a preliminary decree before or at the time.
when the 1956 Act had been passed but had not been given actual possession under a final decree, the property would be deemed to be possessed by her and by force of section 14(1) she would get absolute interest in the property.
It is equally well settled that the possession of the widow, however, must be under some vestige of a claim, right or title, because the section does not contemplate the posses sion of any rank trespasser without any right or title.
[311 A B] 7.
That the words "restricted estate" used in section 14(2) are wider than limited interest as indicated in section 14(1) and they include not only limited interest but also any other kind of limitation that may be placed on the transferee.
[311 C] In the instant case, the properties in dispute were allotted to the appellant under a compromise certified by the Court.
Secondly, the appellant had taken only a life interest in the properties and there was a clear restriction prohibiting her from alienating the properties.
Thirdly, despite these restrictions, she continued t0 be in posses sion of the properties till the alienations which she had made in 1960 and 1961 were after she had acquired an abso lute interest in the properties.
Naraini Devi vs Smt.
Ramo Devi & ors [1976] 1 S.C.C.574 over ruled.
S.S. Munnalal vs
S.S. Rajkumar [1962] Supp. 3 S.C.R. 418; Eramina vs Verrupanna ; Mangal Singh vs Smt.
Rattno ; ; Sukhram & anr.
vs Gauri Shankar & anr.
; ; Badri Parshad vs Smt.
Kanso Devi ; and Nirmal Chand vs Vidya Wanti (dead) by her Legal Representative C.A. 609 of 1966 decided on January 21, 1969 referred to.
B.B. Patil vs Gangabai A.1.R. ; Gaddam Reddayya vs Varapula Venkataraju & Anr.
A.I.R. 1965 A.P. 66; Sumeshwar Mishra vs Swami Nath Tiwari A.I.R. 1970 pat.
348; H. Venkanagouda vs Hansumangouda A.I.R. 1972 Mys. 286; Smt.
Sharbati Devi vs Pt.
Hiralal & Anr.
A.I.R. 1964 Punjab 114; Sasadhar Chandra Der vs Smt.
Tara Sundart Desi A.I.R. 1962 Cal.
438, approved.
Narayan Patra vs Tara Patrant [1970] 36 Cuttack Law Times A.I.R. 1970 Orissa 131; Shiva Pulan Rai & Ors.
vs Jamuna Missir & Ors.
I.L.R. 47 Pat.
1118; Gopisetti Kondaiah vs Gunda Subbarayudu I.L.R. ; Ram Jag Misir vs The Director of Consolidation, U.P. ; Ajab Singh & Ors.
vs Ram Singh & Ors.
A.I.R. 1959 L & K. 92; Surnadham vs Sundararajulu I.L.R. ; Kacha palaya Gurukkal vs
V. Subramania Gurukkal A.I.R. 1972, Mad. 279 not approved. |
Civil Appeal No. 2150 of 1968.
(Appeal by Special Leave from the Judgment and Order dated 5.9.1968 of the Punjab & Haryana High Court in L.P.A. No. 458/68).
V.C. Mahajan, Hardev Singh and R.S. Sodhi, for the appel lant.
O.P. Sharma, for the respondents 1 and 2.
K.R. Nagaraja and P.N. Puri, for respondent No. 3.
The Judgment of the Court was delivered by BEG, C.J.
This appeal under Article 136 of the Consti tution is directed against a very detailed Judgment of the Punjab & Haryana High Court on a Writ Petition No. 1875 of 1965 filed under Articles 226 and 227 of the Constitution, assailing an order of the Additional Director, Consolidation of Holdings, passed on 8 June, 1965.
A perusal of that order, together with the earlier order of 4 May, 1965, and the application for restoration dated 15 May, 1965, filed by Gurdev Singh, respondent No. 3, shows: Gurdev Singh, who had 370 some complaint against the Consolidation Scheme, was not present so that his petition was ordered to be filed by the Additional Director, Consolidation on 4 May, 1965.
Gurdev Singh, soon thereafter i.e. on 15 May, 1965, filed an appli cation for restoration supported by an affidavit, attribut ing his absence on 4 May, 1965, to his illness.
The. order dated 8 June, 1965, of the Additional Director, shows that the applicant Gurdev Singh 's assertion that he could not attend due to illness, over which he had no control, was accepted by the Additional Director, who proceeded to exer cise his powers under section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (hereinafter referred to as the Act) and to set right the grievance of the applicant, Gurdev Singh, after going into all the relevant records.
The learned Judge of the High Court, who heard the petition also went through the records very carefully, came to the conclusion that an assertion of rights by the petitioner/ appellant, a member of the Sanjam Group, merely because of some report contained in the "Fard Badar," could not take away the effect of entries in the revenue records.
The learned Judge held that no injustice was caused to the petitioner/appellant also, there was no ground for interference under Article 226 of the Constitu tion.
The learned counsel for the appellant has relied upon the case of Harbhajan Singh vs Karam Singh& Ors.
reported in ; , where this Court held that the Addl.
Director exercising the powers of the State Government has no jurisdiction under section 42 of the Act to review his previous order.
Section 42 of the Act runs as follows: "The State Government may at any time for the purpose of satisfying itself as to the legality or propriety of any order passed, scheme prepared or confirmed or repartition made by any officer under this Act, call for and examine the record of any case pending before or disposed of by such officer and may pass such order in reference thereto.
as it thinks fit: Provided that no order or scheme or repar tition shall be varied or reserved without giving the parties interested notice to appear and opportunity to.
be heard except in case where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration.
" The proviso to Section 42 lays down that notice to interested parties to appear and opportunity to be heard are conditions precedent to passing of an order under Section 42.
The fact that the Additional Director was satisfied that the respondent, Gurdev Singh, did not have an opportu nity of being ,heard due to his illness, seems to us to amount to a finding that the proviso.
could not be complied with so that the previous order could not be held to be an order duly passed under Section 42 of the Act.
It could be ignored as "non est.
" The view taken in Harbhajan Singh 's case (supra) would not apply to the 371 instant case although Section 42 of the Act does not contain a power of review.
Orders which are 'non est ' can be ignored at any stage.
On the facts and circumstances of this case, we think that this is not a fit case for interference under Article 136 of the Constitution.
The appellant, if he has acquired any rights by reason of long possession, can assert them whenever any proceedings are taken before a competent au thority to dispossess him.
What we have held here or whatever has been held by the High Court will not affect such other rights, if any, as the Appellant may have ac quired by reason of possession.
We do not know and refrain from deciding who is actually in possession and for how long and in what capacity.
This appeal is dismissed.
Parties will bear their own costs.
_ P.H.P. Appeal dismissed. | Gurdev Singh had certain complaints about the Consolida tion Scheme.
He was not present when his application was being considered.
Therefore, the application was dis missed by the Additional Director, Consolidation.
Thereaf ter, Gurdev Singh respondent No. 3 filed an application for restoration supported by an affidavit attributing his ab sence to his illness.
The Additional Director accepted the ground of respondent No. 3 about illness and granted necessary relief to him.
The appellant filed a writ.peti tion in the High Court under Articles 226 and 227 of the Constitution.
The High Court held that the assertion of rights by the appellant merely because of some report con tained in the "Fard Badar" could not take away the effect of the entries in the revenue records The High Court also held that no injustice was caused to the appellant and, there fore, there was no ground for interference under Article 226.
In an appeal by Special Leave, the appellant contended that the Additional Director had no power to review his previous order.
The power to review conferred by section 42 of the Act has to be exercised only after hearing the interested parties.
Since respondent No. 3 was not given an opportunity of being heard on account of his illness, it shows that the order passed was non est and can be ignored at any stage.
The court dismissed the appeal on the ground that this was not a fit case for interference under Article 136.
the Court, however, observed that if the appellant has any right on account of long possession or otherwise he can assert them by adopting proper proceedings and that his rights would not be affected by whatever is stated m the Judgment of this Court as well as the High Court. |
Civil Appeal No. 309 of 1976.
Appeal by Special Leave from the Judgment and Order dated the 22nd January, 1975 of the Bombay High Court in Appeal No. 106 of 1969 in Misc.
Petition No. 320 of 1964.
7 502 SCI/77 526 I. N. Shroff and H.S. Parihar for the Appellants.
M.N. Shroff for Respondents 1 and 2.
V.P. Ram an, Addl.
Genl, K.J. John and Shri Narain for Respondent No. 3.
The Judgment of the Court was delivered by GUPTA, J.
Ahmedabad Jupiter Spinning Weaving and Manu facturing Company Limited was the owner of 5900 Sq.
yds of land forming part of its mill premises at Lower Parel in Bombay which was sought to be acquired by the Maharashtra Government for a municipal school.
Notifications under sections 4 and 6 were issued on June 19, 1961 and May 29, 1964 respectively.
The company filed a petition in the Bombay High Court challenging the validity of the notifica tions on several grounds.
A single Judge of the High Court having dismissed the writ petition on August 11, 1969 the company preferred a. letters patent appeal.
During the pendency of the appeal, the management of the company was taken over by the Central Government on October 8, 1972 under the Industries (Development and Regulation) Act, 1951.
On September 21, 1974 an ordinance called the Sick Textile Undertakings (Nationalisation) Ordinance, 1974 was .promulgated by virtue of which the textile undertaking of the company the 'management of which had been taken over by the Central Government, vested absolutely in the Central Government with effect from the "appointed day", which was April 1, 1974, and immediately thereafter stood transferred and vested in the National Textile Corporation.
The Ordi nance was later replaced by the Sick Textile Undertakings (Nationalisation) Act, 1974 (hereinafter referred to as Sick Textile Act).
Sections 3 and 4 of the Act are as follows: Acquisition of rights of owners in respect of sick textile undertakings.
(1 ) On the appointed day every sick textile taking and the right title and interest of the owner in relation to every such sick textile undertakings shall stand transferred to, and shall vest absolutely in, the Central Government.
(2) Every sick textile undertaking which stands vested in the Central Government by virtue of sub Section (1 ) shall, immediately after it has so vested, stand transferred to, and vested in, the National Textile Corpora tion.
General effect of vesting 4.
(1 ) The sick textile undertaking referred to in section 2 shall be deemed to include all assets, rights, leaseholds, powers, authorities and privileges and all property, movable and immovable, including lands, buildings, workshops, stores, instru ments, machinery and equipment, cash balances, cash on hand, reserve funds, investments and book debts and all other rights and interests in, or arising out of, such property as were immediately before the appointed 527 day in the ownership, possession, power or control of the owner of the sick textile undertaking, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto and shall also be deemed to include the liabilities and obligations speci fied in sub section (2) of section 5.
(2) All property as aforesaid which have vested in the Central Government under sub section (1) of section 3 shall, by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other incumbrances affecting it, and any attachment, injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn.
" The other sub sections of section 4 are not relevant for the present purpose.
The National Textile Corporation applied to the High Court for being substituted in place of the original appel lant in the letters patent appeal which was pending and the application was allowed.
The main contention on behalf of the substituted appellant in the High Court was that the two notifications under sections 4 and 6 of the Land Acqui sition Act must be held to have become ineffective in view of section 4(2) of the Sick Textile Act which provides that all property which vests in the Central Government under section 3(1) does so free from all "incumbrances affecting it.
" The High.
Court dismissed the appeal hold ing that the notifications under the Land Acquisition Act were not incumbrances within the meaning of section 4(2) of the Sick Textile Act.
In the appeal before us filed with special leave obtained from this Court, the National Textile Corporation questions the correctness of the view taken by the High Court.
Thus the only question for determination in the appeal is whether the notifications issued under the Land Acquisi tion Act are incumbrances within the meaning of the word as used in section 4(2} of the Sick Textile Act.
Section 3 and the first two sub sections of section 4 of the Sick Textile Act are the only provisions relevant in this context.
Section 3 provides that on the appointed day every sick textile undertaking shall vest absolutely in the Central Government, and then in the National Textile Corporation.
Subsection (1 ) of section 4 states that the undertakings vesting in the Central Government under section 3 shall be deemed to include all assets, rights and interests in the ownership, possession or control of the owners of such undertakings immediately before the appointed day.
Sub section (2) of section 4 provides that all property vesting in the Central Government under section 3 shall, "by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other incum brances affecting it, and any attachment, injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been with drawn".
Counsel for the appellant argues that sub section (2) of section 4 is intended to vest the sick textile undertakings in the Central Govern 528 ment free from all fetters, and the notifications issued under the Land Acquisition Act which had the effect of freezing the price of the land were fetters falling in the category of "other incumbrances" mentioned in section 4(2) of the Sick Textile Act.
The term 'incumbrance ' has not been defined in the Act.
In Wharton 's Law lexicon incum brance is described as being a claim, lien or liability, attached to property.
This is the sense in which the term is ordinarily used.
An incumbrance in this sense ' has to be a liability "attached to property", it must be a burden or liability that runs with the land, as the High Court has held.
But a notification issued by the Government under the Land Acquisition Act is not a burden Or liability that is attached to the property.
The sovereign right of the State to take proceedings for the acquisition of any land for public purpose is similar to its right to impose a tax on the land which is paramount to the ownership over the land and outside it".
[see The Collector of Bombay vs Nusserwanji Rattanji Mistri & others ; (at 1323).
Under sub section (2) of section 4 of the Sick Tex tile Act all property which have vested in the Central Government under section 3 (1) shall be freed and discharged from any trust, obligation, mortgage, charge, lien and all other incumbrances affecting it, and any attachment, injunction or decree or order of any court restricting the use of such property shall be deemed to have been withdrawn.
Counsel for the respondent.
State of Maharashtra, submits that the term incumbrance should take colour from the dif ferent kinds of burden on the land specified in section 4(2) preceding the words all other incumbrances"it is argued that incumbrance in the context means ' Some burden or li ability that is attached to the property ,like mortgage, charge, lien That this is so would also appear from what follows the words "all other incumbrances affecting it".
Having said that the vesting will be free from trust, obligation, mortgage, charge, lien and all other incum brances affecting it.
sub section (2) goes on to add that "any attachment.
injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn" upon vesting.
If the appel lant 's construction of the provision were correct, and incumbrance meant any kind of fetter, any attachment, in junction or decree or order restricting the use of the property would be included in "all other incumbrances" and it would have been quite unnecessary to mention them sepa rately.
This makes it clear that fetters on the property like attachment, injunction or decree or order of any court restricting the use of the property which are deemed to have been withdrawn upon the property vesting in the Central Government are not really incumbrances within the meaning of the word as used in sub section (2) of section 4.
We therefore agree with the High Court that the notifica tions issued under sections 4 and 6 of the Land Acquisition Act are not incumbrances and cannot be held to have become inoperative on the land in question vesting in the Central Government.
The appeal is dismissed but in the circumstances of the case without any order as to cost.
P. B.R. Appeal dismissed. | The state Government issued two notifications under sections 4 and 6 of the Land Acquisition Act seeking to acquire certain land belonging to a textile mill.
When the Letters Patent Appeal of the 'Textile mill was pending before the High Court the mill was taken over by the Central Government and later the appellant was substituted for the original appellant.
By virtue of section 3 of the Sick Textile Undertakings (Nationalisation) Act, 1974 the management of every sick textile mill vested absolutely in the Central Government and later in the appellant.
Section 4(2) of the Act provides that all property which vested in the Central Government shall, by force of such vesting, be freed and discharged from trust, obligation, mortgage, charge, lien and all other incumbrances affecting it and any attachment, injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been with drawn.
The appellants ' contention that by reason of ss.4(2)the two notifications must be held to have become ineffective because the section provides that all property vested in the Central Government shall be free from all incumbrances affecting it was rejected by the High Court.
Dismissing the appeal to this Court, HELD : The High Court was right in its view that the notifi cations issued under ss 4 and 6 of the Land Acquisition Act were not incumbrances and could not be held to have become inoperative on the land vesting in the Central Government.
[528 B] 1.The term "incumbrance" has not been defined in the Act, The dictionary meaning given to incumbrance is a claim, lien or liability attached to property.
An incum brance in this sense has to be a liability "attached to property".
a burden or liability that runs with the land.
The notifications issued under the Land Acquisition Act are not a burden or liability attached to the property.[528 B] 2.
"Incumbrance" in the context of section 4(2) means some burden or liability attached to the property ,like mortgage, charge, lien etc.
That this is so would appear from the words 'all other incumbrances affecting it".
Having said that the vesting will be free from trust etc.
, sub section
(2) goes on to add that "any attachment.
injunction or decree . shall be deemed to be withdrawn" upon vesting.
If "incumbrance" meant any kind of fetter, any attachment, injunction or decree or order restricting use of the proper ty would be included in "all other incumbrances" and it would have been quite unnecessary to mention them separate ly.
This means that fetters on the property like attach ment, injunction or decree or order of any court restricting the use of the property which are deemed to have been with drawn upon.
the property vesting in the Central Government are not really incumbrances within the meaning of the word as used in s.4(2) [528 E G] |
Appeal No. 144 of 1977.
Appeal by Special leave from the Judgment and order dated the 2nd January, 1976 of the Karnataka High Court in Writ Appeal No. 430 of 1974.
509 V.N. Satyanarayana, K. Rajendra Chowdhary and Veena Devi (Mrs.) Khanna for the Appellant.
S.S. JavaIi, B.P. Singh and A. K. Srivastava for Re spondent.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by the Karnataka Electrici ty Board by its Secretary by Special leave granted by this Court against the judgment of the Karnataka High Court allowing the writ petition filed by the respondent and issuing a writ of mandamus to the appellant to consider the case of the respondent for promotion as an Accounts Superin tendent as on 30th December, 1966, and to promote him to that post with effect from that date.
The respondent was serving as an Accountant, Grade II, in the Electricity Department of the former .State of Hyd erabad.
On the reorganisation of the States in pursuance of the , he was allotted to the new State of Mysore (now Karnataka) with effect from 1st November, 1956.
The post which he held came to be equated with that of I Division Clerk in the former State of Mysore.
On 1st October, 1957, the Mysore State Electricity Board now Karnataka State Electricity Board was constituted under the Indian Electricity (Supply.) Act.
An option was given to the respondent to continue in the Government service or to opt to the Board.
On 1st October, 1957, the respondent opted to the Service under the Board and ceased to be an employee of the Government with effect from that date.
In the year 1960 the Board framed Recruitment and Promo tions Regulations in the exercise of its powers conferred on it under section 79(c) of the Act.
The Regulations were subsequently amended on 16th December, 1966.
The amended Rules prescribed that the posts of Accounts Superintendents were to be filled by promotion of I Division Clerks on the basis of seniority cum merit on their having passed Part I and II of the S.A.S. examination.
On 30th December, 1966, some persons junior to the respondent were promoted on their having passed the S.A.S. examination while promotion was denied to the respondent as he had not passed the examination.
The respondent made several representations one such representation being on 24th December, 1970.
On 21st November, 1972, the respond ent 's representations were rejected.
The respondent there after filed a writ petition before the High Court on 13th February, 1973.
The learned Single Judge who heard the petition dismissed it and the respondent preferred an appeal to a Bench of the Karnataka High Court.
On behalf of the appellant, Karnataka Electricity Board, it was contended before the court that the writ petition ought to be dis missed on the ground of inordinate delay and laches on the part of the respondent and also on the ground that in view of the later Resolution of the Board dated 5th January, 1970, it was no longer open to the respondent to rely on the Resolution dated 19th May, 1969.
The Bench of the Karnataka High Court held that the writ petition cannot 6 502SCI/77 510 be thrown out on the ground of delay.
On a consideration of the two Resolutions of the Board, namely that of 19th May, 1969 and 5th January, 1970, it found that the respondent as an allottee was exempted from complying with the require ments of passing the examination and therefore allowed the writ petition.
We do not see any ground for not accepting the view of the High Court that in the circumstances of the case the relief to the respondent should not be denied on the ground of delay and laches.
The only ground therefore on which the order of the High Court was challenged by the appellant is that the court was in error in construing the relevant provisions of the Regulations and the Resolutions and holding that the re spondent is exempted from passing the S.A.S. examination before qualifying for the promotion.
Before referring to the two Resolutions the relevant provisions of the law and Regulations made thereunder may be referred to.
The Elec tricity (Supply) Act, 1948, by section 79 empowers the Board to make Regulations not inconsistent with the Act and the rules made thereunder to provide for all or any of the matters referred to in clauses (a) to (k) of the section, Sub clause (c) empowers the Board to make Regulations re garding the duties of officers and servants of the Board and their salaries, allowances and other conditions of service.
By virtue of the powers conferred on the Board it framed Mysore State Electricity Board Recruitment and Promotion of Employees of .the
Board Regulation, 1960.
The method of recruitment prescribed for promotion to Accounts Superin tendents is prescribed in Chapter V of Annexure 2.
The method of recruitment is by promotion from the cadre of I Grade Clerks on the basis of seniority cum merit, The minimum qualification prescribed is that the candidate ought to have passed S.A.S. examination Part I and Part II.
This provision which was enacted in 1960 continued to be in force during the relevant time.
If this Regulation is applicable, the respondent 's plea has to be rejected as it is incumbent on him to pass the S.A.S. examination.
The Resolution of the Board relied on by the respondent is 19th May, 1969 and the material paragraph runs as follows : "It is hereby directed that the candi dates appointed to Government/Board Service for the first time after the date of States Re organisation i.e., 1st November 1956 (as they are not allottees) should pass the De partmental Examinations and Kannada Language Tests for purposes of earning increments and for promotion.
" The Resolution requires the passing of the examination and Kannada language test for the purpose of earning incre ments and for promotion for candidates appointed after/st November, 1956.
But as it is not made applicable to the allottees, it is contended that the allottees are by impli cation exempted from passing the Departmental Examination I and Kannada language test.
This contention cannot be ac cepted for the Resolution is silent regarding the allottees and is not made applicable to them.
It is not possible to infer from the Resolution that the 511 allottees are exempted from passing the Departmental Exami nation and the Kannada language test.
the Resolution was ' passed by the Board in pursuance of certain proceedings of the Government referred to in the Resolution itself.
Paragraph 2 of the Resolution reads thus: "Approval is accorded for the adoption of the Government Order Nos.
(1) GAD 123 SSH 65 dated 21 11 1966 (2) GAD dated 3 8 1957 and (3) GAD dated 20 7 1968.
" The three Government orders referred to in the Resolution relate to the requirement of passing of the Departmental Examination and Kannada language test as a consequence of the judgment of the High Court of Mysore and the Supreme Court.
The ' orders specifically states that unless.
in the Recruitment Rules relating to the service concerned Depart mental Examination had been incorporated and prescribed and unless it is clearly specified for what purpose the tests are prescribed viz., whether for increments or promotions, the passing of Departmental tests cannot be legally insist ed upon for grant of increments or for according promotion to higher posts.
The three Government orders make it clear that the relaxation of the rule relating to passing of the Departmental Examinations and Kannada language test is only as regards services where the rules do not specifically require the passing of the examinations and the language test.
These G.O.s do not apply in the present case as the Regulations framed by the Board under section 79(c) specifi cally prescribe the passing of the S.A.S. test.
We are unable to construe the Resolution dated 19th May, 1969 as exempting the allottees from passing the test.
In any event the plea of the respondent will have to fail on the ground that the Regulations framed under section 79(c) of the Board requiting the passing of the examination was not relaxed by amending the Regulations.
The passing of the Resolution by the Board cannot have the effect of modifying a Regulation which was passed by the Board in the exercise of the powers conferred by the statute.
Apart from this circumstance by a subsequent Resolution the Board itself considered the ques tion in all its aspects and resolved that passing of the S.A.S. examination for promotion to the cadre of Accounts Superintendents as before be insisted.
Whatever might have been the purport of the Resolution dated 19th May, 1969, the Board by a subsequent Resolution had resolved on insisting on the passing of the examination.
The High Court found that the later Resolution did not affect the earlier Resolu tion on the ground that the subsequent Resolution did not make any reference to the earlier Resolution and that there is no reference to the allottees at all.
Relying on the words "the passing of the S.A.S. Examination for promotion to the cadre of Accounts Superintendents as before be in sisted" the court found that it would .mean that where the passing of the S.A.S. Examination was insisted prior to that Resolution in the same shall continue to be insisted in future also, and if passing of the S.A.S. Examination was not insisted prior to that Resolution in the case of allot tees for promotion to the cadre of Accounts Superintendents.
The Resolution dated 5th January, 1970, cannot be understood as altering the position existing "as before".
This reasoning is 512 erroneous for, as pointed out by us the earlier Resolution was not intended to cover the case of allottees and merely because the allottees were excluded from the operation of the Resolution the inference that the allottees were exempt ed from the passing 'of the ' examination is not justified.
Further before the Resolution there is nothing to indicate that the allottees were not required to pass the examina tion.
The conclusion of the High Court cannot be upheld as the binding nature of the Regulations passed by the Board under section 79(c) has not been taken due note of.
This is the view taken by the Single Judge of the High Court.
In the result we allow the appeal, set aside the judg ment of the lower appellate court and restore that of the Single judge.
There will be no order as to costs.
P.H.P. Appeal allowed. | The respondent was serving as an Accountant in 'the Electricity Department of the former State of Hyderabad.
On the reorganisation of the States in pursuance of the , he was allotted to the new State of Mysore with effect from 1st November, 1956.
Option was given to the respondent to continue in the Government serv ice or to opt to the BOard.
On 1st October, 1957, the re spondent opted to the service under the Board and ceased to be an employee of the Government with effect from that date.
In 1960, the Board framed Recruitment and Promotion Regula tion in exercise of its powers conferred under section 79(c) of the Indian Electricity Supply Act, 1948.
The regulations were subsequently amended on 16.12.1966.
The amended The regulations prescribed that the posts of Accounts Super intendents were to be filled on the basis of seniority cum merit on their having passed SAS examination.
In December, 1966, some persons junior to the respondent were promoted on their having passed the SAS examination, while promotion was denied to the respondent as he had not passed the examina tion.
After the respondent 's representations were rejected he filed a Writ Petition.
The Single Judge dismissed the Petition.
The Division Bench refused to throw out the Writ Petition on the ground of delay.
It found on consideration of the two resolution of the Board one dated 19.5.1969 and another dated 5.1.1970 that the respondent being an allottee was exempted from complying with the requirements of passing the examination.
Allowing the appeal.
HELD: (1) The Division Bench rightly refused to deny relief to the respondent on the ground of delay and laches.
[510 B] (2) Section 79 of the Act empowers the Board to make regulations not inconsistent with the Act and rules made thereunder to provide for all or any of the matters referred to hi cls.
(a) to (k) of the section.
Sub section
(c) empowers the Board to make regulations regarding the duties of offi cers and servants of the Board and their salaries, allow ances and other conditions of service.
By virtue of the said powers the Board framed Mysore State Electricity Board Recruitment and Promotion of Employees of the Board Regula tions, 1960.
The minimum qualification prescribed is pass ing of SAS examination.
The resolution.
of the Board dated 19.5.1969 merely provides that the candidates appointed to the Government Board services for the first time after 1st November, 1956, must pass the department examination for purposes of earning increments and promotion.
The said resolution does not deal with cases of allottees.
It is silent about allottees and, therefore, it is not possible to infer from that resolution that the allottees were exempted from passing the departmental examination.
In any case, the passing of the resolution cannot have the effect of relax ing statutory regulations.
Apart from that by the subse quent resolution of 1970, the Board made it absolutely clear that the SAS examination had to be passed.
[510 C D, G H, 511 E F] |
Civil Appeal Nos.
2254 & 2255 of 1968.
(From the Judgment and Order dated the 10 1 1967 of the Madhya Pradesh High Court in Misc.
First Appeal No. 12/64) Ram Panjwani, Rameshwar Nath, for the appellant in both the appeals.
A. G. Ratnaparkhi, for respondent No. 1 in CA 2254/68.
S.K. Gambhir, for respondent No. 1 in CA No. 2255/68.
The Judgment of the Court was delivered by GUPTA, J.
On June 23, 1961 a bus owned by the appellant which was going from Gwalior to Indore met with an accident as a result of which two of the passengers, Mrs. Usha Kotas thane, aged about 23 years, and her one year old son, died and several others received serious injuries.
Among the injured was one Sailesh Kumar, a boy of about four years.
Claims for compensation were filed before the Motor Acci dent Claims Tribunal at Gwalior.
The application for com pensation for the death of Mrs. Usha Kotasthane and her child was made by her husband Shri Sudhakar Kotasthane, and the claim in respect of the injury to minor Sailesh Kumar was made on his behalf by his guardian mother Shrimati Indubala Bhandari.
Sudhakar Kotasthane and Indubala Bhand ari were also travelling in the same bus and both sustained injuries and were awarded compensation by the tribunal, but these appeals do not concern their cases or the claim in respect of Kotasthane 's dead child.
The two appeals before us at the instance of the Madhya Pradesh State Road Trans port Corporation, on certificate granted by the Madhya Pradesh High Court, are against the common judgment of the High Court enhancing the quantum of damages awarded by the claims tribunal in respect of the death of Mrs. Usha Kotas thane and the injury sustained by Sailesh Kumar.
C.A. 2254 of 1968 relates to the award in Mrs. Kotasthane 's case and C.A. 2255 of 1968 to that in the case of Sailesh Kumar.
629 As regards the death of Mrs. Usha Kotasthane, the claims tribunal awarded Rs. 15000/ as damages to her hus band Sudhakar.
At the time of her death she was employed as a Physical Instructress in a school at Indore, getting a salary of Rs. 190/ per month, in the grade of Rs.150 10 250.
Admittedly Sudhakar remarried within a year of the death of his first wife.
This is how the tribu nal dealt with the claim: "In the present case, it is a case of the death of the wife.
The husband was not dependent on the earning of his wife.
He was himself earning independently.
The applicant has no where stated that on account of the death of his former wife, he has been deprived of her income, nor that he was dependant upon her.
It is true; that 'the wife of the appli cant was educated, healthy, employed, and earning.
As far as, the loss of companionship is concerned, it is again true that he faced this loss for nearly, 11 months, after which, he married for the second time.
No cross examination has been led by the non applicant on the point that the second wife is as accom plished, educated, and healthy as the former one was.
The death of the wife of the appli cant must have caused him mental shock, pain and inconvenient in his house hold.
The work in the house, which he could take from his wife in looking to the household was also not available to the applicant during this period of 11 month.
The advantage of established married life with a child in the lap, was also lossed to the applicant during this time.
Taking into consideration all these facts, in favour of the applicant, and the fact, against him that he was married again after 11 months, of the death of his wife, I think, it will be proper to award damages amounting to Rs. 15000/ for the loss of life of his wife, which resulted into conditions of inconven ience, suffering shock derangement in house and the life, for a period of nearly 11 months.
" Both sudhakar Kotasthane and Madhya Pradesh State Road Transport Corporation preferred appeals to the High Court from the decision of the tribunal.
The High Court proceeded as follows.
The "span of her earning life" was counted as 35 years taking 58 years as the age of superannuation.
For the first six years from the date of accident, the High Court took Rs. 200/ as the average monthly income, and for the remaining twenty nine years of service the average income per month was fixed at Rs. 250/ .
On this basis the High Court computed her total earning to be Rs. 96,000/ .
Giving allowance for her own expenses and also taking into account the promotions and consequently the increased salary she might have earned, the High Court thought that she could have "easily spread" half of this amount for the household and estimated the loss of income on account of her death in round figures, at Rs. 50,000/ .The High Court enhanced the compensation accordingly.
Regarding Sudhakar 's second, marriage the High Court observed: 630 "But even so the second marriage cannot be said to be a substitute for the ' first one.
The second wife is not an earning member of the family nor is it shown that Sudhakar has in any way benefitted from the second marriage financial ly.
Therefore the financial loss would be there despite the second marriage.
" On these findings the High Court allowed the appeal filed by Sudhakar Kotasthane and dismissed that preferred by the Madhya Pradesh State Road Transport Corporation.
The extract from the tribunal 's order quoted above suggests that in fixing the quantum of compensation the tribunal was under the impression that the applicant had made no claim on the ground of ' pecuniary loss resulting from his wife 's death.
In this the tribunal was clearly in error.
In paragraph 11 of the claim petition, Rs. 75,000/is claimed as compensation and the paragraph makes it clear, that the sum is computed on the deceased 's expected earn ings.
If there were no such claim the tribunal would have been hardly justified in awarding Rs. 15000/ as damages for the mental shock and inconvenience suffered by the applicant for a period of 11 months only, after which he remarried.
The High Court also does not seem to be right in estimating the damages at Rs. 50,000/ in the manner it did.
Whether the deceased 's average monthly salary is taken to be Rs. 200/ or Rs. 250/we find it difficult to agree that only half of that amount would have been sufficient for her monthly expenses till she retired from service, so that the remaining half may be taken as the measure of her husband 's monthly loss.
It is not impossible that she would have contributed half of her salary to the household but then it is reasonable to suppose that the husband who was employed at a slightly higher salary would have contributed his share to the common pool which would have been utilised for the lodging and board of both of them.
We do not therefore think it is correct to assume that the husband 's loss amounted to half the monthly salary the deceased was likely to draw until she retired.
If on an average she contributed Rs. 100/every month to the common pool, then his loss would be roughly not more than Rs. 50/ a month and, assuming she worked till she was 58 years, the total loss would not exceed Rs. 19,000/ .
But in assessing damages certain other factors have to be taken note of which the High Court over looked, such as the uncertainties of life and the fact of accelerated payment that the husband would be getting a lump sum payment which but for his wife 's death would have been available to him in driblets over a number of years Allowance must be made for the uncertainties and the total figure scaled down accordingly.
The deceased might not have been able to earn till the age of retirement for some reason or other, like illness or for having.
to spend more time to look after the family which was expected to grow.
Thus the amount assessed has to be reduced taking into account these imponderable factors.
Some element of conjecture is inevitable in assessing damages Pearce in Mallet v Mc Monagle, 1970 (A.C.) (H.L.) 166 Lord( 174)calls it "reson able prophecy"sTaking note of all the relevant factors, the sum of Rs.15000/ awarded by the tribunal appears to be a reasonable figure which h we do not find any reason to disturb.
631 A method of assessing damages, usually followed in England, as appears from Mallet vs Mc Monagle (supra), is to calculate the net pecuniary loss upon an annual basis and to "arrive at the total award b multiplying the figure as sessed as the amount of the annual "dependency" by a number of "year 's purchase" ", (p. 178) that is, the number of years the benefit was expected to last, taking into consid eration the imponderable factors in fixing either the multi plier or the multiplicand, The husband may not be dependant on the wife 's income, the basis of assessing the damages payable to the husband for the death of his wife would be similar.
Here, the lady had 35 years of service before her when she died.
We have found that the claimant 's loss reasonably works out to Rs. 50/ a month i.e. Rs. 600/ a year.
Keeping in mind all the relevant facts and contingen cies and taking 20 as the suitable multiplier, the figure come to Rs. 12,000/ .
The tribunal 's award cannot there fore ' be challenged as too low though it was not based on proper grounds.
In a decision of the Kerala.
High Court relied on by the appellant (P. B. Kader vs Thatchamma: AIR 1970 Kerala 241 ), to which one of us was a party, the same method of assessing compensation was adopted.
The other appeal (C.A. No. 2255 of 1968) relates to the injury sustained by a boy aged about four years.
He suf fered compound fracture of his right tibia and fabula lower third near the ankle joint with infection of the wound.
Skin grafting had to be done and the boy had to remain in hospital from June 25, to August 4, 1961.
AccOrding to the doctor who examined him, the child was likely to develop a permanent limp which might require another operation at the age of 16 years or so.
In any case, in the opinion of the doctor the deformity was certain to persist till the boy was 16 years when another operation might remove it.
The tribu nal awarded Rs. 10,000/as general damages and Rs. 890/ as special damages.
The High Court increased the general damages to Rs. 20,000/ .
It appears from the evidence that the boy comes from a well to do family.
Though the possibil ity was there of the deformity being removed by surgical operation when he grew up to be 16 years, the other possi bility cannot be altogether ruled out.
That being the position, we are not inclined to interfere with the sum awarded by the High Court.
In the result, appeal No. 2254 of 1968 is allowed, the judgment of the High Court is set aside and the award of the tribunal is restored; appeal No. 2255 of 1968 is dismissed.
There will be no order as to costs in either appeal.
C.A. 2254 of 1968 allowed.
S.R. C.A. 2255 of 1968 dismissed. | In a bus accident on June 23, 1961, one Mrs. Usha Kotas thane and her one year old son died.
One Sailesh Kumar.
a boy of about four years coming from a well to do family was disabled due to a compound fracture of his right tibia and fabula lower third near the ankle joint.
_ Sudhakar Kotas thane, the husband of the deceased and respondent No. 1 in C.A. 2254 of 1968 and Smt.
Indu Bala Bhandari.
mother of Sailesh Kumar and respondent No. 1 in C.A. 2255 of 1968 applied to the Motor Accident Claims Tribunal, Gwalior for compensation.
The Tribunal took into consideration (i) the loss of life of Sudhakar 's wife which resulted into condi tions of inconvenience, suffering, shock, derangement in house and the life for a period of nearly 11 months i.e., till he remarried and (ii) The fact that Mrs. Usha was working as Physical Instructress in a school getting a salary of Rs. 190/ p,m.
in the scale of Rs. 150 10 250 and awarded a sum of Rs. 15,000/ as compensation as against the claim of Rs. 75,000/ computed on the deceased 's earn ings.
The Tribunal also awarded a sum of Rs. 10,000/ as damages and Rs. 890/ as special damages to Smt.
Indubala.
Both the respondents and the appellant preferred appeals to the High Court from the decision of the Tribunal.
The High Court enhanced the compensation to Rs. 50,000/ in the case of Sudhakar and to Rs. 20,000/ in the case of Indubala.
Allowing the appeal in C.A. No. 2254 of 1968 and dis missing the appeal in C.A. No. 2255 of 1968, the Court.
HELD: (1) A method of assessing damages usually followed in England is to calculate the net pecuniary loss upon an annual basis and "to arrive at a total award by multiplying the figure assessed as the amount of the annual 'dependency ' by a number of year 's purchase", that is, the number of years that benefit was expected to last taking into consid eration the imponderable factors in fixing either the multi plier or the multiplicand.
The husband may not be dependant on the wife 's income.
the basis of assessing the damages payable to the husband for the death of his wife would be similar.
[631 AB] Rule in Mallet vs Mc Mongale 1970 (A.C.) H.L. 166 at 174 quoted with approval.
P.B. Kaclar vs Thatchamma AIR 1970 Kerala 241, approved.
In assessing damages certain other factors have to be taken note of, such as, the uncertainties of life and the fact of accelerated payment that the husband would be getting a lump sum payment which but for his wife 's death would have been available to him in driblets over a number of years.
Allowance must be made for the uncertainties and the total figure sealed down accordingly.
The deceased might not have been able to earn till the age of retirement 628 for some reason or other, like illness or for having to spend more time to look after the family which was expected to grow.
Thus, the amount assessed has to be reduced taking into account these imponderable factors.
[630 G H] In the instant case, the deceased had 35 years of serv ice before her when she died.
The claimant 's loss reasona bly works out to Rs. 50/ a month i.e., Rs. 600/ a year.
Keeping in mind all the relevant factors and contingencies and taking 20 as the suitable multiplier, the figure comes to Rs. 12,000.
The Tribunal 's award cannot, therefore, be challenged as too low though it was not based on proper grounds.
The High Court was also not right in estimating the damages at Rs. 50,000/ in the manner it did.
2255 of 1968: Though the possibility was there, in the instant case, of the deformity being removed by surgical operation when the boy grew up to be 16 years, the other possibility of "likelihood to develop a permanent limp" cannot be altogeth er ruled out.
That being the position, the increase of general damages to Rs. 20,000/ , in the instant case, in addition to Rs. 890/ as special damages is proper.
[631 D F] |
Appeal No. 325/1976.
(From the Judgment and Order dated the 3.12.1975 of the Karnataka High Court in Writ Appeal No. 284/74).
V.S. Desai, Sanjev Aggarwal and R.B. Datar, for the appellant.
S.S. Javali, Jagannath Shetty and B.P. Singh for resp.
No. 1.
S.N. Prasad and Girish Chandra, for the Intervener Union of India.
Nemo for respondent No. 2.
The Judgment of the Court was delivered by FAZAL ALI, J.
Whether hoardings containing adver tisements fixed in the premises of a railway station front ing a ,public street are exigible to tax under the provi sions of section 136 of the City of Bangalore Municipal Corpora tion Act, 1949 (Act No. LXIX of 1949) hereinafter referred to as 'the Act ' is the substantial question of law involved in this appeal by certificate.
The facts of the case lie within a narrow compass and the point raised by counsel for the appellant is one of first impression and undoubtedly requires serious consid eration.
The appellant is a firm of advertising commer cial goods and other items by putting up hoardings contain ing advertisements on properties taken on lease licence from various owners.
The appellant also has been putting up hoardings on railway lands in the compound of the Bangalore Railway Station.
In the instant case, we are only con cerned with the hoardings containing advertisements put up adjacent to.
the railway compound fencing but within the railway premises by being placed on girders affixed to.
the earth.
The fencing of the railway compound is adjacent to and faces a public street.
It is also not disputed by the parties that the advertisements are put up at sufficient height so.
as to be clearly visible to and attract the attention of the members of the general public passing through the public street.
The appellant has produced photographs of some of the hoardings which demonstrate these facts.
The Municipal Corporation of the City of Bangalore being of the opinion that the hoardings containing advertisements put up by the appellant were exigible to tax issued a demand notice dated March 7, 1973 calling upon the.
appellant to pay a sum o.f Rs. 5871 83 as the advertisement tax including arrears.
The appellant represented to the Municipal authorities that as the hoardings containing advertisements were situate within the railway premises they squarely fell within clause (e) of the third proviso to section 136 of the Act.
The Municipal Corporation did not accept the contention of the appellants and pressed for paying up the tax.
The appellant then filed a writ petition before the High Court of Karnataka praying that the order of the Corporation demanding payment of tax be quashed, because the advertise ments were clearly 672 exempt from tax by virtue of the aforesaid proviso.
The writ petition was in the first instance heard by a single Judge who by his order dated April 4, 19.74 overruled the contention of 'the appellant and dismissed the petition.
Thereupon the appellant filed an appeal under the Letters Patent before a Division Bench which also affirmed the order of the single Judge, though on different grounds.
The Division Bench later on being approached under article 133 of the Constitution granted a certificate of fitness and hence this appeal before us.
The only point that has been raised before us is that the hoardings containing advertisements squarely fall within the exemption contained in the third proviso to section 136 of the Act and, therefore, they are not belong to The High Court found that as the advertisements did not exigible to the Railway nor for the purpose of the Railway, the proviso in question did not apply and the Single Judge was right in holding that the advertisements were exigible to tax.
The single Judge had, however, found that as the advertisements were much above the railings which faced the public street, the proviso had no application.
Before examining the view of the High Court, it may be necessary to extract the relevant portions of the statute which we are called upon to interpret.
The relevant part of section 136 of the Act runs thus: "Every person who ' erects, exhibits, fixes or retains upon or over any land, building, wail, hoarding or structure any advertise ment or who displays any advertisement to public view in any manner whatsoever, in any place whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed, retained or displayed to public view a tax calculated at such rates and in such manner and subject to such exemptions, as the corporation may, with the approval of the Government, by resolution determine: x x x x "Provided further that no such tax shall be levied on any advertisement which is not a sky sign and which x x x x (e) is exhibited within any railway station of upon any wall or other property of a railway except any portion of the surface of such wall or property fronting any street.
Explanation 1.
The word 'structure ' in this 'section shall include any movable board on wheels used as an advertisementor an adver tisement medium." (Emphasis supplied) Section 136 of the Act which is the charging section clearly shows that the intention of the statute was to tax certain types of advertisements.
The pith and substance of the entire section, therefore, is the taxation of advertisements fixed, erected or exhibited on any land, building wall, hoarding, structure etc.
Thus it is manifest, that section 136 contemplates tax on advertisements and not tax on prem ises or 673 buildings.
This clear distinction has to be kept in mind in construing the third proviso to section 136 of the Act which falls for determination in this case, particularly in view of some of the authorities relied upon by the appellant which deal with tax on premises rather than tax on adver tisements.
The essential conditions necessary for the application of section 136 of the Act are (i) that a person should erect, exhibit, fix or retain any advertisement upon any land.
building, wall, hoarding or structure or display any advertisement in any manner; (ii) that erection, exhibition, fixation or retention or display of that advertisement must be exposed to public view; and (iii) that the advertisement must be exhibited in any place public or private.
The sine qua non for the application of this section is, therefore, that the advertisements displayed by any person must be to public view in any manner whatsoever.
Once these conditions are satisfied, the person who exhibits the advertisements is liable to pay tax on such advertisements As, however, the Act was merely to regulate the premises falling within the Bangalore Municipal Corporation, it is obvious that the premises which did not fall within the Corporation or which belonged to other autonomous authori ties could not be exigible to tax unless expressly so pro vided.
Furthermore, it appears that the object of the Municipal Corporation in charging tax was to keep the public premises clean and water tight and protect advertisements which may amount to nuisance, because the ,Act lays down a procedure which has to be followed before the advertisements could be exhibited.
Consistent with this object, there fore, the third proviso to section 136 of the Act grants an exemption from tax on any advertisement which is exhibited in any railway station or upon any wail or other property of a railway.
Here also an exception is carved out which is that if such an advertisement, even though on any portion of the railway property, faces any street it will not earn the exemption.
The central argument put forward before us by Mr. V. 8.
Desai counsel for the appellant is that the expression "fronting any street" appearing in cl.
(e) of the third proviso to section 136 qualifies the railway property and not the advertisement so that the fact that the advertisement fronting the street or which is exposed to public view or is visible to the public from the public street will not make the advertisement exigible to tax, if the advertise ment is within the railway premises or is adjacent to the compound wall or any other property which itself is fronting the street.
In other words, the contention was that having regard to the terminology of the word "fronting" it is not possible to conceive that two portions of the property can front a street at one and the same time unless they are in the same 674 line.
From the photographs produced before us, as also before the High Court, it appears that the hoardings con taining the advertisements are no doubt fixed just 2 or 3 feet behind the compound fencing of the railway station premises.
Mr. Desai, therefore, contended that once the compound wall which is in front of the girders on which the advertisements are fixed faces the street, there is No. question of the advertisement facing the street.
Secondly, it was contended that the test of fronting the street as contained in the third proviso is that what is fronting the street is not the advertisement but the property of the railway.
In other words, it was argued that as in the instant case the compound wall already fronted the street, the hoardings containing the advertisements being behind the compound wall, though adjacent to it, cannot be said to front the street, because two properties cannot front the street at the same time.
We have given anxious considera tion to the arguments advanced by the learned counsel for the appellant, but on a proper interpretation of the proviso we are unable to accept the same.
begin with, if the proviso is read with reference to the context, then it is absolutely clear that the verb "fronting" qualifies not the wall or the property but the advertisement.
The central subject matter of section 136 as also of the proviso is not a place or building but advertisement which alone attracted tax.
If we read the third proviso in the following man ner, then the intention of the statute becomes absolutely clear: "Provided further that no such tax shall be levied on any advertisement (e) which is exhibited within any railway station or upon any wall of other property of a railway except any portion of the surface of such wall or property/fronting any street." (Emphasis supplied) The verb "fronting", ' therefore, does not qualify wall or property mentioned in the latter part of the.
proviso.
but the noun advertisement.
The test, therefore, laid down by this proviso is that the Court has to see whether the adver tisement affixed whether inside the compound of the railway or not fronts the street.
If the advertisement fronts the street or faces the street even if it is within the railway premises, it will be exigible to tax.
For instance if the; hoardings containing the advertisements were affixed just behind the compound wall and the advertisements did not face the street at all but faced the other side of the railway station their back being to the street, then the advertise ments will certainly be exempt from tax and the proviso would clearly apply.
This seems to us to be the natural interpretation of the proviso having regard to the context in which it is placed.
Mr. Desai learned counsel for the appellant relied on the definition of the word "fronting" as used in Stroud 's Judicial Dictionary, 4th End., at p. 1121, where the learned author while defining "fronting" observed thus: "Fronting.
(1) Premises "fronting, adjoining, or abutting" on a STREET, and as such chargeable with expense 675 of road making under Public Health Act 1875 (c. 55), section 150, did not need to be absolutely contiguous.
" In the first, place the author defines the word "fronting" within the meaning of the Public Health Act, 1875, which levied tax on premises.
The author was not at all con cerned with tax on advertisement as in the instant case.
In the case referred to in the book, the Court was called upon to judge the expenses on road making under the Public Health Act.
It is, therefore, manifest that these consider ations would not apply to the facts of the present case.
On the other hand in Webster 's Third New International Dictionary Vol.
I, the word "front" used as a verb is defined thus: "something that confronts or faces forward: as (1): a face of a building; esp.
the face that contains the principal entrance . . . . . put a facing upon (e.g. the building with brick) 5: to face or look forward have the front toward, opposite, or over against the houses the street)." According to the aforesaid dictionary meaning "fronting" merely means that the article should face or have its front toward, opposite or over against the house or the street.
In our opinion the word "fronting" has been used in the proviso not in any legal or technical sense but as used in ordinary parlance.
It is not a term of art but one that signifies its meaning according to common notions.
For these reasons, therefore, we are clearly of the opinion that as the advertisements upon the hoardings in the instant case were undoubtedly facing or fronting the street they were exigible to tax and the fact that they were a f[axed on the earth which formed the compound of the railway premises would make no difference in view of the plain and unambigu ous language of the proviso.
Learned counsel for the appellants relied on a decision of the Madras High Court in The Corporation of Madras vs Messrs The Oriental Mercantile Company Ltd., Madras.
C) This authority, however, can have no application to the facts of the present case, because to begin with, there is nothing to show that the hoardings containing the advertise ments were in any way fronting or facing the street.
On the other hand, the advertisements were merely on the out side wall within the railway compound.
In these circum stances, therefore, this case does not appear to be of any assistance to the appellant.
Reliance was then placed on a decision of the Queen 's Bench Division in Ware Urban District Council vs Gaunt and Others(2) and particularly on the observations of Ashworth, J., where the Judge observed as follows: "The remaining issue is, in a sense, the most troublesome of all, namely, whether it is open to the appellants to apportion part of the expense on premises situate on the wester ly (1) , (2) , 787. 4 707SCI/77 676 side of Walton Road but separated from it b,y the public footpath.
This issue involves as an ancillary problem the question whether part of the expense should in any event be appor tioned on ' the public footpath.
Section 6 of the Act of 1892 provides, inter alia, that ".:. the expenses incurred by the urban authority in executing private street works shall be apportioned (subject as in this Act mentioned) on the premises fronting, adjoin ing, or abutting on such street or pan of a street." " The observations extracted above will show that there also.
the Court was dealing not with a tax on advertisements but a tax on premises, and the question of the frontage was inter preted having regard to the place where the premises were situate.
In the same judgment, the learned Judge observed as follows: "In each case, as it seems to me, regard must be paid to the context in which the words appear and, quite apart front any decided cases, I am inclined to think that the context in the present case points to an enlarged rather than a restricted meaning of the word "adjoin"." (Emphasis ours) It is, therefore, clear that the meaning of the words used in a particular statute has to be construed with reference to the context and not in isolation, not is it possible to lay down any rule of universal application in a matter like this.
For these reasons, therefore, this authority also does not appear to be apposite so far as the present case is concerned.
The Single Judge of the High Court, while interpreting the proviso, observed as follows: "These advertisements in question are displayed on the hoardings standing close to the cement fencing at the outer mark of the railway property.
The cement railings are hardly about 3 feet in height and the adver tisement boards are very much above the rail ings.
The Public street to which the adver tisements are facing runs along the cement railings, with no other obstacle between the advertisement boards and the public view.
Therefore, it can reasonably, be said that they are fronting the Public Street.
" We find ourselves in complete agreement with the view taken by the Single Judge.
The Division Bench of the High Court, however, while upholding the judgment of the Single Judge, observed as follows: "In the instant case, we are not faced with any situation as the one envisaged in the second part of the exemption clause relative to advertisement on a wall or other property 677 of the railway 'frontage by street '.
We are concerned herein with the case of a hoard ing put up by and belonging to the appellant and not the railway.
Hence, it is plain that no exemption on that score could be claimed on behalf of the appellant.
" The High Court does not appear to have interpreted the proviso correctly.
The view of the High Court that the proviso would only apply to advertisements of such hoardings whose ownership lies with the Railway or which belong to the Railway is not borne out by cl.
(e) of the third proviso to section 236.
In other words the question of exigibility to tax is relatable not to the ownership of the hoarding but its situs.
Even if the hoarding does not belong to the Railway but to some private party, if it does not front the street and is situated within the Railway premises or within the compound of the railway premises it is clearly exempt.
We, therefore, do not approve of the line of reasoning adopted by the Division Bench.
On a close and careful interpretation, therefore, of cl.
(e) of the third proviso to section 136 of the Act we are clearly of the opinion that on the facts proved in the present case as the hoardings,containing the advertisements were front ing the public street and were clearly exposed to public view and the members of the public passing through the street, they are not covered by the exemption contemplated by the proviso and are, therefore, exigible to tax.
The demand notice, therefore, served on the appellant by the Municipal Corporation for payment of tax is not legally erroneous.
The result is that the appeal is dismissed with costs. | Section 136 of the City of Bangalore Municipal Corpora tion Act, 1949 provides that every person who erects, exhib its etc., over any land or structure any advertisement or who displays any advertisement to public view in any place whether public or private, shall pay on every advertisement a tax levied by the Corporation.
Clause (e) of the third proviso to the section enacts that no such tax shall be levied on any advertisement which is exhibited within any railway station or upon any wall or other property of a railway, except any portion of the surface of such wall or property fronting any street.
An advertisement facing a public street was put up by the appellant adjacent to the compound fencing of a railway station but within the railway premises.
The Municipal authorities levied tax on the advertisement.
The appel lant 's writ petition challenging the levy was dismissed by a single judge of the High Court and this decision was upheld by a division bench.
On appeal to this Court it was contended that the ex pression "fronting any street" occurring in the proviso qualified the railway property and not the advertisement.
Dismissing the appeal, HELD: 1. (a) Since the advertisements were fronting public street and were exposed to public view.
were not covered by the exemption contemplated by the proviso and were, therefore exigible to tax.
[677 D] (b) The word "fronting" qualifies not the wall or property mentioned in the latter part of the proviso but "advertisement".
The test laid down by the proviso is that the Court has to see if the advertisement affixed whether inside the compound of the railway or not fronts the street.
If it fronts the street or faces the street, even if it is within the railway premises it will be exigible to tax.
[674 D & F] (c) The word "fronting" has been used in the proviso not in any legal technical sense but it ordinary parlance.
It is not a term of art but one that signifies its meaning according to common notions.
[675 D] The Corporation of Madras vs Messrs The Oriental Mercan tile Company Ltd., Madras, and Ware Urban District Council vs Gaunt & Others.
[1960] 3 All E.R. 778, 787 distinguished.
The view of the single Judge that since the public street to which the advertisements were facing, ran along the railings with no other obstacle between the advertise ment and the public view, it could reasonably be said that they were fronting public street is correct.
On the other hand, the view of the Division Bench that the proviso would only apply to advertisements of such hoardings whose owner ship lay with the railway or which belonged to the rail way is not borne out by el.
The question of exigibili ty to tax is relatable not to the ownership of the hoardings but their situs.
[676 G H] 671 |
97 of 1976.
(Under Article 32 of the Constitution of India).
section Ramchandra Rao and B. Kanta Rao for the appellants in W.P. No. 97/76.
section Ramachandra Rao and ,A. Subba Rao, for the appel lants in W.P. No. 114/76.
366 Niren De, Attorney General, P.p.
Rao, Sr.
Advocate and T.V.S. Narasimhachari, for the respondents in W.P. No. 97/76.
P. Parmeshwara Rao, and G. Narayana Rao, for respond ents in W.P. No. 114/76.
The Judgment of the Court was delivered by RAY, C.J.
These writ petitions challenge the compulsory retirement of the petitioners.
The petitioners were retired compulsorily under order dated 23 September, 1975.
The order dated 23 September 1975 in the case of the first petitioner in writ petition No. 97 of 1976 may be referred to as typical of orders in the case of other peti tioners.
This order stated first that the said first peti tioner completed 25 years of qualifying service on 24th July, 1975.
The order next stated that the Commissioner of Police being the authority to make a substantive appointment to the post of Inspector of Police is of opinion that it is in public interest to retire the persons mentioned in the order.
The order thereafter states that in exercise of the powers conferred by Clause (a) of sub rule (2)/sub rule 2(A) read with Clause (a) of sub rule (2) of rule 3 of the Andhra Pradesh Liberalised Pension Rules, 1961/sub rule (1) of rule 2/rule 3 read with sub rule (1) of rule 2 of the Andhra Pradesh Government Servants Premature Retirement Rules, 1975, the Commissioner of Police directs that the person mentioned in the order shall retire in public inter est from service with effect from the date of service of the order and that he shall be paid a sum equivalent to the amount pay and allowances for 3 months in lieu of notice calculated at the same rate at which he was drawing immedi ately before the date on which the order is served on him.
The Government of Andhra Pradesh passed a general order dated 28 November, 1975.
In that Government order it is stated that in several Government orders recited therein, orders for the premature retirement of the Government serv ants in public interest had been issued in those cases after giving 3 months previous notice in writing or after giving 3 months salary in lieu of such notice.
The 28 November, 1975 order next states that an instance came to the notice of the Government that a Government servant after compulsory re tirement as per orders mentioned above was re appointed in a cooperative institution as executive officer.
Though the reappointment of the incumbent was in the Semi Govern ment Institution, his re appointment was stated to be irreg ular and contrary to the intention of the Government in retiring corrupt and inefficient persons.
The Government order directed that all the Departments of the Secretariat, all Heads of Department, and all Collectors etc., should ensure that on no account persons who are retired premature ly in pursuance of orders issued by the Government should be re instated or re appointed in any Semi Government or Quasi Government Institutions.
367 The petitioners challenged the compulsory retirement orders as violation of Article 16.
The petitioners also challenged the Government order forbidding re appointment of compulsorily retired persons in Semi Government or Quasi Government Institutions as a stigma within the meaning of Article 311.
At the outset it should be stated that enforcement of violation of Article 311 does not come within the scope of Article 32.
The challenge to the Government order forbid ding re appointment of compulsorily retired persons as a stigma within the meaning of Article 311 is, therefore, not an infringement of fundamental rights.
The petitioners challenged the orders of compulsory retirement as an infraction 0f Article 16.
It is not known how the petitioners have been discriminated against other persons because no such person is impleaded as a respondent and there are no allegations to that effect.
During the subsistence of the Presidential Order issued under Article 359(1 ) it is not competent to invoke Article 14 for enforcement of any fundamental rights.
Articles 14 and 16 are to a certain extent overlapping in regard to rights of equality.
Equality of opportunity for all citizens in matters relating to employment is not violated by provisions for compulsory retirement of Government servants in public interest after the completion of a certain period of quali fying service or attainment of a certain age.
This Court has consistently taken the view that compulsory retirement does not involve any civil consequences.
See Union of India vs Col. J. N. Sinha and Another(1) and Tara Singh etc.
vs State of Rajasthan and Ors.(3) A writ petition under Article 32 can lie only for in fringement of fundamental rights.
See B. Narayana Murthy and Ors.
vs State of Andhra Pradesh etc.(3) The general order for compulsory retirement is applicable to all employees.
The individual application of the order in a given case cannot offend Article 16.
It cannot be suggested that an order for compulsory retirement in the case of one person is denial of equality of opportunity relating to employment because another person in employment has not been compulsorily retired.
Article 16 does not prohibit the prescription of reason able rules for compulsory retirement.
A question arose in T.C. Shivacharana Singh vs State of Mysore (4) whether a rule providing for compulsory premature retirement from Government service violates Article 16.
This Court said that the law in relation to the validity of rules permitting compulsory premature retirement from Government ser (1) [1971] 1 S.C.R. 791.
(2) ; (3) [1971] Supp S.C.R. 741.
(4) A.I.R. 1965 S.C. 280.
368 vice is well settled by prior decision of this Court which does not require to be reconsidered.
The ratio is that the provision for compulsory retirement in public interest applies to all Government servants and as such it is not open to challenge either under Article 14 or under Article 16.
In Shyam Lal vs Stale of U.P.(1) the appellant had been compulsorily retired.
The order was challenged as violating Article 311.
This Court held that there is no stigma in volved in compulsory retirement.
Compulsory retirement does not amount to a dismissal or removal and, therefore, it is not within the vice of Article 311.
One of the petitioners, namely, the first in writ peti tion No. 97 of 1976, challenged the order of compulsory retirement on the ground that he did not complete 25 years of service.
He alleged that he was appointed on 10 Sep tember, 1952 and, therefore, the order of compulsory retire ment dated 23 September, 1975 is bad.
The State on the other hand contends that the correct date of appointment of the first petitioner is 25 July, 1950.
In writ petitions the Court does not go into disputed questions of fact, like date of appointment as in the present case.
In Tata Engi neering and Locomotive Company Ltd. vs Assistant Commission er of Commercial Taxes & Anr.
(a) this Court said that the exercise of jurisdiction in writ matters is not desirable if facts have to be found on evidence.
This Court has also said that there may be exceptions.
One such exception is when action is taken under an invalid law or arbitrarily without the sanction of law.
In the present case there is no aspect of either kind.
Further it has to be observed that in the present writ petitions several petitioners have combined as petitioners.
Their causes of action are separate and independent.
Each is alleged to be an instance of individual assertion of constitutional right in regard to facts and circumstances of each case.
Where several petitioners combine for alleged violation of their rights, it is difficult for court to go into each and every individual case.
In the present case the affidavit evidence on behalf of the State is preferred and, therefore, the first petitioner cannot agitate the question of disputed date of appointment.
In Krishna Chandra Nayar vs Chairman, Central Tractor Organization and Others(3) this Court considered the imposi tion of a ban against one man, namely, the petitioner in that case from being ever taken into Government service.
He was a temporary servant and his services were terminated by giving him pay and allowances in lieu of notice for one month.
This Court found that case to be one of arbitrary imposition of ban against the employment or appointment one individual to an office.
(1) ; (2) ; (3) 369 Krishna Chander 's case (supra) is of no aid to the petitioners in the present case.
The ban is not challenged here.
In Krishna Chander 's case (supra) the ban was chal lenged as an arbitrary act against one individual.
In the present case the ban is not against anyone individually but it is not to employ in Quasi Government service or Semi Government service, persons who are compulsorily retired from Government service.
The ban has a reasonable basis and has some relation to the suitability for employment or appointment to an office.
When compulsory retirement is made in public interest it will be an exercise in futility if Government servants who are compulsorily retired are again employed in Government service or Semi Government service or Quasi Government service.
The petitioners challenged the orders for compulsory retirement also on the ground that reference to so many rules was made and, therefore, it was not possible for the petitioners to know under what provision the orders for compulsory retirement had been made.
It is not open to the petitioners to challenge the orders on that ground.
The orders specifically mention that compulsory retirement is made in public interest.
The State affidavit evidence is that petitioners No. 4 and 5 in writ petition No. 97 of 1976 are governed by Hyderabad Civil Service Regulations and the rest of the petitioners are governed by Andhra Pradesh Liberalised Pension Rules, 1961.
Rule 292 of the Hyderabad Civil Service Regulations and sub rule (2) (a) of rule B of the Andhra Pradesh Liberalised Pension Rules, 1961 are similar.
Both the rules confer power on the authority to require Government servant to retire in the public interest from service on the date on which he completes 25 years of qualifying service or attains 50 years of age.
Rule 2(1) of the Andhra Pradesh Government Servants ' Premature Retirement Rules, 1975 is also worded in similar language.
The word ing of the rules relating to retirement in public interest is identical in all the three sets of rules mentioned above.
The mere fact that three different rules.
were mentioned in the impugned orders without scoring out the rules which are not applicable to a petitioner in one case cannot be any grievance for the reason that in each case the relevant rule is identically worded.
The omission on the part of the officers competent to retire the petitioners in not scoring out the rules which are inapplicable to a particular individual does not render the order bad.
The reason is that one of the rules is applicable to him and the omission to strike out the rules which are not applicable will not in any manner affect the applicability of the rule mentioned.
Further this Court has taken the view that a wrong reference to power will not vitiate any action if it can be justified under some other power under which the Government can law fully do the act.
See Hukumchand Mills Ltd. vs The State of Madhya Bharat and Another(1).
In the present case the valid rule is mentioned in each case.
(1) ; 370 The Government of Andhra Pradesh has by an administra tive order constituted a review committee for each depart ment to review orders of retirement in public interest and to revoke and modify the same, if necessary.
The petition ers made representations to the review committee.
The petitioners yet choose to come to this court.
The petition ers are not justified in applying to this court.
The petitioners obtained rules in these two cases during the vacation.
A similar matter came before this Court on 29 April, 1976 and this Court did not issue any rule.
If the attention of this Court had been drawn to that order, perhaps no rule would have been issued in these matters.
The Andhra Pradesh Administrative Tribunal Order, 1975 confers power on the Tribunal to exercise jurisdiction with respect to appointment, allotment or promotion and other conditions of service of such persons.
It is open to a person who complains about an order of compulsory retirement to approach the Tribunal in a given case.
For the foregoing reasons, the writ petitions are dis missed.
There will be no order as to costs.
M.R. Petitions dismissed. | On the completion of their 25 years of qualifying serv ice, the appellants were compulsorily retired in public interest, and were to receive 3 months salary in lieu of notice.
Thereafter, the respondent Government passed a general order forbidding re employment of compulsorily retired persons in semi Government institutions.
The appellants filed, writ petitions under article 32 of the Con stitution challenging the compulsory retirement orders as violative of article 16 and the ban on such re employment as a stigma under article 311.
Dismissing the petitions, the Court, HELD: (1) Article 16 does not prohibit the prescription of reasonable rules for compulsory retirement.
The provi sion for compulsory retirement in public interest after the completion of a certain period of qualifying service or attainment of a certain age, applies to all Government servants and as such it is not open to challenge either under article 14 or under article 16, and the individual applica tion of the order in a given case cannot offend article 16.
[367 D H] T. C. Shivacharana Singh V. State of Mysore A.I.R. 1965 S.C. 280, applied.
Union of India vs Col. J.N. Sinha, & Anr.
[1971] 1 S.C.R. 791; Tara Singh etc.
vs State of Rajasthan & Ors.
[19753 3 S.C.R. 1002, and B. Narayana Murthy & Ors.
vs State of Andhra Pradesh etc.
[1971] Supp.
S.C.R. 741, referred to.
(2) The Government order forbidding re appointment of compulsorily retired persons as a stigma within the meaning of Article 311 is not an infringement of fundamental rights, and the enforcement of violation of Article 311 does not come within the scope of Article 32.
The ban is not against anyone individually and has a reasonable basis and some relation to the suitability for employment or appointment to an office.
[367A B,369 A B] Krishna Chander Nayar vs Chairman, Central Tractor Organisation & Ors. ; Shyam Lal vs State of U.P. ; ; Tata Engineering and Locomo tive Company Ltd. vs Assistant Commissioner of Commercial Taxes & Anr. ; and Hukumchand Mills Ltd. vs The State of Madhya Bharat & Anr. ; , referred to.
(3) The Government of Andhra Pradesh has by an adminis trative order constituted a review committee for each department to review orders of retirement it public interest and to revoke and modify the same, if necessary.
petitioners made representations to the review committee, and are not justified in applying to this Court.
[370A B] |
iminal Appeal No. 25 of 1954.
Appeal under Article 134(1) (c) of the Constitution from the judgment and order dated the 12th January 1954 of the Patna High Court in Criminal Miscellaneous Case No. 10 of 1953.
M. C. Setalvad, Attorney General of India and Mahabir Prasad, Advocate General of Bihar (Balbhadra Prasad Sinha and P. G. Gokhale, with them) for the appellant.
Purshottam Prikamdas, (R. Patnaik, with him) for the respondent.
November 8.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with certificate under article 134(1)(c) of the Constitution arises out of an application under section 2 of the Contempt of Courts 121 956 Act (XXXII of 1952) and section 8 of the (XXXVII of 1850) read with article 227 of the Constitution filed by the respondent against the appellant in the High Court of Judicature at Patna and raises an important question as to whether the Commissioner appointed under Act XXXVII of 1850 is a Court.
The respondent is a Member of the Bihar Civil Service (Executive Branch).
The State Government received reports to the effect that the respondent bad been guilty of serious misconduct and corrupt practices in the discharge of his official duties while employed as Sub Divisional Officer at Aurangabad and they accordinly decided that an inquiry into the truth of.
the various charges against him should be made under the provisions of the (Act XXXVII of 1850, hereinafter referred to as the Act) and Mr. Anjani Kumar Saran who was the then Additional District and Sessions Judge, Gaya, and was thereafter the District and Sessions Judge of that place was appointed Commissioner under the Act for making the inquiry.
Gaya was fixed as the venue of the inquiry and the State Government also ordered that, during the pendency of the inquiry, the respondent will remain under suspension.
The Government made the appointment aforesaid after obtaining the concurrence of the High Court on its administrative side which was obtained on the condition that an extra temporary post of Additional District and Sessions Judge was created by the Government for the period Mr. Saran was occupied with the inquiry.
The appointment was made on the 2nd June 1952 and it was expected that Mr. Saran would be able to complete the inquiry during a period of three months.
The respondent, however, adopted dilatory tactics.
He made various representations to the Government, one on the 6th June 1952 demanding that a Judge of the High Court be appointed as Commissioner under the Act to make the inquiry against him and that inquiry be made at Patna and not at Gaya, another on the 10th July 1952 protesting against the appointment of Mr. Saran 957 as Commissioner to hold the inquiry against him and demanding that a ' confirmed District and Sessions Judge be appointed as Commissioner in his place, and ' a third on the 17th November 1952 in which he requested the Government to appoint three Commissioners instead of one for holding the inquiry against him and also to pay the entire cost of his defence at the same rates at which the Special Public Prosecutor engaged by the Government was being paid and also to reimburse other incidental expenses to be incurred by him.
All these representations were turned down by the Government.
Being thus thwarted in his attempts to put off the inquiry on some pretext or the other, the respondent tried to evade the same and failed and neglected to reply to the queries made from him by the Commissioner.
The Commissioner also could not communicate to him the orders passed by him from time to time because the respondent did not stay at the headquarters and did not leave his proper address for communication either at Gaya or at Motihari.
On the 24th November 1952 the Commissioner passed an order calling upon the parties to attend the hearing of the proceedings before him on the 8th December 1952 and forwarded a copy of this order to the appellant for communication to the respondent.
The District Magistrates of Champaran and Gaya who were requested to serve a true copy of the order upon the respondent could not do so as he was available neither at Motihari nor at Gaya and it was with great difficulty that he could be traced at Patna and the order served upon him.
On the 18th December 1952, the Commissioner passed another order recording that he was feeling great difficulty in contacting the respondent and in communicating his orders to him.
He observed that this was a highly undesirable state of affairs and that it was necessary that his orders should be communicated to the res pondent as early as possible.
A copy of this order was forwarded by the Commissioner to the appellant along with his letter dated the 20th December 1952 for information and doing the needful.
The appellant thereafter wrote the letter complained against to 958 the Commissioner on the 26th December 1952 being D.O. No. II/3C 306/52A 11614 which ran as under: "Dear Mr. Saran, I am desired to refer to your memo No. 8266 dated the 26th November 1952 and to say that Government are anxious not to allow Mr. Jyoti Narayan to adopt dilatory tactics and delay the progress of the inquiry against him.
I am to request you to be vigilant against such tactics adopted by Mr. Narayan.
Yours sincerely, (Sd.) B. N. Sinha".
The Commissioner acknowledged receipt of this letter by his D.O. letter No. 244, dated the 5th January 1953 stating that he would not allow the respondent to adopt any dilatory tactics and delay the progress of the inquiry against him.
On the 2nd February 1953, the respondent filed a petition before the Commissioner stating inter alia that he had not been able to engage any lawyer or counsel for want of necessary papers and copies and prayed for an adjournment of the inquiry.
He also prayed for starting a contempt of Court proceeding against the appellant but the Commissioner rejected both his prayers.
The order which was passed by the Commissioner on these applications may as well be set out in extenso inasmuch as it has a bearing on the question whether the appellant was guilty of contempt of Court for having addressed the letter complained against to him: "3 2 53.
Another point raised in the first petition of the accused was that Mr. B.N. Sinha, Deputy Secretary to Government in addressing his D.O. letter No. 11614, dated the 26th of December, 1952, was guilty of contempt, because he had interfered in my judicial discretion.
I do not find anything in this letter from which it can be inferred that the author of the letter intended to influence me in the exercise of my judicial function.
This letter was sent to me in reply to my memo No. 8266 dated 26 11 1952 whereby I had forwarded a copy of my order dated 24 11 1952 for communication to Mr. Narayan.
Mr. 959 B.N. Sinha wrote in his letter dated the 26th of December 1952 that Government are anxious not to allow Mr. Jyoti Narayan to adopt dilatory tactics and to delay the progress of the inquiry.
Now it is to be noted that Mr. Narayan in paragraph 11 of his petition has himself charged the State Government for delaying the inquiry and thereby causing harassment to him.
Therefore, it is obvious that both parties, that is, the State and the accused are anxious that the inquiry should be expedited so what Mr. B.N. Sinha meant by writing the D.O. was that the inquiry should be expedited.
This cannot by any stretch of imagination be construed to mean that the aforesaid officer in any way tried to influence me in the discharge of my judicial functions.
For these reasons I rejected the two prayers contained in the first petition of Mr. J. Narayan".
The respondent thereafter started proceedings in, contempt against the appellant in the High Court of Judicature at Patna.
A Rule was issued by the High Court against the appellant which was heard and finally disposed of on the 12th June 1954.
The High Court was of the opinion that the Commissioner appointed under Act XXXVII of 1850 was a Court, that the Court was subordinate to the High Court, that the letter complained against amounted to a contempt of Court and that the appellant was guilty of such contempt.
It accordingly sentenced the appellant to pay a fine of Rs. 250 and in default to undergo simple imprisonment for a period of one month.
The appellant obtained a Certificate under Article 134(1), (e) of the Constitution from the High Court.
The Certificate was, however, limited to the question as to whether the Commissioner appointed under the Act is a Court.
At the hearing before us, the appellant filed a petition for urging additional grounds which included inter alia the ground that the High Court erred in holding that the Commissioner appointed under the Act is a Court subordinate to the High Court within the meaning of the for the mere reason that its orders are open to be reviewed 960 judicially in exercise of the power vested in the High Court under article 227 of the Constitution and also the ground that the High Court erred in holding that the letter complained against tended to interfere with or obstruct the course of justice and constituted contempt of Court.
The learned Attorney General for the appellant contended in the first instance that the Commissioner appointed under the Act is not a Court.
He next contended that even if he is a Court, he is not a Court subordinate to the High Court within the meaning of the .
He lastly contended that the letter complained against did not tend to interfere with or obstruct the course of justice and did not constitute contempt of Court.
Prior to the enactment of the , there was in existence in India the Contempt of Courts Act, 1926 (XII of 1926).
The various States also had their corresponding enactments.
The Contempt of Courts Act, 1926 (XII of 1926) and the corresponding enactments in the States of Hyderabad, Madhya Bharat, Mysore, Pepsu, Rajasthan and Travancore Cochin and the Saurashtra Ordinance II of 1948 were repealed by the and a uniform Act to define and limit the powers of certain Courts in punishing contempts of Courts was enacted which extended to the whole of India except the State of Jammu and Kashmir.
In section 2 of the Act, "High Court" was defined as meaning the High Court for a Part A State or a Part B State and including the Court of the Judicial Commissioner in a Part C State.
Section 3 of the Act enacted: "3.
(1) Subject to the provisions of sub section (2) every High Court shall have and exercise the same jurisdiction, powers and authority, in accordance with the same procedure and practice, in respect of contempts of Courts subordinate to it as it has and exercises in respect of contempts of itself.
(2) No High Court shall take cognisance of a contempt alleged to have been committed in respect of a Court subordinate to it where such contempt is an 961 offence punishable under the Indian Penal Code (Act XLV of 1860)".
The word "Court" was not defined in the Act and ' the expression "Courts subordinate to the High Courts" would prima facie mean the Courts of law subordinate to the High Courts in the hierarchy of Courts established for the purpose of administration of justice throughout the Union.
It would be relevant, however, to notice the definitions of "Court" available elsewhere.
Coke on Littleton and Stroud defined the word "Court" as the place where justice is judicially administered.
According to Stephen, "In every Court, there must be at least three constituent parts the actor, reus and judex; the actor or plaintiff, who complains of an injury done; the reus, or defendant, who is called upon to make satisfaction for it; and the judex, or judicial power, which is to examine the truth of the fact, and to determine the law arising upon that fact, and if any injury appears to have been done, to ascertain, and by its officers to apply, the remedy".
Section 3 of the Indian Evidence Act (I of 1872) defines "Court" as including all Judges and Magistrates, and all persons, except arbitrators.
legally authorised to take evidence.
This definition, however, has been held to be not exhaustive but framed only for the purpose of Indian Evidence Act and is not to be extended where such an extension is not warranted.
Sections 19 and 20 of the Indian Penal Code (Act XLV of 1860) define the words "Court" and the "Court of Justice" as under: "Section 19.
The word 'Judge ' denotes not only every person who is officially designated.
as a Judge, but also every person who is empowered by law to give, in any legal proceeding, civil or criminal, a definitive judgment, or a judgment which, if not appealed against would be definitive, or a judgment which, if confirmed by some other authority would be definitive, or who is one of a body of persons, which body of persons is empowered by law to give such a judgment.
962 Section 20.
The words "Court of Justice" denote a Judge who is empowered by law to act judicially alone, or a body of Judges which is empowered by law to act judicially as a body, when such Judge or body of Judges is acting judicially".
The pronouncement of a definitive judgment is thus considered the essential sine qua non of a Court and unless and until a binding and authoritative judgment can be pronounced by a person or body of persons it cannot be predicated that he or they constitute a Court.
The Privy Council in the case of Shell Co. of Australia vs Fedral Commissioner of Taxation(1) thus defined "Judicial Power" at page 295: "Is this right? What is "judicial power"? Their Lordships are of opinion that one of the best definitions is that given by Griffith, C. J. in Huddart, Parker & Co. vs Moorehead(2) where he says: "I am of opinion that the words judicial power ' as used in section 71 of the Constitution mean 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".
Their Lordships further enumerated at page 297 certain negative propositions in relation to this subject: "1.
A tribunal is not necessarily a Court in this strict sense because it gives a final decision; 2.
Nor because it hears witnesses on oath; 3.
Nor because two or more contending parties appear before it between whom it has to decide; 4.
Nor because it gives decisions which affect the rights of subjects; 5.
Nor because there is an appeal to a Court; 6.
Nor because it is a body to which a matter is referred by another body.
See Rex vs Electricity Commissioners(3)" (1) (2) ; , 357.
(3) 963 and observed at page 298: "An administrative tribunal may act judicially, but still remain an administrative tribunal as distinguished from a Court, strictly so called.
Mere externals do not make a direction to an administrative officer by an ad hoc tribunal an exercise by a Court of Judicial power".
The same principle was reiterated by this Court in Bharat Bank Limited vs Employees of Bharat Bank Ltd.(1) and Maqbool Hussain vs The State of Bombay(1) where the test of a judicial tribunal as laid down in a passage from Cooper vs Wilson(1) was adopted by this Court: "A true judicial decision presupposes an existing dispute between two or more parties, and then involves four requisites: (I) The presentation (not necessarily orally) of their case by the parties to the dispute; (2) if the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and, often with the assistance of argument by or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal arguments by the parties; and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and an application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law".
Maqbool Hussain 's case, above referred to, was followed by this Court in section A. Venkataraman vs The Union of India and, Another(4) where a Constitution Bench of this Court also laid down that both finality and authoritativeness were the essential tests of a judicial pronouncement.
It is clear, therefore, that in order to constitute a Court in the strict sense of the term, an essential condition is that the Court should have, apart from having some of the trappings of a judicial tribunal, power to give a decision or a definitive judgment which has finality and authoritativeness which are (1) ; (2) (1953] S.C.R. 730.
(3) , 340.
(4) ; 122 964 the essential tests of a judicial pronouncement.
It was, however, urged by Shri Purshottam Tircamdas for the respondent that the word "Court" should not be limited to a Court of Justice or a Court of law but should be construed in a wide sense, including within the connotation, other Courts which, though not Courts of Justice, were nevertheless Courts according to law and be relied upon a decision of the Court of Appeal in England in Royal Aquarium and Summer and Winter Garden Society Ltd. vs Parkinson(1) and the observations of Fry, L.J. at page 446 therein: "I do not desire to attempt any definition of a "court".
It is obvious that, according to our law, a court may perform various functions.
Parliament is a court.
Its duties as a whole are deliberative and legislative: the duties of a part of it only are judicial.
It is nevertheless a court.
There are many other courts which, though not Courts of Justice, are nevertheless courts according to our law.
There are, for instance, courts of investigation, like the coroner 's court.
In my judgment, therefore, the existence of the immunity claimed does not depend upon the question whether the subject matter of consideration is a Court of Justice, but whether it is a Court in law.
Wherever you find a Court in law, to that the law attaches certain privileges, among which is the immunity in question".
The question involved in that case was whether the defendant was entitled to absolute immunity from action for anything done by him while performing his duty as a member of the County Council in dealing with the applications for licences for music and dancing.
It was contended on behalf of the defendant that he was exercising a judicial function when he spoke the words complained of and therefore was entitled to absolute immunity in respect of anything he said.
The argument that "wherever you find a Court in law, to that the law attaches certain privileges among which is the immunity in question" was used on behalf of the defendant and Fry, L. J. dealt with the same as under at page 447: 965 "It was said that the existence of this immunity is based on considerations of public policy, and that, as a matter of public policy, wherever a body has to decide questions, and in so doing has to act judicially, it must be held that there is a judicial proceeding to which this immunity ought to attach.
It seems to me that the sense in which the word "judicial" is used in that argument is this: it is used as meaning that the proceedings are such as ought to be conducted with the fairness and impartiality which characterize proceedings in Courts of Justice, and are proper to the functions of a judge, not that the members of the supposed body are members of a Court.
Consider to what lengths the doctrine would extend, if this immunity were applied to every body which is bound to decide judicially in the sense of deciding fairly and impartially.
It would apply to assessment committees, boards of guardians, to the Inns of Court when considering the conduct of one of their members, to the General Medical Council when considering questions affecting the position of a medical man, and to all arbitrators.
Is it necessary, on grounds of public policy, that the doctrine of immunity should be carried as far as this? I say not.
I say that there is ample protection afforded in such cases by the ordinary law of privilege.
I find no necessity or propriety in carrying the doctrine so far as this argument requires".
Lord Esher, M. R. expressed himself as follows while dealing with this argument at page 442: "It is true that, in respect of statements made in the course of proceedings before a Court of Justice, whether by judge, or counsel, or witnesses, there is an absolute immunity from liability to an action.
The ground of that rule is public policy.
It is applicable to all kinds of Courts of Justice; but the doctrine has been carried further; and it seems that this immunity applies wherever there is an authorized inquiry which, though not before a Court of Justice, is before a tribunal which has similar attributes.
In the case of Dawkins vs Lord Rokeby(1) the doctrine was extended (1) L.R. 8 Q.B. 255; , 966 to a military court of inquiry.
It was so extended on the ground that the case was one of an authorized inquiry before a tribunal acting judicially, that is to say, in a manner as nearly as possible similar to that in which a Court of Justice acts in respect of an inquiry before it.
This doctrine has never been extended further than to Courts of Justice and tribunals acting in a manner similar to that in which such Courts act.
Then can it be said that a meeting of the county council, when engaged in considering applications for licences for music and dancing, is such a tribunal? It is difficult to say who are to be considered as judges acting judicially in such a case".
The case of Dawkins vs Lord Rokeby(1) was a case where immunity was claimed by a witness who had given evidence before a military Court of inquiry.
The case went to the House of Lords and the Lord Chancellor, in his speech at page 754, in observed: "Now, my Lords, adopting the expressions of the learned Judges with regard to what I take to be the settled law as to the protection of witnesses in judicial proceedings, I certainly am of opinion that upon all principles, and certainly upon all considerations of convenience and of public policy, the same protection which is extended to a witness in a judicial proceeding who has been examined on oath ought to be extended, and must be extended, to a military man who is called before a Court of Inquiry of this kind for the purpose of testifying there upon a matter of military discipline connected with the army".
Both these cases, the one before the Court of Appeal and the other before the House of Lords, were concerned with the extension of the principle of immunity of members of a tribunal or witnesses in judicial proceedings and the Courts logically extended the principle of immunity beyond the Courts of Justice to tribunals or bodies of persons functioning in a manner and according to procedure which was assimilated to a judicial inquiry.
The extension of the (1) L.R. 8 Q.B. 255; 967 immunity to such tribunals or bodies would not, however, constitute them Courts of Justice or Courts of law.
The position is thus summarised in the following passage in Halsbury 's Laws of England, Hailsham Edition, Volume 8, page 526: "Many bodies are not courts, although they have to decide questions, and in so doing have to act judicially, in the sense that the proceedings must be conducted with fairness and impartiality, such as assessment committees, guardians committees,, the Court of referees constituted under the Unemployment Insurance Acts to decide claims made on the insurance funds, the benchers of the Inns of Court when con sidering the conduct of one of their members, the General Medical Council, when considering questions affecting the position of a medical man".
We must, therefore, fall back upon the tests laid down above for determining what is a Court strictly so called within the connotation of the term as used in the .
It would be appropriate at this stage to note the relevant provisions of the (XXXVII of 1850) which would fall to be considered for determining whether the Commissioner appointed under the Act is a Court or not.
The Act was passed for regulating inquiries into the behaviour of public servants and the preamble runs: "Whereas it is expedient to amend the law for regulating inquiries into the behaviour of public servants not removable from their appointments without the sanction of Government, and to make the same uniform throughout India; It is enacted as follows: " Section 2 requires the articles of charges to be drawn out and a formal and public inquiry to be ordered whenever the Government shall be of opinion that there are good grounds for making a formal and public inquiry into the truth of any imputation of misbehaviour by any such person.
The inquiry may be committed under section 3 either to the Court, 968 Board or other authorities to which the person accused is subordinate or to any other person or persons specially appointed by the Government, Commissioners for the purpose.
Sections 4 to 7 contain provisions in regard to the conduct of the prosecution and section 8 prescribes the powers of the Commissioners.
This section has been particularly relied upon as constituting the Commissioners a Court, and runs as under: "Section 8.
The commissioners shall have the same power of punishing contempts and obstructions to their proceedings, as is given to Civil and Criminal Courts by the Code of Criminal Procedure, 1898, and shall have the same powers for the summons of witnesses, and for compelling the production of documents, and for the discharge of their duty under the commission, and shall be entitled to the same protection as the Zila and City Judges, except that all process to cause the attendance of witnesses or other compulsory process, shall be served through and executed by the Zila or City Judge in whose jurisdiction the witness or other person resides, on whom the process is to be served, and if he resides within Calcutta, Madras or Bombay, then through the Supreme Court of Judicature thereto.
When the commission has been issued to a Court, or other person or persons having power to issue such process in the exercise of their ordinary authority, they may also use all such power for the purposes of the commission".
Section 9 prescribes a penalty for disobedience to process issued as aforesaid for the purpose of the commission and sections 10 to 20 prescribe the procedure to be followed in the conduct of the inquiry.
It ,may be noted that this procedure is assimilated as far as possible to the conduct of a prosecution in a Criminal Court of law and the person accused is given the fullest opportunity to enter upon his defence and lead evidence in order to clear himself of the charges levelled against him.
Sections 21 and 22 lay down the functions of the Commissioners in regard to the report to be made by them to the Government of their proceedings under the commission and the powers of 969 the Government to pass final orders on such reports.
These sections have an important bearing on the question before us and they enact: "Section 21.
After the close of the inquiry the commissioners shall forthwith report to Government their proceedings under the commission, and shall send with the record thereof their opinion upon each of the articles of charge separately, with such observations as they think fit on the whole case.
Section 22.
The Government, on consideration of the report of the commissioners, may order them to take further evidence, or give further explanation of their opinions.
It many also order additional articles of charge to be framed, in which case the inquiry into the truth of such additional articles shall be made in the same manner as is herein directed with respect to the original charges.
When special commissioners have been appointed, the Government may also, if it thinks fit, refer the report of the commissioners to the Court or other authority to which the person accused is subordinate, for their opinion on the case; and will finally pass such orders thereon as appear just and consistent with its powers in such cases".
These provisions were considered by this Court in the case of S.A. Venkataraman vs The Union of India and Another(1).
The question that arose for consideration there, was whether an inquiry made and concluded under the Act amounted to prosecution and punishment for an offence as contemplated under article 20(2) of the Constitution.
Articles of charge bad been framed against the petitioner in that case and evidence had been led both by the prosecutor and by the defence and witnesses on both sides were examined on oath and cross examined and re examined in the usual manner.
The Commissioner bad found, on a consideration of the evidence, that some of the charges had been proved against the petitioner and had submitted a report to that effect to the Government.
The President had accepted the opinion of the Commissioner and, in view of the findings on (1) ; 970 the several charges arrived at by the latter, was pro visionally of the opinion that the petitioner should be dismissed.
Opportunity was given to the petitioner under Article 311(2) of the Constitution to show cause against the action proposed to be taken in regard to him and after considering his representation and after consultation with the Union Public Service Commission, the President finally decided to impose the penalty of dismissal upon him and he was accordingly dismissed.
After his dismissal, the police submitted a charge sheet against him before the Special Judge, Sessions Court, Delhi, charging him with offences under sections 161 and 165 of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act and upon that summons were issued by the learned Judge directing the petitioner to appear before his Court.
The petitioner thereupon challenged the legality of this proceeding in a writ petition contending, that the proceedings were without jurisdiction inasmuch as they amounted to a fresh prosecu tion, for offences for which he had been prosecuted and punished already.
While considering whether under the circumstances there had been a violation of the fundamental right of the petitioner under Article 20(2) of the Constitution, this Court, scrutinised the provisions of the Act and the position of the Commissioner appointed, thereunder.
Justice Mukherjea, as he then was, delivered the judgment of the Court and observed at page 1159: "As the law stands at present, the only purpose, for which an enquiry under Act XXXVII ' of 1850 could be made, is to help the Government to come to a definite conclusion regarding the misbehaviour of a public servant and thus enable it to determine provisionally the punishment which should be imposed upon him, prior to giving him a reasonable opportunity of showing cause, as is required under article 311(2) of the Constitution.
An enquiry under this Act is not at all compulsory and it is quite open to the Government to adopt any other method if it so chooses.
It is a matter of convenience merely and 971 nothing else.
It is against this background that we will have to examine the material provisions of the of 1850 and see whether from the nature and result of the enquiry which the Act contemplates it is at all possible to say that the proceedings taken or concluded under the Act amount to prosecution and punishment for a criminal offence."; and at page 1160: "A Commissioner appointed under this Act has no duty to investigate any offence which is punishable under the Indian Penal Code or the Prevention of Corruption Act and he has absolutely no jurisdiction to do so.
The subject matter of investigation by him is the truth or otherwise of the imputation of misbehaviour made against a public servant and it is only as instances of misbehaviour that the several articles of charge are investigated, upon which disciplinary action might be taken by the Government if it so chooses.
The mere fact that the word "prosecution" has been used, would not make the proceeding before the Commissioner one for prosecution of an offence.
As the Commissioner has to form his opinion upon legal evidence, be has been given the power to summon witnesses, administer oath to them and also to compel production of relevant documents.
These may be some of the trappings of a judicial tribunal, but they cannot make the proceeding anything more than a mere fact finding enquiry.
This is conclusively established by the provisions of sections 21 and 22 of the Act.
At the close of the enquiry, the Commissioner has to submit a report to the Government regarding his finding on each one of the charges made.
This is a mere expression of opinion and it lacks both finality and authoritativeness which are the essential tests of a judicial pronouncement.
The opinion is not even binding on the Government.
Under section 22 of the Act, the Government can, after receipt of the report, call upon the Commissioner to take further evidence or give further explanation of his opinion.
When Special Commissioners are appointed, their report could be referred to the court or other authority 123 972 to which the officer concerned is subordinate for further advice and after taking the opinion of the different authorities and persons, the Government has to decide finally what action it should take".
The Court was no doubt concerned in that case with finding whether the inquiry before the Commissioner was tantamount to a prosecution of the petitioner.
While considering the same, however, the position of the Commissioner was discussed and the conclusion to which the Court came was that he was a mere fact finding authority, that the report made by the Commissioner to the Government was merely his expression of opinion and it lacked both finality and auth oritativeness which are the essential tests of a judicial pronouncement.
This conclusion is sufficient to establish that the Commissioner appointed under the Act was not a Court and his report or findings were not a definitive judgment or a judicial pronouncement inasmuch as they were not binding and authoritative and lacked finality.
We are also of the same opinion.
Apart from the above considerations which weighed with the Court in that case, we have also the provisions of section 8 of the Act itself which go to show that the Commissioners are given certain powers 'of the Civil and Military Courts in regard to punishing contempts and obstruction to their proceedings, summoning of witnesses, compelling the production of documents and for service of their process as also the same protection as Zila and City Judges.
The very fact that this provision had got to be enacted shows that the position of the Commissioners was not assimilated to that of Judges and that they did not constitute Courts of Justice or Courts of law but were mere fact finding tribunals deriving whatever powers they could exercise under the very terms of the Act which created them.
The power of punishing contempts and obstruction to their, proceedings as is given to Civil and Criminal Courts by the Code of Criminal Procedure, 1898 was also similar in its nature and the very nature and extent of the power indicated that they were not Courts in the ordinary sense of the term.
No such provision would have been 973 uted Courts of Justice or Courts of law and it is no argument to say that these provisions were enacted even though they were not strictly necessary merely for the sake of abundant caution or clarification of the position.
We are of the opinion that the Commissioner appointed under the Act, having regard to the circumstances above set out, does not constitute a Court within the meaning of the term as used in the .
Our attention was, however, drawn by, Shri Purshottam Tricamdas to a decision of a Division Bench of the Punjab High Court in Kapur Singh vs Jagat Narain(1).
That was a case directly in point and on all fours with the case before us.
The learned Chief Justice of the Punjab High Court bad been appointed a Commissioner under the Act in the matter of an inquiry against Sardar Kapur Singh, I.C.S., and Lala Jagat Narain, the editor, printer and publisher of ail Urdu Daily newspaper published at Jullundur called The Hindu Samachar, was called upon to show cause why he should not be punished under section 3 of with regard to a leading article which appeared in his name in the issue of the paper dated the 12th March 1951.
A preliminary objection was taken on his behalf that the Court had no jurisdiction to take proceedings against him for contempt and the argument was that the Court of the Commissioner appointed to hold an inquiry under the Act was not a Court and in any event was not a Court subordinate to the High Court.
Mr. Justice Falshaw who delivered the judgment of the Court observed at page 50 in connection with this argument: "The itself seems clearly to indicate that a Commissioner or Commissioners appointed under the Act constitute a Court as they are given all the powers of a Court regarding the summoning of witnesses and other matters, and the only ground on which the learned counsel for the respondent could base his argument that the Commissioner does not constitute a Court was that he can (1) A.I.R. 1951 Punjab 49. 974 give no final decision, but merely has to draw up a report giving his findings on the charge or charges against the respondent, which is to be forwarded to the Government.
In my opinion, however, this fact alone is not sufficient to make the Commissioner or Commissioners any thing other than a Court and it is to be noted that the definition of Court in section 3, Evidence Act, is very wide indeed as it reads: " 'Court ' includes all Judges and Magistrate and all persons, except arbitrators, legally authorised to take evidence".
The learned Judges there relied upon the definition of Court given in section 3 of the Indian Evidence Act which, as has already been noted, is framed only for the purposes of the Act and is not to be extended where such an extension is not warranted.
This definition does not help in the determination of the question whether the Commissioners appointed under the Act constitute a Court and the attention of the learned Judges was not drawn to the position that finality and authoritativeness are the essential tests of a judicial pronouncement.
We are of the opinion that the decision reached by the learned Judges of the Punjab High Court in that case was wrong and cannot help the respondent.
Our attention was also drawn to another decision of the Nagpur High Court in M. V. Rajwade vs Dr. section M. Hassan(1).
The question which came to be considered by the Court in that case was whether a commission appointed under the was a, Court within the meaning of section 3 of the , and, while considering the provisions of that Act, the learned Judges of the Nagpur High Court incidentally considered the provisions of the .
They rightly observed that "the term 'Court ' has not been defined in the .
The Act, however, does contemplate a 'Court of Justice ' which as defined in section 20, Indian Penal Code, 1860, denotes 'a judge who is empowered by law to act judicially '.
The least that is required of a Court is the capacity to deliver a "definitive judg (1) A.I.R. 1954 Nag.
975 ment" and unless this power vests in a tribunal in any particular case, the mere fact that the procedure adopted by it is of a legal character and it has the power to administer an oath will not impart to it the status of a Court", and came to the conclusion that the commission appointed under the is not a Court within the meaning of the Contempt of 'Courts Act, 1952.
The learned Judges were merely considering the provisions of the and were not concerned with the construction of the provisions of the and whatever observations they made in regard to the provisions of the latter Act by way of comparing the same with the provisions of the former which they were there considering would not have the effect of putting on the provisions of the latter Act a construction which would be any avail to the respondent before us.
The ratio which was adopted by the learned Judges was quite correct but it appears that they digressed into a consideration of the provisions of the in order to emphasize the character and position of the commission appointed under the even though it was not strictly necessary for the purpose of arriving at their decision, though it must be mentioned that while discussing the nature and function of the commission they expressed themselves correctly as under: "The Commission governed by the is appointed by the State Government "for the information of its own mind", in order that it should not act, in exercise of its executive power, "otherwise than in accordance with the dictates of justice & equity" in ordering a departmental enquiry against its officers.
It is, therefore, a fact finding body meant only to instruct the mind of the Government without producing any document of a judicial nature".
We are of the opinion that neither of these cases which have been relied upon by Shri Purshottam Tricamdas is of any help to the respondent or detracts 976 from the true position as we have laid down above.
The only conclusion to which we can come on a consideration of all the relevant provisions of the Act is that the Commissioner appointed under the Act is not a Court within the meaning of the .
In view of the conclusion reached above, we do not think it necessary to go into the question whether the Commissioner appointed under the Act is a Court subordinate to the High Court within the meaning of the .
Nor do we think it necessary to express any opinion as to whether the letter complained against constituted a contempt of Court.
We may, however, note in passing that the circum stances under which the letter came to be addressed by the appellant to the Commissioner, the terms thereof and the order which was passed by the Commissioner on the application made by the respondent to proceed against the appellant in contempt on date the 2nd February 1953 lend support to the argument which was advanced on behalf of the appellant that the letter complained against did not constitute contempt of Court.
The result, therefore, is that the appeal will be allowed, the order passed against the appellant by the Court below will be set aside and the original Criminal Miscellaneous Petition No. 10 of 1953 filed by the respondent in the High Court of Judicature at Patna will stand dismissed.
The fine if paid will be refunded. | Held, that a Commissioner appointed under the (XXVII of 1850) is not a court within the meaning of the (XXXII of 1952).
Shell Co. of Australia vs Federal Commissioner of Taxation ([1931] A.C. 275), Huddart,Parker & Co. vs Moorehead ([1909] ; , Rex vs Electricity Commissioners ([1924] 1 K.B. 171), Bharat Bank Limited vs Employees of Bharat Bank Ltd. ([1950] S.C.R. 459), Maqbool Hussain vs The State of Bombay ([1953] S.C.R. 730), Cooper vs Wilson ([1937] 2 K.B. 309), section A, Venkataraman vs The Union of India and Another ([1954] S.C.R. 1150), Royal Aquarium and Summer and Winter Garden Society Ltd. vs Parkinson ([1892] 1 Q.B. 431), Dawkins vs Lord Rokeby ([1873] L.R. 8 Q.B. 265), Kapur Singh vs Jagat Narain (A.I.R. 1951 Punjab 49) and M. V. Bajwade vs Dr. section M. Hassan, (A.I.R. , referred to. |
: Criminal Appeal No. 315 of 1974.
Appeal from the Judgment and Order dated 22 5 1974 of the Allahabad High Court in Contempt Case No. 43/73.
D. Mukherjea, R.N. Sharma, Umesh Chand, R.N. Trivedi, S.P. Pathak, Hari Nath Tilhari, S.R. Srivastava, M.N. Sharma and O.P. Lal for the Appellants.
Yogeshwar Prasad, (Miss) Rani Arora, S.K. Bagga and (Mrs.) section Bagga, for Respondent No. 1.
O.P. Rana for Respondents 2 and 3.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is against the judgment and order dated 22 May 1974 of the High Court of Allahabad in Criminal Contempt Case No. 43 of 1973.
The High Court issued notices to five persons on the ground that they committed contempt of Court.
602 The two appellants before us are the President of the Avadh Bar Association and the Chairman, Action Committee of the Avadh Bar Association.
There were three charges against the appellants.
It is not necessary to refer in detail to the same.
The gist of the charge against the appellants was that they had met and resolved that the Chief Justice was acting in a most parti san manner under the influence of the Allahabad Bar.
The text of the resolution was this "The Action Committee is of the opinion that the Chief Justice is acting in the dis charge of administrative power under clause 14 of the U.P. High Court 's Amalgamation Order, 1948 in a most partisan manner under the influence of Allahabad Bar quite unbecoming of the office which he holds".
The High Court discharged the notices.
The High Court yet made certain observations; some of which are confusing, some of which are conflicting and some of which are vague.
If the High Court found that there was any contempt it should have punished the appellants.
The High Court however discharged the notices.
The High Court held that the Chairman of the Action Committee, described as contemner No. 2 was actively associ ated with the passing of the resolution which contained disparaging remarks about the Chief Justice and since he also issued that resolution for publication in newspapers, he is guilty of 'Criminal Contempt '.
The High Court held that since the resolution was passed under the presidentship of the first appellant described as contemner No. 1, he is as much guilty of having committed contempt as contemner No. 2 was.
The High Court further held that contemners Nos.
1 & 2 are guilty of contumacious conduct, and the High Court gave the ground that they were responsible for the passing of the resolution.
At another place the High Court used words showing that the conduct of the appellants individually was considered only "indiscreet" by it.
The High Court confused 'criminal contempt ' with 'contu macious conduct '.
The matter becomes clear when the High Court said "we do not propose to punish contemners Nos. 1 & 2 for the contumacious conduct of which we have adjudged them guilty though we express.
our disapproval of that conduct and hope that the indiscretion will not be repeated".
We are unable to find that the High Court found the contemners guilty of criminal contempt.
It is true that the High Court referred to the contumacious conduct of the appellants but the High Court did not wish to proceed against the appellants.
The High Court said on that aspect as follows: 603 "It is a matter of regret that the contem ners who are prominent members of the Avadh Bar, should have themselves embarked on the path of vilifying the Chief Justice of this Court and that we do not want to be over sensitive in the matter, keeping in mind the surrounding circumstances in which the contu macious act was committed by them.
and also keeping in view the fact that it was a single act of the Chief Justice for which the attack was made, we do not propose to punish contem ners for the contumacious conduct for which we have adjudged them guilty, though we express our strong.
disapproval of that conduct and hope that the indiscretion will not be repeat ed".
Counsel for the appellants did not justify the language of the resolution.
There is no gainsaying that the members of the Bar did not act with dignity in regard to the resolu tion.
The language used by them was unfortunate.
Counsel for the appellants rightly said that was not proper and it should not have been passed in that manner.
It is the duty of lawyers to protect the dignity and decorum of the judiciary.
If lawyers fail in their duty the faith of the people in the judiciary will be undermined to a large extent.
It is said that lawyers are the custodians of civilisation.
Lawyers have to discharge their duty with dignity, decorum and discipline.
In view of the fact that the notices were discharged, the appeal is disposed of with the foregoing observations. | The appellant No. 1 is the President of the Oudh Bar and appellant No. 2 is the Chairman of Action Committee of the Oudh Bar Association.
They met and passed a Resolution that the Chief Justice of Allahabad High Court was acting in a most partisan manner under the influence of the Allahabad Bar and that it was unbecoming of the office which he holds.
The High Court issued notices for contempt, inter alia, to the appellants.
The High Court discharged the notices but made certain observations against the appellants.
HELD: 1.
If the High Court found that there was any contempt it should have punished the appellants.
The High Court confused criminal contempt with contumacious con duct.
This Court is unable to find that the High Court found contemners guilty of criminal contempt.
[602 D, G, H] 2.
There is no gainsaying that the members of the Bar did not act with dignity in regard to the resolution.
The language used by them was unfortunate.
It is the duty of lawyers to protect the dignity and decorum of the judici ary.
If lawyers fail in their duty the faith of the people in the judiciary would be undermined to a large extent.
It is said that lawyers are the custodian of civilization Lawyers have to discharge their duties with dignity, decorum and discipline.
[603 C D] |
vil Appeal No. 2086 (N) of 1978.
From the Judgment and Order dated 10.12.1976 of the Rajasthan High Court in D .B.
Civil Misc.
Appeal No. 73 of 1970.
C.M. Lodha and H.M. Singh for the Appellants.
B.R. Sabharwal, P.R. Ramasesh and H. Wahi for the Re spondents.
The Judgment of the Court was delivered by DUTT, J.
This appeal is directed against the judgment and decree of the Rajasthan High Court affirming the award made by the Motor Accident Claims Tribunal, Udaipur.
763 In the night between the 3rd and 4th December, 1966, Hari Singh, since deceased, the husband of the appellant No. 1 and the father of the appellant No. 2, hired an Ambassador car belonging to the.
Rajasthan Mahila Parishad for going to his native village at 'Kangeti in Madhya Pradesh from Udai pur in Rajasthan.
When the car had gone 21 miles from Udai pur, it collided with a truck coming from the opposite direction.
It skidded and hit against a tree.
As a result of the accident, Hari Singh died on the spot and one Shanker Lal who was also travelling in the same car and happened to be the friend of Hari Singh received some injuries.
At the time of his death, Hari Singh was only 25.
He left behind him his wife, the appellant No. 1 who was only 18 and the appellant No. 2, his daughter, then only a child.
The appellants filed a petition before the Motor Acci dent Claims Tribunal, Udaipur, claiming a sum of Rs. 1 lac as compensation.
The Tribunal came to the finding that the accident which resulted in the death of Hari Singh was due to the rash and negligent driving of the car.
The Tribunal disposed of the issue as to the claim of the appellants for compensation of Rs. 1 lac as follows: "Claimants of Case No. 3 of 1967 have claimed compensation of Rs. 1 lac which appears to be excessive.
In my opinion an amount of Rs. 10,000 would be adequate.
The issue is decided accordingly.
" The Tribunal has not given any reason why the claim of the appellants for compensation of Rs. 1 lac could not be accepted.
At this stage, it may be stated that the case of the Insurance Company which was the opposite party No. 3 before the Tribunal was that its liability was only up to a sum of Rs.4,000.
Issue No. 7 that was framed by the Tribunal relating to the liability of the Insurance Company is ex tracted below: "7.
Whether the liability of opposite party No. 3 cannot exceed Rs.4,000 in each case.
" The finding of the Tribunal on Issue No. 7 is as follows: "The learned counsel for the claimants conced ed that the liability of the Insurance Company could not exceed 764 Rs.4,000 in each case.
Issue is accordingly decided in favour of the Opposite Party No.3.
" Upon the said findings, the Tribunal made an award for Rs. 10,000 in favour of the appellants against the opposite parties including the Rajasthan Mahila Parishad and the driver of the truck assessing the liability of the Insurance Company to the extent of Rs.4,000 only.
Being aggrieved by the award of the Tribunal, the appel lants preferred an appeal to the Rajasthan High Court chal lenging only the adequacy of the amount of compensation as awarded by the Tribunal.
A cross objection was also filed by the Rajasthan Mahila Parishad, the owner of the car.
The High Court, as stated already, affirmed the award and dis missed the appeal and the cross objection.
Hence this appeal by special leave.
The first point that has been urged by Mr. Lodha, learned counsel appearing on behalf of the appellants, is that the High Court was not justified in affirming the award of the Tribunal for Rs. 10,000 only as compensation.
It appears from the evidence of the appellant No. 1 that the father of the deceased had a dairy farm, a poultry farm, a flour mill and an agricultural farm.
The deceased used to look after the business and his monthly income was about Rs. 1,000 and that out of the said income, about Rs.700 used to be spent and the total saving was only Rs.300 a month.
As against this evidence, no evidence was led by the respond ents regarding the income of the deceased.
The High Court, in affirming the award of the Tribunal as to the quantum of compensation observed as follows: "It appears to us from the evidence so led by the claimants that Hari Singh at the time of his death was in fact a student and may be that whenever he could spare time, he looked after the various business activities of his father which according to Rajendra Kumari are still running.
He had devoted himself to the family business and had no prospects whatever dependent upon education.
While estimating the benefits derived from the various business activities one cannot lose sight of the con tingencies of losses and fluctuations in income that occur in such types of business.
We do realise that the loss of a husband to a young Rajput girl is something which no amount of money can compensate, yet in the circum stances of the case, we do not find 765 that the amount of compensation fixed by the Tribunal was too high or too low.
We feel ' that it represents the just and proper compen sation.
" We are unable to understand the reasons given by the High Court in finding that the amount of compensation as awarded by the Tribunal was quite adequate.
The High Court has not disbelieved the evidence of the appellant No. 1 that her husband had an income of Rs. 1,000 a month.
It is true that Hari Singh was a student at the time of his death, but he was also looking after the business of his father and earning a sum of Rs. 1,000 a month.
There is no reason to disbelieve the evidence of the appellant No. 1 about the income of Hari Singh.
Even at the modest computation, the contribution of Hari Singh towards his family could not he less than Rs.500 per month, that is, Rs.6,000 per year.
Taking the normal span of life to be 60 years, Hari Singh would have lived for another 35 years.
It is apparent that the appellants have been deprived of more than a lac of rupees and, accordingly, their claim for Rs. 1 lac on account of compensation was quite reasonable.
Both the Tribunal and the High Court were not justified in assessing the amount of compensation pay able to the appellants at Rs. 10,000 only.
The next question is as to the liability of the Insur ance Company, the respondent No. 4 herein.
It has been already noticed that the appellants conceded before the Tribunal that the liability of the Insurance Company did not exceed the sum of Rs.4, '000.
Indeed, as the law stood at the material time, the maximum liability of the Insurance Compa ny in such a case was only to the tune of Rs.4,000.
In the appeal before the High Court, the appellants did not chal lenge the finding of the Tribunal that the statutory liabil ity of the Insurance Company was Rs.4,000 Only as conceded to by the appellants.
For the first time in this Court, it is submitted that the respondent No. 4 is liable for the entire amount of compensation.
It is urged by Mr. Lodha appearing for the appellants that it was incumbent upon the respondent No. 4 to file before the Tribunal the policy of Insurance in order to show that apart from the statutory liability up to Rs.4,000, the respondent No. 4 had no fur ther liability under the policy in excess of the statutory liability.
In support of the contention, much reliance has been placed by the learned counsel on a decision of this Court in National Insurance Co. Ltd. vs Jugal Kishore & Ors.
, In that case, it has been observed that where the Insurance Company concerned wishes to take a defence in a claim petition that its liability 766 is not in excess of the statutory liability, it.
should ' file a copy of the Insurance policy along with its defence.
This decision, in our opinion, is not applicable to the facts of the instant case.
It has been already noticed that before the Tribunal the appellants had categorically admit ted that the liability of the Insurance Company extended to Rs.4,000 only.
In the circumstances, we do not think that it was incumbent upon the Insurance Company to file the policy.
The contention made on behalf of the appellants is, accordingly, rejected.
In the result, we direct that the appellants are enti tled to a sum of Rs. 1 lac (Rupees one lac only) on account of compensation.
Out of the said sum, the Insurance Company, the respondent No. 4, is liable to pay Rs.4,000 only and the respondent Nos. 1, 2 and 3 including the Rajasthan Mahila Parishad are jointly and severally liable to pay to the appellants the remaining amount.
The respondent shall depos it the decretal amount to the extent of their respective liabilities in the Motor Accident Claims Tribunal, Udaipur, within two months .from date; in default, the decretal amount or so much thereof as will remain outstanding will bear interest at twelve per cent per annum till realisation.
The appeal is allowed.
The judgment and decree of the High Court are modified to the extent indicated above, There will be no order as to costs.
G.N. Appeal al lowed. | Appellants 1 and 2 are the wife and daughter respective ly of the deceased who died in a road accident, while trav elling in a hired car, which collided with a truck.
He died on the spot.
At the time of his death he was 25.
Appellants filed a petition before the Motor Accident Claims Tribunal claiming a compensation of Rs.1 lac.
The Tribunal 's finding was that the accident was due to rash and negligent driving of the car.
Without giving reasons, the Tribunal awarded only Rs.10,000 against the owner of the car and the truck driver, and also assessed the liability of the Insurance Company to the extent of Rs.4,000.
Against the award the appellants filed an appeal to the High Court challenging the adequacy of the compensation awarded.
The owner of the car filed a cross objection.
The High Court affirmed the award and dismissed the appeal, as also the cross objection, stating that the compensation awarded was just and proper.
This appeal, by special leave, is against the High Court 's judgment affirming the Tribunal 's award.
On behalf of the appellants, it was contended that High Court was not justified in affirming the Tribunal 's award of only Rs. 10,000 as compensation.
Allowing the appeal, HELD: 1.
The appellants are entitled to a sum of Rs.l lac on account of compensation.
Out of this amount the Insurance Company, i.e., Respondent No. 4 is liable to pay Rs.4,000 and the other respondents are jointly and severally liable to pay to the appellants the remaining amount.
[766C] 762 2.
It is true that the deceased was a student at the time of his death, but he was also looking after the busi ness of his father and earning about Rs.l,O00 a month.
Even at the modest computation, the contribution of the deceased towards his family could not be less than Rs.500 per month, i.e. Rs.6,000 per year.
Taking the normal span of life to be 60 years, he would have lived for another 35 years.
It is apparent that the appellants have been deprived of more than a lac of rupees and, accordingly their Claim for Rs.l lac on account of compensation was quite reasonable.
Both the Tribunal and the High Court were not justified in assessing the amount of compensation payable to the appellants at Rs. 10,000 only.
[765B D] 3.
As the law stood at the material time, the maximum liability of the Insurance Company in such a case was only to the tune of Rs.4,000.
In the appeal before the High Court, the appellants did not challenge the finding of the Tribunal that the statutory liability of the Insurance Company was Rs.4,000 only as conceded to by the appellants themselves.
In the circumstances, it Was not incumbent upon the Insurance Company to file the policy.
[766A B] National Insurance Co. Ltd. vs Jugal Kishore & Ors., , distinguished.
[This Court directed that the decretal amount should be paid within two mouths and in case of default, it will bear interest at the rate of 12% per annum till realisation.] [766D] |
minal Appeal No. 568 of 1976.
(From the Order dt. 2 4 1975 of the Punjab and Haryana High, Court at Chandigarh in Criminal Original No. 15/Crl.11975).
Mohan Behari Lal for the Appellant.
Hardev Singh, Sunada Bhandare and Mohini for the Respondents Nos.
1 2. 511 section M. Kacker, Sol.
Genl. & R. N. Sachthey for Respondent No. 3.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal filed by the alleged contemner under section 19(1) of the (hereinafter called the Act), from the order dated 2nd April, 1975 of the High Court of Punjab and Haryana directing the issue of notice to the appellant to show cause why he should not be proceeded against for committing con tempt of the High Court.
The Notice was issued in accordance with the procedure prescribed under section 17 of the Act, to show cause against the appellant 's alleged liability to be punished under section 15.
A preliminary objection was raised by the, Learned Solicitor General,, on behalf of the respondents that no appeal lies to this Court under section 19 of the Act from an order issuing notice as nothing yet has been decided by the High Court.
Mr. Mohan Behari Lai, learned counsel for the appellant combated this argument and submitted that an appeal does lie to this Court as a matter of right under section 19.
In our opinion, the preliminary objection raised on behalf of the, respondents is well founded and must be accepted as correct.
section 19(1) says .lm15
An appeal shall lie as of right from any order or decision of the High Court in the exercise of its jurisdiction to punish for contempt (a) where the order or decision is that of a single judge, to a Bench of not less than two Judges of the Court; (b) where the order or decision is that of a Bench, to the Supreme Court : Provided that where the order or decision is that of the Court of the Judicial Commissioner in any Union territory, such appeal shall lie to the Supreme Court.
" It would appear from a plain reading of the section that an appeal shall lie to this Court as a matter of right from any order or decision of a bench of the High Court if the order has been made in the exercise of its jurisdiction to punish for contempt.
No appeal can lie as a matter of right from any kind of order made by the High Court in the proceeding for contempt: The proceeding is initiated under section 17 by issuance of a notice.
Thereafter, there may be many interlocutory orders passed in the said proceeding by the High Court.
It could not be the intention of the legislature to provide for an appeal to this Court as a matter of right from each and every such order made by the High Court.
The order or the decision must be such that it decides some bone of contention raised before the High Court affecting the right of the party aggrieved.
Mere initiation of a proceeding for contempt by the issuance, of the notice on the prima facie view that the case is a fit one for drawing up the proceeding, does not decide any question.
This Court, 512 for the first time, cannot be asked in such an appeal to decide whether the; person proceeded against has committed contempt of the High Court or not.
The matter has to be decided either finally or, may be.
even at an earlier stage an order is made, which does decide a contention raised by the alleged contemner asking the, High Court to drop the, proceeding.
It is neither possible, nor advisable, to make an exhaustive list of the: typo of orders which may be appealable to this Court under section 19.
A final order, surely, will be appealable.
Our attention was drawn by Mr. Mohan Behari Lai, to section 20 of the Act which provides "No Court shall initiate any proceedings for contempt, either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed.
" He submitted that initiation of the proceeding by the High Court will be, without jurisdiction if it is in violation of section 20.
It may be so.
If the alleged contemner in response to the notice appears before the High Court and asks it to drop the proceeding on the.
ground of its being barred under section 20 of the Act but the High Court holds that the, proceeding is not barred, it may well be that an appeal would lie to this Court under section 19 from such an order although the proceeding has remained pending in the High Court.
We are not called upon to express our final opinion in regard to such an order, but we merely mention this type of order by way of an example to show that even orders made at some intermittent stage in the proceeding may be, appealable under section 19.
In our considered judgment, an order merely initiating the proceeding without anything further, does not decide anything against the alleged contemner and cannot be appealed against as a matter of right tinder section 19.
in a given case special leave may be granted under article 136 of the Constitution from an order initiating the proceeding.
But that is entirely a different matter.
What we are deciding in, this case is that the present appeal filed under section 19 (1) of the Act does not lie and is incompetent.
We find some support to, the view expressed by us above from the decision of this Court in Baradakanta Mishra vs Orissa High Court,(1) where it has been held that no appeal lies to this Court under section 19 of the Act from an order rejecting the prayer of the alleged contemner for bearing the case piecemeal.
Mr. Lai placed reliance on the observations of this Court in Baradakanta Mishra vs Justice Gatikrushna Mishra (2).
What has been decided therein is this : that on a reference made by the Advocate General if the Court declines to take cognisance and to initiate proceeding for contempt, the order is not an order initiating contempt proceeding.
Surely, it is not appealable under section 19.
But there are no observations by this Court nor on the facts of that case there can be any,.
to show that an appeal would lie to, this Court from an order of the High Court merely initiating the proceeding by issuance of a notice.
We, may repeat that it may be, a different matter if the order does decide (1) A.I.R. 1976 S.C. 1206.
(2) ; (at pp.
531 32).
513 some disputes raised before it by the contemner asking it to drop the proceeding on one ground or the other.
But unless and until there is some order or decision of the High Court adjudicating upon any matter raised before it by the parties, affecting their right, the mere order issuing the notice is not appealable.
The appeal is, therefore, dismissed as being not maintainable.
P H. P. Appeal dismissed. | The High Court passed an order directing issue of notice to the appellant to show cause why he should not be proceeded against for committing contempt .of the High Court.
The notice was issued in accordance with the procedure prescribed under section 17 of the .
The appellant filed an appeal against the said order under section 19(1) of the Act in this Court.
The counsel for the respondent raised a preliminary objection that no appeal under section 19(1) is maintainable against the order in question.
Dismissing the appeal the Court, HELD : (1) An appeal lies to this Court as a matter of right from any order or decision of a Bench of the High Court if the order has been made in the exercise of its jurisdiction to punish for contempt.
However, an appeal cannot lie from any kind of order made by the High Court in the proceeding for contempt.
The proceeding is initiated under section 17 by issuance of a notice.
Thereafter, there may be many interlocutory orders passed in the said proceeding by the High Court.
It could not be the intention of the Legislature to provide for an appeal to this Court as a matter of right from each and every such order made by the High Court.
The order or the decision must be such that.
it decides some bone of contention raised before the High Court affecting the right of the party aggrieved.
Mere initiation of a proceeding does not decide any question.
[511 F H] 2.
if the alleged contemner in response to the notice appears before the High Court and asks it to drop the proceedings on the ground of its being barred under Section 20 of the Act but the High Court holds that the proceedings is not barred, it may well be that an appeal would lie to this Court under section 19 It is neither possible nor advisable to make an exhaustive list of the type of orders which may be appealable under section 19.
[512 B C] Baradakanta Mishra vs Orissa, High Court, A.I.R. 1976 S.C. 1206, relied on.
Baradakanta Mishra vs Justice Gatikrushna Mishra ; , 53132, distinguished. |
Appeal No. 2462 of 1968.
Appeal by Special Leave from the Judgment and Order dated 17 5 1968 of the Allahabad High Court in First Appeal No. 13 of 1956.
M. N. Phadke, M. Qamaruddin, (Mrs.) M. Qamaruddin, M. Y. Omar, N. Aly Khan and V. M. Phadke for the appellant.
889 Lal Narain Sinha, D. P. Singh, section C. Agarwal, A. Gupta, section Mohdkazum and P. P. Singh; for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by special leave.
Bibi Saddiqa Fatima, the appellant, was the plaintiff in Suit No. 86 of 1952 filed in the Court of the Civil Judge it Aligarh in which the defendant was Saiyed Mohammad Hasan.
He was the sole respondent in this appeal also.
He died during the pendency of the appeal and on his death his legal heirs and representatives were substituted as respondents.
For the sake of convenience hereinafter in this judgment by the respondent would be meant the original respondent.
One Smt.
Sughra Begum was a Shia Muslim Lady.
She was a resident of Asgharabad in the District of Aligarh.
She was possessed of vast Zamindari and other properties.
On October 6, 1928, she created a waqf of the entire properties dividing them in three qurras.
Raja Haji Saiyad Mohammad Mahmood Hasan was appointed by the waqifa as the Mutawalli of qurra No. 1.
His brother was appointed the Mutawalli of the second qurra.
The waqifa appointed herself the Mutawalli of the third qurra.
The dispute in this case relates to a property concerning qurra No. 1.
The Raja 's first wife was Smt.
Akbari Begum.
She died in the year 1931 leaving behind four sons and six daughters.
Raja Sahib, when he was about 50 years of age, took the plaintiff as his second wife in the year 1933.
The plaintiff, at the time of her marriage with the Raja, was a young lady of seventeen.
Raja died in September, 1939.
On January 22, 1935, a permanent lease was executed on behalf of one Saiyed Anwarul Rahman in respect of the disputed land in the name of the plaintiff.
The rent fixed was Rs. 80/ per year.
Between the years 1937 and 1939 a Kothi (Bungalow) was constructed on the said land, which was named as 'Mahmood Manzil '.
The suit property in this litigation is the said Kothi together with the land appertaining to it.
In short the plaintiff 's case is that the disputed property belongs to her.
The defendant was inducted as a tenant of the Kothi an and from 1st of March, 1947 on a rental of Rs. 60/ per month.
He paid rent upto May, 1950 but did not pay any rent thereafter.
In the year 1952, the plaintiff served a notice on the defendant to pay the arrears of rent and deliver vacant possession of the Kothi.
The defendant, in his reply, refuted the claim of the plaintiff and asserted that the Kothi did not belong to her nor was be a tenant of the same.
Hence the appellant instituted the suit for realisation of arrears of rent, damages and recovery of possession of the suit property.
The respondent, inter alia, pleaded that Raja Sahib, the.
first Mutawalli of qurra No. 1, had acquired the lease of the land and constructed the Kothi with the waqf fund as Mutawalli of the waqf.
It was a waqf property.
After the death of the Raja, the respondent became the Mutawalli of qurra No. 1 including the Kothi in question.
He occupied the Kothi as a Mutawalli and not as a tenant.
The Trial Court accepted the case of the defendant, rejected that of the plaintiff and 6 329SCI/78 890 dismissed her suit.
The ' Allahabad High Court has dismissed her appeal.
She has preferred this appeal in this Court on grant of special leave.
Shri M. N. Phadke advanced a very strenuous argument in sup port of this appeal.
Shri Lal Narayan Sinha combated his argument on behalf of the respondent.
It would be convenient to refer to some more facts and facets of the case from the pleadings of the parties and judgments of the Courts below before enunciating and enumerating the submissions made on their behalf.
The case pleaded in the plaint by the appellant was like this, Raja Sahib out of great love for the plaintiff "used to pay her a handsome amount every month as pin money and also a good deal of money occasionally.
" The plaintiff, with the object of constructing a Kothi, took on lease the disputed land measuring about 4 bighas and had been paying the annual rent of Rs. 80/ since the execution of the lease.
She pleads in para 4: "After the execution of the said lease, the plaintiff with her personal fund built a kothi and the out houses on the land mentioned in paragraph No. 3 above and named it as Mahmood Manzil after the name of her husband.
The construction of this Kothi bad been completed by May 1938, after which the plaintiff herself used lo stay in that Kothi whenever she came from Asgharabad to Aligarh." The plaintiff bad only one daughter born to her out of the wedlock with the Raja.
She is Smt.
Abrar Fatima.
She was married on the 25th May, 1950 to one Saiyed Mohammed Raza Ali Khan.
The defendant was quite obedient and faithful to the plaintiff until the marriage of her daughter.
But after the said marriage, he gradually turned hostile and thereupon the plaintiff mostly lived with her daughter.
According to the respondent 's case in his written statement the lease was taken by Raja Sahib and the sum of Rs. 786/spent on 'Nazrana ' etc.
for taking the lease was paid by him from the income of the waqf property and he constructed the Kothi from the wakf fund of Asgharabad estate.
He had neither any money of his own to invest in acquisition of the property nor was the property acquired by the plaintiff with her personal fund.
The appellant was examined on commission as a witness to support her case at the trial.
In her examination in chief, she stated that her husband used to give her Rs. 500/ per month as pin money besides, meeting her expenses regarding food and clothing.
Over and above this, he used to send money on the occasions of Id and Bakrid and also gave her money whenever she demanded.
She constructed the Kothi at Aligarh by investing about Rs. 20,000/ .
In other words she meant to convey in her examination in chief that she had acquired the land and constructed the Kothi out of the savings she had from the various amounts of money given by the Raja monthly or from time to time.
At a later stage of her deposition (probably in cross examination) she demolished her case and claimed to be in possession of Rs. 50,000/ at the time of the death of her husband, 891 which sum was her total savings out of the money paid to her monthly or from time to time by the Raja.
Thus in her evidence she could not explain as to out of which personal fund she claimed to have acquired the disputed property.
The Civil Judge framed for trial several issues out of which issues 1 and 5 were, in the following terms "1.
Whether the plaintiff is the owner of the property in suit as alleged and is she entitled to the possession claimed ? 5.
Whether the defendant possesses the disputed property as the Mutawalli ' as alleged by him The defendant 's case was that the 'Patta ' was obtained by the old Raja tinder the influence of her young wife benami in her name though it was acquired with the waqf fund.
The Raja, as Mutawalli, was the real lessee of the land.
He had constructed the Kothi out of the income of the waqf property.
A Mutawalli is not an owner of the waqf property, but whatever property of the waqf was there from before or acquired subsequently must, ordinarily, be in the name of the Mutawalli.
A property could be acquired in the name of any beneficiary, like the plaintiff, but she would be; merely a benamidar of the Mutawalli and the property will be a waqf property.
The Civil Judge has noted in his judgement that the plaintiff did not put forth a plea that the Kothi was built by late Raja out of his personal money and that she was owner, on the basis of the equitable deoctrine of advancement.
He has said further: "Thus the only point on which the parties were at issue was with respect to the source of the money out of which the patta was obtained and the building constructed and the plaintiff could succeed only if she proved that she had obtained the patta and built the kothi out of the money given to her by her late husband as pocket expenses, etc.
" The Civil Judge also remarked "Had she stated that she built the kothi out of the money which she had saved, that would have been consistent with her allegations in the plaint.
But she admitted that the whole of her savings were still with her and that out of them she had spent a little when she filed the present suit." The Trial Court, thereafter, considered the voluminous documentary evidence in the light of the oral evidence adduced and came to the conclusion that the plaintiff did not provide any money either for the lease of the land or for the construction of the Kothi thereon and that the money for both the purposes was provided out of the waqf estate.
Hence it was held, while deciding issues 1 and 5, that the plaintiff was not the owner of the Kothi in suit and the defendant was in possession of it in his capacity as the successor Mutawalli.
892 It would be advantageous to note at this stage the stand taken by the appellant in the High Court in her Memo of Appeal as also in argument.
On perusal of the grounds set out in the Memorandum of Appeal, especially ground Nos. 6, 8, 9, 11, 13 and 27, it would appear that the case made out therein was that the Raja had his personal money kept in the waqf estate treasury alongwith the waqf money.
The amount spent in constructing the Kothi was mostly taken out of the treasury from his personal fund with the intention of making his wife the owner of the property even though the doctrine of advancement did not apply in India, and that the observation of the learned Civil Judge that the plaintiff failed to prove that she did not provide any money out of her personal fund was wholly irrelevant for the decision of issue No. 1.
In argument, however, a stand like the one taken in the Trial Court was reiterated but consistently and concurrently rejected because the evidence in favour of the defendant 's case was so overwhelming to show that the lease had been taken and the Kothi had been constructed with the money coming out of the waqf fund that no other view was reasonably probable to be taken.
At one place in its judgment the High Court says "Counsel for the appellant has strongly relied on these documents in proof of the fact that the Kothi was constructed with her money and belonged to her." In the teeth of the overwhelming evidence the appellant was obliged to take 'an entirely new stand in her petition for special leave and in the argument before us.
In paragraph 23 of the petition it was stated That the case of the applicant had been that the lease was obtained with the applicant 's funds and that she had constructed the Kothi with her own money and it was also her alternative case put forward before the Hon 'ble High Court that even if it be assumed that the money utilised for constructing the Kothi did not pass directly from the plain tiff 's hand: and even if it be the finding of the Court that the money so utilised bad proceeded from Raja Mahmudul Hasan then on the admitted case of the defendant that this fund was waqf fund, the plaintiff 's claim ought to have been decreed inasmuch as on the ground that the usufruct or the profit of the waqf property though arising out of the waqf property did not belong to waqf as waqf property but it was by its very nature the property of the beneficiary and in the absence of any evidence to the contrary Raja Mahmoodul Hasan.
I held that those funds for the beneficiaries and the amount spent by him in the construction of the Kothi should be the money belonging to the applicant." Mr. Phadke made the following submissions (1) The Raja intended to acquire the land on lease and construct the Kothi for the plaintiff by investing from time to time money taken out of the waqf estate treasury, which had the effect of disbursement and payment of the money by the Mutawalli to his wife, 893 the beneficiary, for the purpose of the, acquisition of the Kohi.
The source of Money in that event is immaterial.
(2) The intention of the Raja to provide a separate Kothi to the plaintiff evidenced by numerous documents taken and standing in her name must be respected.
(3) The Raja went on giving money in driblets for construction of the Kothi by taking out the money from the waqf fund from time to time.
It was open to him to do so in accordance with clause 18 of the waqf deed Ext.
(4) The intention of the Raja is further fortified 'by the recital in his Will Ext.
(5) That there is a number of circumstances in support of the contentions aforesaid.
(6) The rules of pleading should not be too strictly applied in India and no party should be defeated on that account when both sides adduced evidence and proceeded to trial of the real issues in the case 'with their full knowledge and understanding.
(7) That there is no substantial variance in the case made out in the pleadings and the evidence and in argument either in the Courts below or in this Court.
(8) The burden of proof to displace the ostensible title of the appellant and to show that she was a benamidar was on the respondent.
In absence of any clinching evidence on either side, the ostensible title prevails.
(9) Although the doctrine of advancement does not apply in India, the Mutawalli being the owner of the waqf property had full and unlimited power of disposal over its usufruct and income.
Mr. Lal Narayan Sinha, while refuting the submissions made on behalf of the appellant, contended that it is a settled law that the question whether a particular transaction is, benami or not is purely one of fact and this Court in exercise of its jurisdiction under Article 136 of the Constitution does not, ordinarily and generally, review the comment findings of the Courts below in that regard.
Counsel submitted that the Courts below had correctly applied the Muslim law applicable to Shias in respect of the waqf property and its income.
They have rightly come to the conclusion that the suit property appertained to the waqf.
It was clear, according to the submis 894 sion of Mr. Sinha, that the parties went to trial to prove their respective cases as to whether the property had been acquired with the personal funds of the Plaintiff or those of the waqf.
The plaintiff 's case failed in view of the overwhelming evidence against her and she should not be permitted to make out an entirely new case in this Court.
He also contended, firstly, that the theory of onus probandi is not strictly applicable when both parties have adduced evidence;in such a situation it becomes the duty ' of the Court to arrive at the true facts on the basis of reasonable probabilities.
Secondly, in the instant case the strict tests to prove the benami character of the transaction cannot be applied, as, to do so will be in the teeth of the, well settled principles of Mohammedan law in relation to waqfs.
We proceed to examine the correctness of the rival contentions of the parties but not exactly in the Order it has been stated above.
It is undisputed in this case that a valid waqf was created by Smt.
Sughra Begum.
It is further indisputably clear from the waqf deed that except a portion of money which was to be spent for public, religious or charitable objects the waqf was primarily of a private nature for the benefit of the.
settler 's family and their descendants, which is called wakf alal aulad.
The ultimate object of the waqf was to spend income, if any, in the service of the Almighty God.
In Abdul Fata Mahomed vs Rasamaya (1) their Lordships of the Privy Council held that the gift to charity was illusory, and that the sole object of the settler was to create a family settlement in perpetuity.
The waqf of this kind was, therefore, invalid.
Ibis decision aforesaid caused considerable dissatisfaction in the Mohammedan community in India.
This led to the passing of the which was made retrospective in opera tion by a subsequent Act of 1930.
In view of the Validating Act of 1913 the validity of the wakf was beyond the pale of challenge.
Although in respect of the law applicable to waqfs there is some difference in regard to some matters between the Shia law and the various other schools of Mohamedan law applicable to Sunnis, in very many fields the law is identical.
After the Validating Act of 1913, on the basis of the law as it prevailed even before, creation of a waqf for the purpose of the maintenance of the members of the waqif 's family and their descendants is also a charitable purpose.
We now proceed to notice some salient features of the law as applicable to waqfs and especially of the Shias.
Tyabji 's Muslim Law, Fourth edition, Chapter X deals with waqf.
According to Shia law the waqf is irrevocable after possession is given to the beneficiaries or the Multawalli.
The settler divests himself of the ownership of the property and of everything in the nature of usfufruct from the moment the wakf is created.
In purely metaphorical sense the expression "ownership of God" is used but unlike Hindu Law, since conception of a personal God is not recognized, there is no (1) 22 Indian Appeals, 76. 895 ownership of God or no property belongs to God in the jural sense, although "the ownership of the property becomes reverted in God as he is originally the owner of all things" (vide page 523).
The Shia authorities considered the property as transferred to the beneficiaries or to the object of the, waqf.
Strictly speaking, the ownership of the waqf property has no jural conception with any exactitude.
The corpus is tied 'down and is made inalienable.
Only the usufruct and the income from the corpus of the waqf property is available for carrying out the objects of the wakf.
The Sharaiu 'l Islam says "Waqf is a contract the fruit or effect of which is (a) to tie up the original and (b) to leave its usufruct free " "the waqf or subject of appropriation (corpus) is transferred, so to become the property of the mowkoof alehi, [or 'person on whom the settlement is made '] for he has a right to the advantage or benefits (usufruct) to be derived from it." (vide page 494, In the foot note at the same page occurs a passage which runs thus "But it should not be overlooked that question about ownership of property after dedication, refers merely to scientulla juris, supposed to remain undisposed of although entire usufruct, (all benefits, & C.) are assigned away.
Question in whom property rests, therefore, entirely academical.
" Mutawalli is like a Manager rather than a trustee (see page 498).
The Mutawalli, so far as the waqf property is concerned, has to see that the beneficiaries got the advantage of usufruct.
We have already pointed out that under the Shia law the property does not remain with the waqif.
It is transferred to God or to the beneficiaries.
At page 554 of Tyabji 's famous book it is stated : "The support and maintenance of the waqf 's family, & c. would seem under the Act to be deemed a purpose recognized by the Muslim law as religious, pious or charitable : section 2.
This view was put forward by Ameer Ali, J., with great learning in his dissenting judgment in Bikani Mia 's case." ' Section 527 at page 593 runs thus "The mutawalli has no ownership, right or estate in the waqf property: in that respect he, is not a trustee in the technical sense : he holds the property as a manager for ful filling the purpose of the waqf.
" A contrary statement of law at page 202 of Mullas Mohamedan Law, seventeenth edition based on the decision of the Allahabad High Court in Mohammad Qamar Shah Khan vs Mohammad Salamat Ali Khan(1) (1) A.I.R. 1933 Allahabad 407.
896 to the effect that "the mutawalli is not a mere superintendent or manager but is practically speaking the owner" is not correct statement of law.
In a later Full Bench decision of the same court in Moattar Raza and others vs Joint Director of Consolidation, U.P. Camp at Bareilly and others(1) while over ruling the earlier decision, it has been said at pages 513 14 : "the legal status and position of a mutawalli under a waqf under the Musalman Law is that of a Manager or Superintendent.
" The general powers of the Mutawalli as mentioned in section 529 of Tyabji 's book are that he "may do all acts reasonable and proper for the protection of the wakf property, and for the administration of the waqf.
" It will be useful to point out the Law as regards, distribution of distributable income of the waqf properties amongst the beneficiaries as mentioned in the various subsections of section 545 at pages 606 608.
Unless a different intention appear, subsection (4) says: "The benefit of a waqf for a person 's "sons and his children, and the children of his children for ever so long as there are descendants, is taken per capita, males and females taking equally and the children of daughters being included.
" Attention must be called to an important statement of law in the well known authoritative book of Mohamedan Law by Ameer Ali Vol. 1, fourth edition, page 472.
It runs thus : "It is lawful for a mutawalli with the income of a waqf to erect shops, houses, & c., which may yield profit to the waqf, as all this is for the benefit of the waqf.
All properties purchased by the mutawalli out of the proceeds of the waqf become part of the waqf and are subject to the same legal incidents as the original waqf estate." Mr. Phadke cited the decision of this Court in Ahmed G. H. Ariff & Ors.
vs Commissioner of Wealth Tax, Calcutta(2) and contended that the right of the beneficiaries to get money out of the income of the waqf property for their maintenance and support was their property.
In our opinion the case does not help the appellant at an in regard to the point at issue.
A hanafi Muslim had created a wakf alalaulad and on a proper construction of the relevant clauses in the waqf deed it was held that the aliquot share of the income provided for the beneficiaries was not meant merely for their maintenance and support but even if it was so, it would be an asset within the meaning of section 2 (a) of the Wealth Tax Act, 1957.
The definition of the term 'asses, was very wide in the Wealth Tax Act.
The share of the income which a beneficiary was getting under the said waqf was assessable to income tax and following the particular method of evaluation it was held to be an asset for the purposes of the Wealth Tax.
The question at issue in the present case is entirely different as will be shown and discussed (1) A.I.R. 1970 Allahabad, 509.
(2) ; 897 hereinafter.
But in support of what we have said above in relation to the waqf property and the position of the Mutawalli we may quote a few lines from tills judgment also which am at page 24 : "As mentioned before, the moment a wakf is created, all rights of property pass out of the Wakif and vest in the Almighty.
Therefore, the Mutawalli has no right in the property belonging to the wakf.
He is not a trustee in the technical sense, his position being merely that of a superintendent or a manager.
" It would be convenient to briefly discuss the questions of fact and the evidence in relation thereto before we advert to the discussion of some other questions of law argued before us on either side as those principles of law will be better"appreciated and applied in the.
background of the facts of this case.
As has been stated already the evidence is overwhelming on the question as to what was the source of money for the acquisition of the disputed property, either the land or the kothi.
It came from the waqf fund.
This position could not be seriously challenged before us.
What was argued will be alluded to a bit later.
We may just cursorily refer to some, of the pieces of the evidence on the question aforesaid.
A 35 is a written direction by the Raja to Mahmud Syedullah Tahvildar directing him to debit a sum of Rs. 741/ to his personal account for the acquisition of the.
plot in question.
The details of the expenses and the Nazrana money are given therein.
The payment was from the funds of the waqf estate.
But the Raja made a feable and futile attempt to get this debit entry made as a repayment of the loan money said to have been advanced by him to the waqf estate.
The High Court as also the Trial Court has rightly remarked that the entry like Ext.
A443 was got made by the Raja in the account books of the waqf estate as a fictitious countervailing entry in his attempt to show that some of the sums of money which he had withdrawn from the waqf estate were on account of the repayment of his alleged loans.
The High Court has rightly pointed out that they were all fictitious entries.
Mr. Phadke endeavored to show that the approximate gross income of the waqf estate was not Rs. 43,515/ as is shown by the High Court but it was in the neighbourhood of Rs. 58,000/ .
We shall accept it to be so.
Thus the net distributable income at the disposal of the Raja was about Rs. 30,000/ instead of Rs. 15,5101 mentioned in the judgment of the High Court.
There were 13 beneficiaries in qurra No. 1 of which the Raja was the Mutawalli.
In that capacity he was getting a monthly allowance of Rs. 70/ only from the estate account.
He bad no other personal property or source of income from which he could advance any loan to the waqf estate.
Nor could it be shown that the waqf estate at any point of time was in need of any loan from the Raja.
Therefore, the attempt of the Raja to put a show of acquiring the land in the name of his young wife out of his personal money was a very crude attempt to disguise the real source of that 898 money.
The concurrent findings of the Courts below that the expenses for the acquisition of the lease were incurred from the waqf estate funds could not be successfully assailed.
The High Court has referred next to the question of payment of rent of the land to the lessor.
The plaintiff produced six rent receipts.
13 and 14 were of the year 1952 when disputes between the parties had started.
As regards four other receipts the High Court was inclined to believe the explanation of the defendant that the plaintiff had surreptitiously obtained their possession.
On the other band, the defendant filed four rent receipts of the period when the Raja was alive.
Since the lease had been taken in the name of the plaintiff, naturally all the receipts were in her name.
The High Court has also referred to the satisfaction of a decree for rent obtained by the lessor in a suit instituted against the plaintiff as well as the defendant and has come to the conclusion that the entire decretal amount, the expenses of the auction sale and the costs were deposited in the Court out of the waqf fund.
Then comes the evidence regarding the construction of the Kothi.
All documents for obtaining permission from 'be Municipal Board and for electric connection etc.
obviously stood in the name of the plaintiff as the lease wag, standing in her name.
As in the High Court, so here, Mr. Phadke strongly relied upon those documents to show that the Kothi was constructed for and on behalf of the plaintiff.
As already stated the stand in the High Court was, that it was constructed with her money.
Here it was a completely different stand.
It was urged that the money came from the waqf fund but as and when the money was being spent by the Raja for the construction of the Kothi it amounted, in law, as payment of the money by the Raja to his wife and the construction of the Kothi should thus be treated as having been made with her money.
We shall scrutinize the correctness of this branch of the argument a bit later.
Numerous documents are mentioned in the judgments of the Trial Court as also of the High Court to show that every bit of expenditure in the construction of the Kothi came out of the ' waqf fund under the direction of the Raja.
We need not discuss these documents in any detail as the concurrent finding of the Courts below could not be assailed in face of these documents and that led the appellant to make a somersault here and to take an ingenuous stand.
These documents are Ext.
A 449 series; Ext.
A 450 series; Ext.
A 452; Ext.
A 453; Ext.
A 455; Ext.
A 458; Ext.
A 460; Ext.
A 463; Ext.
A 486; Ext.
A 491; Ext.
A 493 series; Ext.
A 495 and Ext.
A 518.
A 3 shows that Ramlal, a mason who had worked as a contractor in the construction of the Kothi instituted a suit for recovery of Rs. 2,917/10/ , the amount which was not paid during the life time of the Raja.
The suit was instituted in the year 1941.
It was decreed in 1942.
A 36, A 43 and A 44 are the receipts in proof of the fact that eventually the decree was satisfied by the defendant on payment of money to Ramlal.
A 45 is a similar receipt dated January 2, 1942 showing payment of Rs. 923/ by the defendant to Zafaruddin in satisfaction of his decretal dues on account of the construction of the Kothi.
The 899 plaintiff 's claim of the payment of Rs. 2,000/ to Ramlal was too slippery to be accepted by the Courts below and it need not detain us either.
The High Court has also relied upon two letters Exts.
A 28 and A 27 written by the Raja to the Supervisor of the building operations indicating that if the foundation of the Kothi was not laid within a certain time, loss would be caused to the Riyasat namely the waqf estate.
It may be emphasised here that the countervailing fictitious entries got made by the Raja were very few and far between and the entire amount spent in the acquisition of the Kothi which was in the neighbourhood of Rs. 21,000/ (both for the land and ,the building) could not be.
shown to be the personal money of the Raja by this spurious method.
A major portion of the total amount obviously, clearly, and admittedly too, had come from the waqf fund., And that compelled the appellant to take an entirely new stand in this Court.
We now proceed to deal with the new stand.
It is necessary in that connection to refer to some of the important recitals in Ext.
A 2 the waqf deed.
In the preamble of the document it is recited that the waqf is being created with some religious purposes and for the regular support and maintenance of the descendants of the waqif for all times to come so that they may get their support from generation to generation.
The ultimate object is for charitable purposes in the service of the God Fisaliilah.
After referring to the Act of 1913 it is stated : "Hence the entire property given below having become Waqf Alal aulad in perpetuity, has become, uninheritable and non transferable".
Each Mutawalli of his respective qurra was appointed " the principal manager with full and complete powers of entire waqf property." From clauses 7 and 13 of the waqf deed it was rightly Pointed out on behalf of the appellant, and not disputed by the respondent either, that Rs. 6,000/ amiually had to be spent by Mutawalli of qurra No. 1 for the religious purposes mentioned therein.
This was the first obligation of the Mutawalli before he could apply the rest of the usufruct in the support and maintenance of the family beneficiaries.
Then comes the most important clause in the waqf deed namely clause 18.
The said clause as translated and printed in the paper book runs as follows "Syed Mahmood Hasan the Mutawalli of the, first lot is vested with the power to fix stipends for his children and their descendants and for his wives during his life time whatsoever he pleases or to lay down conditions by means 0 a registered document or may get any writing kept reserved in the custody of the district judge, so that after him it be binding upon every Mutawalli, such in case he might not get any writing registered or kept in the custody of the district judge of the district, then under such circumstances the twenty percent (20%) of the income of the waqf property having been set apart for the expenditure of collection and realisation and right of the, Mutwalliship and the amount of Rs. 6,000/ (Rupees six thousand) for meeting 900 the expenditure of Azadari ' as detailed at para No. 7 above; the entire remaining will be distributed among the heirs of Mahmood Hasan according to their respective legal share provided under Mohammadan Law.
" The High Court referring to this clause has said that the power given to the Raja in clause 18 could be exercised by him during his life time in the fixation of the stipends but it was to come in operation after his death.
With the help of learned counsel for both sides,.
we looked into the original clause 18 and found that there is some inaccuracy in the translation as made and printed in the paper book.
But substantially there is not much difference.
Correctly appreciated, the meaning of the clause is that Saiyed Mohammad Hasan, the Raja, was given a special power and right to fix stipends for his children, wives and descendants either by a registered document and or by a document in writing kept in the custody of the District Judge so that after him it may be binding on every subsequent Mutawalli.
If he failed to do so, then after setting apart 20% of the gross income to meet the expenditure of collection and realisation and Rs. 6,000/the charitable expenditure mentioned in clause 7, the balance was to be distributed amongst the heirs of Saiyed Mohammad Hasan according to their respective legal shares provided under the Mahomedan law.
The bone of contention between the parties before us was that according to the appellant such a power of fixation of stipends for the wives and children was given to the Raja even to be operative during his life time, while according to the respondent it was only to be effective after his death.
We do not think it necessary to meticulously examine the terms of clause 18 and resolve this.
difference.
We shall assume in favour of the respondent that, in terms, the power was given which was meant to be operative after his death.
But then, does it stand to reason that he had no such power during his life time ? On a reasonable view of the matter, either by way of construction of clause 18, or as a necessary implication of it, we find no difficulty in assuming in favour of the appellant that the Raja was vested with the power to fix stipends for his children and their descendants and for his wives during his life time also.
A question, however, arises was this power completely unfettered, unguided and not controlled by the general principles of Mohamedan law ? Apart from the fact that in clause 27 of the waqf deed it is specifically mentioned that any condition or phrase laid down in any of the paras of the waqf deed was not meant to go against the, Mohamedan law and was not to be of any effect, if it did so, it is difficult to conclude that the Raja was conferred an absolute power or discretion to fix any stipend for any beneficiary and no stipend for some beneficiary.
Equality amongst all is a golden thread which runs throughout the Mohamedan law.
It is a chief trait of that law.
We have already pointed out from Tyabji 's book that each beneficiary was entitled to share the usufruct of the waqf property per capita.
The Power given to the Raja under clause 18 had to be reasonably exercised within a reasonable limit of variation according to the exigencies and special needs of a particular beneficiary.
He had no power to spend money quite disproportionately for the benefit of one 901 beneficiary may she be his young wife or young daughter or be he a young son.
He had no power to spend money for acquisition of any immovable property for a beneficiary.
No income from the waqf estate could be, spent for acquisition of an immovable property, and particularly a big property with which we are concerned in this case, to benefit only one beneficiary ignoring the others who were about a dozen.
The money had to be spent equitably for the support and maintenance of each and every beneficiary.
Of course, the Raja had the discretion to spend more money say on the education of a particular beneficiary it was necessary to do so or for the treatment of an ailing one.
There it would be preposterous to suggest that money bad to be equally spent.
It is, however, difficult to spell out from Clause 18, as was argued by Mr. Phadke, that the Raja should be deemed to have fixed as stipends for the young lady all the numerous sums of money spent from time to time in the various items of the acquisition of land or the construction of the Kothi.
Such a construction will, not only militate against the tenets of the Mahomedan law as quoted from Ameer Ali 's book, but would be obviously against the spirit of clause 24 of the waqf deed itself.
The said clause says "If any property will be purchased out of the funds of the State, it shall also be deemed to be property included in and belonging to the waqf.
It shall not become the private or personal property of any one.
" Taking a permanent lease of the land and constructing a Kothi thereupon to all intents and purposes, is a purchase of the property out of the funds of the estate.
It will be a startling proposition of Mahomedan law to cull out from clause 1 8 of the waqf deed that a property acquired obviously and clearly out of the funds of the waqf estate in the name of one of the beneficiaries should be treated as having been acquired for him or her in exercise of the power under clause 18.
It should be remembered that apart from the properties which were mentioned in the waqf deed and which had been tied and made inalienable if any further property was to be acquired, in the, eye of law, according to the concept of Mahomedan law, there was no legal entity available in whose name the property could be acquired except the Mutawalli or the beneficiary.
Unlike Hindu law, no property could be acquired in the name of the God.
Nor could it be acquired in the name of any religious institution like the waqf estate.
Necessarily the property had to be taken in the name of one of the living persons.
Ordinarily and generally the acquisition of property out of the waqf funds should have been made in the name of the Mutawalli.
But it did not cease to be, a waqf property merely because it was acquired in the name of one of the beneficiaries.
We are empbasizing this aspect of the matter at this stage to point out that the law relating to benami transactions, strictly speaking, cannot be applied in all its aspects to a transaction of the kind we are concerned with in this case.
We, however, hasten to add that even if applied, there will be no escape from the position that the real owner of the property was the Raja in his capacity as Mutawalli and the plaintiff was 902 a mere benamidar.
The property in reality, therefore, belong to the waqf estate as concurrently and rightly held by the two courts be low.
It is a very novel and ingenuous stand which was taken in this Court to say that all money spent from time to time in acquiring the land and constructing the Kothi was payment by the Raja as Mutawalli to his wife and therefore the property must be held to have been acquired by the lady herself out of her own personal fund.
At no stage of this litigation except in this Court such a case was made out in pleading or evidence or in argument.
The defendant was never asked to meet such a case.
Parties went to trial and evidence was adduced upon the footing that the plaintiff claimed that out of the money given to her by the Raja as pin money or on the occasions of festivals or otherwise she had saved a lot and out of those savings she had spent the money in acquiring the property.
The defendant asserted and proved that the case of the plaintiff was untrue and that all the money came from the waqf fund directly to meet the cost of the ac quisition of the property.
In such a situation it is difficult to accept the argument put forward by Mr. Phadke that pleadings 'should not be construed too strictly.
He relied upon three authorities of this Court in support of this argument namely, (1) Srinivas Ram Kumar vs Mahabir Prasad and others(1); (2) Nagubai Ammal & others vs B. Shama Rao & others(2), and (3) Kunju Kesavan vs M. M. Philip I.C.S. and others(3).
Let us see whether any of them helps the appellant in advancing her case any further.
In the case of Srinivas Ram Kumar (supra) the suit for specific performance of the contract failed.
The defendant had admitted the receipt of Rs. 30,000/ .
In that event, it was held that a decree could be passed in favour of the plaintiff for the recovery of Rs. 30,000/ and interest remaining due under the agreement of loan pleaded by the defendant, even though the plaintiff had not set up such a case and it was even inconsistent with the allegations in the plaint.
The Trial Court had passed a decree for the sum of Rs. 30,000/ .
The High Court upturned it.
In that connection, while delivering the judgment of the Court, it was observed by Mukherjea J., as he then was, at page 282 : "The question, however, arises whether, in the absence of any such alternative case in the plaint it is open to the Court to give him relief on that basis.
The rule undoubtedly is that the Court cannot grant relief to the plaintiff on a case for which there was no foundation in the pleadings and which the other side was not called upon or had an opportunity to meat.
But when the alternative case, which the plaintiff could have made, was not only admitted by the defendant in his written statement but was expressly put forward as an answer to the claim which the plaintiff made in the suit, there would be nothing improper in giving the plaintiff a decree upon the case which the defendant him self makes." (1) ; (2) ; (3) [1964]3 S.C.R. 634. 903 In the instant case, there is no question of giving any alternative relief to the plaintiff.
The relief asked for is one and the same.
The plaintiff claimed that she had acquired the property with her personal funds.
The defendant successfully combated this case.
He had not said anything on the basis of which any alternative relief could be given to the plaintiff.
The facts of the case of Nagubai Ammal (supra) would clearly show that the decision of this Court does not help the appellant at all.
The respondent did not specifically raise the question of his pending in his pleading nor was an issue framed or.
the point, but he raised the question at the very commencement of the trial in his deposition, proved relevant documents which were admitted into evidence without any objection from the appellants who filed their own documents, cross examined the respondent and invited the Court to hold that the suit for maintenance and a charge and the connected proceedings evidenced by these documents were collusive in order to avoid the operation of section 52 of the Transfer of Property Act.
The matter was decided with reference to section 52.
In such a situation it was held by this Court that the decisions of the Courts below were correct and in the facts and circumstances of thecase the omission of the respondent to specifically raise the questionof his pending in his pleading did not take the appellants by surprise.
It was a mere irregularity which resulted in no prejudice to the appellants.
In the instant case no body at any stage of the litigation before the appeal came up to this Court had taken any stand or said a word any where that money spent in acquisition of the property was the personal money of the plaintiff because as and when the sums were spent they went on becoming her personal money.
The evidence adduced and the stand taken in arguments were wholly different.
No party had said anything on the lines of the case made out in this Court.
Similar is the position in regard to the decision of this Court in the case of Kunju Kesavan.
At page 648 Hidayatullah J., as he then was,has stated, "The. parties went to trial fully understanding the central fact whether the succession as laid down in the Ezhava Act applied to Bhagavathi Valli or not.
The absence of an issue, therefore, did not lead to a mis trial sufficient to vitiate the decision.
" It was further added that the plea was hardly necessary in view of the plea made by the plaintiff in the replication.
Mr. Lal Narayan Sinha placed reliance upon the decision of this Court in Meenakshi Mills, Madurai vs The Commissioner of Income tax, Madras(1) in support of his submission that the question of benami is essentially a question of fact and this Court would not ordinarily and generally review the concurrent findings of the courts below in that regard.
Mr. Phadke submitted that his case was covered by some exceptionscarved out in the decision of the Federal Court in Gangadara Ayyarand others vs Subramania Sastrjgal and others.(2) (1) ; (2) A.T.R. 904 In our opinion it is not necessary to decide as to on which side of the dividing line this case falls in the light of the principles enunciated, in the case aforementioned.
Truly speaking, the concurrent findings of the Courts below on the, primary facts could not be seriously challenged.
They are obviously correct.
But a new stand was taken on ' the basis of clause 18 of the waqf deed which we have already discussed and rejected.
Mr. Phadke, heavily relied upon clause 19 of the Win dated 17 6 1938 Ext.
15 executed by the Raja fixing various amounts of stipends to be paid to the beneficiaries after his death.
He had executed two other wills prior to this Will.
In an earlier litigation, a question had arisen as to which Will would prevail the first one or the last one.
The amounts fixed for the plaintiff in the last Will was much higher than the amount fixed for her in the first Will.
in an earlier judgment dated 3 9 1949 Ext.
3 which was a judgment inter partes it was held that the amount fixed in the first Will would prevail.
Clause 18 of the waqf deed was also interpreted in a particular manner.
Mr. Lal Narayan Sinha endeavoured to use this judgment operating as res judicata in regard to some of the questions falling for decision in this litigation.
We do not propose to make use of that judgment in that form.
Nor do we propose to express any final opinion as to which amount of stipend was effective the first one or the last one.
shall assume in favour of the plaintiff that the. amount fixed by the last Will was effective and binding on the subsequent Mutawalli.
We are, however, concerned to read clause 19 of the last Will which runs as follows "My wife Siddique Fatima has got a kothi known as (main (?) Shagird Pasha in mauza Doodhpur (paper torn) by taking on perpetual lease.
I or the state has no concern with the same.
It has been 'constructed by her with her own funds.
All the articles lying there belong to her and have been purchased by her from her own money.
I have certainly given some articles to her which belonged to me personally.
In short all the articles, of whatever sort they may be are her property and nobody has got any right in respect thereof because the state or any one else has got no concern or right in respect thereof.
Hence she(?) has got the right to dispose the same off or to make a waqf of the same.
She may give it to any of my sons, who renders obedience and service to her or may give the same to any of my grandsons.
My other heirs shall have no right in respect thereof.
If any body brings, any claim, in order to harass her, the same shall be false.
" Let us see whether this clause advances the case of the appellant any further.
On a close scrutiny, it would be found that it directly demolishes her stand taken in this Court.
The recital by the Raja in clause 19 is that his wife bad taken the perpetual lease and constructed the kothi with her own funds.
All the articles lying there have been purchased by her from her own money.
He had certainly given some articles to her which belonged to him personally.
There is 905 no recital that the Raja had constructed the kothi ',for the plaintiff out of his own funds nor was there a recital that he had constructed the kothi by taking the money from the waqf estate and treating it as payment of stipends to her as and when the sums of money were paid.
By no stretch of law such a recital could create a title in favour of the plaintiff and finish the right of the, waqf to the property.
The recital was demonstrably false and could not bind the subsequent Mutawalli.
If the property became the acquired property of the waqf a Mutawalli,as the Raja was, by his mere declaration contained in clause 19 ofthe Will could not make it a property of the lady.
The recital of fact could be pressed into service only to lend additional support to the plaintiff 's case if she would have stuck to that case and proved it by evidence aliunde.
The appellant 's counsel relied upon the various circumstances to, advance her case in this Court the foremost of them is based upon clause 18 of the waqf deed, which we have already dealt with.
It was next contended that the real question was that the property was of waqf alal aulad of which the main object was the maintenance and support of the members of the settler 's family and to tie up the corpus of the property in perpetuity so as to, make it inalienable.
The Raja, however, according to the submission was left free duringhis life time to make disbursement of the income in any manner he chose and liked.
Acquiring a property with the waqf fund was the fulfillment of the object of the wakf.
It was a part of making a provision for the maintenance and support of the wife of the Mutawallii.
It was an integral part of the object of the waqf and was not in breach of the trust.
We are not impressed with this argument and have already dealt with it in the earlier portion of this judgment.
True it is that the property was not acquired by the sale of the corpus of any of the waqf property but even acquisition of an immovable property directly with the, waqf fund was an accretion to the waqf property.
The Raja had no power while administering the waqf to acquire a property for a particular beneficiary by way of maintenance and support of such a beneficiary.
As indicated earlier, a Mutawalli of a waqt although not a trustee in the true sense of the terms is still bound by the various obligations of a trustee.
He like a trustee or a person standing in a fiduciary capacity, cannot advance his own interests or the interests of his close relations by virtue of the position held by him.
The use of the funds of the waqf for acquisition of a property by a Mutawalli in the name of his wife 'would amount to a breach of trust and the property so acquired would be treated as waqf property.
In the tenth edition of The Law of Trusts by Keaton and Sheridan it has been pointed out at page 329, Chapter XX "The general rule that a trustee must not take.
heed of one beneficiary to the detriment of others has already been discussed.
Put in another way, the rule implies that although a trustee, may be the servant of all the beneficiaries, he is not the servant of any one of them, but an arbitrator, who must hold the scales evenly.
" The position of the Mutawalli under the.
Mahomedan law is in no way different and all the beneficiaries are entitled to benefit equally, 7 329 SCI/78 906 of course, subject to the special power conferred on the Mutawalli as the one provided in clause 18 of the waqf deed and to the extent and in the manner interpreted by us above.
Exhibit A 22 an account of daily expenses incurred in the construction of the Kothi was attacked as a spurious document.
we do not attach much importance to Ext.
A 22 in face of the other pieces of evidence to indicate that the expenses were all met from the waqf fund.
It is not necessary to lay any stress on Ext.
A 22 Our attention was drawn to some statements made in the testimony of the defendant himself who was examined as D.W. 2 and D.W. 1the brother of the Raja.
It may be mentioned here that Hamid Hasan brother of the defendant was examined at P.W.3.
The plaintiff had examined herself in the house in which P.W. 3 was living and in his presence.
Without discussing in any detail a few lines here for a few lines there in their evidence, suffice it to say that their evidence could not and did not establish the plaintiffs case as made out in the Courts below nor did they lend any support to the new case made out here.
We, therefore, do not think it necessary to encumber this judgment by a detailed discussion of the evidence, because it has all been dealt with in full by the Trial Court and to a large extent by the High Court also.
We now proceed to consider, the law of benami prevalent in India and especially in regard to acquisition of a property by the husband in the name of the wife.
We would also in this connection be discussing whether the, doctrine of advancement is applicable in India or any principle analogous to that can be pressed into service on behalf of the appellant as was sought to be done by her learned counsel.
Alongwith the discussion of the points aforesaid, we shall be adverting to the appellant 's argument of burden of proof being on the person to prove that a transaction which is apparent on the face of the document of title is not a real one but a benami deal.
In conclusion, we shall show that neither the Trial Court nor the High Court has deviated from the application of the well settled principles in this regard, although at places the Trial Court seems to have apparently thrown the onus on the plaintiff.
But as a matter of fact neither of the two Courts below has committed any error in the application (,it the real principle.
In Gopeekrist Gosain and Gungaparsaud Gosain(1) it was pointed out as early as 1854, at page 72 : "It is very much the habit in India to make purchases in the names of others, and, from whatever cause or causes the practice may have arisen, it has existed for a series of years, and these transactions are known as "Benamee transactions." Lord Justice Knight Bruce proceeds to observe further at Pages 7475 that if the money for acquisition of property has been provided by a person other than the individual in whose name the purchase was effected and if such a person was a stranger or a distant relative of the person providing the money,, "he would have.
been prima (1)6 Moore 's Indian Appeals, 53. 907 facia a trustee".
It was observed further that even when the purchaser was the son of the real purchaser the English doctrine of advancement was not applicable in India.
This case was followed by the Board in Bilas Kunwar and Desraj Ranjit Singh and others(1) Sir George Farwell has said at page 205 : "The exception in our law by way of advancement in favour of wife or child does not apply in India : Gopeekrist vs Gangaparsaud; (1854) 6 Moo, Ind. Ap.
53 but the relationship is a circumstance which is taken into consideration in India in determining whether the transaction is benami or not.
The general rule in India in the absence of all other relevant circumstances is thus stated by Lord Campbell in Dhurm Das Pandey vs Mussumat Shama Soondari Dibiah (1843) 3 Moo.
Ind. Ap. 229; "The criterion in these cases in India is to consider from what source the money comes with which the purchase money is paid." Lord Atkinson reiterated the same view in Kerwick and Kerwick (2) at page 278 in these terms : "In such a case there is, under the general law in India, no presumption of an intended advancement as there is in England.
" It will be useful to quote a few lines from the judgment of the Judicial Committee of the Privy Council delivered by Sir John Edge in the case of Sura Lakshmiah Chetty and others vs Kothandarama Pillai ( 3 ) The lines occurring at page 289 run thus : "There can be no doubt now that a purchase in India by a native of India of property in India in the name of his wife unexplained by other proved or admitted facts is to be regarded as a benami transaction, by which the beneficial interest in the property is in the husband, although the ostensible title is in the wife.
The rule of the law of England that such a purchase by a husband in England is to be assumed to be a purchase for the advance ment of the wife does not apply in India.
" In the well known treatise of the law of Trusts referred to above the learned authors say at page 173 : "The best example of a trust implied by law is where property is purchased by A in the name of B; that is to say, A supplies the purchase money, and B takes the conveyance.
Here, in the absence of any explanatory facts, such as an intention to give the property to B, equity presumes that A intended B to hold the property in trust for him.
" It may here be made clear that much could be said in favour of the appellant if the Raja would have acquired the property with his own money intending to acquire it for her.
But such an intention was of (1) 42 Indian Appeals, 202.
(2) 47 Indian Appeals, 275.
(3) 52 Indian Appeals, 286.
908 no avail to the appellant when the money for the acquisition of the property came from the coffers of the waqf estate over which the Raja had no unbridled or uncontrolled power of ownership.
He was himself in the position of a trustee owing a duty and obligations to the beneficiaries.
He had no free volition in the matter to spend and invest the trust fund in any manner he liked and for showing undue advantage to his wife.
At one stage of the argument Mr. Phadke felt persuaded to place reliance upon the decision of Yorke and Agarwal JJ in Mt. Sardar Jahan and others vs Mt. Afzal Begam(1).
At page 291, column 1 the observation seems to have been made per in curium to the effect: "As regards this question of pleading, it does not appear to us that there was anything to prevent the plaintiff from falling back on the plea of advancement in case she was unable to satisfy the court that the moneys expended were her own." Yorke J realised the inaccuracy of the above proposition and said so in Mt. Siddique Begam vs Abdul Jabber Khan and others(2) and then concluded at page 312 column 1 thus : "In point of fact it has been laid down by their Lordships in earlier cases that the burden of proof that a transfer is benami does lie in the first instance upon the person asserting it to be so, but that burden is discharged upon the said person showing that the purchase money was provided by him.
" In the case of Gangadara Ayyar and others (supra) Mahajan J., enunciated the law pithily, if we may say so with respect, in paragraph 14 at page 92 : "It is settled law that the onus of establishing that a transaction is benami is on the plaintiff and it must be strictly made out.
The decision of the Court cannot rest on mere suspicion, but must rest on legal grounds and legal testimony.
In the absence of evidence, the apparent title must prevail.
It is also well established that in a case ' where it is asserted that an assignment in the name of one person is in reality for the benefit of another, the real test is the source whence the consideration came and that when it is not possible to obtain evidence which conclusively establishes or rebuts the allegation, the case must be dealt with on reasonable probabilities and legal inferences arising from proved or admitted facts.
" While dealing with the question of burden of proof, one must remember a very salutary principle reiterated by this Court in Kalwa Davadattam and two others vs The Union of India and other(3) at page 205.
Says the learned Judge: (1) A.I.R. 1941, oudh, 288.
(2) A.I.R. 1942, Allahabad, 308.
(3) ; 909 The question of onus probandi is certainly important in the early stages of a case.
It may also assume importance where no evidence at all is led on the question in dispute by either side; in such a contingency the party on whom the onus lies to prove a certain fact must fail.
Where however evidence has been led by the contesting parties on the question in issue, abstract considerations of onus are out of place; truth or otherwise of the case must always be adjudged on the evidence led by the parties." Shinghal J. recently followed this dictum in the case of Union of India vs Moksh Builders and Financiers Ltd. and ors.
etc.(1) at page 973.
Mr. Phadke heavily relied upon the decisions of this Court in (1) Kanakarathanammual vs V. section Loganatha Mudaliar and another(2) (2) Jaydayal Poddar (deceased) through his L. Rs and another vs Mst.
Bibi Hazra and ors(3) and (3) Krishnanand vs The State of Madhya Pradesh (4).
A question of some fine distinction arose in Kanakarathanammal 's case.
The question was whether the property purchased in the name of the wife by the money given to her by the husband was a property gifted to her under section 10(2) (b) of the Mysore Hindu Law women 's Rights Act, 1933 or was it a property in which fell under clause (d) of section 10(2).
If it was a property gifted by the husband to the wife, then the appellant 's contention was right and it became a property gifted under section 10(2) (b).
If, on the other hand, it was a property purchased with the money gifted by the husband to the wife, then it would not be so.
According tothe finding of the Courts below, the whole of the consideration waspaid by the appellant 's father and not by her mother.
The majorityview expressed by Gajendragadkar J., as he then was, at page 9 of the report is : "We have carefully considered the arguments thus presented to us by the respective parties and we are satisfied that it would be straining the language of section (2)(b) to hold that the property purchased in the name of the wife with the money gifted to her by her husband should be taken to amount to a property gifted under section 10(2) (b).
" It would thusbe seen that indisputably in that case the property was of the wife.
The only dispute was whether the property itself was acquired as agift from her husband or it was acquired with the money gifted to her by the husband.
In our opinion, therefore, this case is of no help, to the appellant in this appeal.
In Jaydayal Poddar 's case (supra) one of us (Sarkaria J.) while delivering the judgment on behalf of the Court was dealing with a case where the question was whether the property purchased by Abdul Karim in the name of his wife Mst.
Hakimunnissa was a benami purchase in the name of the latter.
The Trial Court held that she was benamidar.
The High (1) ; (2) ; (3) (4) [1977]1 S.C.R. 816.
910 Court reversed the decision and held that the plaintiffs had failed to show that Mst.
Hakimunnissa in whose name the sale deed stood, was only a benamidar and not the real purchaser.
While affirming the view of the High Court, it was aptly said at pages 91 92 : "It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so.
This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of Benami or establish circumstances unerringly and reasonably raising an inference of that fact.
The essence of a benami is the intention of the party or parties concerned; and not unoften such intention is shrouded in a thick veil which cannot be easily pierced through.
But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof.
The reason is that a deed is a solemn document prepared and executed after considerable deliberation and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his ' favour that the apparent estate of affairs is the real state of affairs.
Though the question, whether a particular sale is Benami ornot, is largely one of fact, and for determining this question,no absolute formulae or acid tests, uniformally applicable inall situations, can be laid down; yet in weighing the probabilities and for gathering the relevant indicate, the courts are usually guided by these circumstances : (1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale.
The above indicate are not exhaustive and their efficacy varies according to the facts of each case.
Nevertheless No. 1, viz. the source whence the purchase, money came, is by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another." Apart from the fact that in the present appeal we are not concerned with a simple case of purchase of the property by the husband in the name of the wife with his own money, the purchase being with the waqf money, even applying the principles extracted above it would be noticed that the concurrent findings of the courts below that the appellant was benamidar on behalf of the waqf does not suffer from any infirmity to justify our interference with the said finding. ] 'lie burden has been strictly discharged by the respondent so much 911 so that the finding as recorded could not be assailed.
It was merely attempted to be availed of to support a new case in this Court.
It should be remembered that 'by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another ' namely the source whence the purchase money came has been established beyond doubt.
The nature and possession of the property after the acquisition was such that it did not lead to the conclusion that it was not a waqf property and was a property in exclusive possession of the appellant through her tenants including tile respondent.
The motive to, acquire the property in the name of the wife is clearly spoken of by D.W.I.brother of the Raja when he said at page 37 of the paper book "Raja Sahib was also present at the time of the execution of the lease.
At that time there was no debt against him.
On being asked by me he said that the plaintiff used to, trouble him and that in order to please her he was getting a fictitious lease executed in her favour.
" It was argued for the appellant that the Raja wanted to make a provision for his young wife to protect her interests from being trampled with by her sons and daughters.
This is not correct.
Although the defendant was not pulling on well with the Raja after he had married the plaintiff, according to her own case pleaded 'in the plaint she was pulling on well with the defendant upto the year 1950 and the relations between them got strained when her daughter was married to Saiyed Mohammed Raja Ali Khan.
The position of the parties, namely, the Raja and the plaintiff, was such that one could be inclined to believe that in all probability the Raja could provide funds for acquisition of the property not only in the name of his wife but for her and her alone provided the funds expended were his personal funds.
But no such inference is possible on the unmistakable position of thiscase that the funds came from the coffer of the waqf estate.
The custody of the title deed and other papers, except a few, were not with the plaintiff.
But on the facts of this case one, cannot attach much importance to this circumstance either way.
The conduct of the parties concerned in dealing with the property after acquisition also goes in favour the defendant and against the plaintiff.
It could not be shown that the plaintiff bad realised rent from the other tenants who had been there in the Kothi before 1947.
Nor was there anything to show that the defendant himself was inducted as a tenant in the Kothi by the plaintiff.
We, therefore, hold that even on the application of the salutary principles of law enunciated in Jaydyal Poddar 's case the appellant cannot succeed.
This case was merely followed in Krishnanand 's case by Bhagwati J.
We may again emphasize that in a case of this nature, all the aspects of the benami law including the question of burden of proof cannot justifiably be applied fully.
Once it is found, as it has been consistently found, that the property was acquired with the money of with the money of the waqf, a presumption would arise that the property is a waqf property irrespective of the fact as to in whose name it was acquired.
The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large 912 number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself.
In such a situation it will not be unreasonable to say rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf Is it possible to decree her appeal in face of her three varying stands in the three courts ? They are (1) in the Trial Court case of acquisition of property with her personal money; (2) in the High Court acquisition of property with the personal money of her husband and (3) in this Court the waqf fund invested from time to time became her personal money and enabled her to acquire the property.
For the reasons stated above, we dismiss the appeal, but with this direction that the parties will bear their own costs throughout.
Before we part with this case, we would like to put on record that a suggestion was thrown from the Court to the parties to arrive, at some kind of lawful settlement which may not go against the terms of the waqf deed or the Mahomedan law in relation to waqf.
Pursuant to the said suggestion, an offer was made on behalf of the substituted respondents to pay a sum of Rs. 30,000/ to the, appellant within a period of one year.
This was on the footing, as suggested by the Court, as if the lease hold in the land upon which the Kothi stands was the property of the appellant, but the Kothi was of the waqf.
Unfortunately this offer was not accepted by the appellant.
Still we hope and trust that the respondent will honour their unilateral offer and pay the sum of Rs. 30,000/ to the appellant within a period of one year from today, preferably in 4 three monthly equal instalments of Rs. 7,500/ each.
The amount so paid would be over and above the duty and the obligation which is there under the waqf on the present Mutawalli out of the substituted respondents.
We have tried to take a compassionate view for the appellant to the, extent to which we thought we could justifiably go.
We have relieved her of costs in all the three Courts.
We believe that the respondents will not belie our hopes merely because an executable decree in respect of the sum of Rs. 30,000/ in absence of them acceptance of the offer by the appellant cannot be passed.
S.R. Appeal dismissed. | One Smt.
Sughra Begum, a Shia Muslim lady was possessed of vast Zamindari and other properties.
On October 6, 1928, she created a waqf of the entire properties dividing them in three qurras, Raja Haji Saiyed Mohammad Mahmood Hasan was appointed by the waqifa as the Mutawalli of qurra No. 1.
After the death of his first wife Smt.
Akbari Begum.
the Raja took the plaintiff appellant as his second wife in the year 1933.
On January 22, 1935, a permanent lease was executed on behalf of one Saiyad Anwarul Rahman in respect of the disputed land in the name of the plaintiff.
The rent fixed was Rs. 80/per year.
Between the years 1937 and 1939 a bungalow was constructed on the said land which was named as "Mahmood Manzil".
The Raja died in September, 1939.
The plaintiff appellant filed a suit No. 86 of 1952 in the Court of the Civil Judge, Aligarh in which the original respondent was the sole defendant.
The plaintiffs case was that the disputed property belonged to her and that the defendant was inducted as a tenant of the 'kothi ' on and from 1 3 1947 on a rental of Rs. 60/ p.m., that he paid rent upto May 1950, but did not pay any rent thereafter, that she served a notice on him to pay the arrears of rent and deliver vacant possession of the Kothi.
The defendant respondent pleaded inter alia that Raja Sahib, the first Mutawali of qurra No. 1 had acquired the lease of the land and constructed the Kothi with the waqf fund as Mutawalli of the waqf and therefore it was a waqf property, that after the death of the Raja, he became the Mutawalli of qurra No. 1 including the Kothi in question and that he occupied the Kothi as a Mutawalli and not as a tenant.
The Trial Court accepted the case of the defendant, rejected that of the plaintiff and dismissed her suit.
Her appeal before the High Court was dismissed.
Dismissing the appeal by special leave, the Court HELD : 1.
According to Shia law, the waqf is irrevocable after possession is given to the beneficiaries or the Mutawalli.
The settler divests himself of the ownership of the property and of everything in the nature of usufruct from, the moment the waqf is created.
In pure metaphorical sense, the expression "ownership of God" is used but unlike Hindu law, since conception of a personal God is not recognised there is no ownership of God or no property belongs to God in the jural sense, although "the ownership of the property becomes reverted in God as he is originally the owner of all things".
The property is considered as transferred to the beneficiaries or the Mutawalli for the object of the waqf.
Strictly speaking, the ownership of the waqf property has no jural conception with any exactitude.
The corpus is tied down and is made inalienable.
Only the usufract and the income from the corpus or the waqf property is available for carrying out the objects of the waqf.
Creation of waqf for the purpose of maintenance of the waqif 's family and their descendants is also a charitable purpose.
[894 G 14, 895 A B] 2.
A Mutawalli is like a manager rather than a trustee.
The Mutawalli, so far as the waqf property is concerned, has to see that the beneficiaries got the advantage of usufruct.
The Mutawalli may do all acts reasonable and proper for the protection of the waqf property, and for the administration of the waqf.
[895 E, 896 D] 887 2(a) A Mutawalli of a waqf although not a trustee in the true sense of the term is still bound by the various obligations of a trustee.
He like a trustee or a person standing in a fiduciary capacity cannot advance his own interests or the interests of one class of relations by virtue of the position held by him.
The use of the funds of the waqf for acquisition of a property by a Mutawalli in the name of his wife would amount to a breach of trust and the property so acquired would be treated as waqf property.
[905 E G] Moattar Raza and Ors.
vs Joint Director of Consolidation U.P., Camp at Bareilly and Ors., A.1,R. 1970 All.
509 explained.
Mohammad Qamer Shah Khan vs Mahammed Salamat Ali Khan A.I.R. 1933, All. 407 over ruled.
The law as regards distribution of distributable income of the waqf property amongst the beneficiaries is that the benefit of a waqf for a person 's "sons and his children, and the children of his children for ever so long as there are descendants, is taken per capita, males and females taking equally and the children of daughters being included." [896 C F] Ahmed G. H. Ariff and Ors.
vs Commissioner of Wealth Tax, Calcutta, ; ; explained and held inapplicable.
In the eye of law, according to the concept of Mohammedan law, there was no legal entity available in whose name the property could be acquired except the Mutawalli or the beneficiary.
Unlike Hindu law, no property could be acquired in the name of God.
Nor could it be acquired in the name of any religious institution like the waqf estate.
Necessarily the property bad to be taken in the name of one of the living persons.
Ordinarily and generally the acquisition of property out of the waqf funds should have been in the name of the Mutawalli.
But it did not cease to be a waqf property merely because it was acquired in the name of one of the beneficiaries.
[901 E G] 5.
(a) The burden of proof that a particular sale is benami and the apparent purchaser is not the real owner always rests on the person asserting it to be so.
This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact.
[910 A B] (b) The law relating to benami transactions strictly speaking, cannot, be applied in all its aspects to a transaction of such a kind.
Even if applied there will be no escape from the position that the real owner of the property was the Raja in the instant case in his capacity as Mutawalli and the appellant was a mere benamidar.
The property in reality, therefore belong to the waqf estate as concurrently and rightly field by the two Courts below.
[901 G H, 902 A] Gopeekrist Gosain and Gangaparsaud Gosain, 6 Moore 's Indian Appeals, 53.
Bilas Kunwar and Desraj Ranjit Singh and Ors., 42 Indian Appeals, 202, Kerwick and Kerwick, 47 Indian Appeals, 275, Sura Lakshmiah Chetty and Ors.
vs Kothandarama Pillai 52 Indian Appeals, 286 Mt. Sardar Jahan and Ors.
vs Mt. Afzal Begam, A.I.R. 1941, Oudh, 288, Mt. Siddique Begam vs Abdul Jabbar Khan and Ors.
, A.I.R. 1942, Allahabad, 308, Kalwa Devadattam and two Ors.
vs The Union of India and Ors, ; Union of India vs Moksh Builders and Financiers Ltd. and Ors., ; Kana karathanammal vs V. section Loganatha Mudaliar and Anr.
; , Jaydayal Poddar (deceased) through 1. rs.
and Anr.
vs Mst.
Bibi Hazra and Ors., and Krishnanand vs The State of Madhya Pradesh, [1977] 1 S.C.C. 816 referred to.
In the instant case (a) It is not possible to decree the appeal in face of her three varying stands in the three Courts viz. (1) in the Trial Court case of acquisition of property with her personal money; (2) in the High Court acquisition of property with the personal money of her husband and (3) in this Court the waqf fund invested from time to time became her personal money and enabled her to acquire the property.
[912 B C] 888 (b) A valid waqf was created by Smt.
Sughra Begum.
Except a Portion of money which was to be spent for public, religious or charitable objects the waqf was primarily of a private nature for the benefit of the settler 's family and their descendants, which is called waqf alal aulad.
The ultimate object was to spend income, if any, in the service of the Almighty God.
[894 C] Abdul Fata Mohammad vs Rasamaya, 22 Indian Appeals 76 referred to.
(c) The evidence is overwhelming on the question as to what was the source of money for the acquisition of the disputed property, either the land and Kothi.
It came from the waqf fund.
[897 C] (d) Though the Raja was vested with the power to fix stipends for his children and their descendants and for his wives during his life time also, he was not conferred an absolute power or discretion to fix any stipend for any beneficiary and no stipend for some beneficiary.
Equality amongst all is a golden thread which runs throughout the Mohammadan law.
It is a chief trait of that law.
[900 G] (e) Clause 19 of the last will of the Raja cannot create a title in favour of the plaintiff and finish the right of the waqf to the property.
If the property became the acquired property of the waqf, a Mutawalli; as the Raja was, by his own declaration contained in clause 19 of the Will could not make it a property of the plaintiff appellant.
The recital of fact could be pressed into service only to lend additional support to the plaintiff 's case if she would have stuck to that case and proved it by evidence aliunde.
[905 A B] (f) The concurrent findings of the Courts below that the appellant was benamidar on behalf of the waqf does not suffer from any infirmity to justify this court 's interference with the said finding.
The burden has been discharged by the respondent so much so that the finding as recorded could not be assailed.
It was merely attempted to be availed of to support a new case in this Court.
It should be remembered that 'by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another ' namely the source whence the purchase money came has been established beyond doubt.
The nature and possession of the property after the acquisition was such that it did not lead to the conclusion that it was not a waqf property and was a property in exclusive possession of the appellant through her tenants including the respondent.
[910 H, 911 A B] (g) In a case of this nature, all the aspects of the benami law including the question of burden of proof cannot justifiably be applied fully.
Once it is found, as it has been consistently found, that the property was acquired with the money of the waqf, a presumption would arise that the property is a waqf property irrespective of the fact as to in whose name it was acquired.
The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself.
In such a situation it will not be unreasonable to say rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf.
[911 G H, 912 A B] |
Civil Appeal No. 2126 of 1968.
Appeal by Special Leave from the Judgment and order dated 14 8 1968 of the Punjab and Haryana High Court in Civil Revision No 430 of 1967 In person (C.K. Babbar) for the Appellant.
Harbans Singh for the Respondent.
The Judgment of the Court was delivered by SEN, J.
This appeal by special leave in directed against the order of the.
Punjab and Haryana High Court dated 14 August, 1968 upholding an order of the trial court dated 23 May, 1967 striking out the defence of the defendant under order XI, rule 21 read with section 151 of the Civil Procedure Code, 1908 and directing that the defendant cannot be permitted to cross examine the plaintiff 's witnesses.
The suit out of which this appeal arises was brought by the respondent Trilok Nath Mahajan, as plaintiff, against the appellant defendant M/s. Babbar Sewing Machine Co., on 9th March, 1966 for recovery of a certain sum alleged to be due to M/s. Chitra Multipurpose Co operative Society (Jogyana) Ltd., Ludhiana which remained unpaid towards the price of sewing machines sold on credit from time to time, claiming to be an assignee under a deed dated 27 April, 1965.
The transaction sued upon was of the year 1959, and the suit was obviously barred by limitation.
The plaintiff however, pleaded that the defendant had acknowledged his liability by his letter dated 8 March, 1963 for Forwarding cheque No. 01194 dated 7 March, 1963 for Rs. 50 drawn on the Punjab National Bank Ltd., Yamunanagar.
The defendant disputed the plaintiff 's claim and pleaded, inter alia, that he does not owe anything to the said society and as such the suit was not maintainable, that there was no privity of contract between the parties nor does any relationship of a creditor and debtor exists between them.
He further pleaded that the suit was barred by limitation.
He also pleaded that the trial court had no jurisdiction to try the suit.
On 11 November, 1966, the plaintiff moved an application under order XI, rules 14 and 18 for production and inspection of the following documents: (a) Cash book, day book and ledger for the year 1 4 1959 to 31 3 1960 and 1 4 1960 to 31 3 1961.
H (b) Cash book and ledger for the years 1 4 1961 to 31 3 1966 60 (c) All the original bills issued in favour of the defendant by M/s. Chitra Multipurpose Cooperative Society Jogyana Ltd., including Bill No. 22 dated 13 5 1960, Bill No. 43 dated 2 8 19607 Bill No. 49 dated 14 9 1960, Bill No. 53 dated 26 9 1960.
(d) Original letters written by the plaintiff to the defendant and letters addressed by M/s. Chitra Multipurpose Cooperative Society Jogyana Ltd., to defendant.
(e) Counterfoils of cheque book in use on 7 3 1963.
(f) The original cheque No. 01194 dated 7 3 1963.
(g) Bank pass book from 1 4 1962 to 31 3 1964 with counterfoils of the cheque books with which the respondent (T.N. Mahajan) firm had an account.
Despite objection by the defendant, the trial court by its order dated 11 January, 1967, directed their production on 30 January, 1967 holding that they were relevant for the determination of the controversy between the parties.
On 30 January, 1967, when the suit came up for hearing, the court adjourned the suit to 7 February, 1967, for production of the documents.
In compliance with the court 's order, on 7 February, 1967, the defendant produced all the documents in his possession viz., account books for the years 1959 60 to 1965 65 but he was permitted by the trial court to ' take back the account books as they were required to be produced before the Income Tax officer, Yamunanagar on that day, with the direction that he should produce the same on '23 February, 1967.
On 23 February, 1967 the defendant appeared in the court with his books but the trial judge directed him to produce them on 16 March, 1967 and in the meanwhile allow their inspection to the plaintiff with three days ' notice.
The defendant accordingly sent a letter dated 25 February, 1967 asking the plaintiff to take inspection of the account books on 27 February, 1967.
On 28 February, 1967, the plaintiff made an application that the defendant had not produced the documents for inspection but this was apparently wrong, as is evident from the registered notice dated 1 March, 1967, sent by the defendant to the following effect: "After the last date of hearing on 23.2.1967 I wrote you a letter from Yamuna Nagar on 25.2.1967 informing you that I shall be present in the office of my counsel Sh.
H. L. Soni on 27th February, 1967 at 6 p.m. for affording you the inspection of the documents.
I reached at my counsel 's office at the scheduled informed time but you did not turn up.
I 61 kept waiting for you uptil 8.30 p.m.
On that day.
Later A I contacted your lawyer Shri section R. Wadhera but he expressed his inability to contact you.
Now I would be reaching Ludhiana again on the 9th March, 1967 and shall be available in my lawyer 's Shri H. L. Soni 's office from 7 p.m. to 9 p.m. and you will be free to inspect the documents at the afore mentioned venue and during the above noted time.
Three days ' clear notice is being given to you.
Please be noted to this effect " Admittedly, the plaintiff never sent any reply to the notice.
Nor did he avail of the opportunity of inspecting the account books at the office of the defendant 's lawyer on 9 March, 1967.
On 16 March, 1967 the trial court passed an order saying that the defendant should produce the books within four days in the court to enable the plaintiff 's counsel to inspect them before 29 March, 1967 i.e. the date fixed for evidence, failing which the defence of the defendant would be struck off.
On 29 March, 1967 three witnesses of the plaintiff were examined.
After the examination of these witnesses, the trial court asked the plaintiff 's counsel that he should apply under order XI, rule 21 to strike out the defence of the defendant.
On 31 March, 1967, the plaintiff accordingly made an application under C`order XI, rule 21 read with section 151 of the Code asserting that the defendant had failed to comply with the order of the court as regards production of documents inasmuch as he had not produced them for inspection.
The defendant opposed the application stating, that there was no failure on his part to produce the documents ordered.
It was stated that all the documents as were capable of identification had been produced in the court.
It was alleged that the plaintiff had already inspected the documents that were specifically set out in the application.
It was also alleged that the plaintiff had not once but thrice or even four times inspected the documents to his entire satisfaction except that he was prevented from making fishing, roving and searching enquiries into the entries which had no relevance to the suit transaction.
It was, therefore, urged that the striking out of the defence would not he warranted by law.
Feeling apprehensive that he would not get a fair trial at the hands of the trial Judge, the defendant applied to the District Judge, Ludhiana for the transfer of the suit on 10 April, 1967.
While the District Judge was seized of the transfer application, the defendant moved the 62 High Court for transfer of the suit to some other court of competent jurisdiction.
The High Court by its order dated 15 May, 1967 declined to interfere.
On 23 May, 1967, the trial court passed an order under order XI, rule 21 striking out the defence of the defendant stating that he was placed in the same position as if he had not defended the suit and adjourned the suit to 21 June, 1967, for examination of the remaining witnesses of the plaintiff.
On 21 June, 1967, the court did not allow the defendant 's counsel to cross examine plaintiff 's witnesses holding that in view of the fact that his defence has been struck off, he had no right to participate and, therefore, could not cross examine the witnesses produced in the court.
The defendant filed a revision before the High Court which was rejected on 14 August, 1968.
In this appeal, two questions are involved: firstly, whether the trial court was justified in striking out the defence of the defendant under order XI, rule 21 of the C.P.C., 1908, and secondly, whether the High Court was right in observing that in view of the clear language are of order XI, rule 21 the defendant cannot be permitted to cross examine the plaintiff 's witnesses.
It is a travesty of justice that the trial court should have, in the facts and circumstances of the case, passed an order striking out the defence of the defendant under order XI, rule ' '1 and that the High Court should have declined to set it aside.
The penalty imposed by order XI.
rule 21 is of highly penal nature, and ought only to be used in extreme cases, and should in no way be imposed unless there is a clear failure to comply with the obligations laid down in the rule.
Order XI, rule 21 of the Code of Civil Procedure reads: "21.
Where any party fails to comply with any order to answer interrogatories, or for discovery of inspection of documents, he shall, if a plaintiff, be liable to have his suit dismissed for want of prosecution, and, if a defendant, to have his defence; if any, struck out, and to be placed in the same position as if he had not defended.
and the party interrogating or seeking discovery or inspection may apply to the Court for an order to that effect, and an order may be made accordingly.
" Section 136 of the Code of Civil Procedure, 1882, corresponding to order XI, rule 21 of the C.P.C. 1908, was based upon order XXXI, rule 20, now replaced by order XXIV, rule 16 framed under the Judi 63 cature Act.
The practice of the English Courts is, and it has always A been, to make the order a conditional one, and to grant a little further time for compliance.
In practice this provision is virtually obsolete(l).
Even assuming that in certain circumstances the provisions of order Xl, rule 21 must be strictly enforced, it does not follow that a Suit can be lightly thrown out or a defence struck out, without adequate reasons.
The test laid down is whether the default is wilful.
In the case of a plaintiff, it entails in the dismissal of the suit and, therefore, an order for dismissal ought not be made under order XT, rule 21, unless the court is satisfied that the plaintiff was willfully withholding information by refusing to answer interrogatories or by withholding the documents which he sought to discover.
In such an event, the plaintiff must take the consequence of having his claim dismissed due to his default, i.e. by suppression of information which he was bound to give: Denvillier vs Myers.(2) In the case of the defendant, he is visited with the penalty that his defence is liable to be struck out and to be placed in the same position as if he had not defended the suit.
The power for dismissal of a suit or striking out of the defence under order XI, rule 21, should be exercised only where the defaulting party fails to attend the hearing or is guilty of prolonged or inordinate and inexcusable delay which may cause substantial or serious prejudice to the opposite party.
It is well settled that the stringent provisions of order XI, rule 21 should be applied only in extreme cases, where there is contumacy on the part of the defendant or a wilful attempt to disregard the order of the court is established.
An order striking out the defence under order XI, rule 21 of the Code should, therefore, not be made unless there has been obstinacy or contumacy on the part of the defendant or wilful attempt to disregard the order of the court.
The rule must be worked with caution, and may be made use of as a last resort: Mulla 's C.P.C. 13th Ed.
I, p. 581, Khajah Assenoolla Joo vs Khajah Abdool Aziz(3), Banshi Singh vs Palit Singh(4), Allahabad Bank Ltd. vs Ganpat Rai(5), Haigh vs Haigh(6) and Twycroft vs Grant(7).
(1) Halsbury 's Laws of England, 4th Ed., Vol. 13.
p. 32.
(2) (3) I.L.R. (4) 7 C.L.J. 29S. (5) I.L.R. (6) (7) 64 In Haigh v Haigh (supra) Pearson J. observed: "I have no hesitation in saying that I have the strongest disinclination, as I believe every other Judge has, that any case should be decided otherwise than upon its merits.
But this order was introduced to prevent plaintiffs and defendants from delaying causes by their negligence or willfulness.
So great was my anxiety to relieve this lady from the consequence of her wrong headedness if, by any possibility, I could on proper terms, that I hesitated to refuse to make the order asked for, and I have looked into all the cases I could find on the subject to see that the practice of the Court has been on this order.
And I can find no case in the books where it has been applied, where a man knowingly and wilfully has allowed judgment to go by default.
" In Twycroft vs Grant (supra) Lush J. interpreting corresponding order XXXI, rule 20 of the Judicature Act, held that he would only exercise the powers conferred by the rule in the last resort.
In England, the party against whom such an order is made would, it seems, be entitled to come in and ask that the order might be set aside on showing sufficient grounds for such an application.
In Khajah Assenoolla Joo vs Khajah Abdool Aziz (supra), Pigot J. therefore made an order striking out the defence of the defendant under section 136 of the C.P.C. 1882 in consequence of non compliance with the earlier order for production of certain documents, and at the same time mentioned that the party against whom the order was made might come in and seek to set it aside on showing sufficient grounds for the application.
It is settled law that the provisions of order XI, rule 21, should be applied only in extreme cases where obstinacy or contumacy on the part of the defendant or a wilful attempt to disregard the order of the court is established.
As pointed out by Lord Russel C.J. in Reg.
vs Senior (1) and affirmed by Cave L. C. in Tamboli vs G.l.
P. Rail way(2), "wilfully" means that: "the act is done deliberately and intentionally, not by accident or inadvertence, but so that the mind of the person who does the act goes with it." In this case, there was no default, much less any wilful default, on the part of the defendant, to comply with any order of the court under order XI, rule 18(2).
In obedience of the order of the court dated (1) (2) I.L.R. 65 11 January, 1967, the defendant came all the way from Yamunanagar to Ludhiana on 27 February, 1967 and was waiting at his lawyer 's office from 6.00 p.m. to 8.30 p.m. when the plaintiff or his counsel did not turn up.
Thereafter the defendant sent a registered notice dated I March, 1967 offering inspection of the documents at his lawyer 's office on 9 March, 1967, but the plaintiff did not avail of the opportunity of inspecting the documents.
The defendant had filed an affidavit that the rest of the documents were not in his possession and could not be produced.
The account books for the years 1961. 62, 1962 63 and 1963 64 had to be produced by the defendant before the Income Tax officer, Yamunanagar on 31 January, 1967, then 7 February, 1967 and 16 March, 1967.
An affidavit to this effect was also filed.
It is somewhat strange that the trial court should have fixed the dates which were the dates fixed by the Income Tax officer In view of the notice dated 1 March, 1967, there can be no doubt that the defendant had tried to comply with the order of the court by offering inspection on 27 February, 1967.
There is no dispute that 27 February, 1967 was the date mutually agreed upon between the counsel for the parties.
The only controversy is about the scheduled time.
The time fixed according to the plaintiff 's application dated 28 February, 1967 was 2.30 p.m. at his lawyer 's office while that according to the defendant 's notice dated 1 March, 1967 it was 6.3() p.m. in his lawyer 's office.
The plaintiff has not examined his counsel, S.R. Wadhera, nor is there any affidavit by Wadhera.
From the material on record it is amply clear that the appointed scheduled time and place for inspection of the defendant 's account books was 6.30 p.m. at his lawyer 's office.
The plaintiff was afforded another opportunity of inspection of the account books on 9 March, 1967 at the office of the defendant 's lawyer from 7.0 p.m. to 9.0 p.m.
In the circumstances, the trial court was not justified in holding that there WAS any non compliance of its order under order XI, rule 18(2).
It is common ground that the account books for the years 195960 and 1960 61 were Lying in court.
The suit transactions are of the year 1959.
Nothing prevented the plaintiff from inspecting these books.
As regards the account books for the years 1961 62 to 1964 65, they were required to be produced before the Income Tax Authorities at Yamunanagar on 20 March, 1967 and on subsequent dates.
It is not clear what relevance these books could have to the controversy between the parties unless the plaintiff wanted to find some entries to show that there was carry forward of the entries relating to the suit transaction in the account books for the years 1959 60 to the subsequent years So as to bring his claim within time.
Apparently, there were no such entries in the account books for the years 1959 60 66 and 1960 61.
As regards the bank pass book of the defendant 's account with the Punjab National Bank Ltd., for the period 1 April, 1962 to 31 March, 1963 and 1 April, 1963 to 31 March, 1964 and the counterfoil of cheque No. 01194 dated 7 March, 1963, alleged to be drawn by the defendant in plaintiff 's favour, the defendant has sworn an affidavit that he had no account with Punjab National Bank Ltd., Yamunanagar during that period nor he had issued any such cheque as alleged.
In view of this, the order of the trial court dated 23 May, 1967, striking out the defence of the defendant was wholly unjustified .
The principle governing the court 's exercise of its discretion under Order XI, rule 21, as already stated, is that it is only when the default is wilful and as a last resort that the court should dismiss the suit or strike out the defence, when the party is guilty of such contumacious conduct or there is a wilful attempt to disregard the order of the court that the trial of the suit is arrested.
Applying this test, it is quite clear that there was no wilful default on the part of the defendant of the courts order under order XI, rule 18(2) for the production of documents for inspection, and consequently, the order passed by the trial court on 23 May, 1967, striking out the defence of the defendant must be vacated, and the trial must proceed afresh from the stage where the defendant was not permitted to participate.
It was further contended that the High Court was in error in observing that 'in view of the clear language of order X[, rule 21 ' the defendant has no right to cross examine the plaintiff 's witness.
A persual of order XI, rule ,?1 shows that where a defence is to be struck off in the circumstances mentioned therein, the order would be that the defendant 'be placed in the same position as if he has not defended '.
This indicates that once the defence is struck of under Order XI, rule 21, the position would be as if the defendant had not defendant and accordingly the suit would proceed ex parte.
In Sangram Singh vs Election Tribunal(l) it was held that if the court proceeds ex parte against the defendant under order IX, rule 6(a), the defendant is still entitled to cross examine the witnesses examined by the plaintiff.
If the plaintiff makes out a prima facie case the court may pass a decree for the plaintiff.
If the plaintiff fails to make out a prima facie case, the court may dismiss the plaintiff s suit.
Every Judge in dealing with an ex parte case has to take care that the plaintiff 's case is, at least, prima facie proved.
But, as we set aside the order under order XI, rule 21, this contention does not survive for our consideration.
We, therefore, refrain from expressing any opinion on the question.
(1) ; 67 For the reasons given, the order passed by the trial court dated A 23 May, 1967 striking out the defence of the defendant under order XI, rule read with section 151 of the C.P.C., and its subsequent order dated 21 July, 1967 are both set aside and it is directed to proceed with the trial according to law.
There shall be no order as to costs.
S.R. Appeal allowed. | The plaintiff respondent claiming to be an assignee of a debt under a deed dated 27th April, 1965, filed a suit against the defendant appellant for recovery of a certain sum alleged to be due to M /s Chitra Multipurpose Cooperative Society, the assignor.
On an interlocutory application moved by the respondent under order XI rules 14 and 18 C.P.C. for the production of certain documents, despite the objection by the appellant the Trial Court directed their production.
The appellant produced all the documents in his possession on 7 2 67, but he was permitted to take back The account books as they were required to Be produced before the Income Tax officer on that day with the direction that he should produce them on 23 2 67.
On 23 2 67, when the appellant appeared in the Court with his books the trial judge directed him to produce them on 16 3 67 and in the meanwhile allow their inspection to the respondent with three days ' notice.
The appellant accordingly sent a. letter dt.
25 2 67 asking the respondent to take inspection of the account books on 27 2 67 at 6 p.m. in the office d his Counsel.
On his failure to do so, the appellant sent once again a registered letter dt.
1 3 1967 asking the respondent to inspect the records on 9 3 67 in his lawyer 's office between 7 p.m. and 9 p.m.
The respondent never sent any reply to the notice.
Nor, did he avail of the opportunity of inspecting the account books at the office of the appellant 's lawyer on 9 3 67.
On 16 3 67 the Trial Court passed an order saying that the appellant should produce the books within four days in the Court to enable the respondent 's counsel to inspect them before 29 3 67 i.e. the date fixed for evidence.
After the examination of three witnesses of the respondent, the trial Court asked the respondent 's Counsel to apply under order XI rule 21 to strike out the defence of the appellant.
On 31 3 67 the respondent filed an application accordingly which was vehemently opposed by the appellant.
The appellant also moved both the District Court and the High Court for transfer of the suit to some other Court of competent jurisdiction.
The High Court declined to interfere.
Thereupon the trial Court passed an order on 23 5 67 striking out the defence of the appellant and on 21 6 67 refused permission to the appellant 's counsel to cross examine the respondent 's witnesses.
The revision filed by the appellant in the High Court was rejected on 14 8 1968.
Allowing the appeal by special leave, the Court ^ HELD: 1.
The penalty imposed by order XI, rule 21 is of a highly penal nature and ought only to be used in extreme cases and should in no way be imposed unless there is a clear failure to comply with the obligations laid 5 520SCI/78 58 down therein.
The stringent provisions of order XI, rule 21 should be applied only in extreme eases where there is contumacy on the part of the defendant or a wilful attempt to disregard the order of the Court is established.
[62E, 63E] 2.
The test laid down is whether the default is wilful.
In the case of the plaintiff, it entails in the dismissal of the suit and, therefore, an order of dismissal ought not to be made under order XI, rule 21, unless the Court is satisfied that the plaintiff was wilfully withholding the documents which the defendant sought to discover.
In such an event, the plaintiff must take the consequence of having his claim dismissed due to his default i.e. by suppression of information which he was bound to give.
In the case of defendant, he is visited with the penalty that his defence is liable to be struck out and to be placed in the same position as if he had not defended the suit.
[63 B D] 3.
The power for dismissal of a suit or striking out of the defence under order XI, rule 21, should be exercised only where the defaulting party fails to attend the hearing or is guilty of prolonged or inordinate and inexcusable delay which any cause substantial or serious prejudice to the opposite party.
The rule must be worked with caution and may be made use of as a last resort.
[63D,E] Denvillier vs Myers, , Banshi Singh vs Palit Singh, 7 C.I.J. 295, Haigh, , Twycroft vs Grant, , Reg vs Senior, [1889](1) QBD 283; quoted with approval.
Khajah.
Assenoolla Joo vs Khajah Abdool Aziz, I.L.R. and Allahabad Bank Ltd. vs Ganpat Rai, T.L.R. ; approved.
It is travesty of justice that the trial Court should have, in the facts and circumstances of the case, passed an order striking out the defence of the defendant under order XI, rule 21 and that the High Court should have declined to set it aside.
[62D E] 5.
Applying the principle governing the Court 's exercise of its discretion under order XI, rule 21, in the instant case, there was no wilful default on the part of the defendant of the Court 's order under Order XI, rule 18(2) for the production of documents for inspection, and consequently, the order passed by the trial court on 23 May, 1967, striking out the defence of the defendant must be vacated and the trial must proceed afresh from the stage where the defendant was not permitted to participate.
[66C E] 6.
A perusal of order XI, rule 21 shows that where a defence is to be struck off in the circumstances mentioned therein, the order would be that the defendant 'be placed in the same position as if the has not defended '.
This indicates that once the defence is struck off under order XI, rule 21, the position would be as if the defendant had not defended and accordingly the suit would proceeds ex parte.
If the Court proceeds ex parte against the defendant under order IX, rule 6(a), the defendant is still entitled to cross examine the witnesses examined by the plaintiff.
If the plaintiff makes out a prima facie ease the court unable pass a decree for the plaintiff.
If the plaintiff fails to make out a prima facie case, the Court may dismiss the plaintiff 's suit.
Every Judge in dealing with an ex parte case has to take care that the plaintiff 's case is, at least, prima facie proved.
[66E G] Santram Singh vs Election Tribunal, ; referred to. |
N: Criminal Appeal No. 239 of 1975.
Appeal by special leave from the Judgment and order dated 17 10 1974 of the Allahabad High Court in Cr. A. No. 1013 of 1974 and Reference No. 18/74.
Badri Das Sharma (amicus curiae) for the appellant.
O. P. Rana for the respondent.
The Judgment of the Court was delivered by KAILASAM J.
This appeal is preferred by Deena alias Din Dayal by special leave against the judgment of the High Court convicting and sentencing him.
The case for the prosecution is that on the night of the 20th and 21st June, 1971 the deceased Nainsukh, his brother Hari Singh, his distant uncle Tika Ram, Chandra Pal, daughter 's son of Tika Ram and Chokhey slept on a platform of the Chaupal in village Jar.
According to the prosecution a lantern was hanging on the platform from the branch of a Neem tree.
In the morning at about 4 a.m. the appellant Deena and four other came to the Chaupal of Nainsukh.
The dogs began to bark as a result of which Hari Singh (P.W. 1 ) and others were 108 awakened.
Deena and his associates carried pistol and electric torches Deena challenged Nainsukh saying that he would be taught a lesson for appearing as a witness and fired his pistol striking Nainsukh on his head.
Hari Singh and Chandra Pal shouted for help.
They were also injured.
After hearing the alarm Nihal Singh, Panna Lal and others reached the place of the incident but before their arrival the accused had made good their escape.
The First Information Report was written by Bharat Singh on the dictation of Hari Singh.
The injured witness Hari Singh and Chandra Pal then went to Etah Police Station where the report exhibit Ka 4 was handed over at Police Station Kotwali at 2.05 a.m.
On 21st June, 1971.
The Police officer took up the investigation and reached the scene at about 1.30 p.m.
He found the dead body of Nainsukh and held the inquest, prepared the site plan and recovered the material objects.
Nihal Singh, P.W. 2, produced the lantern before the Investigating officer which was burning at the time the occurrence took place.
shell of used cartridge was also recovered from the scene.
Dr. N. K. Mittal (P.W. 13), the Medical officer of Etah.
found two injuries caused by fire arm on Chandra Pal and one injury on Hari Singh.
The autopsy on the body of Nainsukh was conducted by Dr. Prasad on 21st June, ]971.
He found two gun shot injuries, one on the right side of head above the right ear and the other was non traumatic swelling on the back surface of the right hand.
On internal examination it was found that the surface of the scalp of the right side was congested under injury No. 1.
The doctor found a fissured fracture of the right parietal bone, vertically placed from the suture line to eye brow.
The doctor was of the opinion that the injuries were sufficient in the ordinary course of nature to cause death.
Apart from the eye witness P.W. 1 the prosecution examined P W. 2 Nihal Singh, P.W. 3 Panna Lal who saw the accused running away after the incident.
Reliance was not placed by the courts below on the evidence of P.Ws 2 and 3.
The conviction therefore solely rests on the testimony of eye witness Hari Singh, P.W. ].
Hari Singh P.W. 1 has spoken of the motive.
About 4 or 6 years prior to the occurrence one Ram Chandra was murdered.
Deena was one of the accused in the case.
Deena was found guilty of murder and sentenced to imprisonment for life.
In that case the deceased Nainsukh gave evidence against Deena as an eye witness.
About two months before the murder of Nainsukh, Deena was released on hail and it was rumoured that Deena was saying that now when he had 109 come out of jail he would teach a lesson to Nainsukh.
Nainsukh, Hari Singh and their relations took the threat seriously and were living cautiously.
On the date of the occurrence, according to P.W. 1, a lantern was burning and at about 4 o 'clock in the morning he was awakened by the barking of the dogs.
Four or five other persons came along with Deena.
Deena and one of his companions had torches in their hands and they came flashing their torches.
Deena and the other accused came at the Chaupal from the staircase on the eastern side.
After coming over the Chabutra of the Chaupal the accused stated "Nainsukh, beware, now I will teach you the lesson for giving the evidence".
While flashing the torches on the deceased Deena fired at Nainsukh aiming towards his head.
The shot hit Nainsukh on the head.
The other shot fired by Deena injured Chandra Pal and the third shot hit the prosecution witness Hari Singh.
Hari Singh received an injury on his right shoulder.
The plea that was made by the defence on the evidence of P.W. 1 was that it cannot be safely relied on.
It was submitted that the other injured witness Chandra Pal who was examined as a court witness did not fully support the evidence of the prosecution.
We have gone through the testimony of P.W. 1 and witness Chandra Pal and we do not see any material contradiction.
The enmity between Deena on the one side and the deceased and his family on the other side is not seriously contested.
The deceased Nainsukh gave evidence against Deena in the murder case in which Ram Chandra was killed.
When Deena was released on bail he wanted to teach a lesson to the witness Nainsukh who had appeared against him.
This resulted in Deena shooting the deceased to death.
The motive as alleged by the prosecution stands amply proved.
So far as the scene of the offence is concerned it was not seriously disputed before the High Court.
It was submitted before us that no blood stains were scrapped from the scene which circumstance would show that the occurrence took place at some other place.
It is seen that there was a bundle of straw and a cot at the scene.
The strings of the cot and as well as the straws were stained with blood.
The Serologist had found human blood on the straws.
We do not find any difficultly in accepting the finding of the High Court that the occurrence took place at the site alleged by the prosecution.
The only question that requires consideration is whether there was sufficient light at the scene of occurrence to enable the witness to recognise the accused.
Because of the motive, it is highly probable that Nainsukh, Hari Singh and the family slept with the light burning on the platform which was the scene of offence.
Three shots were 110 fired and there could have been no difficulty in P.W. 1 identifying the appellant Deena.
It is common ground that the witness knew Deena very well.
The lantern that was burning was produced by P.W. 2, Nihal Singh, as soon as the Investigating officer came to the scene of occurrence.
The witness was sleeping to the south of the deceased person at a distance of few feet and we do not think there could have been any difficulty in identifying the assailant.
The High Court has fully considered the question as to whether P.W. 1 would have identified the assailant and has come to the conclusion that the prosecution has established that the lantern was burning and the assailants used torches which enabled the recognition of the accused at the time of the incident.
P.W. 1 Hari Singh is a natural witness and his presence cannot be disputed as he had sustained a gun shot injury.
He had no particular motive for falsely implicating Deena the accused.
The court witness Chandra Pal did not fully support the prosecution except that the incident took place at the chaupal as alleged by the prosecution.
But we do not feel any justification for rejecting the testimony of P.W. 1 because of the contradiction in the testimony of C.W. 1 Chandra Pal.
We are inclined to agree with the High Court that Chandra Pal was won over by the defence.
We also agree with the High Court and find that the appellant Deena was guilty of an offence under section 302 I.P.C. in causing the death of Nainsukh.
The High Court confirmed the extreme penalty of law imposed by the Sessions Court.
The Sessions Court in imposing the death sentence found that the appellant is a desperate character and that while he was on bail in Rare, Chandra murder case he committed the murder of Nainsukh one of the prosecution witnesses in Ram Chandra murder case.
As the offence was committed by a person under a sentence of imprisonment for life for an offence under section 302 I.P.C. the Sessions Court inflicted the extreme penalty.
As a charge under section 303 I.P.C. was not framed and as the parties are not able to tell us the result of the appeal filed by Deena in Ram Chandra 's case, we refrain from invoking the provisions of section 303 I.P.C.
Regarding the sentence after giving our serious and anxious consideration, we find ourselves unable to come to any different conclusion from that arrived at by the trial Judge and the High Court.
The offence was committed after deliberate planning in the night when the victim was sleeping.
It was for the purpose of teaching a lesson to a witness who gave evidence against the accused.
We do not see any extenuating circumstance.
We confirm the sentence of death and dismiss this appeal.
M.R. Appeal dismissed. | The appellant was convicted for having committed an offence u/s 302 I.P.C., and was serving a sentence of imprisonment for life.
He was released on bail.
and during that period.
committed the murder of a prosecution witness in the earlier murder case.
The Sessions Court found him guilty and imposed the sentence of death on him.
The sentence was confirmed by the High Court in appeal .
Dismissing the appeal, the Court ^ HELD: The murder was committed by a person under a sentence of imprisonment for life for an offence under section 302 I.P.C. while he was on bail.
The offence was committed for the purpose of teaching a lesson to a witness who gave evidence against him in the earlier murder case and was committed after deliberate planning, in the night when the victim was sleeping.
We confirm the sentence of death.
[110F H] |
ivil Appeal No. 1 278 of 1978.
Appeal by special leave from the Judgment and Order 15 11 1976 of the Delhi High Court in Civil Writ No. 96 of 1971.
B. Dutta for the Appellant.
Soli J. Sorabjee, Addl.
General and R. N. Sachthey for Respondents 1 and 2.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
We granted special leave and heard arguments on the limited question whether "brick earth" is a 'minor mineral ' within the meaning of that expression as defined in Section 3 (e) of the .
The definition is as follows: "Minor mineral ' means building stones, gravel? ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by Notification in the official Gazette declare to be minor mineral ;" In exercise of the power conferred by Section 3(e) of the Act, the Central Government declared the following minerals to be minor minerals "Boulder, Shingle, Chalcedony pebbles used for ball mill purposes only, limeshell kanker and limestone used for lime burning, murrum, brick earth, fuller 's earth, bentonite road metal, reh matti, slate and shale when used for building material;" The submission of the learned Counsel for the appellant was that a substance had to be a mineral before it could be notified as a minor mineral pursuant to the power under Section 3(e) of the .
He urged that brick earth was not a mineral and, therefore, it could not be notified a minor mineral.
We agree with the learned Counsel that a substance must first be a mineral before it can be notified as a minor mineral pursuant to the power vested in the Central Government under Section 3(e) of the Act.
The question, therefore, is whether brick earth is a mineral.
The expression "Minor Mineral" as defined in Section 3(e) includes 'ordinary clay ' and 'ordinary sand '.
If the expression "minor mineral" as defined in Section 3(e) of the Act includes 'ordinary clay ' and 273 `ordinary sand ', there is no reason why earth used for the purpose A of making bricks should not be comprehended within the meaning of the word "any other mineral" which may be declared as a "minor mineral" by the Government.
The word "mineral" is not a term of article It is a word of common parlance, capable of a multiplicity of meaning depending upon the context.
For example the word is occasionally used in a very wide sense to denote any substance that is neither animal nor vegetable.
Sometimes it is used in a narrow sense to mean no more than precious metalls like gold and silver.
Again, the word "minerals" is often used to indicate substances obtain .
ed from underneath the surface of the earth by digging or quarrying.
But this is not always so as pointed out by Chandrachud, J (as he then was) in Bhagwan Dass vs State of Uttar Pradesh,(1) where the learned judge said (at p. 874): 'It was urged that the sand and gravel are deposited on the surface of the land and not under the surface of the soil and therefore they cannot be called minerals and equally so, any operation by which they are collected or gathered cannot properly be called a minerals operation.
It is in the first place wrong to assume that mines and minerals must always be sub soil and that there can be no minerals on the surface of the earth.
Such an assumption is contrary to informed experience.
In any case, the definition of mining operations and minor minerals in section 3(d) and (e) of the Act of 1957 and Rule 2(S) and (7) of the Rules of 1963 shows that minerals need not be subterranean and that mining operations cover every operation undertaken for the purpose of "Winning" any minor mineral.
"Winning" does not imply a hazardous or perilous activity.
The word simply means extracting a mineral" and is used generally to indicate, any activity by which a mineral is secured.
"Extracting" in turn means drawing out or obtaining.
A tooth is 'extracted ' as much as the fruit juice and as much as a mineral.
Only that the effort varies from tooth to tooth, from fruit to fruit and from mineral to mineral".
We may also refer to Northern Pacific Railway Company vs John A. Sodrberg(2) where the Supreme Court of United States observed as follows (at page 581): "The word 'mineral ' is used in so many senses, dependant upon the context, that the ordinary definitions of the dictionary throw but little light upon its significance in a (1) ; (2) 47 L. Fd.575 274 given case.
Thus, the scientific division of all matter into the animal, vegetable, or mineral kingdom would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom, and therefore, could not be excepted from the grant without being destructive of it.
Upon the other hand, a definition which would confine it to the precious metals gold and silver would so limit its application as to destroy at once half the value of the exception.
Equally subversive of the grant would be the definition of minerals found in the Century Dictionary: as "any constituent of the earth 's crust" ; and that of Beinbridge on Mines: "All the Sub stances stances that now form, or which once formed, a part of the solid body of the earth".
Nor do we approximate much more closely to the meaning of the word by treating minerals as substances which are ""mined"" as distinguished from those are "quarried", since many valuable deposits of gold, copper, iron, and coal lie upon or near the surface of the earth, and some of the most valuable building stone, such for instance, as the Caen stone in France, is excavated from mines running far beneath the surface.
This distinction between under ground mines and open workings was expressly repudiated in Midland C. vs Haunchwood Brick & Tile Co. (L.R 20 Ch.
552) and in Hext vs Gill (L.R. 7 Ch.
699)" The Supreme Court of United States also referred to several English cases where stone for road making or paving was held to be 'minerals ' as also granite, sandstone, flint stone, gravel, marble, fire clay, brick clay, and the like.
It is clear that the word 'mineral ' has no fixed but a contextual connotation.
The learned Counsel for the appellant invited our attention to the decision of the Court of Appeal in Todd Birleston and Co. vs The North Eastern Railway Co.(l) and to Stoud 's Judicial Dictionary to urge that clay, brick earth and the like have sometimes been held not to be minerals by English Courts.
As we said earlier the word mineral is an elastic word whose meaning depends upon the setting in which it is used.
For instance, in the case cited, the question was whether clay forming the surface or subsoil, and constituting the "land" compulsorily taken for the purposes of a railway, was not a mineral WITH the meaning of Sections 77, 78 or 79 of the Railway Clauses Consolidation Act.
The answer was that 'clay ' was not a mineral for the purposes of the Railway Clauses Consolidation Act.
Any other conclusion, in the context of the Act, would have led to the absurd (1) [1903] I K.B. 603 .
275 result that the original owner whose land had been taken would be entitled to dig and take away the clay from the land on which the Railway was constructed, thus defeating the very object of the compulsory taking.
On the other hand, as noticed by the Supreme Court of the United States, in several English cases clay, gravel, sand, stone etc. has been held to be minerals.
That is why we say the word mineral has no definite meaning but has a variety of meanings, depending on the context of its use.
In the context of the Mines and Minerals (Regulation & Development) Act, we have no` doubt that the word 'mineral ' is of sufficient amplitude to include 'brick earth '.
As already observed y us, if the expression 'minor mineral ' as defined in the Act includes 'ordinary clay ' and 'ordinary sand '.
there is no earthly reason why 'brick earth ' should not be held to be 'any other mineral ' which may be declared as 'minor mineral.
We do not think it necessary to pursue the matter further except to say that this was The view taken in Laddu Mal vs State of Bihar(l) Amar Singh Modilal vs State of Haryana(2) and Sharma & Co. vs State of U.P.(3).
We do not agree with the view of the Calcutta High Court in State of West Bengal vs Jagadamba Prasad (4) that because speaks of 'ordinary earth ' as a mineral it is not a minor mineral as defined in the Mines and Minerals (Regulation & Development) Act.
The appeal is accordingly dismissed with costs.
S.R. Appeal dismissed (1) A.I.R 1965 Patna 491 (2) A.I.R 1972 Punj.
& Har. 356 (3) A.I.R. 1975 All. 86.
(4) A.I.R. 1969 Cal. | section 3(e) of the Mines and Mineral (Regulation and Development) Act, 1957 defines " 'Minor Mineral ' as meaning building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by Notification in the official Gazette declare to be a minor mineral".
In exercise of the power conferred by section 3(e) of the Act the Central Government declared inter alia brick earth as a 'minor mineral '.
Dismissing the appeal by special leave the Court ^ HELD: ( I ) The word 'mineral ' has no fixed but a contextual connotation.
If 'mineral ' is not a term of art it is a word of common parlance, capable of multiplicity of meanings depending upon the context.
The word is occasionally used in a very wide sense to denote any substance that neither animal nor vegetable Sometimes it is used in a narrow sense to mean no more than precious metals like gold and silver.
Again the word 'minerals ' is often used to indicate substances obtained from underneath the surface of the earth by digging or quarrying.
though it is not always so.
[273 A C, 274 F] In the context of the ', the word Mineral is of sufficient amplitude to include brick earth.
If the expression 'minor mineral ' as defined in the Act, includes 'ordinary clay` and 'ordinary sand '.
there is no earthly reason why brick earth should not be held to be 'any other mineral ' which may, be declared as a 'minor mineral '.
[1275 B C] Bhagwan Das vs State.
Of U.P., ; , applied Laddu Mal vs State of Bihar, AIR 1965 Pat. 491; Amar Modilal Singh vs State of Haryana, AIR 1972 Punjab and Haryana 356; Sharma & Co. vs State of U.P., AIR 1975 All. 386 approved.
State of West Bengal vs Jagdamba Prasad, AIR 1969 Cal.
281; overruled.
Todd Birleston & Co. vs The North Eastern Railway Co., [1903] I K.B. 603; quoted with approval.
(2) A substance must first be a mineral before it can be notified as a minor mineral pursuant to the power vested in the Central Government under section 3(e) of the Act.
Brick earth being a mineral.
the Central Government has correctly notified it as a 'minor mineral '.
[272 G H] 272 |
Civil Appeal No. 2030 of 1968.
Appeal by special leave from the Judgment and Decree dated 23 5 1968 of the Delhi High Court at New Delhi in R.F.A. No. 147D of 1968.
section N. Andley, Mahinder Narain and Rameshwar Nath, for the Appellant.
Hardyal Hardy, H. section Parihar and 1.
N. Shroff, for Respondents Nos. 1 and 2.
The following Judgments were delivered: FAZAL ALI, J.
This appeal by special leave is directed against the judgment of the Delhi High Court dated 23rd May, 1967 affirming the decree of the District Judge, Delhi and dismissing the plaintiff 's suit for damages against the defendants on the ground that they had violated the copyrighted work of the plaintiff which was a drama called 'Hum Hindustani '.
The facts have been succinctly stated by the District Judge in his judgment and summarised by the High Court, and, therefore, it is not necessary for us to repeat the same all over again.
We would, however, like to give a brief resume of some of the striking facts in the case which may be germane for the purpose of deciding the important issues involved in this appeal.
We might mention here that the High Court as also the District Judge negatived the plaintiff 's claim and prima facie the appeal appears to be concluded by finding of fact, but it was rightly argued by Mr. Andley appealing for the appellant that the principles of violation of copy right in the instant appeal have to be applied on the facts found and the inferences from proved facts drawn by the High Court which is doubtless a question of law and more particularly as there is no clear authority of this Court on the subject, we should be persuaded to go into this question without entering into findings of facts.
Having heard counsel for the parties, we felt that as the case is one of first impression and needs to be decided by this Court, we should enter into the merits on the basis of the facts found and inferences drawn by the High Court and the District Judge.
It is true that both the District Judge and the High Court have relied upon some well established principles to determine whether or not in a particular case a violation of copy right has taken place, but learned counsel for the appellant has challenged the validity of the principles enunciated by the High Court.
226 The plaintiff is an architect by profession and is also a playwright, dramatist and producer of stage plays.
Even before Hum Hindustani the plaintiff had written and produced a number of other plays like Des Hamara, Azadi and Election which were staged in Delhi.
The subject matter of the appeal, however, is the play entitled 'Hum Hindustani '.
According to the plaintiff, this play was written by him in Hindi in the year 1953 and was enacted by him for the first time on 6th, 7th, 8th and 9th February, 1954 at Wavell Theatre, New Delhi under the auspices of the Indian National Theatre.
The play proved to he very popular and received great approbation from the Press and the public as a result of which the play was re staged in February and September, 1954 and also in 1955 and 1956 at Calcutta.
In support of his case the plaintiff has referred to a number of comments appearing in the Indian Express, Hindustan Times, Times of India and other papers.
Encouraged by the success and popularity of the aforesaid play the plaintiff tried to consider the possibility of filming it.
In November, 1954 the plaintiff received a letter dated 19th November, 1954 from the second defendant Mr. Mohan Sehgal wherein the defendant informed the plaintiff that he was supplied with a synopsis of the play by one Mr. Balwant Gargi a common friend of the plaintiff and the defendant The defendant had requested the plaintiff to supply a copy of the play so that the defendant may consider the desirability of making a film on it.
The plaintiff, however, by his letter dated 30th November? 1954 informed the defendant that as the play had been selected out of 17 Hindi plays for National Drama Festival and would be staged on 11th December, 1954, the defendant should take the trouble of visiting Delhi and seeing the play himself in order to examine the potentialities of making a film, and at that time the matter could be discussed by the defendant with the plaintiff.
The plaintiff 's case, however, is that some time about January, 1955 the second and the third defendants came to Delhi, met the plain tiff in his office where the plaintiff read out and explained the entire play to the defendants and also discussed the possibility of filming it.
The second defendant did not make any clear commitment but promised the plaintiff that he would inform him about his re action after reaching Bombay.
Thereafter the plaintiff heard nothing from the defendant.
Sometime in May, 1955 the second defendant announced the production of a motion picture entitled "New Delhi".
One Mr. Thapa who was one of the artists in the play produced by the plaintiff happened to be in Bombay at the time when the picture 'New Delhi ' was being produced by the defendant and informed the plaintiff that the picture being produced by the defendant was really based on the 227 plaintiff 's play 'Hum Hindustani '.
The plaintiff thereupon by his letter dated 30th May, 1955 wrote to the second defendant expressing serious concern over the adaptation of his play into a motion picture called 'New Delhi '.
The defendant, however, by his letter dated 9th June, 1955 informed the plaintiff that his doubts were without any foundation and assured the plaintiff that the story treatment, dramatic construction, characters etc.
were quite different and bore not the remotest connection or resemblance with the play written by the plaintiff.
The picture was released in Delhi in September, 1956 and the plaintiff read some comments in the papers which gave the impression that the picture was very much like the play 'Hum Hindustani ' written by the plaintiff.
The plaintiff himself saw the picture on the 9th September, 1956 and he found that the film was entirely based upon the said play and was, therefore, convinced that the defendant after having heard the play narrated to him by the plaintiff dishonestly imitated the same in his film and thus committed an act of piracy so as to result in violation of the copy right of the plaintiff.
The plaintiff accordingly filed the suit for damages, for decree for accounts of the profits made by the defendants and a decree for permanent injunction against the defendants restraining them from exhibiting the film 'New Delhi '.
The suit was contested by defendants No. 1 and 2 as also by other defendants who adopted the pleas raised by defendants No. 1 and 2.
The defendants, inter alia, pleaded that they were not aware that the plaintiff was the author of the play 'Hum Hindustani ' nor were they aware that the play was very well received at Delhi.
Defendant No. 2 is a film Director and is also the proprietor of defendant No. 1 Delux Films.
The defendants averred that in November, 1954 the second defendant was discussing some ideas for his new picture with Mr. Balwant Gargi who is a play wright of some repute.
In the course of the discussion, the second defendant informed Mr. Gargi that the second defendant was interested in producing a motion film based on 'provincialism ' as its central theme.
In the context of these discussions Mr. Gargi enquired of defendant No. 2 if the latter was interested in hearing the play called 'Hum Hindustani ' produced by the plaintiff which also had the same theme of provincialism in which the second defendant was interested.
It was, therefore, at the instance of Mr. Gargi that the second defendant wrote to the plaintiff and requested him to send a copy of the script of the play.
The defendant goes on to state that the plaintiff read out the play to the second defendant in the presence of Rajinder Bhatia and Mohan Kumar, Assistant Directors of the second defendant when they had 228 come to Delhi in connection with the release of their film "Adhikar".
The second defendant has taken a clear stand that after having heard the play he informed the plaintiff that though the play might have been all right for the amateur stage, it was too inadequate for the purpose of making a full length commercial motion picture.
The defendants denied the allegation of the plaintiff that it was after hearing the play written by the plaintiff that the defendants decided to make a film based on the play and entitled it as 'New Delhi '.
The defendant thus submitted that there could be no copy right so far as the subject of provincialism is concerned which can be used or adopted by any body in his own way.
He further averred that the S motion picture was quite different from the play 'Hum Hindustani ' both in contents, spirit and climax.
The mere fact that there were some similarities between the film and the play could be explained by the fact that the idea, viz., provincialism was the common source of the play as also of the film.
The defendant thus denied that there was any violation of the copy right.
On the basis of the pleadings of the parties, the learned trial Judge framed the following issues: 1.
Is the plaintiff owner of the copyright in the play 'Hum Hindustani ' ? 2.
Is the film 'New Delhi ' an infringement of the plaintiff 's copyright in the play 'Hum Hindustani ' ? 3.
Have defendants or any of them infringed the plaintiff 's copyright by producing, or distributing or exhibiting the film 'New Delhi ' ? 4.
Is the suit bad for misjoinder of defendants and cause of action ? 5.
To what relief is the plaintiff entitled and against whom ? Issue No. 1 was decided against the defendants and it was held by the trial Judge that the plaintiff was the owner of the copy right in the play 'Hum Hindustani '.
Issue No. 4 was not pressed by the defendants and was accordingly decided against them.
The main case however turned upon the decision on issues No. 2 and 3 which were however decided against the plaintiff as the learned Judge held that there was no violation of the copyright of the plaintiff.
The plaintiff then went up in appeal to the Delhi High Court where a Division Bench of that Court affirmed the decision of the District Judge and upheld the decree dismissing the plaintiff 's suit.
The findings of fact arrived at by the learned trial Judge and the High Court 229 have not been assailed before us.
The only argument advanced by h the appellant was that the principles enunciated and the legal inferences drawn by the courts below are against the settled legal principles laid down by the courts in England, America and India.
It was also submitted by Mr. Andley that the two courts have not fully understood the import of the violation of copy right particularly when the similarities between the play and the film are so close and sundry that would lead to the irresistible inference and unmistakable impression that the film is nothing but an imitation of the play.
On the other hand, it was argued by Mr. Hardy counsel for the respondents that the two courts below have applied the law correctly and it is not necessary for this Court to enter into merits in view of the concurrent findings.
of fact given by the two courts.
He further submitted that even on the facts found it is manifest that there is a vast difference both in the spirit and the content between the play 'Hum Hindustani ' and the film 'New Delhi ' and no question of violation of the copy right arises.
In order to appreciate the argument of both the parties it may be necessary to discuss the law on the subject.
To begin with there is no decided case of this Court on this point.
Secondly, at the time when the cause of action arose Parliament had not made any law governing copy right violations and the courts in the absence of any law by our Parliament relied on the old law passed by the British Parliament, namely, the Copy Right Act of 1911.
Section 1 sub section (2) (d) defines 'copy right ' thus: "(2) For the purposes of this Act, copy right ' means the sole right to produce or reproduce the work or any substantial Part thereof in any material form whatsoever to perform, or in the case of a lecture to deliver, the work or any substantial part thereof in public.
If the work is unpublished, to publish the work or any substantial part thereof; and shall include the sole right, (d) in the case of a literary, dramatic, or musical work, to make any record, perforated roll, cinematograph film, or other contrivance by means or which the work may be mechanically performed or delivered".
Section 2 provides the contingencies where a copy right could be infringed and runs thus : "2(1) Copyright in a work shall be deemed to be in fringed by any person who, without the consent of the 230 owner or the copyright, does anything the sole right to do which is by this Act conferred on the owner of the copy right".
It is, therefore, clear that the Act of 1911 defines 'copyright ' and also indicates the various contingencies where copy right cannot be in fringed.
The statute also provides exceptions which would not amount to violation of copyright.
In the instant case the play written by the appellant falls within section 1(2)(d) because it is a dramatic work.
The learned District Judge has rightly held that emotions like mere ideas are not subject to pre emption because they are common property.
Quoting from the law of copyright and Movie rights by Rustom R. Dadachanji the learned Judge observed as follows: "It is obvious that the underlying emotion reflected by the principal characters in a play or look may be similar and yet that the characters and expression of the same emotions be different.
That the same emotions are found in plays would not alone be sufficient to prove infringement but if similar emotions are portrayed by a sequence of events presented in like manner expression and form, then infringement would be apparent".
Similarly in the case of Hanfstaengl vs W. H. Smith and Sons(1) it has been held by Bayley, J. that "a copy is that which comes so near to the original as to give to every person seeing it the idea created by the original".
In Halsbury 's Laws of England by Lord Hailsham Fourth Edition the following observations are made: "only original works are protected under Part I of the Copyright Act 1956, but it is not requisite that the work should be the expression of original or inventive thought, for Copyright Acts are not concerned with the originality of ideas, but with the expression of thought, and, in the case of a literary work, with the expression of thought in print or writing. .
There is copyright in original dramatic works and adaptations thereof, and such copyright subsists not only in the actual words of the work but in the dramatic incidents created, so that if these are taken there may be an infringement although no words arc actually copies.
There cannot be copyright in mere science effects or stage situations which are not reduced into some permanent form".
(1) 231 Similarly, it was pointed out by Copinger in his book on Copyright 11th Edition that what is protected is not the original thought but expression of thought in a concrete form.
In this connection, the author makes the following observations based on the case law: "What is protected is not original thought or information, but the original expression of thought or information in some concrete form.
Consequently, it is only an in fringement if the defendant has made an unlawful use of the form in which the thought or information is expressed.
The defendant must to be liable, have made a substantial use of this form; he is not liable if he has taken from the work the essential, ideas however original, and expressed the idea in his own form, or used the idea for his own purposes.
" The author also points out that there is no infringement unless the plaintiff 's play wrighted work has been actually used so, that it may be said that the latter work reproduces the earlier one.
In this connection the author observes as follows: "A further essential matter, and one which rather strangely is not anywhere precisely stated in the Act of 1956 is that there can be no infringement unless use has been made, directly or indirectly, of the plaintiff 's work".
Moreover, it seems to us that the fundamental idea of violation of copyright or imitation is the violation of the Eighth Commandment: "Thou shalt not steal" which forms the moral basis of the protective provisions of the Copyright Act of 1911.
It is obvious 11 ' that when a writer or a dramatist produces a drama it is a result of his great labour, energy, time and ability and if any other person is allowed to appropriate the labours of the copy righted work, his act amounts to theft by depriving the original owner of the copy right of the product of his labour.
It is also clear that it is not necessary that the alleged infringement should be an exact or verbatim copy of the original but its resemblance with the original in a large measure, is sufficient to indicate that it is a copy.
In Article 418 Copinger states thus: "In many cases the alleged infringement does not consist of an exact, or verbatim copy, of the whole, or any part, of the earlier work, but merely resembles it in a greater or lesser degree".
232 In Article 420 the author lays down the various tests to determine whether an infringement has taken place and observes as follows: "Various definitions of 'copy ' have been suggested, but it is submitted that the true view of the matter is that, where the court is satisfied that a defendant has, in producing the alleged infringement, made a substantial use of those features of the plaintiff 's work in which copyright subsists, an infringement will be held to have been committed, if he has made such use, he has exercised unlawfully the sole right which is conferred upon the plaintiff.
" Ball in "Law of Copyright and Literary Property '` page 364 points out that where the defendant materially changes the story he cannot be said to have infringed the copyright.
In this connection, the author observes as follows: "In such a composition the story is told by grouping and representing the important incidents in the particular sequence devised by the author whose claim to copyright must depend upon the particular story thus composed; and not upon the various incidents, which, if presented individually, without such unique sequential arrangement, would be common literary property.
Consequently another dramatist who materially changes the story by materially varying the incidents should not be held to be infringer '.
It is also pointed out by Mr. Ball that sometimes even though there may be similarities between the copy righted work and the work of the defendant they may be too trivial to amount to appropriation OF copyrighted material.
The author observes thus: "When two authors portray in literary or dramatic form the same occurrence, involving people reacting to the same emotions under the influence of an environment constructed of the same materials.
similarities in incidential details necessary to the environment; or setting are inevitable; but unless they are accompanied by similarities in the dramatic development of the plot or in the lines or action .
Of the principal characters, they do not constitute evidence of copying.
They are comparable to similarities in two works of art made by different artists from the same original subject, and in the usual case are` too trivial and unimportant to amount to a substantial appropriation of copyrighted material".
233 The author further says that unless there is any substantial identity A between the respective works in the scenes, incidents and treatment a case of infringement of copyright is not made and observes thus: "But there was no substantial identity between the respective works in the scenes, incidents, or treatment of the common Them, the court held that the plaintiff 's copyright were not infringed by the defendant 's photoplays".
Dealing with the infringement of copyright of a play by a motion picture which appears to be an identical case in the present appeal.
the author observes as follows: "In an action for the alleged infringement of the copy right of a play by a motion picture, wherein it appeared that both authors had used life in a boys ' reform school as a background, but the only similarity between the two productions consisted to a few incidents and points in dialogue, such as one would expect to find in stories set against the same background, there was no infringement of copyright" To the same effect are the following observations to` the author: "Where the only evidence of similarities between two plays was based upon the author 's analysis and interpretation of an extensive list of "parallel", from which he infer red that many incidents, scenes and characters in the alleged infringing play were adapted from the plaintiff 's copy righted play but no such resemblance would be apparent i. to an ordinary observer, it was held that the meaning or interpretation which the author gives to his literary work cannot be accepted as a deciding test of plagiarism; and that, in the absence of any material resemblance which could be recognised by an ordinary observation.
each play must be regarded as the independent work of the named author" Similar observations have been made in Corpus Juris Secundum VOL 18 at page 139 where it is observation as follows : "An author has, at common law, a property in his intellectual production before it has been published, and may obtain redress against anyone who deprives him of it, or, by improperly obtaining a copy, endeavours to publish or to use it without his consent".
16 520 SCI/78 234 "This right exists in the written seenario of a motion picture photoplay and in the photoplay itself as recorded on the photographic film.
There is, however, no common law literary property right in the manner and postures of the actors used by them in performing the play". "Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copy right, or piracy, which is a synonymous term in this connection consists in the doing by any person, without the con sent of the owner of the copyright, of anything the sole right to do, which is conferred by the statute on the owner of the copyright.
" This view was taken by the U.S. Supreme Court in the case of Bobbs Merrill Company vs Isidor Straus and Nathan Straus.(1) In the American Jurisprudence also it is pointed out that the law does not recognize property rights in abstract idea, nor is an idea protected by a copyright and it becomes a copyright work only when the idea is given embodiment in a tangible form.
In this connection the following observations are made: "Generally speaking, the law does not recognize property rights in abstract ideas and does not accord the author or proprietor the protection of his ideas.
which the law does accord to the proprietor of personal property '.
"In cases involving motion pictures or radio or television broadcasts, it is frequently stated that an idea is not protected by a copyright or under the common law, or that there is no property right in an idea, apart from the manner in which it is expressed".
"When an idea is given embodiment in a tangible form, it becomes the subject of common law property rights which are protected by the courts, at least when it can be said to be novel and new".
It was also pointed out in this book as to what constitutes colorable imitation.
In this connection, the following observations have been made: "Infringement involves a copying, in whole or in part, either in haec verba (sic) or by colorable variation .
A copy (1) 21 O U.S .
339. 235 as used in copyright cases, signifies a tangible object which is a reproduction of the original work.
The question is not whether the alleged infringer could have obtained the same information by going to the same source used by the plaintiff in his work, but whether he did in fact go to the same source and do his own independent research.
In other words, the test is whether one charged with the infringement made an independent production, or made a substantial and unfair use of the plaintiff 's work".
"Intention to plagiarise is not essential to establish liability for infringement of a copyright or for plagiarism of literary property in unpublished books, manuscripts, or plays.
One may be held liable for infringement which is unintentional or which was done unconsciously".
Similarity of the alleged infringing work to the author 's or proprietor 's copyrighted work does not of itself stablish copyright infringement, if the similarity results from the fact that both works deal with the same subject or have the same common source .
Nevertheless, it is the unfair appropriation of the labour of the author whose work has been infringed that constitutes legal infringement, and while identity of language will often prove that the offence was committed, it is not necessarily the sole proof; on the other hand, relief will be afforded, irrespective of the existence or non existence of any similarity of language, if infringement in fact can be proved.
" "The appropriation must he of a 'substantial ' or 'material ' part of the protected work .
The test is whether the one charged with the infringement has made substantial and unfair use of the complainant 's work.
Infringement exists when a study of two writings indicates plainly that the defendant 's work is a transparent rephrasing to produce essentially the story of the other writing, but where there is no textual copying and there are differences in literary style, the fact that there is a sameness in the tricks of spinning out the yarn so as to sustain the reader 's suspense, and similarities of the same general nature in a narrative of a long, complicated search for a lost article of fabulous value, does not indicate infringement. ' 236 We shall now discuss some of the authorities that have been cited at the Bar as also some others with whom we have come across and which throw a flood of light on the point in issue.
Dealing with the question of similarities Lord Kekewich, J. in Hanfstaengl case (Supra) described various qualities of a copy and observed as follows: "In west vs Francis(1) Bayley J. uses language coming, as Lord Watson says, nearer to a definition than anything which is o be found in the books.
It runs thus: "A copy is that which comes so near to the original as to give to Every person seeing it the idea created by the original .
; If it were altered thus "a copy is that which comes so near to the original as to suggest that original to the mind of every person seeing it" the substance of the definition would be preserved and Lord Watson 's criticism would be avoided.
The learned Judge aptly pointed out that an imitation will be a copy which comes so near to the original as to suggest the original to the mind of every person seeing it.
In other words, if after having seen the picture a person forms a definite opinion and gets a dominant impression that it has been based on or taken from the original play by the appellant that will be sufficient to constitute a violation of the copy right.
In the case of Ladbroke (Football) Ltd. vs William Bill (Foot ball) Ltd Reid made the following pertinent observations .
But, in my view, that is only a short out, and more correct approach is first to determine whether the plaintiff 's work a whole is 'original ' and.
protected by copyright, rand then to inquire whether the part taken by the defendant is substantial.
A wrong result can easily be reached if one begins by dissecting the plaintiff 's work and asking, could section A be the subject of copyright if it stood by itself, could section be protected it stood by itself, and so on.
To my mind, it does not follow that, because the fragments taken separately would not be copyright, therefore the whole cannot be".
(1) [1822] r. B. & Ald. 737, 743.
(2) 237 Lord Hodson expressed similar views at p. 475 in the following A words: The appellants have sought to argue that the coupons can be dissected and that on analysis no copyright attaches to any of their component parts and accordingly no protection is available.
In my opinion this approach is wrong and the coupons must be looked at as a whole.
Copy right is a statutory right which by the terms of section 2 of the Act of 1956 would appear to subsist, if at all, in the literary or other work as one entity".
This case clearly lays down that a similarity here or a similarity there is not sufficient to constitute a violation of the copyright unless the imitation made by the defendant is substantial.
In the case of Corelli vs Gray(1) Sargent, J. Observed as follows: "The plaintiff 's case is entirely founded on coincidences or similarities between the novel and the sketch.
Such coincidences or similarities may he due to any one of the four hypotheses namely (1) to mere chance, or (2) to both sketch and novel being taken from a common source: (3) to the novel being taken from the sketch, or (4) to the sketch being taken from the novel.
Any of the first three hypothesis would result in the success of that defendant; it is the fourth hypothesis alone that will entitle the plaintiff to succeed".
Looking now at the aggregate of the similarities between the sketch and the novel, and the case is essentially one in which the proof is cumulative.
I am irresistibly forced to the conclusion that it is quite impossible they should be due to mere chance coincidence and accordingly that they must be due to a process of copying or appropriation by the defendant from the plaintiff 's novel".
Thus it was pointed out in this case where the aggregate of the similarities between the copyrighted work and the copy lead to the cumulative effect that the defendant had imitated the original and that the similarities between the two works are not coincidental, a reasonable inference of colorable imitation or of appropriation of the labour of the owner of the copyright by the defendant is proved.
This case was followed by the Master of Rolls in the case of Corelli vs
Gray (2) .
(1) (2) 238 The case of Hawkes and Son (London) Limited vs Paramount Film Service Limited(1) was whether a musical composition made by the owner was sought to he imitated by producing a film containing the said composition.
An action for violation of the copyright was fired by the owner.
Lord Hansworth, M. R. found that the quantum taken was substantial and a substantial part of the musical copyright could be reproduced apart from the actual film.
In this connection, Lord Hansworth observed as follows: Having considered and heard this film I am quite satisfied that the quantum that is taken is substantial, and although it might be difficult, and although it might be difficult and although it may be uncertain whether it will be ever used again, we must not neglect the evidence that a substantial part of the musical copy right could be reproduced apart from the actual picture film." Similar observations were made by Lord Slesser which may be extracted thus: "Any one hearing it would know that it was the march called "Colonel Bogey" and thought it may be that it was not very prolonged in its reproduction, it is clearly, in my view, a substantial, a vital and an essential part which is there reproduced.
That being so, it is clear to my mind that a fair use has not been made of its that is to say, there has been appropriated and published in a form which will or may materially injure the copyright that in which the plaintiffs have a proprietary right".
In the case of Harman Pictules N.V. vs Osborne & ors.(a) it was held that similarities of incidents and situation undoubtedly afforded prima facie evidence of copy and in the absence of any explanation by the defendant regarding the sources, the plaintiffs must succeed.
It: was however held that there was no copyright in ideas, schemes or systems or method and the copyright is confined only to the subject.
In this connection Coff, J. Observed as follows: "There is no copyright in ideas or schemes or systems or methods; it is confined to their expression. .
But there is a distinction between ideas (which are not copy right) and situations and incidents which may be. . . one must, however, be careful not to jump to the (1) [1934]1 Ch. D. 593.
(2) [196711 W.L.R. 723.
239 conclusion that there has been copying merely because of A similarity of stock incidents, or of incidents which are to be found in historical, semi historical and fictional literature about characters in history.
In such cases the plaintiffs, and that includes the plaintiffs in the present case, are in an obvious difficulty because of the existence of common sources".
"But I have read the whole of the script very carefully and compared it with the book and I find many similarities of detail there also. .
Again it is prima facie not without significance that apart from the burial of Captain Nolan the play ends with The very quotation which Mrs. Wodham Smith used to end her description of the battle . . .
As Sir Andrew Clark points out, some of these might well be accounted for as being similar to other events already in the scripts, and in any event abridgment was necessary, but that may not be a complete answer." Similarly in the case of Donoghue vs Allied Newspapers(1) it was pointed out that there was no copyright in an idea and in this connection Farwell, J. Observed as follows: This.
at any rate, is clear, and one can start with This beyond all question that there is no copyright in an idea, or in ideas. . . of the idea, however brilliant and however clever it may be, is nothing more than an idea, and is not put into any form of words, or any form of expression such as a picture or a play, then there is no such thing as copyright at all.
It is not until it is (If I may but it in that way) reduced into writing, or into some tangible form, that you get any right to copyright at all, and the copyright exists in the particular form of language in which, or, in the case of a picture, in the particular form of the picture by which, the information or the idea is conveyed to those who are intended to read it or look at it".
Similarly in the case of Bobl and Anr.
vs Palace Theatre (Limited) and Anr.(2) Justice Hamilton observed as follows . "If similarity between two works was sufficiently strong the evidence of copying would be so cogent that no one would believe any denial, but here the intrinsic evidence was (1) (2) 240 really the other way. .
The matter had been considered by Justice Scrutton in his book on Copyright, and the conclusion there come (sic) to (Note h p. 83 of fourth edition) was that to which his own reflection during the progress of this case would have led him.
He considered, therefore, that where the similarity was a mere coincidence there was no breach of copyright." In the case of Tate vs Fullbrook(1) Lord Vaughan Williams observed as follows: '.
I do not think that I need go at length through the similarities and dissimilarities of the two sketches.
It is practically admitted that, so far as the words are concerned the similarity is trifling.
All that we find here is a certain likeness of stage situation and scenic effect, which, in my opinion, ought not to he taken into consideration at all where there is appreciable likeness in the words".
In the case of Frederick B. Chatterton and Benjamin Webster vs Joseph Arnold Cave(2) Hatherley observed as follows: "And if the quantity taken be neither substantial nor material if, as it has been expressed by some Judges, "a fair use only be made of the publication, no wrong is done and no action can be brought.
It is not, perhaps, exactly the same with dramatic performances.
They are not in tended to be repeated by others or lc be used in such a way as a book may be used, but slill the principle de minimis non curat lex applies to a supposed wrong in Laking a part of dramtic works, as well as in reproducing a part of a book.
"I think.
my Lords, regard being had to the whole of this case to the finding of the Lord Chief Justice that the parts which were so taken were neither substantial nor material parts, and the impossibility of damage being held to have accrued to the plaintiff from such taking, and the concurrence of the other Judges before whom the case was, brought that this appeal should be dismissed, and dismissed with costs ' '.
In the case of Sheldon vs Metro Gclden Pictures Corporation(3) Judge Learned Hand stated that while considering a case which is very similar to the case in this appeal observed as follows: (1) (2) (3) 241 "But it is convenient to define such a use by saying that others may "copy" the "theme" or "ideas", or the like, of a work, though not its "expression".
At any rate so long as it is clear what is meant, no harm is done Finally, in concluding as we do that the defendants used the play pro tanto, we need not charge their witnesses with perjury.
With so many sources before them they might quite honestly forget what they took; nobody knows the origin of his inventions; memory and fancy merge even in adults.
Yet unconscious plagiarism is actionable quite as much as deliberate." "The play is the sequence of the confluents of all these means, bound together in an inseparable unity; it may often be most effectively pirated by leaving out the speech, for which a substitute can be found, which keeps the whole dramatic meaning.
That as it appears to us is exactly what the defendants have done here; the dramatic significance of thevwcenes we have recited is the same, almost to the letter . . .
It is enough that substantial parts were lifted; no plagiarist can excuse the wrong by showing how much of his work he did not pirate.
" In the aforesaid case the Court held that there was no plagiarism or violation of the copyright.
In the case of Shipman vs R. K. O. Radio Pictures(l) which holding that an idea cannot be the subject of copyright great stress was laid on the impression which the audience forms after seeing the copy.
In this connection, Menton, J. Observed as follows. "The Court concluded that it was the idea or impression conveyed to the audience which was the determining factor, and since the impressions were the same, held there was an infringement. .
From this case stand the modern law of copyright cases, with the result that it is now held that ideas are not copyrightable but that sequence of events is; the identity of impression must be capable of sensory perception by the audience".
In the case of Michael V. Moretti vs People of the State of Illinois(2) It was held that law does not recognise property rights in ideas but only in the expression of the same in a particular manner adopted by the author.
A writ of certiorari was taken against this judgment to the U.S. Supreme Court which was denied.
To the (1) (2) ; U.S. 947 242 same effect is an earlier decision in the case of Funkhouser vs Loew 's(1) where the following relevant observations were made on the various aspects of the matter: "We are also mindful that the test used to determine infringement in cases of this case is whether ordinary observation of the motion picture photoplay would cause it to be recognised as a picturisation of the compositions allow ed to have been copied, and not whether by some hypercritical dissection of sentences and incidents seeming similarities are shown to exist. . .
It recognised that there were similar incidents in the productions, but such similarities were due to the nature of the subject matter and not to copying.
Both the motion picture and plain tiff 's story 'old John Santa Fe ' were set in the same geo graphical area and both had the typical western back ground. . . . .
Appellant 's attempt to show similarities by comparing a word or phrase taken from his` manuscript with the word or words appearing in the lyrics of a song in appellee 's motion picture is not in conformity with the test used in infringement cases and to which we have referred to above.
We find no merit in the contention that any of the songs in defendant 's movie were taken from plaintiff 's manuscripts. .
Considering that both the movie and the manuscript presented activities of Harvey Girls, and information concerning them was received from the same source, we think it reasonable that some similarities in character portrayal could be discovered".
In view of the aforesaid observation too much stress cannot always be laid on similarities or similar situations.
A writ of certiorari against the judgment of the U.S. Courts Appeal to the U.S. Supreme Court was taken but the certiorari was denied and the petition was rejected in limine as it appears from This was also a case where a film was made on the basis of a play claimed to have been written by the plaintiff.
The case of Warner Bros. Pictures vs Columbia Broadcasting System(2) is another illustration of the manner in which a copyright can be violated.
Dealing with this aspect of the matter Stephens, J observed as follows: "It is our conception of the area covered by the copy right statute that when a study of the two writings is made and it is plain the study that one of them is not in fact the (1) 208 F 2d 185.
(2) ; 243 creation of the putative authority, but instead has been copied in substantial part exactly or in transparent phrasing to produce essentially the story of the other writing, it in fringes".
A writ of certiorari was taken against the decision to the U.S. Supreme B, Court but was denied as reported in 348 U.S. 971.
In the case of Otto Eisenchiml vs Fowcett Publications(1) Duffy, Chief Judge observed as follows: "An infringement is not confined to literal and exact repetition or reproduction; it includes also the various modes in which the matter of any work may be adopted, imitated, transferred, or reproduced, with more or less colorable alterations to disguise the piracy.
Paraphrasing is copying and an infringement, if carried to a sufficient extent The question of infringement of copyright is not one of quantity but of quality and value".
A writ of certiorari against this decision was taken to the U.S. Supreme Court but was denied which was reported on U.S. 907.
In the case of Dorsey vs Old Surety Life Ins.
Co.(2) Phillips, J. 1 observed as follows: "The right secured by a copyright is not the right to the use of certain words, nor the right to employ ideas expressed thereby.
Rather it is the right to that arrangement or words which the author has selected to express his ideas To constitute infringement in such cases a showing of appropriation in the exact form or substantially so of the copy righted material should be required".
Similar observations were made in the case of Twentieth Century Fox Film Corporation vs Stonesifer(3) which are as follows: "In copyright infringement cases involving original dramatic compositions and motion picture productions, in as much as literal or complete appropriation of the protected property rarely occurs, the problem before the court is concrete and specific in each case to determine from all the facts (1) 246 2d 598.
(2) 98 2d 872.
(3) 140 2d 579 244 and circumstances in evidence whether there has been a substantial taking from an original and copyrighted property, and therefore an unfair use of the protected work The two works involved in this appeal should be considered and tested, not hypercritically or with meticulous scrutiny, but by the observations and impressions of the average reasonable reader and spectator.
We find and conclude, as did the court below, that the numerous striking similarities in the two works cannot in the light of all the evidence be said to constitute mere chance.
The deduction of material and substantial unlawful copying of appellee 's original play in appellant 's motion picture is more in consonance with the record and with the probabilities of the situation therein disclosed".
This authority lays down in unmistakable terms the cases where an infringement of the copyright would take place and as pointed out that before the charge of plagiarism is levelled against the defendant it must be shown that the defendant has taken a substantial portion of the matter from the original and have made unfair use of the protective work The two works involved must be considered and tested not hypercritically but with meticulous scrutiny.
Similarly, in the case of Oliver Wendell Holmes vs George D. Hirst(1) Justice Brown speaking for the Court and describing the incidents of a violation of the copyright observed as follows: "It is the intellectual production of the author which the copyright protects, and not the particular form which such production ultimately takes".
The Judicial Committee in the case of Macmillan & Company Limited vs K. and J. Cooper(2) while pointing out the essential ingredients of the infringement of copyright Lord Atkinson observed as follows: "Third, that to constitute piracy of a copyright it must be shown that the original has been either substantially copied or to be so imitated as to be a mere evasion of the copyright".
(1) ; (2) 51 I.A. 109.
245 In the case of Florence A. Deeks vs H. G. Wells & ors(1) Lord Atkin speaking for the Judicial Committee summarised the nature of the evidence required to prove as a violation of copyright and observed as follows: "Now their Lordships are not prepared to say that in the case of two literary works intrinsic evidence of that kind may Br not be sufficient to establish a case of copying, even if the direct evidence is all the other way and appears to be evidence that can be accepted; but such evidence must be of the most cogent force before it can be accepted as against the oath of respectable and responsible people whose evidence otherwise would be believed by the Court".
In the case of N.T. Raghunathan & Anr.
vs All India Reporter Ltd., Bombay(2) it was held that copyright law did not protect ideas but only the particular expression of ideas.
In that case, the Bombay High Court however held that the defendant had copied not only the ideas but also the style of abridgment, the expression of ideas and the form in which they were expressed and thus held that a case for violation of copyright was made out.
K. R. Venugopalan Sarma vs Sangu Ganesan(3) was a case of infringement of copyright in picture and it was held that an infringement of the copyright was complete even though the reproduction was not exact, but the effect on the mind by study of the two pictures was that the respondent 's picture was nothing but a copy of the plaintiff 's picture.
The Court while applying the various tests Observed as follows: "Applying this test, the degree of resemblance between the two pictures, which is to be judged by the eye, must be such that the person looking at the respondents ' pictures must get the suggestion that It is the appellant 's picture. . one picture can be said to be a copy of another picture only if a substantial part of the former picture finds place in the reproduction".
To the same effect is an earlier decision of the Division Bench of the Madras High Court in the case of The Daily Calendar Supplying Bureau, Sivakasi vs The United Concern(4) where the Court observed as follows (1) 60 I.A. 26.
(2) A.I.R. 1971 Bom.
(3) (4) A.T.R. 246 "What is essential is to see whether there is a reproduction of substantial part of the picture.
There can be no test to decide what a substantial part of a picture is.
One useful test, which has been followed in several decisions of Courts, is the one laid down by Lord Herschel, L.C. in Hanjastaengl vs Bains & Co. (1) ". . it depends really, on the effect produced upon the mind by a study of the picture and of that which is alleged to be a copy of it, or at least of its design".
In the case of C. Cunniah and Co. vs Balraj & Co.(2) the Court applying the test of resemblance observed as follows: "Applying this test, the degree of resemblance between the two pictures, which is to be judged by the eye, must be such that the person looking at the respondents ' picture must get the suggestion that it is the appellant 's picture.
In this sense, the points of similarity or dissimilarity in the picture assume some importance .
We agree that this could not be the sole test, though, incidentally, the points of resemblance and dissimilarity assume some importance in the case of finding out whether, taken as a whole, the respondents ' picture produces the impression in the mind of any observer, which amounts to a suggestion of the appellants ' picture".
"one picture can be said to be a copy of another picture only if a substantial part of the former picture finds place in the reproduction".
In the case of Mohendra Chandra Nath Ghosh and ors.
vs Emperor(3) the Court while defining what a copy is held that a copy is one which is so near the original as to suggest the original to the mind of the spectator and observed as follows: "But the question is whether the offending pictures are copies of substantial portions of the copyright picture The figures may have been reduced in the offending pictures and slight modifications may have been introduced, or the clothes and colours may have been different, but there can be no doubt whatsoever that the main figures have an identi (1) , 25.
(2) A.I.R. 1961 Mad. 111.
(3) A.I.R. 1928 Cal 359.
247 cal pose.
These are not, in my opinion, coincidences due to A the pictures being produced to represent common stock idea.
" Similarly in the case of S.K. Dutt vs Law Book Co. & ors.(l) it was held that in order to be an infringement of a man 's copyright there must be a substantial infringement of the work.
A mere fair dealing with any work falls outside the mischief of the Copyright Act.
Similarly, in the case of Romesh Chowdhry & Ors.
vs Kh.
Ali Mohamad Nowsheri & Ors.(2) the Division Bench of the Court to which one of us (Fazal Ali, J.) was a party and had written the leading judgment it was thus observed : "It is well settled that in order to be actionable the infringement must be a colorable imitation of the originals with the purpose of deriving profit".
In the case of Mohini Mohan Singh & Ors.
vs Sita Nath Basak(3) a Division Bench of the Calcutta High Court while laying down the necessary concomitants of a colorable imitation Mukherji, J. Observed as follows: "The question there is where a colorable imitation has been made.
Whether a work is a colorable imitation of another must necessarily be a question of fact.
Similarly is a great point to be considered in this connection but mere similarity is not enough as it may be due to any one of four hypotheses as Copinger points out at p. 134, Edn. 6, viz., (1) to mere chance, (2) to both works being taken from a common force, (3) to plaintiff 's work being taken from the defendant 's and (4) defendant 's work; being taken from the plaintiff 's and each case must depend upon its own circumstances".
Guha, J. Observed as follows: "It has to be determined whether in a particular case the work is a legitimate use of another man 's publication in the fair exercise of a mental operation deserving the character of original work".
(1) A.I.R. 1954 All. 570, (2) A.I.R. 1965 J & K. 101.
(3) A.I.R. 1931 Cal.
248 Thus, the position appears to be that an idea, principle, theme, or subject matter or historical or legendary facts being common property cannot be the subject matter of copyright of a particular person.
It is always open to any person to choose an idea as a subject matter and develop it in his own manner and give expression to the idea by treating it differently from others.
Where two writers write on the same subject similarities are bound to occur because the central idea of both are the single but the similarities or coincidences by themselves cannot lead to an irresistible inference of plagiarism or piracy.
Take for instance the great poet and dramatist Shakespeare most of whose plays are based on Greek Roman and British mythology or legendary stories like Mer chant of Venice, Hamlet, Romeo Juliet, Jullius Caesar etc.
But the treatment of the subject by Shakespeare in each of his dramas is so fresh, so different, so full of poetic exuberance.
elegance and erudition and so novel in character as a result of which the end product be comes an original in itself.
In fact, the power and passion of his expression, the uniqueness, eloquence and excellence of his style and pathos and bathos of the dramas become peculiar to Shakespeare and leaves precious little of the original theme adopted by him.
It will thus be preposterous to level a charge of plagiarism against the great play wright.
In fact, thoughout his original thinking, ability and incessant labour Shakespeare has converted an old idea into a new one, so that each of the dramas constitutes a master piece of English literature.
It has been rightly said that "every drama of Shakespeare is an extended metaphor".
Thus, the fundamental fact which has to be determined where a charge of violation of the copyright is made by the.
plaintiff against the defendant is to determine whether or not the defendant not only adopted the idea of the copyrighted work but has also adopted the manner, arrangement, situation to situation, scene to scene with minor changes or super additions or embellishment here and y there.
Indeed, if on a perusal of the copyrighted work the defendant 's work appears to be a transparent rephrasing; or a copy of a substantial and material part of the original, the charge of plagiarism must stand proved.
Care however must be taken to see whether the defendant has merely disguised piracy or has actually reproduced the original in a different form, different tone, different tenor so as to infuse a new life into the idea of the copyrighted work adapted by him.
In the latter case there is no violation of the copyright.
Thus, on a careful consideration and elucidation of the various authorities and the case law on the subject discussed above, the following propositions emerge: 1.
There can be no copyright in an idea, subject matter, themes, plots or historical or legendary facts and violation of the copyright in 249 such cases is confined to the form, manner and arrangement and expression of the idea by the author of the copyright work.
Where the same idea is being developed in a different manner, it is manifest that the source being common, similarities are bound to occur.
In such a case the courts should determine whether or not the similarities are on fundamental or substantial aspects of the mode of expression adopted in the copyrighted work.
If the defendants work is nothing but a literal imitation of the copyrighted work with some variations here and there it would amount to violation of the copyright.
In other words, in order to be actionable the copy must be a substantial and material one which at once leads to the conclusion that the defendant is guilty of an act of piracy.
One of the surest and the safest test to determine whether or not there has been a violation of copyright is to seeing the reader, spectator or the viewer after having read or seen both the works is clearly of the opinion and gets an unmistakable impression that the subsequent work appears to be a copy of the original.
Where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work, no question of violation of copyright arises.
Where however apart from the similarities appearing in the two works there are also material and broad dissimilarities which negative the intention to copy the original and the coincidences appearing in the two works are clearly incidental no infringement of the copyright comes into existence.
As a violation of copyright amounts to an act of piracy it must be proved by clear and cogent evidence after applying the various tests laid down by the case law discussed above.
Where however the question is of the violation of the copyright of stage play by a film producer or a Director the task of the plaintiff becomes more difficult to prove piracy.
It is manifest that unlike a stage play a film has a much broader prospective, a wider field and a bigger background where the defendants can by introducing a variety of incidents give a colour and complexion different from the manner in which the copyrighted work has expressed the idea.
Even so, if the viewer after seeing the film gets a totality of impression that the film is by and large a copy of the original play, violation of the copyright may be said to be proved.
17 520 SCI/78 250 We would now endeavour to apply the principles enunciated above and the tests laid down by us to the facts of the present case in order to determine whether or not the plaintiff has been able to prove the charge of plagiarism and violation of copyright levelled against the dependant by the plaintiff.
The learned trial Judge who had also had the advantage of seeing the picture was of the opinion that the film taken as a whole is quite different from the play written by the plaintiff.
In order to test the correctness of the finding of the trial Court we also got the play read to us by the plaintiff in the presence of counsel for the parties and have also seen the film which was screened at C.P.W.D. Auditorium, Mahadev Road, New Delhi.
This was done merely to appreciate the judgment of the trial Court and the evidence led by the parties and was not at all meant to be just a substitute for the evidence led by the parties.
To begin with, we would like to give a summary of the play Hum Hindustani which is supposed to have been plagiarized by the defendants.
The script of the play exhibit P.1 has been placed before us and we have gone through the same.
The main theme of the play is provincialism and the prejudice of persons belonging to one State against persons belonging to other States.
In the play however the author chooses two families, viz., a Punjabi family and a Madrasi family to show what havoc can be caused by provincial parochialism possessed by the two families.
The Punjabi family and the Madrasi family were living as close neighbours having good and cordial relations and are on visiting terms with each other.
The Punjabi consists of Dewan Chand, contractor, his wife Krishna, their grown up daughter Chander and son Tinnu aged about 8 or 10 years.
The Madrasi family however consists of Subramaniam, Government officials, his wife Minakshi and grown up son Amni and daughter Pitto who is aged about 8 or 10 years.
As a result or the close association between the two families it appears that Amni the son of Subramaniam falls in love with Chander the daughter of Dewan Chand of the Punjabi family.
When the parents are out Amni and Chander meet and talk.
Unfortunately, however, the parents of both Amni and Chander arc extremely adverse to the matrimonial union of Amni and Chander because the two families belong to two different provinces.
When they get some scent of the love affair between Amni and Chander the parents of Chander make a serious attempt to find a suitable match for her amongst their own caste namely Punjabis.
Similarly, the parents of Amni also try to arrange a match for him amongst Madrasis.
For this purpose, the services of a marriage broker named Dhanwantri are enlisted by both the parties without knowing 251 that Dhanwantri was trying to negotiate marriages for both the couples.
Later on, when this fact is discovered the relations of the two families become strained.
Amni and Chander also persuade Dhanwantri to assist there in bringing about their marriage by persuading their parents to agree.
This gives a chance to Dhanwantri to make a lot of money out of the two couples.
Dewan Chand and his wife Krishna in sheer desperation hurriedly arranged the marriage of their daughter Chander to Bansi, a simpleton, son of Murari Lal who is a friend of Dewan Chand.
In fact, Dewan Chand is not very impressed with Bansi but in view of the critical situation arising out of the love affair between his daughter and Amni he prefers Bansi to the Madrasi boy.
When Chander and Amni come to know of this Chander asked Amni to speak to his parents in a free and frank manner and express his strong desire to marry Chander.
Amni who appears to be a cowardly fellow prefers to commit suicide rather than dare to talk out this matter with his parents.
Realising that no hope is left for Chander and Amni to go through the marriage ceremony both of them entered into a suicidal pact and wrote letters to their parents indicating their intention to commit suicide because they were not prepared to marry anybody else.
Dhanwantri, however, intervenes and persuades Chander and Amni not to commit suicide as according to him they were not destined to die unless they had been actually married.
Meanwhile, the parents of Amni and Chander on getting the suicide note mourn the loss of their children and it now dawns upon them that they had committed the saddest mistake of their life in refusing to marry the couple and repent for their act.
Just at that time Amni and Chander appear on the scene after having been married to each other.
The marriage was performed by Dhanwantri himself.
Thus ends the story with the realisation by both the families that provincialism helps nobody.
This in short is the story of the play written by the appellant.
We might mention that before the play starts the author show some voices reciting various persons proclaiming that they come from different States like the slogan that they belong to a particular state rather than that they belong to India.
Analysing therefore the essential features of the play the position is as follows: 1.
That the central idea of the play is based on provincialism and parochialism.
The evils of provincialism are illustrated by the cordial relations of the two families being married because of an 252 apprehended marriage tie which according to both the families was not possible where they belonged to different States.
That the Madrasi boy Amni is a coward and in spite of his profound love for Chander he does not muster sufficient courage to talk the matter out with his parents.
That in sheer desperation while the parents of the families are trying to arrange a match for the couple belonging to the same State Amni and Chander enter into a suicidal pact and write letters to their parents intimating their intention.
It was only after the letters are perused by the parents that they realise the horror of parochialism and arc repentant for having acted so foolishly.
That after this realisation comes the married couple Amni and Chander appear before the parents and thus all is well that ends well.
As the play was read to us by the appellant we find that it was very exquisitely presented and the plot was developed with great skill.
It must be noted however that the author in writing out the play has concentration only on one aspect of provincialism namely whether there can be a marriage between the persons belonging to one State with those belonging to other States.
This is the only aspect of provincialism which has been stressed in the play.
The play does not touch any other aspect nor does it contain anything to throw light on the evils of society or that of dowry etc.
We have mentioned these acts particularly because the film revolves around not only the aspect of marriage but other aspects also which are given the same importance as the problem of marriage.
We shall now give the summary of the film.
The script of which is exhibit D 2.
The film starts showing Anand a young graduate from Punjab who comes to New Delhi for a course in Radio Engineering.
At the Railway Station Anand meets a Madrasi girl Janaki and due to some misunderstanding an altercation between the two takes place, as a result of which Janaki feels that Anand was trying to tease her.
Thereafter Anand comes and stays in a Sarai opposite the Railway Station, but he is allowed to stay there only for three days after which he was expected to find accommodation elsewhere.
Thereafter Anand runs from house to house trying to get some accommodation but is sadly disappointed because wherever he goes he finds that in every case the landlord is not prepared to give the house to any person who 253 does not belong to his province.
We might mention here that this is one of the very important aspect of provincialism which pervades through the entire film, viz., that so parochial are the landlords that they were not even prepared to let out their houses or rooms to any person coming from outside their State.
This particular aspect is completely absent from the story revealed in the play written by the appellant.
One Kumaraswamy a South Indian attendant at the Sarai comes to the rescue of Anand and suggests to him that he should attire as a South Indian and then go to any South Indian landlord to get the house.
Thereafter Anand disguised as a South Indian approaches one Iyer for giving him accommodation and Iyer is only too glad to accommodate Anand on the ground that Anand is also a South Indian.
Anand then meets Subramaniam father of Janaki the girl with whom he had all altercation at the station.
The film then proceeds involving several sequences of the meeting between Anand and Janaki, Murli Dhar the Principal of a Dancing School takes Anand is his student and there he is introduced to Janaki who is a Professor of Dance and Music in that Institute.
Janaki then discovers that Anand is a good singer and is slowly and gradually attracted towards him.
Janaki invited him to her house for the celebration of Pongal festival and Anand goes there as usual attired as South Indian to witness the dance performance of Janaki.
He also comes to know that Janaki 's father Subramaniam does not hold any good opinion about the Punjabis.
Thereafter Anand leaves the place after making an appointment with Janaki to meet near Rashtrapati Bhawan the following day.
When Anand returns to his house he comes to know that his father Daulat Ram had been transferred to New Delhi and was expected at any moment.
Daulat Ram was posted as Manager in the same commercial company in which Subramaniam was employed ill a subordinate position.
Anand receives his parents and his grown up sister Nikki at the railway station and takes them to his house.
He also brings Kumaraswamy, the attendant, at the Sarai to his own house as a cook.
Thereafter Anand goes out on the pretext of taking his sister Nikki around the city.
When they reach the Red Fort he meets Ashok Banerjee, a young Bengali painter whom he had met earlier in connection with the search for accommodation of the house but was refused accommodation because Anand did not happen to be a Bengali.
Ashok Banerjee is impressed by Nikki and requests her to allow him to make Nikki 's portrait.
Leaving his sister there Anand meets Janaki and both of them come to the Red Fort.
When Anand and Janaki meet Nikki and Ashok, Anannd in order to conceal his real identity tells Janaki that Nikki is the daughter of his father 's friend, which naturally angers Nikki hut later Anand apologies to her and 18 520 SCI/78 254 explains that he did not want Janaki or her father lo know that he was not a Madrasi and thus upset the love affair between Anand and Janaki.
Subramaniam, father of Janaki takes a fancy for Anand and asks Janaki to invite Anand 's father to the house so that he could negotiate Janaki 's marriage with Anand.
This puts Anand in a most awkward position In order to save the situation Anand hits upon an idea by introducing his cook Kumaraswamy to Subramaniam as his father.
Just at that time Daulat Ram happens to pass through Subramaniam 's house and is called in by Subramaniam, but the situation is saved by Kumaraswamy feigning illness as a result of which he is taken to a room where he hides his face in a blanket.
Anand leaves the house and returns with a false beard posing as a doctor.
Similarly, Ashok and Nikki get attached to each other and Ashok receives a telegram from his father summoning him to Calcutta.
Before he leaves Ashok frankly declares his love to Nikki and gets her consent to marry him.
The love affair of Nikki however is not in the knowledge of her parents.
Murli Dhar, Principal of the Institution of Dance and Music arranges a performance in which the principal role is played by Anand and Janaki.
Up to this time neither Janaki nor her father Subramaniam had ever known the real identity of Anand but both of them had taken him to be a South Indian.
We might like to add that here the picture makes a complete departure from the story contained in the play where both the parents of the couple knew the identity of each other.
Before the performance starts Anand tries to disclose his identity to Janaki but is unable to do so because Janaki is in a hurry.
The performance is applauded by The audience which includes Subramaniam, Daulat Ram and Kumaraswamy.
In the theater hall where the performance is staged Kumaraswamy is given a prominent place as he is taken to be the father of Anand.
Daulat Ram resents this fact because Kumaraswamy was his servant.
After the performance Murli Dhar introduces Subramaniam Janaki 's father to the audience.
Murli Dhar then calls Kumaraswamy and introduces him to the audience as the father of Anand.
This infuriates Daulat Ram who comes to the stage and gives a thrashing to Kumarswamy.
It is at this stage that the entire truth is revealed and both Subramaniam and Janaki come to know that Anand was not a South Indian hut a Punjabi and his father was Daulat Ram.
Daulat Ram also does not like the relations of his son with Janaki because he thinks that if the son marries outside the caste that will create difficulties for the marriage of his daughter Nikki Subramaniam then starts negotiation for Janaki 's marriage with a South Indian boy.
Anand goes to Janaki and asks her to delay the negotiations for about a month or two till Nikki 's marriage is over after which he would marry Janaki.
255 Janaki feels completely let down and when she goes home she is given a serious rebuke by her father.
In utter frustration Janaki decides to commit suicide and leaves suicide note.
She proceeds to Jamuna river.
Before she is able to jump into the river she is saved by Sadhu Ram, a Punjabi Ghee Merchant, and a friend of Subramaniam Sadhu Ram scoffs at the people 's preference for provincialism and their lack of appreciation of intrinsic human values.
He takes Janaki to his own house and tells Daulat Ram that she is her niece and on that basis negotiates for the marriage of Janaki with Anand.
Daulat Ram accepts the proposal because Janaki appears as a Punjabi girl on receiving the suicide note Subramaniam feels extremely sorry and realises his mistake.
In the meanwhile when Daulat Ram returns to his house he finds Ashok Banerjee on very intimate terms with Nikki Daulat Ram gets furious and turns out Ashok from his house.
Thereafter Daulat Ram arranges the marriage of his daughter Nikki with the son of one Girdhari Lal.
After the marriage party comes to the house of Daulat Ram, Girdhari Lal insists upon Rs. 15,000 as dowry from Daulat Ram.
Daulat Ram does not have such a large sum of money and implores Girdhari Lal not to insist and to save his honour but Girdhari Lal is adamant.
Daulat Ram tries to enlist the support of his caste men but no one is prepared to oblige him.
At this juncture Ashok Banerjee appears on the scene and offers his mother 's jewellery to Daulat Ram to be given in dowry to Girdhari Lal and thus seeks to save the honour of Daulat Ram.
This act of Ashok Banerjee brings about a great mental change in the attitude of Daulat Ram, who stops Nikki 's marriage with Girdhari Lal 's son and turns them out along with the men of his brotherhood.
Daulat Ram declares his happiness that he has found a bigger brotherhood, namely, the Indian brotherhood and asks Ashok to marry Nikki at the same marriage Pandal.
At that time Sadhu Ram requests Daulat Ram that Mohini who is none other than Janaki should also be married to Anand.
Sadhu Ram discloses the true identity of Janaki and then Daulat Ram realises his short sightendness and welcomes the idea of the marriage of Anand with Janaki.
Subramaniam who is present there feels extremely happy and blesses the proposed marriage.
Ashok and Nikki as also Anand and Janaki are then married and thus the film ends.
Analysing the story of the film it would appear that it protrays three main themes: (1) Two aspects of provincialism viz. the role of provincialism in regard to marriage and in regard to renting out accommodation (2) Evils of a caste ridden society, and (3) the evils of dowry.
So far as the last two aspects are concerned they do not figure at all in the play written by the plaintiff/appellant.
A close 256 perusal of the script of the film clearly shows that all the three aspects mentioned above are integral parts of the story and it is very difficult to divorce one from the other without affecting the beauty and the continuity of the script of the film.
Further, it would appear that the treatment of the story of the fills in many respects different from the story contained in the play.
Learned counsel for the appellant however drew our attention to para 9 of the plaint at pages 18 19 of the paper book wherein as many as 18 similarities have been detailed.
The similarities may be quoted thus: (i) Before the actual stage play, the producer gives a narrative.
He states that although we describe ourselves as Hindustanis we are not really Hindustanis.
He questions their audience as to what they are and various voices are heard to say in their own provincial language that they are Punjabis, Bengalis, Gujratis, Marathas, Madarasis, Sindhis, etc.
In the said film the same idea is conveyed and the hero of the picture is shown searching for a house in New Delhi and wherever he goes he is confronted by a landlord who describes himself not as Hindustanis but as a Punjabi, Bengali Gujrati, Maratha, Madarasi or Sindhi.
(ii) Both the said play and the said film deal with the subject of provincialism.
(iii)Both the said play and the said film evolve a drama around the lives of two families, one a Punjabi and the other a Madrasi family.
(iv) In both the said play and the said film the name of the Madrasi father is Subramanyam.
(v) Both the said play and the said film have their locale in New Delhi.
(vi) Both the said play and the said film show cordiality of relations between the two families.
(vii)Both the said play and the said play and the said film show the disruption of cordial relations as soon as the head of the families discover the existence of love affairs between their children.
(viii)In both the said play and the said film, both the parents warn their respective children not to have anything to do with each other on pain of corporal punishment.
257 (ix) The entire dialogue in both the said play and the said film before and after the disruption is based upon the superiority of the inhabitants of one Province over the inhabitants of the others.
(x) In both the said play and the said film the girl is shown to be fond of music and dancing.
(xi) In both the said play and the said film the hero is shown as a coward to the extent that he has not the courage to go to his parents and persuade them to permit him to marry a girl hailing from another Province.
(xii) Both in the said play and in the said film, when the parents of the girl are discussing marrying her off to some body the girl is listening to the dialogue from behind a curtain.
Thereafter the girl runs to the boy and explains the situation to him.
(xiii)In both the said play and the said film, the girl writes a letter of suicide.
(xiv)In the said play reconciliation takes place when the children of the two families, who were in love, go out to commit suicide by drowning etc., whereas in the said film, it is only the daughter who goes out to commit suicide by drowning herself in the Jamuna.
(xv) In the said play the children are stopped from commit ting suicide by an astrologer whereas in the said film the girl is stopped from committing suicide by a friend of the family.
(xvi)In the said play reconciliation between the two families takes place only after they have experienced the shock of their children committing suicide on account of their provincial feelings whereas in the film, the father of the girl realised his mistake after experiencing the shock of his daughter committing suicide.
(xvii)In both the said play and the said film, stress is laid on the fact that although India is one country, yet there is acute feeling of provincialism between persons hailing from its various States even though they work together and live as neighbors.
(xviii)Both in the said play and in the said film, even tho dialogue centres around the same subject of provincialism.
258 In the course of the argument also our attention was Drawn to a comparative compilation of the similarities in the film and the play.
The learned trial Judge after considering the similarities was of the opinion that the similarities are on trivial points and do not have the effect of making the film a substantial and material imitation of the play.
Moreover apart from the fact that the similarities and coincidences mentioned above are rather insignificant as pointed out by the trial Judge and the High Court, in our opinion, they are clearly explainable by and referable to the central idea, namely, evils of provincialism and parochialism which is common to both the play and the film.
Nothing therefore turns upon the similarities categorised by the plaintiff (in para 9 of the plaint), in the peculiar Facts and circumstances of this case.
After having gone through the script of the play and the film we are inclined to agree with the opinion of the Courts below.
We have already pointed out that mere similarities by themselves are not sufficient to raise in inference of colourable imitation on the other hand, there are quite a number of dissimilarities also, for instance: (i) In the play provincialism comes on the surface only when the question of marriage of Amni with Chander crops up but in the picture it is the starting point of the story when Anand goes around from door to door in search of accommodation but is refused the same because he does not belong to the State from which the landlord hails as a result ' thereof Anand has to masquerade him self as a Madrasi.
This would, therefore, show that the treatment of the subject of provincialism in the film is quite different from that in the play and is actually a new theme which is not developed or stressed in the play.
(ii) Similarly, in the play the two families are fully aware of the identity of each other whereas in the film they are not and in fact it is only when the dance performance of Janaki and Anand is staged that the identity of the two ( families is disclosed which forms one of the important climaxes of the film.
Thus, the idea of provincialism itself is presented in a manner or form quite different from that adopted in the play.
(iii)In the film there is no suicidal pact between the lovers but only a suicide note is left by Janaki whereas in the play both the lovers decide to end their lives and enter into a suicidal pact and leave suicide note to this effect.
259 Furthermore, while in the play Amni and Chander get married and then appear before the parents in the picture the story takes a completely different turn with the intervention of Sadhu Ram who does not allow Janaki to commit suicide but keeps her with him disguised as his niece and the final climax is reached in the last scene when Janaki 's real identity is disclosed and Subramaniam also finds out that his daughter is alive.
(iv) The story in the play revolves around only two families, namely, the Punjabi and the Madrasi families, but in the film there are three important families, namely, the Punjabi family, the Madrasi family and the Bengali family and very great stress is laid down in the film on the role played by Ashok Banerjee of the Bengali family who makes a supreme sacrifice at the end which turns the tide and brings about a complete revolution in the mind and ideology of Daulat Ram.
D (v) The film depicts the evil of caste ridden society and exposes the hollowness of such a society when, in spite of repeated requests no member of the brotherhood of Daulat Ram comes to his rescue and ultimately it is left to Ashok Banerjee to retrieve the situation.
This aspect of the matter is completely absent in the play.
(vi) The film depicts another.
important social evil, namely, the evil of dowry which also appears to be the climax of the story of the film and the horrors of dowry are exhibited and demonstrated in a very practical and forceful fashion.
The play however does not deal with this aspect at all.
The aspects mentioned above which are absent from the play are not mere surplusage or embellishments in the story of the film but are important and substantial parts of the story.
The effect of the dissimilarities pointed out above clearly go to show that they tar outweigh the effect of the similarities mentioned in para 9 of the plaint set out above.
Moreover, even if we examine the similarities mentioned by the plaintiff they are trifling and trivial and touch insignificant points and do not appear to be of a substantial nature.
The mere fact that the name of the Madrasi father was Subramaniam in both the film and the play, is hardly of any signifi 260 cance because the name of a particular person cannot be the subject matter of copyright because these are common names.
After careful consideration of the essential features of the film and the play we are clearly of the opinion that the plaintiff has not proved by clear and cogent evidence that the defendants committed colourable imitation of the play and have thus violated the copyright of the plaintiff.
It was lastly contended by counsel For the appellant that the correspondence between the plaintiff and the defendant would show that defendant No. 2 himself was aware of the story contained in the play even before he proceeded to make the film in New Delhi.
This is undoubtedly so because defendant No. 2 admits in his evidence that he had come to Delhi and the entire play was narrated to him by the plaintiff.
There is however a serious controversy on the question as to whether the defendant after hearing play said that the play was not suitable for being filmed as alleged.
The plaintiff, however, seems to suggest that defendant No. 2 was undoubtedly Attracted by the play and it was on the basis of this play that he decided to make the film.
However, there is no reliable evidence to show that defendant No. 2 at any time expressed his intention to film the play written by the plaintiff.
There can be no doubt that defendant No. 2 was aware of the story contained in the play and a part of the film was undoubtedly 6 to some extent inspired by the play written by the plaintiff.
But the definite case of defendant No. 2 also is that he was in search of story based on provincialism and the play written by the plaintiff may have provided the opportunity for defendant No. 2 to produce his film though with a different story, different theme, different characterisation and different climaxes.
Thus, applying the principles enunciated above and the various tests laid down to determine whether in a particular case there has been a violation of the copyright we are of the opinion that the film produced by the defendants cannot be said to be a substantial or material copy of the play written by the plaintiff.
We also find that the treatment of the film and the manner of its presentation on the screen is quite different from the one written by the plaintiff at the stage.
We are also satisfied that after seeing the play and the film no prudent person can get an impression that the film appears to be a copy of the original play nor is there anything to show that the film is a substantial and material copy of the play.
At the most the central idea of the play, namely, provincialism is undoubtedly the subject matter of the film along with other ideas also but it is well settled 261 that a mere idea cannot be the subject matter of copyright.
Thus, the present case does not fulfil the conditions laid down for holding that the defendants have made a colourable imitation of the play.
On a close and careful comparison of the play and the picture but for the central idea (provincialism which is not protected by copyright), from scene to scene, situation to situation, in climax to anti climax.
pathos, bathos, in texture and treatment and purport and presentation, the picture is materially different from the play.
As already indicated above, applying the various tests outlined above we are unable to hold that the defendants have committed an act of piracy in violating the copyright of the play.
Apart from this the two courts of fact, having considered the entire evidence, circumstances and materials before them have come to a finding of fact that the defendants committed no violation of the copyright.
This Court would be slow to disturb the findings of fact arrived at by the courts below particularly when after having gone through the entire evidence, we feel that the judgment of the courts below are absolutely correct.
The result is that the appeal fails and is accordingly dismissed.
But in the circumstances there will be no order as to costs in this Court only.
JASWANT SINGH, J. Bearing in mind the well recognised principles and tests to determine whether there has been an infringement of the law relating to copyright in, a particular case which were brought to our notice by the counsel on both sides and which have been elaborately considered and discussed by my learned brother Murtaza Fazal Ali in the course of the judgment prepared by him, we proceeded at the re quest of the counsel to hear the script of the play "Hum Hindustani ' which WAS read out to us by the plaintiff himself in a dramatic style and to see the film "New Delhi" produced by defendants 1 and 2, the exhibition of which was arranged by the defendants themselves.
On a careful comparison of the script of the plaintiff 's copyrighted play with the aforesaid film, although one does not fail to discern a few resemblances and similarities between the play and the film, the said resemblances are not material or substantial and the degree of similarities is not such as to lead one to think that the film taken as a whole constitutes an unfair appropriation of the plaintiff 's copyrighted work.
In fact, a large majority of material incidents, episodes and situations portrayed by defendants I and 2 in their aforesaid film are substantially different from the plaintiff 's protected work and the two social evils viz. caste system and dowry system sought to be exposed 262 and eradicated by defendants 1 and 2 by means of their aforesaid film do not figure at all in the plaintiff 's play.
As such I am in complete agreement with the conclusions arrived at by my learned brother Murtaza Fazal Ali that there has been no breach on the part of the defendants of the plaintiff 's copyright and concur with the judgment proposed to be delivered by him.
PATHAK, J.
It appears from a comparison of the script of the stage play "Hum Hindustani" and the script of the film "New Delhi" that the authors of the film script have been influenced to a degree by the salient features of the plot set forth in the play script.
There can be.
little doubt from the evidence that the authors of the film script were aware of the scheme of the play.
But on the other hand, the story portrayed by the film travels beyond the plot delineated in the play In the play, the theme of provincial parochialism is illustrated only in the opposition to a relationship by marriage between two families hailing from different parts of the country.
In the film the theme is also illustrated by the hostile attitude of proprietors of lodging accommodation towards prospective lodgers who do not belong to the same provincial community.
The plot then extends to the evils of the dowry system, which is a theme independent of provincial parochialism.
There are still other themes embraced within the plot of the film.
Nonetheless, the question can arise whether there is an infringement of copyright even though the essential features of the play can be said to correspond to a part only of the plot of the film.
This can arise even where changes are effected while planning the film so that certain immaterial features in the film differ from what is seen in the stage play.
The relative position in which the principal actors stand may be exchanged or extended and embellishments may be introduced in the attempt to show that the plot in the film is entirely original and bears no resemblance whatever to the stage play.
All such matters fell for consideration in relation to the question whether the relevant part of the plot in the film is merely a colourable imitation of the essential structure of the stage play.
If the treatment of the theme in the stage play has been made the basic of one of the themes in the film story and the essential structure of that treatment is clearly and distinctly identifiable in the film story, it is not necessary, it seems to me, for the Court to examine all the several themes embraced within the plot of the film in order to decide whether infringement has been established.
In the attempt to show that he is not guilty of infringement of copyright, it is always possible for a person intending to take advantage of the intellectual effort and labours of another to so develop his own product that it covers a wider field than the area included within the scope of the earlier product, and in the common area covered by the two productions 263 to introduce changes in order to disguise the attempt at plagiarism.
If a reappraisal of the facts in the present case had been open in this court, I am not sure that I would not have differed from the view taken on the facts by the High Court, but as the matter stands, the trial Court as well as the High Court have concurred in the finding that such similarities as exist between the stage play "Hum Hindustani" and the film "New Delhi" do not make out a case of infringement.
The dissimilarities, in their opinion, are so material that it is not possible to say that the appellant 's copyright has been infringed.
This Court is extremely reluctant to interfere with concurrent findings of fact reached by the Courts below and for that reason I would allow the judgment under appeal to stand.
In another, and perhaps a clearer case, it may be necessary for this Court to interfere and remove the impression which may have gained ground that the copyright belonging to an author can be readily infringed by making immaterial changes, introducing insubstantial differences and enlarging the scope of the original theme so that a veil of apparent dissimilarity is thrown around the work now produced.
The court will look strictly at not only blatant examples of copying but also at reprehensible attempts at colourable imitation.
The appeal is dismissed, but without any order as to costs.
P.H.P. Appeal dismissed. | The appellant plaintiff is a playwright, dramatist and producer of stage plays.
The appellant had written and, produced a number of plays.
The subject matter of the appeal however, is the play entitled (Hum Hindustani '.
This play was written by him in the year 1953 and was enacted in the year 1954 and thereafter the play proved to be popular.
In November 1954 the appellant received a letter from the second defendant Mr.
Mohan Sehgal requesting the appellant to supply a copy of the play so that he could consider the desirability of making, a film on it.
Thereafter, the appellant and defendant No. 2 met at Delhi.
In May, 1955 the second defendant announced the production of a motion picture entitled "New Delhi".
The picture was released in Delhi in September 1956.
The appellant saw the picture.
The appellant filed a suit alleging that the film "New Delhi" was entirely based upon the play "Hum Hindustani", that the play was narrated by the appellant to defendant No. 2 and he dishonestly imitated the same in his film and thus committed an act of piracy as to result in violation of the copy right of the plaintiff.
The appellant, therefore, filed the suit for damages, for decree for accounts of the profits made by the defendant and a decree for permanent inujunction against the defendants restraining them from exhibiting the film.
The suit was contested by the defendants.
The defendants pleaded that defendant No. 2 is a film director and producer and director of Delux Films defendant No. I that at the instance of a common friend Mr. Gargi the defendant No. 2 met the appellant and saw the script of the play, that the play was inadequate for The purpose of making of a full length commercial motion picture.
The defendants contended that there could be no copy right so far as the subject of provincialism is concerned which can be used or adopted by anybody in his own way.
The defendants further contended that the motion picture was quite different from the play both in contents, spirit and climax.
The mere fact of some similarities between the firms and the play could be explained by the Fact that the idea, provincialism was the common source of the play as also of the film.
The trial court raised several issues and came to the conclusion that the appellant was the owner of the copy right in 'Hum Hindustani ' but there was no violation of copy right of the appellant.
Thereafter the appellant filed an appeal in the Delhi High Court.
A Division Bench of the Delhi High Court upheld the decree dismissing the appellant 's suit.
The counsel for the appellant contended (1) that the principles enunicated and the legal inference drawn by the courts below are against the settled legal principles laid down by the courts in England, America and India (2) the two 219 courts have not fully understood the imports of the violation of copy right particularly when the similarities between the play and The film are so close that would lead to the irresistible inference and unmistakable impression that the film is nothing but an imitation of the play.
The counsel for the respondents submitted (1) that the two courts below have applied the law correctly.
(2) This Hon 'ble Court may not enter into the merits in view of the concurrent findings of fact given by the two courts.
(3) Even on the facts found it is manifest that there is a vast difference both in the spirit and the contents between the play and the film.
Dismissing the appeal by special leave the Court ^ HELD: (a) In order to appreciate the argument of the parties the court discussed the law on the subject.
At the time when the cause of action arose in the present suit, the Indian Parliament had not made any law governing copyright violation and therefore the court relied on the old law passed by the British Parliament viz., the Copyright Act of 1911.
section 1 sub sec.
(2)(d) defines copyright as including in the case of a literary, dramatic or musical work, to make any record, performed roll.
cinematograph film, or other contrivance by means of which the work may be mechanically performed or delivered.
section 2(i) defines that copyright in a work shall be deemed to be infringed by any person who without the consent of the owner of the copyright, does anything, the sole right to do which is by this Act conferred on the owner of the copyright.
The play written by the appellant falls within the definition of copyright.
[229 D H 230 A B] The following is summary of the decided cases in England, America and India on the question of copyright.
There can be no copyright in an idea, subject matter, themes, plots or historical or legendary facts and violation of the copyright in such cases is confined to the form, manner and arrangement and expression of the idea by tile author of the copy righted work.
[248 H, 249 A] 2.
Where the same idea is being developed in a different manner, it is manifest that the source being common, similarities are bound to occur.
In such a case the courts should determine whether or not the similarities are on fundamental or substantial aspects of the mode of expression adopted in the copyrighted work.
If the defendant 's work is nothing but a literal imitation of the copyrighted work with some variations here and there it would amount to violation of the copyright.
In other words, in order to be actionable the copy must be a substantial and material one which at once leads to the conclusion that the defendant is guilty of an act of piracy.
1249 A C] 3.
One of the surest and the safest test to determine whether or not there has been a violation of copyright is to see if the reader, spectator or the viewer after having read or seen both the works is clearly of the opinion and gets an unmistakable impression that the subsequent work appears to be a copy of the original.
[249 C D] 4.
Where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work, no question of violation of copyright arises.
[249 D] 220 5.
Where however apart from the similarities appearing in the two works there are also material and broad dissimilarities which negative the intention to copy the original and the coincidences appearing in the two words are clearly incidental no infringement of the copyright comes into existence.
[249 E] 6.
As a violation of copyright amounts to an act of piracy it must be proved By clear and cogent evidence after applying the various tests laid down by decided cases [249 F] 7.
Where however the question is of the violation of the copyright of a stage play by a film producer or a Director the task of the plaintiff becomes more difficult to prove piracy.
It is manifest that unlike a stage play a film has a much broader prospective, wider field and a bigger background where the defendants can by introducing a variety of incidents give a colour and complexion different from the manner in which the copyrighted work has expressed the Idea.
Even so, if the viewer after seeing the film gets a totality of impression that the film is by and large a copy of the original play, violation of the copyright may be said to be proved.
[249 F H] Hanfstaengl vs W. H. Singh & Sons, [1905] 1 Chancery Division 519; Bobbs Merill Co. vs Isdor Straus and Nathan Strau, ; ; West Francis, , 743; Ladbroke (Football) Ltd. vs William Hill (Football) Ltd. ; Corelli vs Gray, ; Hawkes & Son (London) Ltd. vs Paramount Film Service Ltd., ; Harman Pictures N. V. vs Osborne & Ors., ; Donoghue vs Allied Newspapers Ltd. ; Bobl & Anr.
vs Palace Theatre (Ltd.) & Alir.
; Tate vs Fullbrook, 77 Law Journal Reports 577; Frederick.
B. Chatterton & Benjamin Webster vs Joseph Arnold Cave, ; Sheldon vs Metro Goldwyn Pictures Corp., 81 2d 19; Shipman vs R.K.o.
Radio Pictures, 100 2d 533, Michael vs Moretti vs People of the State of Illionois, 248 2d 799=356 U.S. 947, Warner Bros. Pictures vs Columbia Broadcasting System, ; Otto Eisenchiml vs Fawcett Publications, 246 2d 598; Dorsey vs Old Surety.
Life Ins., Co., ; Twentieth Century Fox Film Corporation vs Stonesifer, 140 2d 579; Oliver Wendel Homes vs George D. Hurst, ; ; Macmillan & Co. Ltd. vs K. & J. Cooper, 51 I.A. 109; Florerlce A Deeks vs H. G. p Wells & Ors., 60 I.A. 26; N. T. Ragllunathan & Anr.
vs All India Reporter Ltd., Bombay, A.I.R. 1971 Bom.
48, K. R. Venugopala Sarma vs Sangu Ganesan, ; The Daily Calendar Supplying Bureau, Sivakasi vs The United Concern, A.I.R. 1967 Mad. 381; Hantsiaenql vs Bains & Co., (25); C. Gunniah & Co. vs Balraj & Co., A.I.R. 1961 Mad.
111; Mohendra Ghundra Nath Ghosh & ors.
vs Emperor, A.I.R. 1928 Cal.
section K. Dutt vs Law Book Co. & Ors.
A.I.R. 1954 All. 570; Romesh Chowdhry & Ors vs Kh.
Ali Mohammad Nowsheri & Ors., AIR 1965 J. & K.101 and Mohini Mohan Singh & Ors vs Sita Nath Basak, AIR 1931 Cal.
238; referred to.
The learned trial Judge who had the advantage of seeing the picture was of the opinion that the film taken as a whole is quite different.
from the play written by the appellant.
This Court also got the play read to the learned Judges and the learned Judges also saw the film.
The Court came to the conclusion that the essential features of the play are as under: [250 A B, 251 G] 1.
That the central idea of the play is based on provincialism and parochialism.
[251 G] 221 2.
The evils of provincialism are illustrated by the cordial relations of the two families being marred because of an apprehended marriage tie which according to both the families WAS not possible where they belonged to different States.
[251 H, 252 A] 3.
That the Madrasi boy Amni is a coward and in spite of his profound love 'or Chander he does not muster sufficient courage to talk the matter out with his parents.
[252 A B] 4.
That in sheer desperation while the parents of the families are trying to arrange a match for the couple belonging to the same State Amni and Chander enter into a suicidal pact and write letters to their parents intimating their intention.
[252 B C] 5.
It was only after the letters are perused by the parents that they realise he horror of parochialism and are repentant for having acted so foolishly.
[252 C] 6.
That after this realisation comes the married couple Amni and Chander appear before the parents and thus all is well that ends well.
[252 D] The Court came to the conclusion that the essential features of the film are as under: (1) Two aspects of provincialism viz. the role of provincialism in regard to marriage and in regard to renting out accommodation (2) Evils of a caste ridden society, and (3) the evils of dowry.
[255 H] It is true that there are following similarities in the two.
[256 A] (i) Before the actual stage play, the producer gives a. narrative.
He states that although we describe ourselves as Hindustanis we are not really Hindustanis.
He questions the audience as to what they are and various voices are heard.
To say in their own provincial language that they are Punjabis, Bengalis, Gujarati, Marathas, Madrasis, Sindhis etc.
In the said Film the same idea is conveyed and the hero of the picture is shown searching for a house in New Delhi and wherever he goes he is confronted by a landlord who describes himself not as a Hindustani but as a Punjabi, Bengali, Gujarati, Marathi, Madarasi or Sindhi.
[256 C D] (ii) Both the said play and the said film deal with the subject of Provincialism.
[256 E] (iii)Both the said play and the said film evolve a drama around the lives of two facilities, one a Punjabi and the other a Madrasi family.
1256 E] (iv) In both the said play and the said film the name of the Madrasi father is Subramanyam .[256 F] (v) Both the said play and the said film have their locale in New Delhi.
[256 F] (vi) Both the said play and the said film show cordiality of relations between the two families.
[256 F G] (vii)Both the said play and the said film show the disruption of cordial relations as soon as the heads of the families discover the existence of a love affair between their children.
[256 G] (viii) In both the said play and the said film, both the parents warn their respective children not to have anything to do with each other on pain of Corporal punishment.
1256 Hl.
222 (ix) The entire dialogue in both the said play and the said film before and after the disruption is based upon the superiority of the inhabitants of one Province over the inhabitants of the others.
[257 A] (x) In both the said play and the said film the girl is shown to be fond of music and dancing.
[257 B] (xi) In both the said play and the said film the hero is shown as a coward to the extent that he has not the courage to go to his parents and persuade them to permit him to marry a girl hailing from another Province.
[257 B C] (xii) Both in the said play and in the said film, when the parents of the girl are discussing marrying her off to some body the girl is listening to the dialogue from behind a curtain.
Thereafter the girl runs to the boy and explains the situation to him.
[257 C] (xiii) In both the said play and the said film, the girl writes a letter of suicide.
[257 D] (xiv) In the said play reconciliation takes place when the children of the two families, who were in love, go out to commit suicide by drowning etc., whereas in the said film, it is only the daughter who goes out to commit suicide by drowning herself in the Jamuna.
[257 D E] (xv) In the said play the children are stopped from committing suicide by an astrologer whereas in the said film the girl is stopped from committing suicide by a friend of the family.
[257 E F] (xvi) In the said play reconciliation between the two families takes place only after they have experienced the shock of their children committing suicide on account of their provincial feelings whereas in the film, the father of the girl realised his mistake after experiencing the shock of his daughter committing suicide.
[257 F G] (xvii) In both the said play and the said film, stress is laid on the fact that although India is one country, yet there is acute feeling of provincialism between persons hailing from its various States even though they work together and live as neighbours.
[257 G] (xviii) Both in the said play and in the said film even the dialogue centres around the same subject of provincialism.
[257 H] However, the Court found following dissimilarities: (i) In the play provincialism comes on the surface only when the question of marriage of Amni with Chander crops up but in the picture it is the starting point of the story when Anand goes around from door to door in search of accommodation but is refused the same because he does not belong to the State from which the landlord hails as a result thereof Anand has to masquerade himself as a Madrasi.
This would therefore show that the treatment of the subject of provincialism in the film is quite different from that in the play and is actually a new theme which not developed or stressed in the play[258 D F] (ii) similarly in the play the two families are fully aware of the identity of each other whereas in the film they are not and in fact it is only when the dance Performance of Janki and Anand is staged that the identity of the two families 223 is disclosed which forms one of the important climaxes of the film.
Thus, the idea of provincialism itself is presented in a manner or form quite different from that adopted in the play.
[258 F G] (iii) In the film there is no suicidal pact between the lovers but only a suicide note is left by Janki whereas in the play both the lovers decide to end their lives and enter into a suicidal pact and leave suicide note to this effect.
Furthermore, while in the play Amni and Chunder get married and then appear before the parents in the picture the story takes a completely different turn with the intervention of Sadhu Ram who does not allow Janki to commit suicide but keeps her with him disguised as his niece and the final climax is reached in the last scene when Janki 's real identity is disclosed and Subramaniam also finds out that his daughter is alive [258 H, 259 A B] (iv) The story in the play revolves around only two families, namely, the Punjabi and the Madrasi families but in the film there are three important families, namely, the Punjabi family, the Madrasi family and the Bengali family and very great stress is laid down in the film on the role played by Ashok Banerjee of the Bengali family who makes a supreme sacrifice at the end which turns the tide and brings about a complete revolution in the mind and ideology of Daulat Ram.
[259 B D] (v) The film depicts the evil of caste ridden society and exposes the hollowness of such a society when in spite of repeated requests no member of the brotherhood of Daulat Ram comes to his rescue and ultimately it is left to Ashok Banerjee to retrieve the situation.
This aspect of the matter is completely absent in the play.
[259 D E] (vi) The film depicts another important social evil, namely, the evil of dowry which also appears to be the climax of the story of the film and the horrors of dowry are exhibited and demonstrated in a very practical and forceful fashion.
The play however does not deal with this aspect at all.
The aspects mentioned above which are absent from the play are not mere surplusage or embellishments in the story of the film but are important and substantial part of the story.
[259 E G] The Court came to the conclusion that the number of similarities by themselves are not sufficient to raise an inference of colourable imitation.
The similarities are trivial and touch insignificant points and do not appear to be of substantial nature.
The appellant has failed to prove that the defendants committed colourable imitation of the play.
[259 G H, 260 B] Applying the principles mentioned above to determine whether in this particular case there has been a violation of the copy right, the Court came to the conclusion that the film produced by the defendants cannot be said to be a substantial or material copy of the play written by the plaintiff.
The treatment of the film and the manner of its presentation on the screen is quite different from the play written by the appellant at the stage.
No prudent person can get the impression that the film appears to be a copy of the original play nor is there anything to show that the film is a substantial and material copy of the play.
At the most the central idea of the play viz. provincialism is undoubtedly the subject matter of the film along with other ideas also.
It is well settled that a mere idea cannot be the subject matter of copy right.
[260 G H, 261 A B] 224 The two courts of fact having considered the entire evidence, circumstances and materials before them have come to a, finding of fact that defendants committed no violation of the copyright.
This Court would be slow to disturb the findings of fact arrived at by the courts below particularly when after having gone through the entire evidence the court finds that the judgments of the court below are absolutely correct.
[261 C D] (Jaswant Singh, 1.
concurring) On a careful comparison of the script of the plaintiff 's copyright play with the film, although one does not fail to discern a few resemblances and similarities between the play and the film, the said resemblances are not material or substantial and the degree of similarities is not such as to lead one to think that the film taken as a whole constitutes an unfair appropriation of the appellant 's copyright word;.
In fact a large majority of material `incidents, episodes and dramatic situations portrayed by defendants 1 and 2 in their aforesaid film are substantially different from the plaintiff 's protected work and the two social evils viz. caste system and dowry system sought to be exposed and eradicated by defendants 1 and 2 by means of motion film, do not figure at all in the appellant 's play.
There has been no breach on the part of the defendants of the appellant 's copyright.
[261 G H, 262 A] (Pathak, J. concurring) lt appears from a comparison of the script of the play 'Hum Hindustani ' and the script of the film 'New Delhi ' that the authors of the film have been influenced to a degree by the salient features of the plot set forth in the play script.
There can be little doubt from the evidence that the auth ors of.
the film script were aware of the scheme of the play.
But, the story portrayed by the film travels beyond the plot delineated in the play.
The theme of provincial parochialism is illustrated only in the opposition to a relationship by marriage between two families hailing from different parts of the country.
In the film the theme is also illustrated by the hostile attitude of proprietors` of lodging accommodation towards prospective lodgers who do not belong to the same provincial community.
The plot then extends to the evils of the dowry system which is a theme independent of provincial parochialism.
There are still other themes embraced within the plot of the film.
The question can arise whether there is an infringement of copyright even though the essential features of the play can be said to correspond to a part only of the plot of the film.
In the attempt to show that he is not guilty of infringement of copy right it is always possible for a person intending to take advantage of the intellectual efforts and labour of another to so develop his own product that it covers a wider field than the area included within the scope of the earlier product and in the common area covered by the two productions to introduce changes in order to disguise the attempt at plagiarism.
If a. reappraisal of the facts in the present case were open to this Court, the Court perhaps would have differed from the view taken on the facts by the High Court but in view of the concurrent findings of the two courts below to the effect that the appellant 's copy right has not been infringed this Court is extremely reluctant to interfere with the concurrent findings of fact reached by the Courts below.
In another, and perhaps a clearer case it may be necessary for this Court to interfere and remove the impression which may have gained ground that the copy right belonging to an author can be readily infringed by making immaterial changes, introducing in substantial differences and enlarging the scope of the original theme.
so that a veil of appa 225 rent dissimilarity is thrown around the work now produced.
The court will look A strictly at not only blatant examples of copying but also at reprehensible attempts at colourable imitation.
[262 B H, 263 A C] |
Civil Appeal Nos.
1768 1769/ 72.
Appeals by Special Leave from the Judgment and order dated 15 7 1971 of the Delhi High Court in Sales Tax Reference No. 8 of 1969.
F. section Nariman, (In CA 1768/72), V. section Desai (in C.A. 1769).
M. C. Bhandare (C.A. 1768/72) and Mrs. section Bhandare and Miss M. Poduval for the Appellants.
P. A. Francis, R. N. Sachthey and Miss A. Subhashini for the Respondent.
Y. section Chitale, Vinay.
Bhasin, A. K. Srivastava and Vineet Kumar for the Interveners.
The Judgment of the Court was delivered by PATHAK, J.
This and the connected appeal are directed against the judgment of the High Court of Delhi disposing of a reference made to it under section 21(3) of the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi on the following question: "Whether the service of meals to casual visitors in the Restaurant is taxable as a sale: (i) when charges are lumpsum per meal or (ii) when they are calculated per dish ?" The High Court has answered the question in the affirmative.
The appellant runs a hotel in which lodging and meals are provided on "inclusive terms" to residents.
Meals are served to non residents also in the restaurant located in the hotel.
In the assessment proceedings for the assessment years 1957 58 and 1958 59 under the Bengal Finance (Sales Tax) Act, 1941, the appellant contended that the service of meals to residents and non residents could not be regarded as a sale and therefore sales tax could not be levied in respect thereof.
The contention was rejected by the Sales Tax authorities, who treated a portion of the receipts from the residents and nonresidents as representing the price of the foodstuffs served.
At the instance of the appellant, the High Court called for a statement of the case on two questions.
One was whether the supply of meals to residents, who paid a single all inclusive charge for all services in the 559 hotel, including board, was exigible to sales tax.
The second was the A question set forth above.
The High Court answered the first question in favour of the appellant and the second against it.
And now these appeals by special leave.
Tax is payable by a dealer under section 4 of the Bengal Finance (Sales Tax) Act, 1941 on sales effected by him, and the expression "sale ' has been defined by section 2 (g) of the Act to mean "any transfer of property in goods for cash or deferred payment or other valuable consideration including a transfer of property in goods involved in the execution of a contract. ".
The question is whether in the case of non residents the service of meals by the appellant in the restaurant constitutes a sale of foodstuffs.
It appears to us that after the view taken by this Court in State of Punjab vs M/s Associated Hotels of India Ltd.,(1) the approach to the question before us is clearly indicated.
This is a case where the origin and historical development of an institution as profoundly influenced the nature and incidents it possesses in law.
In the case of an hotelier this Court proceeded on the footing that his position in law was assimilable to that of an inn keeper.
At common law an innkeeper was a person who received travellers and provided lodging and necessaries for them and their attendants and employed servants for this purpose and for the protection of travellers lodging in his inn and of their goods(2).
It was hospitality that he offered, and the many facilities that constituted the components of that hospitality determined the legal character of the transactions flowing from them.
Long ago, in Crisp vs Pratt(3) it was pointed out that innkeepers do not get their living by buying and selling and that although they buy provisions to be spent in their house, they do not sell them but what they do is to "utter" them.
"Their gain", it was added, "is not only by uttering of their commodities, but for the attendance of their servants, and for the furniture of their house, rooms, lodgings, for their guests. '`.
This test went to the root and we find it repeated in Parker vs Flint.(4) In Newton vs Trigg(5) Holt, C.J., defined the true status of an inn keeper by reference to the services afforded by him? that he was an "hospitator", and was "not paid upon the account of the intrinsic value of his provisions, but for other reasons: the recompence he receives, is for care and pains and for protection and security. . but the end of an inn keeper in (1) ; (2) Halsbury 's Laws of England, 3rd Edn.
21 p. 442 paras 932.
(3) [1639] Cro. Car. 549.
(4) [1699] 12 Mod 254.
(5) 3 Mod .
2 549SCI/78 560 his buying, is not to sell, but only a part of the accommodation he is bound to prepare for his guests.
" And for the purpose of the question before us is would be relevant to quote Professor Beale(1): As an inn keeper does not lease his rooms, so he does not sell the food he supplies to the guest.
It is his duty to supply such food as the guest needs, and the corresponding right of the guest is to consume the food he needs, and to take no more.
Having finished his meal, he has no right to take food from the table, even the uneaten portion of food supplied to him, nor can he claim a certain portion of good as his own to be handed over to another in case he chooses not to consume it himself.
The title to food never passes as a result of an ordinary transaction of supplying food to a guest." Having proper regard to those particular considerations, it is not surprising that the principle was extended in England to the service OF food at eating places or restaurants.
The keeper of an eating house, or victualler, was regarded fundamentally as providing sustenance to those who ordered food to eat in the premises.
That eminent and learned Judge, Lord Mansfield, saw no distinction, in Saunderson vs Rowles(2), between an innkeeper and a victualler.
He observed: '.
The analogy between the two cases of an inn keeper and a victualler is so strong that it cannot be got over.
And we are all clear that this man (victualler) is not within these laws; upon the authority of a determined case of an inn keeper, and also upon the reason of the thing.
He buys only to spend in his house, and when he utters it again it is attended with many circumstances additional to the mere selling price.
" Like the hotelier, a restaurateur provides many services in addition to the supply of food.
He provides furniture and furnishings, linen, crockery and cutlery, and in the eating places of today he may add music and a specially provided area for floor dancing and in some cases a floor show.
The view taken by the English law found acceptance on American soil, and after some desultory dissent initially in certain states it very soon became firmly established as the general view of the law.
The first edition of American Jurisprudence sets(3) forth the statement of the law in that regard, but we may go to the case itself, Electa B. Merrill vs James W. Hodson(4), from which the (1) Innkeepers & Hotels, para 169.
(2) (3) Vol.
46 p. 207 para 13.
(4) 561 statement has been derived.
Holding that the supply of food or drink A to customers did not partake of the character of a sale of goods, the Court commented: "The essence of it is not an agreement for the transfer of the general property of the food or drink placed at the com command of the customer for the satisfaction of his desires, or actually appropriated by him in the process of appeasing his appetite or thirst.
The customer does not become the owner of the food set before him, or of that portion which is carved for his use, or of that which finds a place upon his plate, or in side dishes set about it.
No designated portion becomes his.
He is privileged to eat, and that is all.
The uneaten food is not his.
He cannot do what he pleases with it.
That which is set before him or placed at his command is provided tc enable him to satisfy his immediate wants, and for no other purpose.
He may satisfy those wants; but there he must stop.
He may not turn over unconsumed portions to others at his pleasure, or carry away such portions.
The true essence of the transaction is service in the satisfaction of a human need or desire, ministry to a bodily want.
A necessary incident of this service or ministry is the consumption of the food required.
This consumption involves destruction, and nothing remains of what is consumed to which the right of property can be said to attach.
Before consumption title does not pass; after consumption there remains nothing to become the subject of title.
What the customer pays for is a right to satisfy his appetite by the process of destruction.
What he thus pays for includes more than the price of the food as such.
It includes all that enters into the conception of service, and with it no small factor of direct personal service.
It does not contemplate the transfer of the general property in the food supplied as a factor in the service rendered.
" Subsequent cases drew on these observations, notably Mary Nisky vs Childs Company.
(1) The position was radically altered in the United States by the enactment of the Uniform Commercial Code, which provides in effect that the serving for value of food or drink to be consumed either on the premises or elsewhere constitutes a sale.
Nonetheless it is affirmed in the second edition of American Jurisprudence(2) that where the Code does not operate, "in general the pre Code distinction between a contract for sale and one for the giving of services should continue.
" (l) (2) Vol.
67 p. 142 para 33.
562 It has already been noticed that in regard to hotels this Court has in M/s. Associated Hotels of India Limited (supra) adopted the concept of the English law that there is no sale when food and drink are supplied to guests residing in the hotel.
The Court pointed out that the supply of meals was essentially in the nature of a service provided to them and could not be identified as a transaction of sale.
The Court declined to accept the proposition that the Revenue was entitled to split up the transaction into two parts, one of service and the other of sale of foodstuffs.
If that be true in respect of hotels, a similar approach seems to be called for on principle in the case of restaurants.
No reason has been shown to us for preferring any other.
The classical legal view being that a number of services are concomitantly provided by way of hospitality, the supply of meals must be regarded as ministering to a bodily want or to the satisfaction of a human need.
What has been said in Electa B. Merrill (supra) appears to be as much applicable to restaurants in India as it does elsewhere.
It has not been proved that any different view should be taken, either at common law, in usage or under statute.
It was urged for the respondent that in Associated Hotels of India Ltd. (supra) this Court drew a distinction between the case of meals supplied to a resident in a hotel and those served to a customer in a restaurant.
We are unable to find any proposition of law laid down by the court there which could lead to that inference.
We may point 13 out that in the view which appeals to us we find ourselves unable to agree with the observations to the contrary made by the Punjab High Court in M/s. Associated Hotels of India Ltd., Simla vs Excise and Taxation officer, Simla(1) and by the Delhi High Court in Municipal Corporation of Delhi vs Laxmi Narain Tandon and another.
(2), In the result, we hold that the service of meals to visitors in the restaurant of the appellant is not taxable under the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi, and this is so whether a charge is imposed for the meal as a whole or according to the dishes separately ordered.
In the circumstances of the case, we make no order as to costs.
N.V.K. Appeals allowed (1) A. I. R. 1966 Punjab 449.
(2) A, I. R. 1970 Delhi 244. | The appellant runs a hotel in which meals are served to non residents also in the restaurant located in the hotel.
The sales tax authorities treated a portion of the receipts as representing the price of foodstuffs served and levied tax.
The High Court affirmed the view of the sales tax authorities.
On the question whether the transaction constituted sale of foodstuffs.
Allowing the appeals ^ HELD. 1.
Service of meals to non residents in the restaurant of 'the appellant is not taxable under the Bengal Finance (Sales Ta%) Act 1941, as extended to the Union Territory of Delhi.
This is so whether a charge is imposed for the meal as a whole or according to the dishes separately ordered.
[562 F; 2.
In State of Punjab vs M/s. Associated Hotels of India ; this Court held that there was no sale when food and drink were supplied to guests residing in the hotel.
The Court pointed out that the supply of meals was essentially in the nature of a service provided to the guests and could not be identified as a transaction of sale.
This Court declined to accept the position that the Revenue was entitled to split up the transaction into two parts, one of service and the other of sale of foodstuffs.
If that be true in respect of hotels, a, similar approach seems to be called for on principle in the case of restaurants.
Like the hotelier, a restaurateur provides many services in addition to the supply of food.
He provides furniture and furnishings, linen, crockery and cutlery, and he may add music, an area for floor dancing and in some cases a floor show.
The classical legal view being that a number of services are concomitantly provided by way of hospitality, the supply of meals must be regarded as ministering to a bodily want or to the satisfaction of a human need.
No reason has been shown for preferring any other view.
[562 B, 560 F G, 562 C] State of Punjab vs M/s. Associated Hotels of India Ltd. ; applied.
M/s. Associated Hotels of India Ltd., Simla vs Excise and Taxation Officer Simla not approved.
Municipal Corporation of Delhi vs Laxmi Narain Tandon and Another not approved.
Crisp vs Pratt [1639] Cro.
Car 549, Parker vs Flint [1699] 12 Mod.
254 Newton v .
Trigg 3 Mod.
327, Saunderson vs Rowles Electa B. 558 Merrill vs James W. Hodson , and Mary Nisky vs Child Company SO A.L.R. 227 referred. |
Civil Appeal No. 2295 of 1968.
From the Judgment and order dated 3 2 1967 of the Madhya Pradesh High Court in Misc.
Petition No. 26 of 1966.
Harbans Singh for the Appellant.
Raghunath Singh and Manojswarup for Respondent No.1.
S.K. Gambhir for Respondents 3 5 and 7.
U. P. Lalit,B.P.Muheshwari and Suresh Sethi for Respondent No. 6.
The Judgment of the Court was delivered by UNTWALTA, J.
In this appeal by certificate granted by the Madhya Pradesh High Court the question of law which Lalls for our determination is whether conferral of Bhumiswalnli rights on Shri Khushi Lal respondent No. 1 in respect of the lands in question in accordance with Section 190 of the Madhya Pradesh Land Revenue Code, 1959, hereinafter referred to as the M.P. Code of 1959, by the Revenue Authorities is correct and sustainable.
Maulana Shamsuddin, the sole appellant in this appeal, was a Muafidar in the erstwhile State of Bhopal of the disputed lands in accordance with the Bhopal State Land Revenue Act, 1932 (for brevity, the Bhopal Act of 1932) .
The first respondent claimed to be a Shikmi of the appellant in respect of the lands in question.
His case was that the appellant was the occupant of the lands within the meaning of the Bhopal Act of 1932.
On the coming into force of the M.P. Code of 1959.
the appellant became a Bhumiswami under clause (c) of section 158 and the respondent became an occupancy tenant under section 185 (1)(i)(iv)(b).Thus he became entitled to conferment of Bhumiswami rights under Section 490.
He applied before the Tahsildar, Huzur, respondent No. 5 for mutation of his name as a Bhumiswami in the Revenue records.
The Tahsildar by his order dated the 24th June, 1963 directed Khushi Lal to deposit compensation equivalent to 15 times of the land revenue on the payment of which his name was to be recorded as a Bhumiswami of the holdings.
It appears his name was so recorded on the deposit of the compensation money.
The appellant filed an appeal before the Sub Divisional officers Huzur, respondent No. 4 from the order of the Tahsildar.
His appeal was dismissed by the Sub Divisional officer on the 12th of December, 1963.
The appellant failed before the Additional Commissioner, Bhopal, respondent No. 3 on the dismissal of his second appeal on the 25th August 1996.
He went in revision before the Board of Revenue, (respondent No. 2 ) .
The revision was allowed on the 6th of July, 1965.
The 584 Board held that the appellant was not an occupant within the meaning of Section 2(15) of the Bhopal Act of 1932 and consequently the first respondent was not a Shikmi under the said Act.
He did not become an occupancy tenant under the M.P. Code of 1959 and, therefore, conferral of Bhumiswami rights on him was erroneous in law.
The first respondent filed a Writ Petition in the High Court and succeeded there.
The High Court held that the Board was not right in its view of the law.
The appellant was an occupant and the respondent No. 1 was a sub tenant (Shikmi) under the Bhopal Act of 1932.
Conscquently he became an occupancy tenant entitled to conferment of Bhumiswami rights under the M.P. Code of 1959.
The appellant has preferred this appeal in this Court to challenge the decision of the High Court and for restoration of the order of the Board of Revenue.
Mr. Harbans Singh, appearing for the appellant, Advanced a very fair and able argument to advocate his cause.
He could now and did not dispute that if the appellant was an occupant, the first respondent was a Shikmi under the Bhopal Act of l932 and if that be so then the order of the High Court is unassailable.
But he vehemently contended that the appellant was not an occupant.
Learned counsel for the respondents controverted his argument.
Prima facie the argument, as presented, for the appellant appeared to have substance and force but on a close scrutiny we had no difficulty in rejecting it.
Section 2 of the Bhopal Act of 1932 is the definition section and as usual at the outset it uses the phrase "in this Act, unless there is nothing repugnant in the subject or context,".
Sub section (5) defines "Alienated land" to mean "land in respect of which, pursuant to a grant made by His Highness the Ruler, Government has, in whole or in part, assigned or relinquished its right to receive land revenue, and includes such village waste and forest as are mentioned in the sanad of the grant " Thereafter the sub section says: "If the land revenue is assigned the person to whom such assignment is made is called a "Jagirdar".
If the land revenue is relinquished the person in whose favour such relinquishment is made is called "Muafidar";".
Subsection ( l S) provides: " "occupant" means a person who holds land direct from the Government or would do so but for the right of collecting land revenue having been assigned or relinquished.
" It would thus be seen that if pursuant to the grant made by His Highness the Ruler of Bhopal, Government 's right to receive land revenue was assigned to the grantee then he was called a Jagirdar and 585 it was relinquished then the person in whose favour such relinquishment was made was called Muafidar.
Under the first part of the definition of "occupant" given in sub section (IS) a person who holds land direct from Government would be an occupant and being not a person in whose favour the right to receive land revenue has either been assigned or relinquished will be required to pay to the Government land revenue or rent.
We are using both the words revenue ' and 'rent ' on the assumption that such an occupant being neither a Jagirdar nor a Muafidar would be required to pay some money to the Government for being in occupation of the land.
Under the second part of the definition a Jagirdar or a Muafidar would also be holding land direct from Government but because the right of collecting land revenue has either been assigned or relinquished, strictly speaking, he does not hold land direct from the Government in the sense of paying any land revenue or rent to it because the Government has parted with the right to collect land revenue from him.
We are of the opinion, in agreement with the High Court, that on a careful analysis of the definition of the term "occupant" in section 2(15), it is legitimate to conclude that even a Jagirdar or a Muafidar is an occupant.
He holds land under the Government; on the resumption of the Jagir or the Muafirights by the Government the land reverts back to it.
Payment of land revenue or rent for holding land under the Government was not a sine qua non for making the holder of the land an occupant.
"Rent" is defined in sub section (19) of Section 2 of the Bhopal Act of 1932 to mean "whatever is payable to an occupant in money, kind or service by a shikmi for the right to use land.
" This would show that strictly speaking a person holding the land direct from the Government within the meaning of the first part of the definition in sub section (IS) is not to pay any money to the Government in the shape of rent but what he will be required to pay would be the land revenue.
But a Jagirdar or a Muafidar holding the land under the Government is not required to pay any land revenue.
sub section (21) defines "Shikmi" to mean "a person who holds land from an occupant and is, or but for a contract, would be liable to pay rent for such land to that occupant, but does not include a mortgagee or a person holding land directly from Government.
" Respondent No. 1 was inducted upon the land by the appellant in the year 1958.
Since then he had been cultivating the land.
He could not but be a Shikmi within the meaning of sub section (21 ) .
Mr. Harbans Singh was not right in saying that he was a mere cultivator and was cultivating the land not as a sub tenant or a Shikmi but must be doing so under some special arrangement of cultivating the land as a servant of the appellant or the like.
There is no warrant for such a contention.
586 Section 46 of the Bhopal Act of 1932 runs thus .
"(l) All land to whatever purpose applied and wherever situate, is liable to the payment of revenue to the Government, except such land as has been wholly exempted from such liability by a special grant on His Highness the Ruler or by a contract with the Government, or under the provisions of any law or rule for the time being in force.
(2) Such revenue is called "Land Revenue"; and that term includes moneys payable to the Government for land, notwithstanding that such moneys may be described as premium, rent, quit rent, or in any other manner in any enactment, rule, contract or deed." This section lends support to the view which we have expressed above that a person holding land directly under the Government and not being a Jagirdar or a Muafidar will be liable to pay land revenue to the Government in whatever name the payment of money may be described such as premium, rent, quit rent etc.
The High Court in its judgment has adverted to some sections contained in Chapter VI of the Bhopal Act of 1932.
Section 51 provided for disposal of unoccupied land.
Sub section (1) of section 52 says that a person acquiring the right to occupy land under section 51 will be called an occupant of such land and under sub section (2) all persons who, prior to the commencement of this Act, had been entered in settlement records as responsible for the payment of land revenue to the Government, or who, but for a special arrangement, would have been to responsible, would be deemed to be occupants within the meaning of Section 52.
In our opinion this special arrangement mentioned in sub section (2) cannot be squarely equated with the assignment or relinquishment of the right to receive land revenue envisaged by the Bhopal Act of 1932.
We do not feel inclined to agree with the High Court that the appellant became occupant under section 52(2) of the Bhopal Act of 1932 because he was a person who was entered into settlementt records prior to the coming into force of that Act.
Firstly it is not clear whether the facts so stated in the judgment of the High Court are (quite correct, and, secondly, it is admitted on all hands that the appellant was a Muafidar and, therefore, in our opinion he was an occupant within the meaning of Section 2(15).
Section 54 provided that the rights of an occupant, meaning thereby the occupant as mentioned.
in Section 52, were to be permanent, transferable and heritable.
Ordinarily and generally the rights of a Jagirdar 587 or a Muafidar being occupants within the meaning of Section 2(15) A read with Section 167 were neither transferable nor heritable and in that sense the rights were not permanent.
In our opinion, therefore, the type of occupant who is dealt with in Chapter VI of the Bhopal Act of 1932 is not the type of occupant having the same kind of incidence as defincd in Section 2(15).
As we have already indicated it is a well established principle of law that a particular term defined in the definition section is subject to anything repugnant in the contact of the other provisions of the Statute.
The provisions of Chapter VI being at variance with the definition clause cannot make the occupant described in that Chapter the same occupant as defined in Section 2(15).
Our attention was drawn by the learned counsel for the appellant to Section 167 of the Bhopal Act of 1932 dealing With the restriction ill the rights of the Jagirdars and Muafidar to transfer such rights or create encumbrances on them.
According to the said Section no Jagirdar or Muafidar could "transfer his rights as Jagirdar or muafidar, or, except for such period as he is in possession of his jagir or muafi create an encumbrance on the income thereof." But inducting a person as Shikmi on the land was not prohibited under Section 167.
On the other hand, Section 194 provide(l that all occupant could make a lease of his holding and under certain circumstances it could n(lt be for a term of more than 12 years.
It was then argued that the right of a Muafidar being in the nature of a life grant was valid only for the Life time of the Muafidar.
So the Muafidar could not induct a person as Shikmi who ultimately could become an occupancy tenant entitled to conferment of Bhumisavami rights later on.
This argument has to be staled merely to be rejected.
It may well be that the right of a Shikmi would not have lasted beyond the duration of the right of the Muafidar.
But then, his rights were enlarged by operation or the welfare legislation enacted by the State Legislature for the benefit of the cultivators of the soil in the year 1959.
Section 185(1)(iv)(b) of the M.P. Code of 1959 says: "(1) Every person who at the coming into force of this Code holds (iv) in the Bhopal region (b) any land as a shikmi from an occupant as defined in the Bhopal State Land Revenue Act, 1932 (IV of 1932): 588 shall be called an occupancy tenant and shall have all the rights and be subject to all the liabilities conferred or imposed upon an occupancy tenant by or under this Code.
" As held by us above the appellant was an occupant as defined in the Bhopal Act of 1932 and thus under clause (c) of Section 158 on the coming into force of the Code he became a Bhumiswami.
But his Bhumiswami rights were liable to be conferred, under certain conditions, on the occupancy tenant under Section 190.
As a matter of fact in accordance with the said provision the Bhumiswami rights were conferred on respondent No. 1 on payment of compensation being in the amount of 15 times of the land revenue for payment to the appellant.
Our attention was drawn to a recital of facts in the Statement of the case of some of the respondents that the appellant had withdrawn the said amount of compensation.
But we are not resting our judgment on that ground as in our opinion, whether he has withdrawn the amount of compensation or not, he cannot challenge the conferment of his Bhumiswami rights on respondent No. l. which have been validly and legally conferred.
We may now briefly deal with a few more short submissions of the appellant.
In section 185(1)(iv)(a) of the M.P. Code of 1959 it is provided that if a person who at the time of coming into force of tba said Code was holding any land as a sub tenant as defined in the Bhopal State Sub tenants Protection Act, 1952 shall also be called an occupancy tenant.
A copy of this Act could not be made available for our perusal.
But what we get from the order of the Board of Revenue is that a Sub tenant as defined in the Bhopal Act of 1952 means a person who holds a parcel of khud kasta land from a Jagirdar.
Along with this our attention was also drawn to the Bhopal State Sub Tenants (of occupants) Protection Act.
In this Act, section 2(b) runs thus: "The expression "occupant" shall have the same meaning as in the Bhopal State Land Revenue Act, 1932 (IV of 1932) and, for the purposes of this Act, it should also include a muafidar, as defined in Bhopal State Land Revenue Act, 1932 (IV of 1932)".
In other sections of the said Act protection against ejectment was given to the Shikmis.
The argument was that protection to the sub tenants of Jagirdars was given in the Bhopal Act of 1952 and protection to such persons was given in case of sub tenants of Muafidar under the Bhopal Act of 1954 by including Muafidar in the expression 'occupant ' occurring in the said Act.
Counsel, therefore, submitted that if the 589 term 'occupant ' in the Bhopal Act of 1932 had included a Muafidar then there was no necessity of expressly and separately including a Muafidar in the definition of the said expression.
in the Act of 1954.
In our opinion this argument has no substance.
It may be by way of abundant precaution or for putting the matter beyond any shadow of doubt that the expression 'occupant ' was defined in a comprehensive manner in the Bhopal Act of 1954.
Section 3 of the said Act shows that even a Muafidar could sub let a land to a person and induct hi as a Shikmi prior to the coming into force of this Act.
Such a Shikmi got the protection against ejectment by operation of law engrafted in the Bhopal Act of 1954.
After the passing of this Act? he no longer could be said to be a Shikmi only during the life time of the Muafidar but was so even beyond it.
The counsel for the appellant called our attention to a decision of this Court in Begum Suriya Rashid and others vs Stale of Andhra Pradesh(l).
In this case it was held that the muafi grants to the predecessor in interest of the appellants before the Supreme Court were not hereditary or perpetual and the appellants could not claim title as Muafidars even though some contradictory arabic expressions had keen used in the document of grant.
This decision does not advance the case of the appellant any further.
For the reasons stated above, we dismiss this appeal but make no order as to costs.
M.R. Appeal dismissed. | The appellant was a Muafidar of the disputed land, in the erstwhile Bhopal State, while the first respondent cultivated the said lands as his tenant.
When the M. P. L. R. Code, 1959, came into force, the first respondent claimed that the appellant, as the occupant of the lands within the meaning of S.2 (15) of the Bhopal State Revenue Act, 1932, had become a Bhumiswami u/s 158(C) of the Code of l959, while he himself had become an occupancy tenant u/s 185(1)(iv)(b) and as such, was entitled to conferment of Bhumiswami rights u/s 190 of the same Code.
He ' applied to the Tahsildar, Huzur, for mutation of his name as a Bhumiswarni in the Revenue records.
and was directed to deposit compensation equivalent to 15 times of the land revenue.
Thereafter his name was recorded as a Bhumiswami of the holdings, on the deposit of the compensation money.
The Muafidar appellant 's appeal to the sub Divisional officer, against the Tahsildar 's order, and a second appeal to the additional Commissioner.
were dismissed, but the Board of Revenue allowed his revision application holding that he was not an occupant within the meaning of section 2(15) of the Bop Act of ]932.
and that consequently the first respondent was neither a Chime, nor did he become an occupancy tenant under the M.P. Code of 1959, and therefore conferment of Bhumiswami rights on him was erroneous in law.
, The first respondent filed a writ petition against the Revenue Board 's order, which was allowed by the High Court.
Dismissing the appeal by certificate, the Court ^ HELD: 1.
Under section 2(15) of the Bhopal State Land Revenue Act 1932, a person who holds and direct under the Government would be an ` 'occupant", in whatever name the payment of money may be described such as premium, rent, quit rent etc.
On a careful analysis of the definition, it is legitimate to conclude that a Jagirdar or Muafidar is an occupant.
He holds lands under the Government.
On the resumption of the Jagir or the Muafi rights by the Government, the land reverts back to it.
Payment of land revenue or rent for holding land under the Government was not a sine qua non for making the holder of the land an revenue.
[585 A D, 586 D] Begum Suriya Rashid and Ors.
vs State of Madhya Pradesh [19691] 1 SCR 869 held inapplicable.
The rights of Shikmis were enlarged by operation of tile Madhya Pradesh Land Revenue Code.
Under section 185(l)(iv)(b) a Shikmi became an occupancy tenant, while u/s 190, as an occupancy tenant, he became entitled, under certain conditions, to conferment of Bhumiswami rights of the occupant of he holdings.
A B] 583 |
: Criminal Appeal No. 43 of 1972.
From the Judgment and Order dated 11 5 71 of the Rajasthan High Court in D.B. Criminal Appeal No. 478/67.
Nemo: for the Appellant.
S.M. Jain for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal under section 2(a) of the (Act 28 of 1970) raises a short question as to the nature of the offence made out against the appellant on the basis of the evidence adduced in Sessions Case No. 64 of 1966.
The Sessions Judge, Udaipur, who tried the appellant found on a consideration of the evidence led in the case including the direct testimony of Mst.
Jelki (P.W. 3) and Mst.
Modan (P.W. 8) that the appellant attacked his wife, Mst.
Gajri with dagger (Exh. 1) and caused injuries on her person out of which injury No. 2 which had injured the liver and caused the perforation of the large colon was sufficient to cause her death in the ordinary course of nature.
Despite this finding, the Sessions Judge convicted the appellant under section 304 of the Indian Penal Code and acquitted him of the charge under section 302 of the Penal Code in view of the fact that Dr. Laxmi Narain (P.W. 1) who conducted the post mortem examination of the body of Mst.
Gajri had said in the course of his examination that if immediate expert treatment had been available and emergency operation had been performed, there were chances of her survival.
The Sessions Judge agreeing with the contention raised on behalf of the defence also found that according to the case of the prosecution itself, the accused had gone to the village of his in laws to fetch Mst.
Gajri and it was only on her refusal to accompany him that the incident took place; that he had no intention to kill Mst.
Gajri and that at best what could be attributed to the appellant was the knowledge that the injury he was inflicting on the deceased was likely to cause her death.
746 On the matter being taken in appeal by the State, the High Court found that the Sessions Judge was in error in acquitting the appellant of the offence under section 302 of the Indian Penal Code ignoring the evidence to the effect that a penetrating wound 11/2" X1/2" was caused by the appellant with a dagger on the posterior axillary line 10" from the top of the shoulder and 5" from the spine which had caused injury to the liver and perforation of the large colon and was sufficient to cause death in the ordinary course of nature.
Accordingly, the High Court altered the conviction of the appellant from the one under section 304 Part II of the Indian Penal Code to that under section 302 of the Penal Code and sentenced him to imprisonment for life.
Mr. K.K. Luthra who was appointed as amicus curiae in the case not having cared to appear despite long and anxious waiting, we have gone through the entire record with the assistance of counsel for the respondent.
The grounds of appeal submitted by the appellant which are very inartistically drafted can at best be interpreted to urge only one thing viz. that the High Court went wrong in upsetting the judgment and order of the Sessions Judge and convicting the appellant under section 302 of the Indian Penal Code instead of under section 304 Part II of the Penal Code as ordered by the Sessions Judge.
This contention, in our judgment, is entirely misconceived.
It completely overlooks the circumstances attending the commission of the offence viz. that the appellant went armed with a dagger and despite the willingness expressed by Mst.
Gajri to accompany him next morning, he inflicted without the slightest provocation two injuries on her person (1) which landed on her right palm 3/4" above the second metacarpo phalangeal joint in the process of warding off the blow and (2) a penetrating wound, as stated above.
The whole affair appears to be pre planned and pre meditated and as such the case squarely falls within the purview of clause thirdly of section 300 of the Indian Penal Code.
We are fortified in this view by two decisions of this Court viz. Virsa Singh vs The State of Punjab and State of Andhra Pradesh vs Rayavarapu Punnayya & Anr.
In Virsa Singh vs The State of Punjab (supra) where the accused thrust a spear into the abdomen of the deceased which resulted in his death and in the opinion of the doctor, the injury was sufficient to cause death in the ordinary course of nature, it was held that even if the intention of the accused was limited to the infliction of a bodily injury sufficient to cause death in the ordinary course of nature and did not extend to the intention 747 of causing death, the offence would be murder.
The following observations made by this Court in that case are worth quoting: "If there is an intention to inflict an injury that is sufficient to cause death in the ordinary course of nature, then the intention is to kill and in that event, clause 'thirdly ' would be unnecessary because the act would fall under the first part of the section, namely "If the act by which the death is caused is done with the intention of causing death.
" In our opinion, the two clauses are disjunctive and separate.
The first is subjective to the offender: "If it is done with the intention of causing bodily injury to any person.
" It must, of course, first be found that bodily injury was caused and the nature of the injury must be established, that is to say, whether the injury is on the leg or the arm or the stomach, how deep it penetrated, whether any vital organs were cut and so forth.
These are purely objective facts and leave no room for interference or deduction: to that extent the enquiry is objective; but when it comes to the question of intention, that is subjective to the offender and it must be proved that he had an intention to cause the bodily injury that is found to be present.
Once that is found, the enquiry shifts to the next clause "and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death.
" The first part of this is descriptive of the earlier part of the section, namely, the infliction of bodily injury with the intention to inflict it, that is to say, if the circumstances justify an inference that a man 's intention was only to inflict a blow on the lower part of the leg, or some lesser blow, and it can be shown that the blow landed in the region of the heart by accident, then, though an injury to the heart is shown to be present, the intention to inflict an injury in that region, or of that nature, is not proved.
In that case, the first part of the clause does not come into play.
But once it is proved that there was an intention to inflict the injury that is found to be present, then the earlier part of the clause we are now examining 748 "and the bodily injury intended to be inflicted" is merely descriptive.
All it means is that it is not enough to prove that the injury found to be present is sufficient to cause death in the ordinary course of nature; it must in addition be shown that the injury is of the kind that falls within the earlier clause, namely, that the injury found to be present was the injury that was intended to be inflicted.
Whether it was sufficient to cause death in the ordinary course of nature is a matter of inference or deduction from the proved facts about the nature of the injury and has nothing to do with the question of intention.
In considering whether the intention was to inflict the injury found to have been inflicted, the enquiry necessarily proceeds on broad lines as, for example, whether there was an intention to strike at a vital or a dangerous spot, and whether with sufficient force to cause the kind of injury found to have been inflicted.
It is, of course, not necessary to enquire into every last detail as, for instance, whether the prisoner intended to have the bowels fall out, or whether he intended to penetrate the liver or the kidneys or the heart.
Otherwise, a man who has no knowledge of anatomy could never be convicted, for if he does not know that there is a heart or a kidney or bowels, he cannot be said to have intended to injure them.
Of course, that is not the kind of enquiry.
It is broad based and simple and based on commonsense: the kind of enquiry that "twelve good men are true" could readily appreciate and understand.
To put it shortly, the prosecution must prove the following facts before it can bring a case under section 300, "thirdly"; First, it must establish, quite objectively, that a bodily injury is present; Secondly, the nature of the injury must be proved; These are purely objective investigations.
Thirdly, it must be proved that there was an intention to inflict that particular bodily injury, that is to say, that it was not accidental or unintentional, or that some other kind of injury was intended.
Once these three elements are proved to be present, the enquiry proceeds further and, 749 Fourthly, it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature.
This part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender.
Once these four elements are established by the prosecution (and, of course, the burden is on the prosecution throughout) the offence is murder under section 300, thirdly.
It does not matter that there was no intention to cause death.
It does not matter that there was no intention even to cause an injury of a kind that is sufficient to cause death in the ordinary course of nature (not that there is any real distinction between the two).
It does not even matter that there is no knowledge that an act of that kind will be likely to cause death.
Once the intention to cause the bodily injury actually found to be present is proved, the rest of the enquiry is purely objective and the only question is whether, as a matter of purely objective inference, the injury is sufficient in the ordinary course of nature to cause death.
No one has a licence to run around inflicting injuries that are sufficient to cause death in the ordinary course of nature and claim that they are not guilty of murder.
If they inflict injuries of that kind, they must face the consequences; and they can only escape if it can be shown, or reasonably deduced that the injury was accidental or otherwise unintentional.
" Similar view was expressed by this Court in State of Andhra Pradesh vs Rayavarapu Punnayya & Anr.
(Supra).
In the present case, the appellant appears to have intended to cause the death of Mst.
Gajri otherwise there was no necessity for him to carry the dagger with him when he went to the village of his in laws to fetch his wife.
That the appellant intended to cause the death of the deceased is further clear from the fact that he inflicted a through and through penetrating wound on the posterior axillary line which seriously injured the vital organs of the deceased viz. the liver and the large colon leading to internal haemorrhage and shock.
The injury in the opinion of the doctor being sufficient in the ordinary course of nature to cause the death of the deceased, the case squarely fell within the ambit of clause thirdly of section 300 of the Indian Penal Code as held by this Court in the decisions referred to above.
The mere fact that if immediate expert treatment had been available and the emergency operation had been performed, there were chances of survival of the deceased can be of no avail to the appellant.
750 Explanation 2 to section 299 of the Indian Penal Code clearly lays down that where death is caused by bodily injury, the person who causes such bodily injury shall be deemed to have caused the death, although by resorting to proper remedies and skilful treatment the death might have been prevented.
For the foregoing reasons, we are of the view that the Sessions Judge was wholly wrong in convicting the appellant under section 304 Part II of the Indian Penal Code and acquitting him of the charge under section 302 of the Penal Code and the High Court was wholly right in convicting the appellant under section 302 of the Penal Code instead of under section 304 Part II of the Penal Code.
In the result, we do not find any merit in this appeal which is dismissed.
S.R. Appeal dismissed. | The appellant was charged and tried for the offence under Section 302 I.P.C. for causing the murder of his wife.
The Sessions Judge though on a consideration of the evidence led in the case including the direct testimony of Mst.
Jelki(PW 3) and Mst.
Modan (PW 8) found that the appellant attacked his wife.
Gajri with dagger (Ext.
I) and caused injuries on her person out of which injury No. 2 which had injured the liver and caused the perforation of the large colon was sufficient to cause her death in the ordinary course of nature, convicted him under Section 304 Part II I.P.C. and acquitted him of the charge under Section 302 Penal Code, in view of the fact that Dr. Laxmi Narain (PW 1) who conducted the postmortem examination of the body of Mst.
Gajri had said in the course of his examination that "if immediate expert treatment had been available and emergency operation had been performed there were chances of the survival".
In State appeal, the High Court altered the conviction of the appellant from one under Section 304 Part II I.P.C. to that under Section 302 I.P.C. and sentenced him to imprisonment for life.
Hence the appeal under Section 2(a) of the Supreme Court(Enlargement of Criminal Appellate Jurisdiction) Act (Act 28) 1970.
Dismissing the appeal, the Court ^ HELD: 1.
Explanation 2 to Section 299 of the Indian Penal Code clearly lays down that where death is caused by bodily injury the person who causes such bodily injury shall be deemed to have caused the death, although by resorting to proper remedies and skilful treatment the death might have been prevented.
The mere fact that if immediate expert treatment had been available and the emergency operation had been performed, there were chances of survival of the deceased can be of no avail to the appellant.
[749H. 759A] 2.
The injury in the opinion of the doctor being sufficient in the ordinary course of nature to cause death of the deceased, the case squarely fell within the ambit of clause, Thirdly of Section 300 I.P.C. [749G] In the instant case, the appellant appears to have intended to cause the death of Mst.
Gajri otherwise there was no necessity for him to carry the dagger with him when he went to the village of his in laws to fetch his wife.
745 That the appellant intended to cause the death of the deceased is further clear from the fact that he inflicted a through and through penetrating wound on the posterior axillary line which seriously injured the vital organs of the deceased viz. the liver and the large colon leading to internal haemorrhage and shock.
[749F G] Virsa Singh vs The State of Punjab; , and State of Andhra Pradesh vs Rayavarapu Punnayya and Anr., ; ; reiterated. |
N: Criminal Appeals Nos. 178 and 248 of 1977.
Appeals by Special Leave from the Judgment and order dated 25 1 77, 4 3 77 of the Kerala High Court in Criminal Misc.
Petition No. 862/76 and Criminal Appeal No. 416/75.
T. C. Raghavan (In Crl.
A. 178/77) and P. K. Pillai for the Appellant.
K. T. Narindranath (In Crl.
A. 178/77) and K. R. Nambiar for the Respondent.
The Judgment of the Court was delivered by KOSHAL, J.
By this judgment we shall dispose of Criminal Appeals Nos.178 and 248 of 1977, both of which were admitted to a hearing by special leave and in each one of which the sole point for determination is whether a member of an executive committee or a servant of a registered co operative society is a public servant for the purpose of clause (c) of sub section (1) of section 5 of the Prevention of Corruption Act (Central Act No. 2 of 1947, hereinafter referred under the Criminal Law Amendment Act (Central Act No. 46 of to as the 1947 Act) and whether, therefore, a Special Judge appointed 1952, hereinafter called the 1952 Act) has jurisdiction to try him for an offence under that clause.
799 2.
The appellant in Criminal Appeal No. 178 of 1977 is M.A. Kochu Devassy who was sent up, alongwith 11 others, for trial in respect of offences under sections 120 B, 408, 465, 467, 477 and 477 A of the Indian Penal Code (hereinafter described as the Code) and clause (c) of sub section (1) read with sub section (2) of section 5 of the 1947 Act to the Special Judge, Trichur by the Deputy Superintendent of Police, Vigilance Department, Trichur.
The allegations against the accused were that while being members of the Board of Directors or the servants of Cooperative Society No. R 192, Chalakudy (hereinafter called the Society), they, on the 18th of May 1972, entered into a conspiracy to misappropriate the funds of the Society, that in pursuance of that conspiracy they misappropriated a sum of Rs. 1900/ on the same date and that they prepared false records in order to conceal the misappropriation.
Before the trial commenced, however, a petition was made on behalf of the accused to the High Court of Kerala praying that the charge be quashed.
That petition came up for hearing before Khalid, J., who doubted the correctness of the dictum of a Division Bench of that Court in Sahadevan vs State of Kerala to the effect that a Special Judge has jurisdiction to try all cases against employees of co operative societies under all or any of the provisions of section 5 of the 1947 Act.
He adverted to various provisions of that Act and the Kerala Criminal Law Amendment Act (Kerala Act 27 of 1962 and hereinafter referred to as the Kerala Act) and thought that an important aspect of the amendment promulgated by the Kerala Act was not brought to the notice of the Division Bench and therefore referred the matter to a larger Bench by an order dated the 7th of December 1976.
The petition then came up for final hearing before a Full Bench of the Kerala High Court, which has, by the impugned judgment, held that the dictum of the Division Bench mentioned above was correct, that a member of the executive committee or a servant of a registered co operative society was a public servant for the purposes of the 1947 Act as a whole in so far as the State of Kerala was concerned and that, therefore, such a member or servant could be tried by a Special Judge.
It is by that judgment that the appellant feels aggrieved.
The appellant in Criminal Appeal No. 248 of 1977 is one C.A. Thomas, who was convicted by the Special Judge, Trichur, for offences under clause (c) of sub section (1) read with sub section (2) of section 5 of the 1947 Act and section 408 of the Code and was sentenced to rigorous imprisonment for a year and a fine of Rs. 5000/ on the first count, the sentence in default of payment of fine being rigorous imprisonment for six months.
No sentence was awarded for 800 the offence under section 408 of the Code.
The allegations on the basis of which he was prosecuted and which were found proved against him were that while being employed as a store keeper at the firewood depot at Punkunnam owned by the Wholesale Co operative Stores Ltd. Trichur, he misappropriated profits accruing to his employers by abusing his official position.
He filed an appeal to the High Court of Kerala which was dismissed by a learned Single Judge on the 4th of March 1977 through the judgment impugned before us.
The pleas raised before the High Court on his behalf included one that the Special Judge had no jurisdiction to try him inasmuch as he was not a public servant for the purposes of the 1947 Act.
The plea was rejected by the High Court in view of the dictum of the Full Bench which is challenged before us in Criminal Appeal No. 178 of 1977.
At this stage we may usefully refer to various provisions of the Code, the 1947 Act, the 1952 Act, the Kerala Act and the Criminal Law Amendment Act (Central Act No. 50 of 1955 and hereinafter called the 1955 Act).
Section 21 of the Code defines what is a "public servant".
In 12 clauses it lists various categories of persons who fall within the definition.
Members of the executive committee or servants of a co operative society are not embraced by any of those categories.
Chapter IX of the Code headed "Of Offences by or relating to Public Servants" consists of sections 161 to 171.
Section 161 states the conditions on the fulfilment of which a public servant would be guilty of bribery and lays down the punishment therefor.
Section 2 of the 1947 Act as originally enacted was to the following effect: '2.
For the purposes of this Act, "public servant" means a public servant as defined in section 21 of the Indian Penal Code. ' Sub section (1) of section 5 of the 1947 Act states when a public servant can be said to commit the offence of criminal misconduct.
It has five clauses of which the first three run as follows: "(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person, any gratification (other than legal remuneration) as a motive or reward such as is mentioned in section 161 of the Indian Penal Code, or "(b) if he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person, any valuable thing without consideration or 801 for a consideration which he knows to be inadequate, from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned, or "(c) if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, or" Sub section (2) of section 5 of the 1947 Act provides for punishment in respect of an offence under sub section (1) thereof, while section 6 creates a bar against any court taking cognizance of an offence under sections 161, 164 and 165 of the Code or sub section (2) of section 5 of the 1947 Act unless previous sanction of certain authorities has been obtained in that behalf.
Now we come to the provisions of the 1952 Act.
Section 3 thereof added to the Code section 165 A which created and laid down the punishment for the offence of abetment of the offences covered by sections 161 and 165 of the Code.
Section 6 of the 1952 Act dealt with the appointment of Special Judges to try offences under sections 161, 165 or 165 A of the Code or sub section (2) of section 5 of the 1947 Act, or conspiracy to commit any of those offences.
Sub section (1) of section 7 of the 1952 Act barred the jurisdiction of Courts other than those of Special Judges to try the offences mentioned in section 6, while sub section (3) of section 7 provided that a Special Judge trying any of the offences mentioned in section 6 could also try offences with which the accused might be charged at the same trial in accordance with the provisions of the Code of Criminal Procedure.
The 1955 Act added offences under sections 162, 163 and 164 of the Code to the range of offences to try which the Special Judge had exclusive jurisdiction, so that such jurisdiction thenceforth extended to the trial of offences under sections 161 to 165 A of the Code and subsection (2) of section 5 of the 1947 Act.
Seven years later was promulgated the Kerala Act, section 2 where of amended section 161 of the Code by adding thereto an Explanation, the relevant part of which is extracted below: 802 '"Public Servant" For purposes of this section and sections 162, 163, 164, 165 and 165 A, the words "public servant" shall denote, besides those who are "public servants" within the meaning of that section under any law for the time being in force, persons falling under any of the descriptions hereinafter following, namely: (i). . . . . (ii). . . . . (iii). . . . (iv) Every member of the Board of Directors or the executive or managing committee and every officer or servant of a co operative society registered or deemed to be registered under the law relating to co operative societies for the time being in force; (v) . . . . . (vi) . . . . . (vii) . . . . . (viii) . . . . .
Section 3 of the Kerala Act may be reproduced in extenso: 'In the Prevention of Corruption Act, 1947 (Central Act 2 of 1947) (i) for section 2, the following section shall be substituted, namely: "2.
Interpretation For the purposes of this Act, "public servant" shall have the meaning assigned to it under the Explanation to section 161 of the Indian Penal Code as amended by the Kerala Criminal Law Amendment Act, 1962"; (ii) in section 5A, for the words, figures and letter, "under section 161, section 165 or section 165A," the words, figures and letter "under sections 161, 162, 163, 164, 165 or 165A" shall be substituted; (iii) in subsection (1) of section 6, after clause (b), the following clause shall be inserted, namely : "(bb) in the case of a person falling under any of the descriptions mentioned in items (i) to (viii) in the Explanation relating to "Public Servant" in section 161 of the Indian Penal Code as amended by the Kerala Criminal Law Amendment Act, 1962, save by or with the sanction of the State Government;" 803 4.
The contentions raised on behalf of the appellants may be summarised thus.
Section 2 of the Kerala Act brought members of the executive committee or the servants of a registered co operative society within the ambit of the expression "public servant" only for the purposes of sections 161 to 165A of the Code and for no other purpose and therefore the use of the enlarged definition could not be made for the purposes of the 1947 Act.
It is true that section 2 of the 1947 Act as substituted by the Kerala Act states that the expression "public servant" shall have the same meaning for the purposes of the 1947 Act as have been assigned to it under the enlarged definition of that expression in the Explanation added to section 161 of the Code, but then the phrase "for the purposes of this Act" occurring in the said section 2 must be deemed to have a limited meaning and should be read down as if they are restricted to only those purposes of the Act which concern sections 161 to 165A of the Code.
Had the intention of the framers of the substituted section been not to give such a limited meaning to the said phrase but to use it in its literal sense, there was no point in enlarging the definition of the expression "public servant" by adding an Explanation to section 161 of the Code; for, in that case, the proper and direct method of carrying out the intention would have been to amend section 21 of the Code itself, so as to make the definition therein embrace all the eight categories of persons mentioned in the added Explanation.
We find ourselves wholly unable to accept any of the contentions.
The terms of section 2 of the 1947 Act as substituted by section 3 of the Kerala Act are absolutely clear and unambiguous and when they lay down that the expression "public servant" shall have a particular meaning for the purposes of the Act, that meaning must be given to the expression wherever it occurs in the Act.
"For the purposes of the Act" surely means for the purposes of all and not only some of the provisions of the Act.
If the intention was to limit the applicability of the definition of the expression "public servant" as contended, the language used would not have been "for the purposes of the Act" but something like "for the purposes of the Act insofar as they relate to the offences under sections 161 to 165A of the Indian Penal Code.
" It may be noted here that section 2 of the 1947 Act as substituted by the Kerala Act does not reproduce the definition of the expression "public servant" as contained in section 161 of the Code, but states in so many words that the expression shall have the meaning assigned to it in the Explanation to the said section 161.
It follows that what is brought into section 2 of the 1947 Act is the meaning of the expression as contained in the Explanation and not the entire Ex 804 planation itself, so that the words "for the purposes of this section and sections 162, 163, 164, 165 and 165A" occurring in the Explanation are not transplanted into section 2 of the 1947 Act as substituted.
If the contrary were true and the Explanation had to be read word for word into the said section 2, the result would entail an absurdity; for then the section last mentioned would read thus : `For purposes of this Act, for purposes of the section and sections 162, 163, 164, 165 and 165A, the words "public servant" shall denote . . ' So read, the section makes no sense and the method of incorporation of the Explanation into the substituted section 2 cannot be accepted as a correct method of interpretation of the section.
Nor do we see any cogent reason why the legislature should have intended to limit the applicability of the enlarged definition as contended.
The Kerala Act carried out amendments to the 1947 Act insofar as the State of Kerala was concerned and the 1947 Act deals not only with offences under sections 161 to 165A of the Code but also, and mainly, with those falling under various clauses of sub section (1) of section 5 of the 1947 Act.
No reasonable line of distinction between the offences under sections 161 to 165A of the Code on the one hand and those punishable under sub section (2) of section 5 of the 1947 Act on the other appears feasible for the purpose of conferment or exclusive jurisdiction on Special Judges to try them.
From this point of view also, the interpretation canvassed on behalf of the appellants is untenable.
And the argument that the enlarged definition of the expression "public servant" would not have been adopted in the form of the Explanation to section 161 of the Code but would have been incorporated in section 21 thereof if it was to apply to the 1947 Act as a whole, though attractive at first sight, is really without substance.
In our view, the method adopted is not without purpose.
Had the definition been enlarged by an amendment of section 21 of the Code, it would have made the eight new categories of persons brought by it within the ambit of the expression "public servant" liable to punishment not only for offences under sections 161 to 165A of the Code but also for numerous other offences specified in the Code relating to public servants, as also to offences so related and created by other Acts wherein the definition of "public servant" occurring in section 21 of the Code has been adopted as such.
It was presumably to avoid such a result and to limit the scope of the applicability of the 805 definition to bribery, criminal misconduct and allied offences committed by public servants, that the legislature in its wisdom adopted the device of amending section 161 of the Code by adding the Explanation to it and by providing also that the enlarged definition shall govern all the provisions of the 1947 Act.
Not finding any merit in the contentions raised on behalf of the appellants, we hold that the enlarged definition of the expression "public servant" as contained in the Explanation added to section 161 of the Code by section 2 of the Kerala Act governs all the provisions of the 1947 Act, that the appellants are public servants within the meaning of that enlarged definition by reason of the language employed in clause (iv) of the Explanation and that, therefore, the offences under clause (c) of sub section (1) of section 5 of the 1947 Act said to have been committed by them are triable exclusively by Special Judges appointed under the 1952 Act.
Both the appeals are accordingly dismissed.
P.H.P. Appeals dismissed. | The appellants in the above appeal were tried and convicted in respect of the offences inter alia under section 408, 465, 477 and 477A of the Indian Penal Code, 1860 read with section 5 of the Prevention of Corruption Act, 1947 by a special judge.
Both the appellants were members of a registered cooperative society.
The conviction of the appellants, was confirmed by the High Court.
21 of the Indian Penal Code defines a public servant "Members of the Executive Committee or servants of a cooperative society are not embraced by the categories mentioned in sec.
21" Chapter 9 of the Penal Code deals with offences by or relating to public servant.
Sec. 2 of the Prevention of Corruption Act, 1947 adopts definition of public servant from Sec.
21 of the Penal Code.
By the 1952 amendment of the Criminal Procedure Code the provisions of appointment of a Special Judge to try the offences have been provided.
The said 1955 amendment adds certain more offences which are to be tried by a special judge.
The Kerala Criminal Law Amendment Act, 1962 amended Sec.
161 of the Penal Code by adding an explanation thereto.
It provides that for the purpose of the said section and certain other sections a public servant shall denote, besides those who are public servants within the meaning of that section, members of the Board of Directors or the Executive or Managing Committee and other officer or servant of a Co operative Society registered or deemed to be registered under the law relating to co operative societies for the time being in force.
Sec. 3 of the Kerala.
Act provides that for the purpose of the Preventive of Corruption Act, 1947, public servant shall have the meaning assigned to it under the explanation to sec.
161 of the Indian Penal Code as amended by the Kerala Criminal Law Amendment Act, 1962.
(1) The appellants contended that sec.
2 of the Kerala Act brought members of the executive committee or the servants of a registered co operative society within the ambit of the expression "public servant" only for the purpose of Sections 161 to 165A of the Penal Code and for no other purpose.
Therefore, the use of the enlarged definition cannot be made for the purpose of 1947 Act.
(2) If the intention of the legislature was to enlarge the definition for all purposes, whatever, it would have amended section 21 of the Indian Penal Code itself.
Dismissing the appeals the Court, ^ HELD: (1) The terms of sec.
2 of the 1947 Act as substituted by sec.
3 of the Kerala Act are absolutely clear and unambiguous and when they lay down that expression public servant shall have a particular meaning for the 798 purpose of the Act, that meaning must be given to the expression wherever it occurs in the Act.
"For the purpose of the Act" surely means for the purpose of all and not only some of the provisions of the Act.
[803E] (2) The Kerala Act carried out amendment of the 1947 Act insofar as the State of Kerala was concerned.
The 1947 Act deals not only with offences under sec.
161 to 165A of the Penal Code but also and mainly with those falling under various clauses of sub section 1 to 5 of the 1947 Act.
No reasonable line of distinction between the offences under sec.
161 to 165A of the Code on the one hand and those punishable under sec.
5 of the 1947 Act on the other appears feasible for the purpose of conferment of exclusive jurisdiction on special judges to try them.
From this point of view also interpretation canvassed on behalf of the appellants is untenable.
[804C E] (3) The arguments that the legislature would have incorporated the additional definition under sec.
21 if it desired to extend the scope for all purposes is without substance.
If the definition had been enlarged by amendment of sec.
21 it would have made the new categories of persons brought by it within the ambit of the expression "public servant" liable to punishment not only for Offences under sec.
161 to 165A of the Code but also for numerous other offences specified in the code relating to public servants as also to offences so related and created by other Acts wherein the definition of public servant occurring in sec.
21 of the Code has been adopted.
[804F H] |
Civil Appeal No. 1004 of 1988.
From the Judgment and Order dated 2.12.1987 of the High Court of Calcutta in Civil Order No. 2506 of 1987.
509 S.N. Kacker, N. Choudhary and Rathin Das for the Appellant.
A.P. Chatterjee, Deepak Mitra and G.S. Chatterjee for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
The jurisdiction of the City Civil Court, Calcutta to entertain a suit being T.S. No. 520 of 1983 filed by the respondent No. 1 is under challenge in the present appeal, on the ground that the correct value of the suit is beyond the pecuniary jurisdiction of the Court.
The plaintiff respondent No. 1 has alleged that he is a partner of a partnership business along with his brothers defendant Nos. 1 and 2.
Originally it was a proprietary business belonging to Abdul Samad, father of the plaintiff and defendant Nos. 1 and 2, and was later converted into a partnership firm by a regular deed.
During his life time the business was under the control of Abdul Samad, but on his death the defendants Nos. 1 and 2 have effectively taken charge of the business and excluded the plaintiff.
A suggestion to re constitute and partnership made and repeated by the plaintiff has been ignored.
In reply to the plaintiff 's letter seeking information the defendant No. 2 petitioner has stated in his letter to the plaintiff that he (the plaintiff) has no interest in the firm.
In paragraph 11 of the plaint it is stated that he has on enquiry discovered that the defendants nos.
1 and 2 have been falsely representing before the Income Tax department, inter alia, that a new deed of partnership had been executed on 15.1.1979 to be effective from 1.1.1979 in which the plaintiff has no interest.
The Income Tax Officer passed an order on 26th December 1981 on the basis of the false allegations made by the defendants.
The plaintiff has challenged the aforementioned partnership deed of 1979.
In paragraph 16 of the plaint the amount of profit from the business has been described as "huge".
In the prayer portion of the plaint the plaintiff prayed for declaring the partnership deed of 1979 as illegal and void and for passing a decree for dissolution of the partnership firm and for accounts.
The valuation of the suit was put as Rs.150 being the sum of Rs.50 for declaration, Rs. 50 for rendition of accounts and another sum of Rs. 50 for profit to the share of the plaintiff arising out of the business.
Court fee was accordingly paid.
The defendants No. 1 and 2, besides denying the plaint allegations made by the plaintiff, challenged the valuation given by the plaintiff as grossly undervalued and arbitrary.
The issues relating to the correct valuation and pecuniary jurisdiction of the court to enter 510 tain the suit were taken up as preliminary issues and were decided in favour of the plaintiff.
The defendants challenged the order by a civil revision application before the Calcutta High Court which was dismised.
The defendant No. 2 has now come to this Court against the High Court 's order.
Special leave is granted.
Mr. Kacker, the learned counsel for the appellant, has contended that it is manifest that relief to the tune of lacs of rupees has been claimed by the plaintiff in the suit.
He said that the plaintiff has laid claim to a sum of Rs.1,26,796.72 besides another sum of over Rs.84,000 as his share in the profit for a particular period by reference to the proceeding of the Income Tax department mentioned in paragraph 11 of the plaint, and it is, therefore, preposterous on his part to suggest in paragraph 19 of the plaint that it could be tentatively valued at Rs.50 only.
According to the defence case which is challenged as incorrect by the plaintiff, the plaintiff requested for and was allowed a larger share 'in the well established and reputed business of auctioneer known as "Russell Exchange" and its assets and goodwill as well as the amount lying in the Habib Bank, Karachi Branch, solely and absolutely '.
The "Russell Exchange" building is a very valuable property near Park Street in the city of Calcutta.
A copy of the Profit and Loss Account for the calendar year 1979 attached by the plaintiff to the additional affidavit filed on his behalf before this Court mentions figures in lacs.
Mr. Arun Prakash Chatterjee, the learned counsel for the plaintiff respondent No. 1, has argued that the suit is governed for the purpose of court fees by section 7(iv)(f) of the Court Fees Act, and the plaintiff has the absolute right to put on the plaint any value he wishes to and the court has no jurisdiction to examine the matter.
In other words, it is the sweet will of the plaintiff to choose any figure he likes and thus decide finally the court which shall have jurisdiction to entertain the suit without reference to the subject matter of the litigation, the nature and extent of the relief claimed or any other factor.
He has relied upon the decision of this Court in Smt.
Tara Devi vs Sri Thakur Radha Krishna Maharaj, , and Meenakshisundaram Chettiar vs Venkatachalam Chettiar, ; Reference was also made to Krishnaji Hari vs Gopal Narayan, AIR 1936 Bombay 166 and Ishwarappa vs Dhanji, AIR 1932 Bombay 111.
Mr. Chatterjee claimed that the different High Courts in the country have consistently confirmed this right of the plaintiff and he has not discovered any decision to the contrary.
511 5.
We are afraid, the interpretation put by the learned counsel on the decisions of this Court is not correct and cannot be accepted.
None of the two cited judgments relied upon by Mr. Chatterjee helps him.
It is true that in a suit for accounts the plaintiff is not obliged to state the exact amount which would result after taking all the accounts and he may, therefore, put a tentative valuation upon the suit, but he is not permitted to choose an unreasonable and arbitrary figure for that purpose.
At page 392 of the judgment in Meenakshisundaram Chettiar vs Venkatachalam Chettiar, (supra) this Court while taking note of the plaintiff 's right to give a tentative valuation on the suit, observed: "The plaintiff cannot arbitrarily and deliberately under value the relief." In Smt.
Tara Devi vs Sri Thakur Radha Krishna Maharaj, , the view was reiterated thus at page 70: ". .
The plaintiff however, has not been given the absolute right or option to place any valuation whatever on such relief and where the plaintiff manifestly and deliberately under estimates the relief the court is entitled to examine the correctness of the valuation given by the plaintiff and to revise the same if it is patently arbitrary or unreasonable . ." 6.
So far as the opinion of the High Courts is concerned, it is not uniform.
The argument, "that the plaintiff can give an arbitrary valuation in the plaint, and that the court is bound to accept that" made on behalf of the plaintiff before the Allahabad High Court in Aizaz Ahmad vs Nazirul Hasan, AIR 1935 Allahabad 849, was rejected, after observing that there was some authority for the extreme view as urged in two Calcutta decisions but later a different view was taken by the said Court as also by the Allahabad Court.
In Attar Singh vs Manohar Singh, ILR (1947) Nagpur 933, the plaintiff non applicant before the High Court filed a suit for dissolution of partnership and accounts valuing at Rs.150 as has been done in the case before us.
The defendant 's objection to the valuation was rejected by the trial court "on the ground that the court was powerless to challenge the valuation put by the plaintiff on the relief claimed in the suit.
" The Full Bench decision in Mata Ram vs Daulat, ILR (1938) Nagpur 588 (F.B.) was attempted to be distinguished on the basis that it was a case covered by section 7(iv)(c).
of the Court Fees Act and not by section 7(iv)(f).
The 512 High Court while repelling the argument pointed out that the principle underlying both the clauses (c) and (f) of section 7(iv) is substantially the same and the Full Bench decision governed the case.
Accordingly it was held that when the valuation put by the plaintiff appears to be arbitrary and unreasonable the court may reject it and leave the plaintiff to correct the valuation or have the suit rejected.
Similar was the view of the Patna High Court in suits covered by section 7(iv)(c) in Salahuddinhyder vs Dhanoolal, [1945] ILR XXIV Patna 334, and Shama Pershad Shahi vs Sheopershad Singh XLI, I.C. 95 (Patna).
In Gouri Lal and others vs Raja Babu, AIR 1929 Patna 626, the respondent filed a suit praying for accounts from appellant No. 1.
Rejecting his claim to put any valuation under section 7(iv)(f) of the Court Fees Act the High Court observed that when a plaintiff is required to place the valuation on his claim he must state a valuation which need only be approximately correct but qualified it by saying that, "it must not be arbitrary or manifestly inadequate.
It is true that in a suit for accounts the correct amount payable by one party to the other can be ascertained only when the accounts are examined and it is not possible to give an accurate valuation of the claim at the inception of the suit.
The plaintiff is, therefore, allowed to give his own tentative valuation.
Ordinarily the Court shall not examine the correctness of the valuation chosen, but the plaintiff cannot act arbitrarily in this matter.
If a plaintiff chooses whimsically a ridiculous figure it is tantamount to not exercising his right in this regard.
In such a case it is not only open to the Court but its duty to reject such a valuation.
The cases of some of the High Courts which have taken a different view must be held to be incorrectly decided.
The learned counsel for the parties have placed before us the materials on the record at considerable length and we do not have any hesitation in holding that the valuation put by the plaintiff (respondent before us) on the plaint is arbitrary and unacceptable.
We, however, do not propose to examine the matter further and remit this question to be reconsidered by the trial court.
While examining the issue it will be open to the trial court to take into consideration the statement in the plaint that the plaintiff has been ousted from the partnership business.
If the court comes to the conclusion that the tentative valuation of the suit would be beyond its pecuniary jurisdiction, it shall pass an appropriate order under Order VII of the Code of Civil Procedure.
The appeal is accordingly allowed with costs payable by the plaintiff respondent.
G.N. Appeal allowed. | The father and brothers of Respondent No. 1 were running a proprietary business, which was later converted into a partnership firm by a regular deed.
On the death of the father, the two brothers had effectively taken control of the business and excluded Respondent No. 1.
The suggestion to reconstitute the partnership made repeatedly by Respondent No. 1 had been ignored.
The two brothers represented before the Income Tax Officer that a new deed of partnership had been executed on 15.1.1979 to be effective from 1.1.1979 in which Respondent No. 1 had no interest and on that basis the Income Tax Officer passed an order.
In the suit filed by Respondent No. 1, he challenged the partnership deed as being illegal and void and prayed for a decree for dissolution of the partnership firm and for accounts.
Valuation of the suit was put as Rs.150 i.e., Rs.50 each for declaration, rendition of accounts, and for profit to the share of the plaintiff.
Court fee was paid accordingly.
The defendants in the suit denied the allegations made in the plaint and also challenged the valuation as being grossly undervalued and arbitrary.
The issue relating to the correct valuation and pecuniary jurisdiction of the Court was decided in favour of the plaintiff.
The defendants challenged the order by a Civil Revision Application which was dismissed by the High Court.
This appeal by special leave is against the High Court 's order.
On behalf of the appellant, it was contended that while relief to the tune of lakhs of rupees had been claimed, the plaint had been tentatively valued for Rs.50 only, which is preposterous.
The contention of Respondent No. 1 was that a Plaintiff has the absolute right to put on the plaint any 508 value he wishes and the court has no jurisdiction to examine the matter.
Allowing the appeal, this Court, ^ HELD: 1.
It is true that in a suit for accounts the correct amount payable by one party to the other can be ascertained only when the accounts are examined and it is not possible to give an accurate valuation of the claim at the inception of the suit.
The plaintiff is, therefore, allowed to give his own tentative valuation.
Ordinarily the Court shall not examine the correctness of the valuation chosen, but the plaintiff cannot act arbitrarily in this matter.
If a plaintiff chooses whimsically a ridiculous figure it is tantamount to not exercising his right in this regard.
In such a case it is not only open to the Court but its duty to reject such a valuation.
[512D E] 2.
In the instant case the valuation put by the plaintiff on the plaint is arbitrary and unacceptable.
However, the question is remitted to the trial court for reconsideration.
It is open to the trial court to take into consideration the statement in the plaint that the plaintiff has been ousted from the partnership business.
If the court comes to the conclusion that the tentative valuation of the suit would be beyond its pecuniary jurisdiction, it shall pass an appropriate order under Order VII of the Code of Civil Procedure.
[512F G] Smt.
Tara Devi vs Sri Thakur Radha Krishna Maharaj, ; Meenakshisundaram Chettiar vs Venkatachalam Chettiar, ; , relied on.
Aizaz Ahmad vs Nazirul Hasan, AIR 1935 Allahabad 849; Attar Singh vs Manohar Singh, ILR (1947) Nagpur 933; Mata Ram vs Daulat ILR (1938) Nagpur 588 (F.B.); Salahuddinhyder vs Dhanoolal, [1945] ILR XXIV Patna 334; Shama Pershad Sahi vs Sheopershad Singh XLI I.C. 95 (Patna); Gouri Lal and others vs Raja Babu, AIR 929 Patna 626, approved.
Krishnaji Hari vs Gopal Narayan.
AIR 1936 Bombay 166 and Ishwarappa vs Dhanji, AIR 1932 Bombay 111, overruled. |
ivil Appeal No. 912 of 1989.
From the Judgment and Order dated 11.5.1988 of the Allahabad High Court in Misc.
W.P. No. 7886 of 1985.
Yogeshwar Prasad and Mrs. Shobha Dikshit for the Appellant.
758 Satish Chandra and Madan Lokur for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Special leave granted.
This appeal arises out of a suit filed by respondent (plaintiff) landlord in the Court of Judge, Small Causes, Gorakhpur, for eviction of the appellants (defendant) tenant from the house in question on the ground of failure to pay the rent and for realisation of arrears of rent and elec tricity charges amounting to Rs.2,560.60.
It was pleaded that the tenant was to pay a monthly rent of Rs.70 apart from Rs.3 per month as water and electricity charges and was in arrears since July, 1979 which he failed to pay.
The appellant contested the suit mainly on the ground that the rate of rent was not Rs.70 per month but it was only Rs.40 and besides that he was provided with furniture by the landlord for which he was paying Rs.30 per month.
His case further was that some time after the tenancy commenced, he returned the furniture.
The Judge, Small Causes Court, by his judgment dated 10th.
November, 1983, dismissed the suit holding that the rate of rent was Rs.40 per month and as such the appellant was not a defaulter.
The respondent filed a revision which was allowed by the Additional District Judge, Gorakhpur.
The Revisional Court held that the rate of rent was Rs.70 per month.
The appellant filed a writ petition against the revisional order before the Allahabed High Court.
The High Court allowed the writ petition, quashed the revisional order and remanded the case for deciding the revision peti tion afresh.
Thereafter, the Revisional Court again allowed the revision and set aside the judgment of the Trial Court and ordered ejectment.
The appellant again challenged the revisional order by way of a writ petition before the Alla habad High Court but the same was dismissed.
Hence this appeal.
The Trial Court primarily relied upon documents 39/C and 40/C produced by the defendants.
Document 39/C is a receipt by the plaintiff wherein details of Rs.73 are given.
It is clearly mentioned in the receipt that Rs.40 were towards house rent, Rs.30 towards furniture charges and Rs.3 water and electricity charges.
The plaintiff admitted the contents of receipt 39/C but he explained that Rs.30 towards furni ture charges were mentioned at the request of the defendant.
The plaintiff strongly relied upon the rent note 97/C where in monthly rent of the house was mentioned at Rs.70.
The Trial Court rejected the rent 759 note on the ground that the same was not signed by the defendant.
Basing its findings on the receipt 39/C, the Trial Court dismissed the suit.
The Revisional Court, on the other hand, found force in the contention of the plaintiff that the rent note 97/C was signed by the defendant.
It was held that the admission, if any, of the plaintiff in receipt 391C is contradicted by the rent note 97/C and as such cannot be taken into consideration.
The Revisional Court thus differed from the Trial Court and ordered ejectment.
Before us, the counsel for the appellant Shri Prasad contends that in the face of clear admission of the respond ent in the receipt 39/C the rent of the house was Rs.40 per month.
He further contents that the rent note, even if taken into consideration, has been explained by the receipts 39]C and 40/C.
According to him Rs.70 per month mentioned in the rent note has been explained in the receipts to be Rs.40 as house rent and Rs.30 for the furniture.
We find force in the contention of the learned counsel.
In the face of clear admission by the respondent in the two receipts the finding of the Revisional Court to the effect that the monthly rent was Rs.70 is erroneous.
Faced with this situation Shri Satish Chandra, learned counsel for the respondent invited our attention to Section 3(i) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (here inafter called 'the Act ') and contends that the tenancy was for a furnished building and as such failure to pay even Rs.30 in respect of furniture would attract the provisions of Section 20(2)(a) of the Act and the appellant is liable to be ejected.
Section 3(i) and Section 20(2)(a) of the Act are as under: "Section 3(i)"building", means a residential or nonresidential roofed structure and in cludes (i) any land (including any garden), garages and outhouses, appurtenant to such building; (ii) any furniture supplied by the landlord for use in such building; (iii) any fittings and fixtures affixed to such building for the more beneficial enjoyment thereof.
"Section 20(2)(a).
"that the tenant is in arrears of rent for not less than four months, and has failed to pay the same to the landlord within one month from the date of service upon him of a notice of demand." 760 Shri Satish Chandra contends that definition of building under Section 3(i) includes any furniture supplied by the landlord for use in such building and as such non payment of part of the rent meant for furniture would amount to arrears of rent and the appellant having failed to pay the same is liable to be ejected.
In other words, he contends that it was a furnished house which was let out to the appellant.
He also contends that tenancy being of a furnished house, the tenant could not under law unilaterally surrender part of the tenancy by returning the furniture.
There may be some force in the abstract proposition of law canvassed by Shri Satish Chandra on the basis of Sections 3(i) and 20(2)(a) of the Act, but there is no basis for him in the present case to advance the same.
It was never the case of the respondent at any stage that furnished house was given on rent to the appellant.
In the notice before filing the suit, and in the plaint it was specifically pleaded that rent of the house was Rs.70 per month and the tenant was in arrears.
In the written statement appellant took a clear stand that the rent of the house was only Rs.40 and Rs.30 was for furniture which, according to the appellant, he returned after the commencement of the tenancy.
The respondent filed a replica tion to the written statement of appellant.
In Clause 3 of the replication the respondent denied that either the rent was Rs.40 per month or Rs.30 was being charged for furni ture.
He stated that neither any such goods had been sup plied to the appellant by him nor the rent was agreed at Rs.40 per month.
It is thus obvious from the pleadings that at no stage the respondent pleaded that he had given furnished house on rent to the tenant.
Rather the supply of furniture was categorically denied.
In the face of clear pleadings on the record it is impermissible to raise the plea that the land lord rented a furnished house to the tenant.
It would be contrary to the pleadings.
That apart neither before the Trial Court nor before the Revisional Court and not even before the High Court this plea was raised.
Therefore, there is no force in the contention of Shri Satish Chandra and the same is rejected.
This Appeal is, therefore, allowed.
The judgments of the High Court and of the Revisional Court are set aside.
The judgment of the Trial Court is restored and the suit of respondent is dismissed.
There will be no order as to costs.
N.P.V. Appeal allowed. | The respondent landlord filed a suit for eviction of the appellantstenant from the house in question on the ground of failure to pay rent and for realisation of arrears of rent.
While the respondent pleaded that the rate of rent was Rs.70 per month, the appellant contended that it was only Rs.40 and not Rs.70, and that he was paying Rs.30 per month for the furniture, provided by the landlord which he returned sometime after the tenancy commenced.
The trial court dismissed the suit holding that the rate of rent was Rs.40 per month and, as such, the appellant was not defaulter.
In the revision filed by the respondent, the Revisional Court held that the rent was Rs.70 per month.
The appellant filed a writ petition before the High Court, which quashed the revisional order and remanded the case for deciding the revision petition afresh.
Thereafter, the revisional court again allowed the revision.
The appellant challenged the revisional order before the High Court which dismissed the same.
In the appeal, by special leave, it was contended on behalf of the appellant tenant that in the face of clear admission of the respondent in the receipt, the rent of the house was Rs.40 per month, and that the amount of Rs.70 per month mentioned in the rent note had been explained in the receipts, to be Rs.40 as house rent and Rs.30 for furniture.
On behalf of the respondent, it was contended that the tenancy 757 was for a furnished building and failure to pay a part of the rent, in respect of furniture, would attract the provi sions of section 20(2)(a) of the U.P. Urban Building (Regulation of Letting Rent and Eviction) Act, 1972 and the appellant was liable to be ejected.
It was also contended that the tenancy being of a furnished house the tenant could not under law, unilaterally surrender part of tenancy.
Allowing the appeal, HELD: It was never the case of the respondent at any stage that furnished house was given on rent to the appel lant.
In the notice before filing the suit and in the plaint, it was specifically pleaded that rent of the house was Rs.70 per month and the tenant was in arrears.
In the written statement, appellant took a clear stand that the rent of the house was only Rs.40 and Rs.30 was for the furniture, which according to him, was returned after the commencement of the tenancy.
[760C D] In the face of clear pleadings on the record, it is impermissible to raise the plea that the landlord rented a furnished house to the tenant.
It would be contrary to the pleadings.
That apart, neither before the trial court nor before the Revisional Court and not even before the High Court this plea was raised.
[760F] The trial court relied upon the rent receipts, 39/C and 40/C, produced by the appellant.
It was clearly mentioned in the receipt 39/C that Rs.40 were towards house rent and Rs.30 towards furniture charges and Rs.3 towards water and electricity charges.
The respondent admitted the contents of the receipt but explained that Rs.30 towards furniture charges was mentioned at the request of the tenant.
[758G H] In the face of the clear admission by the .respondent in the two receipts, the finding of the Revisional Court that the monthly rent was Rs.70 is erroneous.
[759D] |
titions Nos.
4038, 4147, 4148, 4149, 4150, 4202, 4204, 4207, 4213, 4215, 4222, 4224, 4227, 4232, 4236, 4246, 4249, 4251, 4259, 4311, 4343 & 4347 of 1978.
(Under Article 32 of the Constitution).
V. M. Tarkunde, P. H. Parekh, C. B. Singh and Mukul Mudgar for the Petitioners in W.P. Nos. 4038 and 4244/78.
Yogeshwar Prasad, Mrs. Rani Chhabra and Miss M. Bali for the Petitioners in W.P. Nos. 4147 4150, 4207, 4232 and 4343/78.
B. R. Kapur and section K. Sabharwal for the Petitioners in W.P. Nos.
4213, 4215, 4246, 4249, 4311, 4224 and 4227/78.
O. P. Sharma for the Petitioners in W.P. Nos.
4222, 4259/78.
Pramod Swarup for the Petitioner in W.P. 4347/78.
Shreepal Singh for the Petitioner in W.P. 4236/78.
M. P. Jha for the Petitioner in W.P. 4251/78.
M. C. Bhandare (In W.P. 4204 and 4227/78 only) Mrs. section Bhandare, A. N. Karkhanis and Miss Malini Poduval for R. 3 (In W.P. 4204, 4227/78) and for R. 3 in 4215 and for R. 3 4 in 4249/78.
G. L. Sanghi (In W.P. 4038/78 only) section K. Mehta, K. R. Nagaraja, P. N. Puri and G. Lal for Municipality (rr) in W.P. 4038, 4207, 4215, 4249, 4227.
Hardev Singh and R. section Sodhi for the State of Punjab in (W.P. 4038/78).
Bishamber Lal for the State of Punjab in (W. P. 4147/78).
848 Naunit Lal for Municipal Committee (R.6) in W.P. 4249 and for r. 4 in 4227/78.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This heavy bunch of writ petitions impeaching the validity of a tax on foreign liquor raises a few familiar legal riddles.
A rupee per bottle sold within every municipal town or city is the impugned levy, meant, according to the Punjab Government, to serve the twin purposes of replenishing the resources of municipal bodies reduced by house tax exemptions and of weaning drinkers from overly consuming foreign liquor as a prohibitionist gesture.
To pick the pocket of every spirituous bibber of the higher brackets by a tiny tax may be but a feeble homage to article 47 of the Constitution, and to finance welfare projects with this tainted tax may be queer Gandhiana.
The will to enforce 'dry ' sobriety in society and to abolish massive human squaller by fleecing the fat few, is made of sterner stuff, maybe.
But matters of means and ends, of police and morality, are largely for the legislature and validity is the province of the court.
We let slip the observation only because, from a certain angle, these dual grounds make odd companions and add to the credibility gap, although our focus is solely on the legality of the levy.
It is better to begin with the story of the tax under challenge.
The petitioners are all licensees to trade in foreign liquor including Indian made foreign liquor.
They are either wholesalers or retailers and pay excise duty and other fees and taxes including sales tax under the general sales tax law which imposes a levy of 10 per cent, on sales of foreign liquor.
There are also octroi levies of 10 per cent, and educational tax of 2 per cent, and these add up to a considerable burden; but the commodity taxed is foreign liquor, Indian made or other, whose consumer usually belongs to the well to do sectors.
The municipalities of Punjab are governed by two enactments.
The numerous little ones are statutory bodies created and controlled by the Punjab Municipal Act, 1911 and the few large ones by the Punjab Municipal Corporation Act, 1976 (the Act, for brevity, hereafter).
For our purposes, the provisions run on identical terms and so we will take up the latter statute which compresses into one section a plurality of sections in the former, and set out the common scheme to study the critical issues raised.
Arguments have been addressed only on this basis.
The immediate facts which have launched the litigative rocket need to be narrated now to get a hang of the core questions in their correct perspective.
The State of Punjab, in April 1977, under its statutory 849 power [section 90(4)] required the various municipal bodies in the State to impose a tax on the sale et al, of foreign liquor at the rate of Re. 1/ per bottle with effect from May 20, 1977.
The municipal authorities having tarried too long or totally failed to take action pursuant to this directive, the State directly entered the fiscal arena and issued a Notification under section 90(5) dated May 31, 1977, which reads thus: "Whereas the Government of Punjab, in exercise of the powers conferred by sub section (4) of section 90 of the Punjab Municipal Corporation Act, 1063 A PSLG 77/12170, dated 11th April, 1977, required of the Municipal Corporation of Ludhiana in Punjab to impose tax on the sale of "Indian made Foreign Liquor" at the rate of rupee one per bottle, by the 20th May, 1977.
And Whereas, the Municipal Corporation of Ludhiana has failed to carry out the aforesaid order of the Punjab Government within the stipulated period.
Now, therefore, in exercise of the powers conferred by sub section (5) of section 90 of the Punjab Municipal Corporation Act, 1976, the President of India is pleased to impose/modify the tax on the sale of "Indian made Foreign Liquor" within the Municipal Corporation of Ludhiana at the rate of rupee one per bottle.
The tax shall come into force with effect from 1st June, 1977.
L.S. BINDRA Joint Secretary to Govt.
Punjab Local Government Department" This notification, issued under section 90(5) read with section 90(2)(b) of the Act, was later modified marginally but survives substantially.
The petitioners (licensees) challenge its vires both as contrary to the statutory provision (section 90) and as violative of the Constitution.
The triple shapes of the fatal constitutional pathology are that (a) section 90 (2)(b) of the Act suffers from the vice of excessive delegation or legislative abdication; (b) there are no guidelines for the exercise of the vagariously wide fiscal power of the corporation or Government which make it too unreasonable to be salvaged by article 19(5) and too arbitrary to be 'equal ' under article 14; and (c) the order itself is vitiated by multiple infirmities.
The principal invalidatory charge, based on the Act, is that section 90(4) interdicts any tax 'already imposed '.
The present tax is on sales and there is, under the general sales tax law, already a like levy on sales of foreign liquor in the State, and so the second fiscal venture is beyond Government 's power.
We have to consider these grounds of attack on the notification which are the emphatic submissions of 850 Shri Tarkunde who led the arguments.
There are more subsidiary submissions urged by other counsel on a lower key, though, but we have to deal with them too in due course.
Briefly, they are (a) that in picking out for taxation, from the broad spectrum of luxury goods or intoxicants, foreign liquor alone, discrimination has been practised, (b) that even assuming that Government can exercise the power of the municipal body, it may not do so without adhering to the procedural fairness implied in the Explanation to section 90(2) applicable to municipal bodies and (c) that unequals are being treated equally because the tax of Re. 1/ bottle at a flat rate disregards germane considerations like the price of the liquor or the degree of alcoholic content.
A feeble plea that the tax is bad because of the vice of double taxation and is unreasonable because there are heavy prior levies was also voiced.
Some of these contentions hardly merit consideration, but have been mentioned out of courtesy to counsel.
The last one, for instance, deserves the least attention.
There is nothing in article 265 of the Constitution from which one can spin out the constitutional vice called double taxation.
(Bad economics may be good law and vice versa).
Dealing with a somewhat similar argument, the Bombay High Court gave short shrift to it in Western India Theatres(1).
Some undeserving contentions die hard, rather survive after death.
The only epitaph we may inscribe is: Rest in peace and don 't be re born ! If on the same subject matter the legislature chooses to levy tax twice over there is no inherent invalidity in the fiscal adventure save where other prohibitions exist.
Likewise, the plea that a flat rate of Re. 1/ per bottle, be it brandy or other stronger beverage or be it Rs. 50/ or Rs. 500/ per bottle, cannot be seriously pressed.
In the field of taxation many complex factors enter the fixation and flexibility is necessary for the taxing authority to make a reasonably good job of it.
Moopil Nair 's case(2) does not discredit as unconstitutional anathema all flat rates of taxation.
Maybe, in marginal cases where the virtual impact of irrationally uniform impost on the same subject is glaringly discriminatory, expropriatory and beyond legislative competence, different considerations may arise; but to condemn into invalidity a tax because it is levied at a conveniently flat rate having regard to the commodity or service which has a high range of prices and the minimal effect on the overall price, its easy means of collection and a variety of other pragmatic variables, is an absurdity, especially because in fiscal matters large liberality must be extended to the Government having regard to the plurality of criteria 851 which have to go into the fiscal success of the measure.
Of course, despite this forensic generosity, if there is patent discrimination in the sense of treating dissimilar things similarly or vice versa, the court may treat the tax as suspect and scrutinise its vires more closely.
In the present case, intoxicating liquids falling in the well known category of foreign liquors form one class and a flat minimal rate of Re. 1/ per bottle has no constitutional stigma of inequality.
It is so easy to conceive of innumerable taxes imposed in this manner in the daily governance of the country that illustrations are unnecessary.
As excisable articles go, foreign liquor is a distinct category and absence of micro classification within the broad genus does not attract the argument of inequality.
Likewise, picking and choosing within limits is inevitable in taxation.
The correct law is found in East India Tobacco Co.(1) "It is not in dispute that taxation laws must also pass the test of Art 14.
That has been laid down recently by this Court in Moopil Nair vs The State of Kerala.
But in deciding whether a taxation law is discriminatory or not it is necessary to bear in mind that the State has a wide discretion in selecting the persons or objects it will tax, and that a statute is not open to attack on the ground that it taxes some persons or objects and not others.
It is only when within the range of its selection, the law operates unequally, and that cannot be justified on the basis of any valid classification, that it would be violative of article 14.
The following statement of the law in Willis on "Constitutional Law" page 587, would correctly represent the position with reference to taxing statutes under our Constitution: "A State does not have to tax everything in order to tax something.
It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably. .
The Supreme Court has been practical and has permitted a very wide latitude in classification for taxation." (See also Abdul Shakoor & Co. case)(2).
The foreign liquor levy does not fail on this score.
Shri Yogeshwar Prasad urged that section 90(2) obligated the municipal body to offer an opportunity to the residents of the city to file objections to the tax proposed and consider them before finalising 852 the impost.
This fair procedure must attach to the exercise of the power even under section 90(5); and since that has not been done the impugned notification must fail.
It is clear from section 90 that the scheme is that if the municipal corporation wishes to impose a tax under section 90(2) it must go through the due process indicated in the Proviso and secure Government 's approval.
But if Government is to exercise its power under section 90(5) no such procedural fetter is found in the Section.
Maybe, that power is different from procedure for its exercise; but unless the statute insists, it is impossible for the court to imply invitation of objections and consideration thereof from the residents.
For this simple reason, there is no merit in the submission.
Whether the failure to hear before fixing a tax has a lethal effect upon the fiscal power of the Government under section 90(5) also is of little moment although urged by the same counsel.
May be, it is desirable that the State acquaints itself with the actual sentiments of the denizens of the local area before imposing tax on them.
But it is not inherent in the constitutional requirements for the exercise of the State 's power of taxation that objections should be called for and considered. 'No taxation without representation ' is a slogan with a different dimension and has nothing to do with a levy by a government controlled by an elected legislature exercising its power of taxation.
We are unable to accede to the contention that representations from the residents not having been invited the taxation notification is bad in law.
What is wholesome is different from what is imperative.
Indeed, we are left with the two major arguments addressed by Shri Tarkunde and echoed or endorsed by other counsel.
Even here, we may dispose of the submission based on the wording in section 90(4), namely, that taxing power under section can be exercised in respect of a particular impost only if that species of tax is "not already imposed".
The power under section 90(4) is permissible only if the tax is new and not already imposed.
The petitioner 's argument is that the tax is on sales and is clearly a sales tax.
There is already a sales tax on foreign liquor at the rate of 10 per cent, under the Punjab General Sales Tax Act, 1948.
So the present rupee tax is a second round in breach of the forbiddance in section 90(4).
Simple enough, if the expression 'not already imposed ' in section 90(4) is a ban on further tax whatever the statute; but if the taboo is not on the topology of the tax but limited to the specific statute the contention is specious.
And it takes little reflection to hold the latter to correct view.
We must remember the statutory setting and the placement of the provision.
section 90 occurs in Chapter VIII headed 'Taxation '.
That Section prim 853 arily empowers municipal corporations to levy taxes.
section 90(1) specifies a number of items many of which are taxed also at State level, e.g. lands, vehicles.
section 90(2) is so widely worded that many taxes covered by it would already have been occupied field at the State or even Central level.
The municipal body may not have any index of taxes already imposed by other bodies and they are many.
section 90 would then be a precarious power, often an exercise in futility and frequently a litigative trap.
No. That is not the meaning of the prohibition `not already imposed '.
The Government exercises the power of the corporation under section 90(5) and cannot enter what is forbidden ground for the latter.
And what is forbidden is that the municipal body shall not repeat the same tax, if it has imposed that tax earlier under that Act.
The injunction is plain and is confined to repetition of those taxes which the municipality has already imposed.
If the Corporation has not already imposed the tax proposed, the embargo is absent.
It is of no moment that some other body, including the State Legislature has already entered the field.
The question is : has the municipal committee or corporation, under this Act, already exacted a similar tax? If it has, the second exercise is anathema.
Nobody has a case that the corporation has earlier taxed foreign liquor under this Act.
Therefore, the submission has no substance and we reject it.
The sole surviving ground of invalidation pressed by the petitioners which deserves serious examination is what we have outlined right at the outset, viz., that on the face of section 90(2), (3), (4) and (5) read together, unconstitutionality is writ large, in the sense of naked and uncanalised power with every essential legislative function surrendered to the humour and hubris of the State Executive.
If this charge be true the consequence is in no doubt.
The vice of unreasonableness and arbitrariness are manifestations of the same vice as has been pointed out in P. N. Kaushal etc.(1).
An examination of excessive delegation of legislative power takes us to the scheme of the Act and insight into the dynamics of municipal administration.
Certain fundamentals must be remembered in this context and then the text of the provision understood in the constitutional perspective.
The Founding Document of the nation has created the three great instrumentalities and entrusted them with certain basic powers legislative, judicative and executive.
Abdication of these powers by the concerned instrumentalities, it is axiomatic, amounts to betrayal of the Constitution itself and it is intolerable in law.
This means that the legislature cannot self efface its 854 personality and make over, in terms plenary, the essential legislative functions.
The legislature is responsible and responsive to the people and its representatives, the delegate may not be and that is why excessive delegation and legislative hara kiri have been frowned upon by constitutional law.
This is a trite proposition but the complexities of modern administration are so bafflingly intricate and bristle with details, urgencies, difficulties and need for flexibility that our massive legislatures may not get off to a start if they must directly and comprehensively handle legislative business in all their plenitude, proliferation and particularisation.
Delegation of some part of legislative power becomes a compulsive necessity for viability.
If the 500 odd parliamentarians are to focus on every minuscule of legislative detail leaving nothing to subordinate agencies the annual output may be both unsatisfactory and negligible.
The Lawmaking is not a turnkey project, ready made in all detail and once this situation is grasped the dynamics of delegation easily follow.
Thus, we reach the second constitutional rule that the essentials of legislative functions shall not be delegated but the inessentials, however numerous and significant they be, may well be made over to appropriate agencies.
Of course, every delegate is subject to the authority and control of the principal and exercise of delegated power can always be directed, corrected or cancelled by the principal.
Therefore, the third principle that emerges is that even if there be delegation, parliamentary control over delegated legislation should be a living continuity as a constitutional necessity.
Within these triple principles, Operation Delegation is at once expedient, exigent and even essential if the legislative process is not to get stuck up or bogged down or come to a grinding halt with a few complicated bills.
It is apt to excerpt here an oft quoted observation from Vasantlal Maganbhai Sanjanwala affirmed in Devi Das Gopal Krishnan & Ors(1) : "The Constitution confers a power and imposes a duty on the legislature to make laws.
The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct.
Obviously it cannot abdicate its functions in favour of another.
But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation.
It must necessarily delegate the working out of details to the executive or any other agency.
But there is a danger inherent in such a process of delegation.
An over 855 burdened legislature or one controlled by a powerful executive may unduly overstep the limits of delegation.
It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation.
This self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation.
It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits.
But the said liberal construction should not be carried by the Courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities.
It is the duty of the Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature.
" Such being the basics, accepted by presidential profusion of this Court, we have to examine whether any essential legislative function has been transplanted into the hands of Government or corporation by the Act, whether the delegation itself is an entrustment of overboard power, so unguided that the delegate may run amok and do what is arbitrary, unreasonable and violative of Articles 14 and 19 of the Constitution.
Taxation is exaction and even expropriation and, therefore, the right to property is in peril when a fiscal measure is afoot.
Article 10 comes into play when law is made for purposes of taxation and that law must comply with Part III.
Arbitrariness must be excluded in the law, for, if power is arbitrary it is potential inequality and article 14 is fatally allergic to inequality before the law.
These generalities take us to the particularities of the present case.
Shri Tarkunde turned the forensic fusillade on the total absence of guidance and regulation anywhere in the statute, expressly or implicitly, and on a true construction, according to him, a blanket power has been vested by section 90 on the corporation and, indubitably, on the Government.
The jurisprudence of delegation of legislative power, as earlier mentioned, has been the subject matter of this Court 's pronouncements.
In the absence of the rate of taxation being indicated by the Legislature, Shri Tarkunde and other counsel appearing on either side drew our attention to Liberty Cinema,(1) the land mark case on the point.
The later decisions have affirmed the principle in Liberty Cinema.
But 856 before we enter into a fuller discussion we may concretize the specific contention urged by counsel for the petitioners.
Section 90(1) sets out certain items for taxation by the corporation.
The taxes so levied are to be utilised for the purposes of the Act.
Therefore, there is a clear directive contained in the provision about the purpose and limit of the tax.
What is needed for the purposes of the Act by way of financial resources may be levied by the corporation.
Beyond that, No. If the corporation has a fancy for spending money on purposes unconnected with the Act and seeks to levy a tax for the fulfillment of such extra statutory objects the mis adventure must fail.
Moreover, the items on which taxes may be imposed are also specified.
Thus, the legislature has fixed the purpose of the taxation, the objects of the taxation and the limits of the taxation.
In short, section 90(1) is a textbook illustration of valid delegation by the legislature.
The offending area is approached as we move down to sub section (2) (b) which enables the corporation "to levy any other tax which the State Legislature has power to impose under the Constitution".
The fiscal area is obviously specious and so the question directly arises whether this over broad provision accords with or exceeds the principles of delegation.
Sub section (3) leaves the rates of levy to be specified by the Government and the legislature, argue petitioners ' counsel, has given no indication of the minima or the maxima of such rates.
Can such non fixation of at least the maximum rate of taxation be upheld or does it enable the delegate to usurp the essential functions of the legislature ? When we proceed further to sub section (5), the Government is clothed with the power to notify the tax which the corporation shall levy and, in exercising this power, not even the wholesome obligation of receiving representations could considering objections, contained in the Proviso to section 90(2), is present.
Can such untrammeled power, liberated from local pressures and intimate appreciation of municipal needs, be sanctioned as within the deligible ambit ? These are the substantial grounds of attack which we have to consider presently.
Back to the Liberty Cinema case (supra), Sarkar, J. who spoke for the majority overruled the contention that the levy in question was a fee and held that it was a tax and addressed himself to the question of excessive delegation of legislative functions to the municipal corporation "because it left it entirely to the latter to fix the amount of the tax and provided no guidance for that purpose".
While what constitutes an essential feature cannot be delineated in detail it certainly cannot include a change of policy.
The legislature is the master of legislative policy and if the delegate is free to switch policy it may be usurpation of legislative power itself.
So we have 857 to investigate whether the policy of legislation has been indicated sufficiently or even change of policy has been left to the sweet will and pleasure of the delegate in this case.
We are clearly of the view that there is fixation of the policy of the legislation in the matter of taxation, as a close study of section 90 reveals; and exceeding that policy will invalidate the action of the delegate.
What is that policy ? The levy of the taxes shall be only for the purposes of the Act.
Diversion for other purposes is illegal.
Exactions beyond the requirements for the fulfillment of the purposes of the Act are also invalid.
Like in section 90(1), section 90(2) also contains the words of limitation `for the purposes of this Act ' and that limiting factor governs sub sections (3), (4) and (5).
Sub section (3) vests nothing new beyond sub sections (1) and (2).
Sub section (4) does not authorise the government to direct the corporation to impose any tax falling outside sub section (1) or sub section (2).
Sub section (5) also is subject to a similar circumscription because the Government cannot issue an order to impose a tax outside the limitation of sub section (1) or sub section (2).
Thus, the impugned provision contains a severe restriction that the taxation leviable by the corporation, or by the Government acting for the corporation, shall be geared wholly to the goals of the Act.
The fiscal policy of section 90 is manifest.
No tax under guise of section 90(2) (b) can be charged if the purposes of the Act do not require or sanction it.
The expression "purposes of this Act" is pregnant with meaning.
It sets a ceiling on the total quantum that may be collected.
It canalises the objects for which the fiscal levies may be spent.
It brings into focus the functions, obligatory or optional, of the municipal bodies and the raising of resources necessary for discharging those functions nothing more, nothing else.
In Liberty Cinema (supra) it was contended that the rate of tax was an essential feature of legislation and if the power to fix it were abandoned it amounted to abdication of legislative power.
After an exhaustive examination of the judgments of this Court, Sarkar, J. reached the conclusion that there was clear authority "that the fixing of rates may be left to the non legislative body".
The matter does not end here, since the delegate may under guise of this freedom tyrannies and exact exorbitant sums which the legislature would hardly have intended.
If this possibility exists and there is no guideline given to the non legislative body in the matter of fixation of rates, the result may be a frustration of the legislative object itself.
For this reason, the Court in the Liberty Cinema (supra) case observed as axiomatic : "No doubt when the power to fix rates of taxes is left to another body, the legislature must provide guidance for such 858 fixation.
The question then is, was such guidance provided in the Act ? We first wish to observe that the validity of the guidance cannot be tested by a rigid uniform rule; that must depend on the object of the Act giving power to fix the rate.
It is said that the delegation of power to fix the rates of taxes authorised for meeting the needs of the delegate to be valid, must provide the maximum rate that can be fixed, or lay down rules indicating that maximum.
We are unable to see how the specification of the maximum rate supplies any guidance as to how the amount of the tax which no doubt has to be below the maximum, is to be fixed.
Provision for such maximum only sets out a limit of the rate to be imposed and a limit is only a limit and not a guidance.
It seems to us that there are various decisions of this Court which support the proposition that for a statutory provision for raising revenue for the purposes of the delegate, as the section now under consideration is, the needs of the taxing body for carrying out its functions under the statute for which alone the taxing power was conferred on it, may afford sufficient guidance to make the power to fix the rate of tax valid." (Pp. 493 494) In the Western India Theatres case (supra) the power given to the corporation (of the city of Poona), in terms very wide, to levy "any other tax" came to be considered from the point of view of abdication of legislative function.
The negation of this argument was based on the key words of limitation contained therein, namely, "for the purposes of the Act" and it was held "that this permits sufficient guidance for the imposition of the tax." In Devi Das Gopal Krishnan & Ors.
(supra) this Court again considered a similar contention.
The crucial passage in the judgment of Sarkar, J. was there extracted with approval by Subba Rao, C.J. : "It (the Municipal Corporation) has to perform various statutory functions.
It is often given power to decide when and in what manner the functions are to performed.
For all this it needs money and its needs will vary from time to time, with the prevailing exigencies.
Its power to collect tax, however, is necessarily limited by the expenses required to discharge those functions.
It has, therefore, where rates have not been specified in the statute, to fix such rates as may be necessary to meet its needs.
That, we think, would be sufficient guidance to make the exercise of its power to fix the rates valid.
"#R#(Pp.
562 563) 859 In the Municipal Corporation of Delhi(1) case, the proposition that where the power conferred on the corporation was not unguided, although widely worded, it could not be said to amount to excessive delegation, was upheld.
Delegation coupled with a policy direction is good.
Counsel emphasised that the court had made a significant distinction between the local body with limited functions like a municipality and Government : "The needs of the State are unlimited and the purposes for which the State exists are also unlimited.
The result of making delegation of a tax like sales tax to the State Government means a power to fix the tax without any limit even if the needs and purposes of the State are to be taken into account.
On the other hand, in the case of a municipality, however large may be the amount required by it for its purposes it cannot be unlimited, for the amount that a municipality can spend is limited by the purposes for which it is created.
A municipality cannot spend anything for any purposes other than those specified in the Act which creates it.
Therefore in the case of a municipal body, however large may be its needs, there is a limit to those needs in view of the provisions of the Act creating it.
In such circumstances there is a clear distinction between delegating a power to fix rates of tax, like the sales tax, to the State Government and delegating a power to fix certain local taxes for local needs to a municipal body.
A review of these authorities therefore leads to the conclusion that so far as this Court is concerned the principle is well established that essential legislative function consists of the determination of the legislative policy and its formulation as a binding rule of conduct and cannot be delegated by the legislature.
Nor is there any unlimited right of delegation inherent in the legislative power itself.
The legislature must retain in its own hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purposes and objects of the Act.
Where the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere.
What guidance should be given and to what extent and whether guidance has been given in a particular case at all depends on a consideration of the provisions of the parti 860 cular Act with which the Court has to deal including its preamable.
Further it appears to us that the nature of the body to which delegation is made is also a factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation." ". . . . .
It is too late in the day to contend that the jurisprudence of delegation of legislative power does not sanction parting with the power to fix the rate of taxation, given indication of the legislative policy with sufficient clarity.
In the case of a body like a municipality with functions which are limited and the requisite resources also limited, the guideline contained in the expression "for the purposes of the Act" is sufficient, although in the case of the State or Central Government a mere indication that taxation may be raised for the purposes of the State may be giving a carte blanche containing no indicium of policy or purposeful limitation.
In a welfare State allowing in privations, the total financial needs may take us to astronomical figures.
Obviously that will be no guideline and so must be bad in law.
Something more precise is necessary; some policy orientation must be particularised Shri Tarkunde relied on this differentiation in attacking section 90(6) of the Act.
He argued that had the municipal corporation done the job there would have been some guidance from the section.
But when the Government did it, it did not have any such restraint and could, therefore, run berserk.
We do not appreciate this contention as we will explain at a later stage.
Suffice it to say that flexibility in the form the legislative guidance may take, is to be expected.
Wanchoo, C.J. explained : "It will depend upon the circumstances of each statute under consideration; in some cases guidance in broad general terms may be enough; in other cases more detailed guidance may be necessary.
As we are concerned in the present case with the field of taxation, let us look at the nature of guidance necessary in this field.
The guidance may take the form of providing maximum rate of tax upto which a local body may be given the discretion to make its choice, or it may take the form of providing for consultation with the people of the local area and then fixing the rates after such consultation.
It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watch dog on the actions of the local body in this matter on behalf of the legislature.
There may be other ways in which guidance may 861 be provided.
But the purpose of guidance, whatsoever may be the manner thereof, is to see that the local body fixes a reasonable rate of taxation for the local area concerned.
So long as the legislature has made provision to achieve that reasonable rates of taxation are fixed by local bodies, whatever may be the method employed for this purpose provided it is effective, it may be said that there is guidance for the purpose of fixation of rates of taxation.
The reasonableness of rates may be ensured by fixing a maximum beyond which the local bodies may not go.
It may be ensured by providing safeguards laying down the procedure for consulting the wishes of the local inhabitants.
It may consist in the supervision by Government of the rate of taxation by local bodies.
So long as the law has provided a method by which the local body can be controlled and there is provision to sec that reasonable rates are fixed, it can be said that there is guidance in the matter of fixing rates for local taxation.
As we have already said there is pre eminently a case for delegating, the fixation of rates of tax to the local body and so long as the legislature has provided a method for seeing that rates fixed are reasonable, be it in one form or another, it may be said that there is guidance for fixing rates of taxation and the power assigned to the local body for fixing the rates is not uncontrolled and uncanalised.
It is on the basis of these principles that we have to consider the Act with which we are concerned.
(pp. 269 270) In the Municipal Corporation of Delhi (supra) case it was significantly observed : "According to our history also there is a wide area of delegation in the matter of imposition of taxes to local bodies subject to controls and safeguards of various kinds which partake of the nature of guidance in the matter of fixing rates for local taxation.
It is in this historical background that we have to examine the provisions of the Act impugned before us." (p. 271) Both the sides relied on certain important criteria contained in the judgment of Wanchoo, C.J., especially because it is a Bench of seven Judges and the ratio therein laid down has considerable authority and binds us.
Dealing with municipal bodies and the nature and 862 content in that Municipal Act, the court observed what is instructive for us in the present case : "This is in our opinion a great check on the elected councillors acting unreasonably and fixing unreasonable rates of taxation.
This is a democratic method of bringing to book the elected representatives who act unreasonably in such matters.
It is however urged that section 490 of the Act provides for the supersession of the Corporation in case it is not competent to perform or persistently makes default in the performance of duties imposed upon it by or under the Act or any other law or exceeds or abuses its power.
In such a case the elected body may be superseded and all powers and duties conferred and imposed upon the Corporation shall be exercised and performed by such officer or authority as the Central Government may provide in this behalf.
It is urged that when this happens the power of taxation goes in the hands of some officer or authority appointed by Government who is not accountable to the local electorate and who may exercise all the powers of taxation conferred on the elected Corporation by the Act. " "Another guide or control on the limit or taxation is to be found in the purposes of the Act.
The Corporation has been assigned certain obligatory functions which it must perform and for which it must find money by taxation.
It has also been assigned certain discretionary functions.
If it undertakes any of them it must find money.
Even though the money that has to be found may be large, it is not, as we have already indicated, unlimited for it must be only for the discharge of functions whether obligatory or optional assigned to the Corporation.
The limit to which the Corporation can tax is therefore circumscribed by the need to finance the functions, obligatory or optional which it has to or may undertake to perform.
It will not be open to the Corporation by the use of taxing power to collect more than it needs for the functions it performs. " "Another limit and guideline is provided by the necessity of adopting budget estimates each year as laid down in section 109 of the Act.
That section provides for division of the budget of the Corporation into four parts i.e. general, electricity supply, transport, water and sewage disposal.
The budget will show the revenue and expenditure and those 863 must balance so that the limit of taxation cannot exceed the needs of the Corporation as shown in the budget to be prepared under the provisions of the Act.
These four budgets are prepared by four Standing Committees of the Corporation and are presented to the Corporation where they are adopted after debate by the elected representatives of the local area.
Preparation of budget estimates and their approval by the Corporation is therefore another limit and guideline within which the power of taxation has to be exercised.
Even though the needs may be large, we have already indicated that they cannot be unlimited in the case of the Corporation, for its functions both obligatory and optional are well defined under the Act.
Here again there is a limit to which the taxing power of the Corporation can be exercised in the matter of optional taxes as well, even though there is no maximum fixed as such in the Act." (Pp. 271 273) In the present case it was the State Government, not the municipal corporation, which fixed the rate; but the Government did only what the Corporation ought to have done.
It acted for the purposes of the corporation 's finances and functions and not to replenish its own coffers.
In the Municipal Corporation of Ahmedabad City,(1) a further point fell for consideration which has some relevance to the present set of arguments.
Shri Tarkunde submitted that even if the provision requiring the sanction of the Government for the rate fixed by the corporation were a guideline and a control indicative of a legislative policy, that was absent in the impugned levy since the Government directly acted.
Shelat, J. negatived a kindred submission: ". .It is impossible to say that when a provision requiring sanction of the Government to the maximum rate fixed by the Corporation is absent, the rest of the factors which exist in the Act lose their efficacy and cease to be guidelines.
Furthermore, if the Corporation were to misuse the flexibility of the power given to it in fixing the rates, the State legislature can at any moment withdraw that flexibility by fixing the maximum limit up to which the Corporation can tax.
Indeed, the State Legislature has now done so by section 4 of Gujarat Act, 8 of 1968.
In view of the decisions cited above it is not possible for us to agree with counsel 's contention 864 that the Act confers on the Corporation such arbitrary and uncontrolled power as to render such conferment an excessive delegation.
"(1) We have no hesitation in holding that the law is well settled and none of the canons governing delegation of legislative power have been breached in the present case.
We will explain a little more in detail, with specific reference to the scheme of the Act, why we hold that the tax is valid and does not suffer from the infirmity of excessive delegation.
The thrust of Shri Tarkunde 's argument is that even if, in the light of Liberty Cinema (supra) and later rulings, guidelines are found in section 90 (2) of the Act, the notified impost being by the State Government did not have the benefit of such guidelines.
The local body knew precisely the local needs and the cost of such local services.
Like wise, the local councillors would be responsive and to local lobbies and be restrained from reckless taxes.
None of these controls were operational when Government acted or directed.
Moreover, the absence of the wholesome obligation to receive and pay regard to objections [Proviso to section 90(2)] removed the procedural check envisaged by the Legislature.
These criticisms highlight the role of Government in the setting of section 90(5) and its competence to be acquainted with the needs of municipal denizens, the finances of the local body and the like.
It must be remembered that as between two interpretations that which sustains the validity of the law must be preferred.
A close look at the schematic provisions and administrative realities is very revealing.
Is Government innocent of the total needs of municipal bodies and indifferent to the legitimate pressures of its denizens ? An overview of local self government may set the perspective.
The statutory pattern of municipal government is substantially the same all over the country.
The relevant legislation fabricates these local bodies, invests them with corporate personality, breathes life into them, charges them with welfare functions, some obligatory, some optional, regulates their composition through elected representatives, provides for their finances by fees and taxes and heavily controls their self government status through a Department of the State Government in various ways, including direction and correction, sanction and supersession.
Consequentially the law clothes the State Government with considerable powers over almost every aspect of municipal work 865 ing Local self government, realistically speaking, is a simulacrum of article 40 and democratically speaking, a half hearted euphemism, for in substance, these elected species are talking phantoms with a hierarchy of State officials hobbling their locomotion.
Their exercises are strictly overseen by the State Government, their resources are precariously dependent on the grace of the latter and their, functions are fulfilled through a chief executive appointed by the State Government.
Floor level democracy in India is a devalued rupee, article 40 and the evocative opening words of the Constitution, notwithstanding.
Grass roots never sprout until decentralisation becomes a fighting creed, not a pious chant.
What happens to Panchayats applies to municipalities.
This description has critical relevance to the cases on hand because one of the propositions underlying the major arguments advanced before us is that while municipal bodies know their needs and respond to local pressures and tailor their taxes accordingly, the distant State Government is neither aware nor responsive and the impugned tax measure is bad because the pragmatic and policy guidelines of (a) the local people 's welfare requirements vis a vis available municipal finances, and (b) people 's pressurising proximacy and municipality ' correctional reaction to undue tax burdens are absent when the power is exercised by a remote control board niched in the State Secretariat.
But if the picture is of a powerless talking shop of elected councillors passing resolutions but all the do 's and don 'ts, sanctions and approvals, countermands and even supersession of the Council itself reside in the State Government, the effective voice, the meaningful responses, the appreciation of budgetary needs and gaps and need for grants and a host of other responsibilities can be traced to the Government.
Such is the backdrop to the discussion of the issues raised.
Now let us scan the Act from this angle.
Corporations are created for the purposes of carrying out the provisions of the Act and they are charged with municipal administration (see section 4).
So, corporations cannot do anything beyond the purposes set out in the statutory provisions.
This itself is a statutory restriction on action.
The composition of the body corporate is by periodically elected councillors (see section 5) and this feature ensures responsive action.
The powers necessary for municipal government are spelt out as also the obligatory and discretionary functions (see Chapter III).
Now come certain other aspects of local self government.
The entire executive power of the corporation vests in the Commissioner who is appointed by Government.
This means that the Corporation Council takes a back seat in the municipal administration see sections 47, 866 52 et al.
Section 54 brings the Government into the expenditure picture.
The municipal staff also is, in a way, under Government control (section 71).
Money shall be spent by the municipality only according to budget provisions and budget estimates shall be submitted to Government for approval which has the power to modify them.
Thus, the financial control over the corporation by Government is a statutory fact.
Now we may consider the mode of raising tax revenue.
Any non traditional tax (i.e. which falls under section 90(2) of the Act) has to be with the prior approval of Government.
Indeed, affirmative direction to impose taxes may be issued by the Government to the local body and if the addressee is indifferent the Government itself may impose the tax and the corporation shall levy such tax.
Sub section (6) enables Government to make other tax payments to municipal bodies.
Municipal borrowings require government sanction, municipal accounts shall be audited by government auditors.
Chapter XXII provides for further government control upto even supersession of the corporation itself.
Even the resolutions of corporations may be suspended by Government and its proceedings annulled or modified.
There is a whole army of governmental minions in the department of local self government to sit upon, check, oversee and control municipal doings that the elective element becomes a decorative parlour.
This conspectus of provisions brings into bold relief the anaemic nature of municipal autonomy.
Full blooded units of self government, reflecting full faith in decentralised democracy uninhibited by a hierarchy of bureaucrats is the vision of article 40.
While the Gandhian goal is of a shining crescent on a starry sky the sorry reality is that our municipalities vis a vis government are wan like a full moon at midday.
This study of the statutory scheme shows that, in large measure, municipal councils reign, municipal commissioners rule; local self government is an experiment in directed democracy by the bureaucracy, article 40, notwithstanding.
State Governments master mind municipal administration in broad policies and even in smaller details and legally can suspend resolutions and supersede the organ itself.
Municipal legislation sanctions this Operation Mask.
If pluralism and decentralisation are to strengthen our democracy more authority and autonomy, at least experimentally, must be vested in local bodies.
To day, prompt elections when periods expire are rare; councillors exist, debate, resolve, but power eludes them.
Even so, municipal maya also counts ceremonially and otherwise.
867 To set the record straight, we must state that many municipal bodies do exercise their limited powers properly and serve the public without nagging interference by Government officials.
Municipalities are realities, often precarious, though.
This statutorily sanctified comprehensive oversight by Government weaken the assumption of Shri Tarkunde that State Governments know little of the needs and respond remotely to the pressures of the locality and that the guidelines stressed in the rulings cited above vanish when Government directly operates under section 90(5).
The finances, budgetary estimates and many aspects of the affairs of each municipal body, reach the Government, channelled through its minions, and, by force of statute, are approved, sanctioned, modified or reversed by the State Secretariat.
So, there is not much force in the submission that under section 90(5) governmental action may be a blind man 's buff, not intelligent appreciation.
Secondly, under section 90(5) Government acts to augment municipal revenues and so will, understandably, inform itself of the needs of the corporation and, on fiscal economics, 'of what the traffic will bear '.
The statutory strategy also ensures this.
First, a directive is given, obviously after considering relevant matters.
Only if indifference or intractability is displayed, the fiscal sword of section 90(5) is unsheathed.
Moreover, there is overall control by the legislature, sometimes, ineffective, sometimes meaningful.
It is familiar knowledge that there are a number of institutionalised means by which the legislature exercises supervision and control over municipal matters.
Broadly speaking, they are: (a) through inter relations, (b) by discussions and debates, (c) by approval or otherwise of rules and orders, and (d) by financial control when the budget is presented.
A study of the legislative proceedings in the various States of the country brings out many of these means of control (see Indian Administrative System, edited by Ramesh K. Arora & Co. Chapter 17).
In a sense, the general municipal administration comes under fire in the House on many occasions, including during the debate on the Governor 's Address.
Financial control and supervision by the legislators come up when budget proposals which contain allocation for municipal administration are presented to the House and at the time of the Appropriations Bill.
Moreover, the Public Accounts Committee, the Estimates Committee and like other bodies also make functional probes into municipal administration fiscal and other.
There may be a big gap between the power of control and its actual exercise but it is also a fact that in a general way the political echelons in Government and the bureaucracy in turn are influenced in their policies by the criticisms 868 of the municipal administration on the floor of the House and through other representations.
We cannot, therefore, dismiss the legal position that there is control by the Legislature over Government in its supervision of municipal administration therefore, delegated legislation cannot be said to be uncontrolled or unchecked by the delegator.
This discussion is of critical importance in view of the argument put forward by Shri Tarkunde that when Government exercises power under section 90(6) it is a law unto itself, unbridled and uncontrolled by the Legislature.
We may now refer to a few decisions which have been brought to our notice by counsel appearing for the municipal bodies and the State of Punjab to make out that the needs of municipalities and the pressures of local people are within the ken of the State Government and they also respond like municipal bodies and guide themselves in the manner corporations do.
More importantly, excessive delegation stands negatived because of legislative control over Government.
Even in the Liberty Cinema case, (supra) the control by Government over the municipal administration was relied upon as a policy guideline and it is an a fortiori case if the Government itself takes action, responsible and responsive as it is to the elected representatives of the House.
Great stress was laid on Papiah 's case(1) which dealt with subordinate legislation elaborately and upheld the validity of a provision where, superficially viewed, too wide a power had been delegated.
Mathew, J. speaking for the court, gave considerable latitude to the Legislature in delegating its power and referred to many prior rulings.
He quotes Subba Rao, C.J. to say: "An over burdened Legislature or one controlled by a powerful executive may unduly overstep the limits of delegation.
It may not lay down any policy at all; It may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it, without reserving for itself any control over subordinate legislation.
This self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation.
"(2) 869 Nevertheless, this observation was neutralised by another made by Hegde, J. in Bishar Dayal (1): "However much one might deplore the 'New Despotism ' of the executive, the very complexity of the modern society and the demand it makes on its Government have set in motion forces which have made it absolutely necessary for the Legislatures to entrust more and more powers to the executive.
Text book doctrines evolved in the 19th Century be come out of date.
" Mathew, J. proceeded to cover English cases and reached the conclusion: "The legislature may also retain its control over its delegate by exercising its power of repeal.
This was the basis on which the Privy Council in Cobb & Co. vs Kropp(2) upheld the validity of delegation of the power to fix rates to the Commissioner Transport in that case." (P.613) The learned Judge quoted the Privy Council(3) which held that the Legislature was entitled to use any agent or machinery that it considered for carrying out the object and the purposes of the Acts and to use the Commissioner for Transport as its instrument to fix and recover the licence and permit fees, provided it preserved its own capacity intact and retained perfect control over him; that as it could at any time repeal the legislation and withdraw such authority and discretion as it had vested in him, it had not assigned, transferred or abrogated its sovereign power to levy taxes, nor had it renounced or abdicated its responsibilities in favour of a newly created legislative authority and that, accordingly, the two Acts were valid, Lord Morris of Borth y Gest said: "What they (the legislature) created by the passing of the Transport Acts could not reasonably be described as a new legislative power or separate legislative body armed with general legislative authority (see R. vs Burah, Nor did the Queensland Legislatare 'create and endow ' with its own capacity a new legislative power not created by the Act to which it owes its own existence (see In re the Initiative and Referendum Act (1919) A.C. 945 at 946)." 870 The point to be emphasised and this is rather crucial is the statement of their Lordships that the legislature preserved its capacity intact and retained perfect control over the Commissioner for Transport inasmuch as it could at any time repeal the legislation and with draw the authority and discretion it had vested in him, and, therefore, the legislature did not abdicate its functions.
The proposition so stated is very wide and sweeping.
By that standard, there is nothing unconstitutional about section 90(5) of the Act.
In the course of the argument certain observations of this Court were read to the effect that there was always a check by the courts on unconstitutional misuse of delegated power and that, in itself with out more, was good enough to make the delegation good.
So stated, the proposition may be perhaps too wide to be valid; for any naked delegation may then be sustained by stating that the court is there as the watch dog.
We do not have to go that far in the present case and so we make no final pronouncement on this extension of delegations jurisprudence.
We must state, while concluding that Punjab & Haryana High Court has overruled similar contentions on grounds which have our approval [see AIR 1977 P&H 297 and 74 PLR We are conscious that constitutional legitimation of unlimited power of delegation to the Executive by the Legislature may, on critical occasions, be subversive of responsible government and erosive of democratic order.
That peril prompts us to hint at certain portents to our parliamentary system, not because they are likely new but because society may have to pay the price some day.
As a back drop to this train of thoughts a few statements from a working paper presented by Prof. Upendra Baxi of the Delhi University at a recent seminar may be excerpted: ". law making remains the, more or less, exclusive prerogative of a small cross section of elites.
This necessarily affects both the quality of the law made as well its special communication, acceptance and effectivity.
It also reinforces the highly centralised system of power.
It is time that we considered the desirability and feasibility of building into the law making processes a substantial amount of public participation." 871 "People 's participation in the enforcement and implementation of the law is also not actively sought, sponsored or structured by the State.
Equally now is the idea that there should be a "social audit" of major legislations by the beneficiaries or, more generally, the consumers of legal justice." ".
The situation in regard to delegated legislation the volume of which is immensely greater than that of usual legislation, is even more alarming.
The Indian Parliament enacted from the period 1973 to 1977 a total of 302 laws; as against this the total number of statutory orders and rules passed in the same period was approximately 25,414.
Corresponding figures for States and union territories are not just available but the number of rules issued under the delegated legislation powers may well be astronomical. " Plenary powers of law making are entrusted to elected representatives.
But the political government instructed by the bureaucracy, by and large, gets bills through with the aid of the three line whip.
Even otherwise, legislators are some times innocent of legal skills; and complex legislations call for considerable information and instruction.
The law making sequence leaves much to subordinate legislation which, in practical terms, means surrender to the surrogate, viz., the bureaucracy which occupies commanding heights within the Secretariat.
The technocracy and the bureaucracy which mostly draft subordinate legislation are perhaps well meaning and well informed but insulated from parliamentary audit, isolated from popular pressure and paper logged most of the time.
And units of local self government are reduced to a para babel mechanisms, what with a pyramid of officialdom above them.
The core of Shri Tarkunde 's argument, even though rejected in legal terms by force of precedents, has a realistic touch to the effect that municipal administration in the matter of taxation, if taken over by Government as under section 90(5) of the Act, becomes administration by the barrel of the Secretariat pen.
The doctrine of delegation, in its extreme positions, is fraught with democracy by proxy of a coterie, of which the nation, in its naivete, may not be fully cognizant.
Therefore, the system of law making and performance auditing needs careful, yet radical, re structuring, if participative, pluralist Government by the People is not to be jettisoned.
We have laid down the law and obeyed the precedents but felt it necessary to lay bare briefly the political portents implicit in the extent law, for action by the national leadership betimes.
Who owns and operates India, that is Bharat ? That disturbing interrogation becomes deeply relevant 872 as we debate and decide the jurisprudence of delegation of power and vicarious exercise and so we have pardonably ventured to make heuristic hints and to project new perspectives.
The journey 's end is in sight.
The discussion has come to a close.
The notification suffers from no infirmity.
The writ petitions stand dismissed.
Costs one set.
(to the state) P.H.P. Petitions dismissed. | The Municipalities of Punjab are governed by two enactments.
The numerous little ones are statutory bodies created and controlled by the Punjab Municipal Act, 1911 and few large ones by the Punjab Municipal Corporation Act, 1976.
For the purpose of the present petitions the provisions run on identical terms.
The State of Punjab in April, 1977 required the various municipal bodies in the State to impose tax on the sale of Indian made foreign liquor @ Re. 1/ per bottle w.e.f. 20 5 1977.
The Municipal authorities having failed to take action pursuant to the directive the State of Punjab directly issued a notification under sec.
90(5) of the Punjab Municipal Corporation Act, 1976 and similar provision of the Municipal Act, 1911.
The petitioner challenged the constitutional validity of the said statutes and levy on the following grounds: 1.
Section 90(2)(b) of the Act suffers from the vice of excessive delegation or legislative abdication.
There are no guidelines for the exercise of the wide fiscal power of the Corporation or Government which make it too unreasonable to be salvaged by article 19(5) and too arbitrary to be equal under article 14.
The order imposing the tax itself is vitiated because: (a) It seeks to impose the tax which is already imposed and, therefore, violates section 90 (4); (b) There is double taxation; (c) It levies too heavy taxation; (d) Picking out from the broad spectrum of luxury goods or intoxicants the Indian made foreign liquor amounts to discrimination; (e) No opportunity of being heard was given; (f) Unequals are being treated equally by imposing Re. 1/ per bottle irrespective of the type of liquor taxed, price of the liquor and alcoholic content.
Dismissing the appeal.
^ HELD: (1) There is nothing in article 265 of the Constitution prohibiting double taxation.
[850 D] 846 Cantonment Board Poona vs Western India Theatres Ltd., AIR 1954 Bom.
261 approved.
(b) The plea that flat rate of Re. 1/ per bottle be it on brandy or other stronger beverage or be it Rs. 50/ or Rs. 500/ per bottle cannot be seriously pressed.
In the field of taxation many complex factors enter the fixation and flexibility is necessary for the taxing authority.
[850E F] Moopil Nair (K.T.) vs State of Kerala, ; ; East India Tobacco Co. vs State of A.P., ; at 406; A. Hajee Abdul Shakoor & Co. vs State of Madras. ; at 230 referred to.
(2) If the Municipal body proposed to impose a tax it is required to offer an opportunity to the residents of area.
No such procedural fetter is to be found under sec.
90(5) if the levy is imposed by the State Government.
It is impossible for the Court to imply invitation of objections. 'No taxation without representation ' is not applicable to a Government controlled by an elected legislature exercising its power of taxation.
[852B, C, D] (3) Sec.
90(4) talks of tax not already imposed.
The Sales Tax imposed by the state legislature under the Punjab General Sales Tax Act 1948 is no bar to the present levy.
Section 90 deals with the levy of taxes for Municipal Corporation.
The injunction is confined to repetition of the taxes which the Municipality has already imposed.
If the Corporation has not already imposed the tax.
the embargo is absent.
It is of no moment that some other body, including the State Legislature has already entered the field.
The question is has the Municipal Committee or Corporation under this Act already exacted a similar tax ? [852F, H, 853BC] (4) The Founding Document of the nation has created the three great instrumentalities and entrusted them with certain basic powers legislative, judicative and executive.
Abdication of these powers by the concerned instrumentalities, amounts to betrayal of the constitution and it is intolerable in law.
The legislature cannot delegate the essential legislative functions.
The legislature is responsible to the people and its representative, the delegate may not be and this is why excessive delegation have been frowned upon by constitutional law.
However, the complexities of modern administration are so bafflingly intricate and bristle with details, urgencies difficulties and the need for flexibility is such that our legislature may not get off to a start if they must directly and comprehensively handle legislative business in all their plenitude and particularisation.
Delegation of some part of legislative power becomes a compulsive necessity for viability.
Of course, every delegate is subject to the authority and control of the principal and exercise of delegated power can always be directed or cancelled by the Principal.
Therefore, even if there be delegation, parliamentary control over delegated legislation should be a living continuity as a constitutional necessity.
[853GH, 854A, B, C, D, E] Devi Das Gopal Krishnan & Ors.
vs State of Punjab & Ors.
, ; at 565; P. N. Kaushal etc.
vs vs Union of India & Ors.
; ; Corp. of Calcutta & Anr.
vs Liberty Cinema, referred to.
The taxes levied under the Act can be utilised only for the purpose of the Act.
There is a clear purpose contained in the provisions about the purpose and limit of the tax.
What is needed for the purpose of the Act by way of financial resources may be levied by the Corporation.
Beyond that not.
Moreover the 847 items on which taxes may be imposed are also specified.
Thus the legislature has fixed the purpose of the taxation, objects of the taxation and limits of the taxation.
[856A B] It is too late in the day to contend that the jurisprudence of delegation of legislative power does not sanction parting with the power to fix the rate of taxation, given indication of the legislative policy with sufficient clarity.
[860 B] When the Government is imposing taxes for the Municipality the Government is bound to know what ought to have been done by the Municipality.
The whole scheme of the statute shows that Government has an important role to play in the running of the municipalities.
The financial control over the corporation is with the State Government.
[865E] As between the two interpretations that which sustains the validity of law must be preferred.
[864E] M. K. Papiah & Sons vs The Excise Commr. & Anr., ; ; Sita Ram Bishambhar Dayal vs State of U.P., ; referred to. |
Civil Appeal Nos.
1847 1848/72.
979 From the Judgment and Order dated 30 4 1970 of the Calcutta High Court in Income Tax Reference No. 128 of 1966.
V. section Desai, P. V. Kapur, section R. Agarwal, R. N. Bajoria, A. T. Patra and Praveen Kumar for the Appellant.
J. Ramamurthy and Miss A. Suhbashini for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
These appeals by special leave are directed against a judgment of the Calcutta High Court answering the first question referred to it by the Tribunal in favour of the Revenue and against the assessee.
There were in all five questions referred by the Tribunal but questions Nos. 2 to 5 no longer survive and these appeals are limited only to question No. 1.
That question is in the following terms: "Whether on the facts and in the circumstances of the case, the assessee 's claim for the exchange loss of Rs. 11 lakhs for the assessment year 1957 58 and Rs. 5,50,000/ for the assessment year 1959 60 in respect of remittances of profit from Pakistan was not allowable as a deduction? Since there are two assessment years in regard to which the question arises, there are two appeals one in respect of each assessment year, but the question is the same.
W will briefly state the facts as that is necessary for the purpose of answering the question.
The assessee is a limited company having its head office in Calcutta.
It has inter alia a cotton mill situate in West Pakistan where it carries on business of manufacturing and selling cotton fabrics.
This textile mill was quite a prosperous unit and in the financial year ending 31st March, 1954, being the accounting year relevant to the assessment year 1954 55, the assessee made a large profit in this unit.
This profit obviously accrued to the assessee in West Pakistan and according to the official rate of exchange which was then prevalent, namely, 100 Pakistani rupees being equal to 144 Indian rupees, this profit, which may for the sake of convenience be referred to as Pakistan profit, amounted to Rs. 1,68,97,232/ in terms of Indian rupees.
Since the assessee was taxed on actual basis, the sum of Rs. 1,68,97,232/ representing the Pakistani profit was included in the total income of the assessee for the assessment year 1954 55 and the assessee was taxed accordingly after giving double taxation relief in accordance with the bilateral agreement between India and Pakistan.
It may be pointed out that for some time, after the partition of India.
there continued to be parity in the rate of exchange between India and 980 Pakistan but on 18th September 1949, on the devaluation of the Indian rupee, the rate of exchange was changed to 100 Pakistani rupees being equal to 144 Indian rupees and that was the rate of exchange at which the Pakistani profit was converted into Indian rupees for the purpose of inclusion in the total income of the assessee for the assessment year 1954 55.
The rate of exchange was, however, once again altered when Pakistani rupee was devalued on 8th August, 1955 and parity between Indian and Pakistani rupee was restored.
The assessee thereafter succeeded in obtaining the permission of the Reserve Bank of Pakistan to remit a sum of Rs. 25 lakhs in Pakistani rupees out of the Pakistani profit for the assessment year 1954 55 and pursuant to this permission, a sum of Rs. 25 lakhs in Pakistani rupees was remitted by the assessee to India during the accounting year relevant to the assessment year 1957 58.
The assessee also remitted to India during the accounting year relevant to the assessment year 1959 60 a further sum of Rs. 12,50,000/ in Pakistani rupee out of the Pakistani Profit for the assessment year 1954 55 after obtaining the necessary permission of the Reserve Bank of Pakistan.
But by the time these remittances came to be made, the rate of exchange had, as pointed out above, once again changed to 100 Pakistani rupees being equal to 100 Indian rupees and the amounts received by the assessee in terms of Indian rupees were, therefore, the same, namely, Rs. 25 lakhs and Rs. 12,50,000.
Now, the profit of Rs. 25 lakhs in terms of Pakistani rupees had been included in the total income of the assessee for the assessment year 1954 55 as Rs. 36 lakhs in terms of Indian rupees according to the prevailing rate of exchange of 100 Pakistani rupees being equal to 144 Indian rupees and, therefore, when the assessee received the sum of Rs. 25 lakhs in Indian rupees on remittance of the profit of Rs. 25 lakhs in Pakistani rupees on the basis of 100 Pakistani rupees being equal to 100 Indian rupees, the assessee suffered a loss of Rs. 11 lakhs in the process of conversion on account of appreciation of the Indian rupee qua Pakistani rupee.
Similarly, on remittance of the profit of Rs. 12,50,000 in Pakistani currency the assessee suffered a loss of Rs. 5,50,000/ .
The assessee claimed in its assessments for the assessment years 1957 58 and 1959 60 that these losses of Rs. 11 lakhs and Rs. 5,50,000/ should be allowed in computing the profits from business.
This claim was however rejected by the Income Tax Officer.
The assessee carried the matter in further appeal to the Tribunal but the Tribunal also sustained the disallowance of these losses and rejected the appeals.
The decision of the Tribunal was assailed in a reference made at the instance of the assessee and Question No. 1 which we have set out above was referred by the Tribunal for the opinion of the High Court.
On the reference the High Court took substantially the same view as 981 the Tribunal and held that no loss was sustained by the assessees on remittance of the amounts from West Pakistan and that in any event the loss could not be said to be a business loss, because it was not a loss arising in the course of business of the assessee but it was caused by devaluation which was an act of State.
The High Court accordingly answered the question in favour of the Revenue and against the assessee.
The assessee thereupon preferred the present appeal after obtaining certificate of fitness from the High Court.
The first question that arises for consideration is whether the assessee suffered any loss on the remittance of Rs. 25 lakhs and Rs. 12,50,000/ in Pakistani currency from West Pakistan.
These two amounts admittedly came out of Pakistan profit for the assessment year 1954 55 and the equivalent of these two amounts in Indian currency, namely, Rs. 36 lakhs and Rs. 18 lakhs respectively.
was included in the assessment of the assessee as part of Pakistan profit.
But by the time these two amounts came to be repatriated to India, the rate of exchange had undergone change on account of devaluation of Pakistani rupee and, therefore, on repartition, the assessee received only Rs. 25 lakhs and Rs. 12,50,000/ in Indian currency instead of Rs. 36 lakhs and Rs. 18 lakhs.
The assessee thus suffered a loss Rs. 11 lakhs in one case and Rs. 5,50,000/ in other in the process of conversion of Pakistani currency into Indian currency.
It is no doubt true and this was strongly relied upon by the High Court for taking the view that no loss was suffered by the assessee that the books of account of the assessee did not disclose any loss nor was any loss reflected in the balance sheet or profit and loss account of the assessee.
The reason was that though, according to the then prevailing rate of exchange, the equivalent of Pakistani profit in terms of Indian rupee was Rs. 1,68,97,232/ and that was the amount included in the assessment of the assessee for the assessment year 1954 55, the assessee in its books of account maintained at the Head Office did not credit the Pakistani profit at the figure of Rs. 1,68,97,232/ , but credited it at the same figure as in Pakistani currency.
The result was that the loss arising on account of the depreciation of Pakistani rupee vis a vis Indian rupee was not reflected in the books of account of the assessee and hence it could not figure in the balance sheet and Profit and Loss Account.
But it is now well settled that the way in which entries are made by an assessee in his books of account is not determinative of the question whether the assessees has earned any profit or suffered any loss.
The assessee may, by making entries which are not in conformity with the proper accountancy principles, conceal profit or show loss and the entries 10 699SCI/7 982 made by him cannot, therefore, be regarded as conclusive one way or the other.
What is necessary to be considered is the true nature of the transaction and whether in fact it has resulted in profit or loss to the assessee.
Here, it is clear that the assessee earned Rs. 36 lakhs and Rs. 18 lakhs in terms of Indian rupees in the assessment year 1954 55 and retained them in West Pakistan in Pakistani currency and when they were subsequently remitted to India, the assessee received only Rs. 25 lakhs and Rs. 12,50,000/ and thus suffered loss of Rs. 11 lakhs and Rs. 5,50,000/ in the process of conversion on account of alteration in the rate of exchange.
It is, therefore, not possible to accept the view of the High Court that no loss was suffered by the assessee on the remittance of the two sums of Rs.25 lakhs and Rs. 12,50,000/ from West Pakistan.
This view which we are taking is clearly supported by the decision of this Court in Commissioner of Income Tax vs Tata Locomotive Engineering Company (1) which we shall discuss a little later.
That takes us to the next and more important question whether the loss sustained by the assessee was a trading loss.
Now this loss was obviously not an allowable deduction under any express provision of section 10(2), but if it was a trading loss, it would be liable to be deducted in computing the taxable profit of the assessee under section 10(1).
This indeed was not disputed on behalf of the Revenue but the serious controversy raised by the Revenue was whether the loss could at all be regarded as a trading loss.
The argument which found favour with the High Court was that the loss was caused on account of devaluation of the Pakistani rupee which was an act of the sovereign power and it could not, therefore, be regarded as a loss arising in the course of the business of the assessee or incidental to such business This argument is plainly erroneous and cannot stand scrutiny even for a moment.
It is true that a loss in order to be a trading loss must spring directly from the carrying on of business or be incidental to it as pointed out by Venkatarama Iyer, j., speaking on behalf of this Court in Badri Das Dage vs C.I.T. (2) but it would not be correct to say that where a loss arises in the process of conversion of foreign currency which is part of trading asset of the assessee, such loss cannot be regarded as a trading loss because the change in the rate of exchange which occasions such loss is due to an act of the sovereign power.
The loss is as much a trading loss as any other and it makes no difference that it is occasioned by devaluation brought about by an act of State.
It is not the factor or circumstance which causes the loss that is material in determining the true 983 nature and character of the loss, but whether the loss has occurred in the course of carrying on the business or is incidental to it.
If there is loss in a trading asset, it would be a trading loss, whatever be its cause, because it would be a loss in the course of carrying on the business.
Take for example the stock in trade of a business which is sold at a loss.
There can be little doubt that the loss in such a case would clearly be a trading loss.
But the loss may also arise by reason of the stock in trade being stolen or burnt and such a loss, though occasioned by external agency or act of God, would equally be a trading loss.
The cause which occasions the loss would be immaterial : the loss, being in respect of a trading asset, would be a trading loss.
Consequently, we find it impossible to agree with the High Court that since the loss in the present case arose on account of devaluation of the Pakistani rupee and the act of devaluation was an act of sovereign power extrinsic to the business, the loss could not be said to spring from the business of the assessee.
Whether the loss suffered by the assessee was a trading loss or not would depend on the answer to the query whether the loss was in respect of a trading asset or a capital asset.
In the former case, it would be a trading loss, but not so in the latter.
The test may also be formulated in another way by asking the question whether the loss was in respect of circulating capital or in respect of fixed capital.
This is the formulation of the test which is to be found in some of the English decisions.
It is of course not easy to define precisely what is the line of demarcation between fixed capital and circulating capital, but there is a well recognised distinction between the two concepts.
Adam Smith in his `Wealth of Nations ' describes `fixed capital ' as what the owner turns to profit by keeping it in his own possession and `circulating capital ' as what he makes profit of by parting with it and letting it change masters.
`Circulating capital ' means capital employed in the trading operations of the business and the dealings with it comprise trading receipts and trading disbursements, while `fixed capital means capital not so employed in the business, though it may be used for the purposes of a manufacturing business, but does not constitute capital employed in the trading operations of the business.
Vide Golden Horse Shoe (new) Ltd. vs Thurgood.,(1) If there is any loss resulting from depreciation of the foreign currency which is embarked or adventured in the business and is part of the circulating capital, it would be a trading loss, but depreciation of fixed capital on account of alteration in exchange rate would be a capital loss.
Putting it differently, if the amount in foreign currency is utilised or intended to be utilised in the course of business or for a trading purpose or for effecting a 984 transaction on revenue account, loss arising from depreciation in its value on account of alteration in the rate of exchange would be a trading loss, but if the amount is held as a capital asset, loss arising from depreciation would be a capital loss.
This is clearly borne out by the decided cases which we shall presently discuss.
We will first refer to the English decisions on the subject for they are quite illuminating.
The first decision to which we should call attention is that in Landes Brothers vs Simpson(1).
There the appellants who carried on business as fur and skin merchants and as agents were appointed sole commission agents of a company for the sale, in Britain and elsewhere, of furs exported from Russia, on the terms, inter alia, that they should advance to the company a part of the value of each consignment.
All the transactions between the appellants and the company were conducted on a dollar basis, and owing to fluctuations in the rate of exchange between the dates when advances in dollars were made by the appellants to the company against goods consigned and the dates when the appellants recouped themselves for the advances on the sale of the goods, a profit accrued to the appellants on the conversion of prepaid advances into sterling.
The question arose whether this profit formed part of the trading receipts of the appellants so as to be assessable to tax.
Singleton, J., held that the exchange profit arose directly in the course of the appellants ' business with the company and formed part of the appellants ' trading receipts for the purpose of computing their profits assessable to income tax under Case I of Schedule D.
The learned Judge pointed out that "the profit which arises in the present case is a profit arising directly from the business which had to be done, because the business was conducted on a dollar basis and the appellants had, therefore, to buy dollars in order to make the advances against the goods as prescribed by the agreements.
The profit accrued in this case because they had to do that, thereafter as a trading concern in this country re transferring or re exchanging into sterling.
" Since the dollars were purchased for the purpose of carrying on the business as sole commission agents and as an integral part of the activity of such business, it was held that the profit arising on retransfer or re exchange of dollars into sterling was a trading profit falling within Case I of Schedule D.
This decision was accepted as a correct decision by the Court of Appeal in Davis vs Shell & Co. of Chine Ltd.(2) 985 We may then refer to the decision of the Court of Appeal in Imperial Tobacco Co. vs Kelly(1).
That was a case of a company which, in accordance with the usual practice, bought American dollars for the purpose of purchasing in the United States, tobacco leaf.
But before tobacco leaf could be purchased, the transaction was interrupted by the outbreak of war and the company had, at the request of the Treasury, to stop all further purchases of tobacco leaf in the United States.
The result was that the company was required to sell to the Treasury and owing to the rise which had in the mean time occurred in the dollar exchange, the sale resulted in a profit for the company.
The question was whether the exchange profit thus made on the dollars purchased by the company was a trading profit or not ? The Court of Appeal held that it was a trading profit includible in the assessment of the company under Case I of Schedule D and Lord Green, Master of the Rolls delivering the main judgment, said : "The purchase of the dollar was the first step in carrying out an intended commercial transaction, namely, the purchase of tobacco leaf.
The dollars were bought in contemplation of that and nothing else.
The purchase on the facts found was, as I say, a first step in the carrying out of a commercial transaction, " "The Appellant Company having provided themselves with this particular commodity "namely, dollars" which they proposed to exchange for leaf tobacco, their contemplated transactions became impossible of performance, or were not in fact performed.
They then realised the commodity which had become surplus to their requirements".
When I say "surplus to their requirements" I mean surplus to their requirements for the purpose and the only purpose for which the dollars were acquired." "In these circumstances, they sell this surplus stock of dollars : and it seems to me quite impossible to say that the dollars have lost the revenue characteristic which attached to them when they were originally bought, and in some mysterious way have acquired a capital character.
In my opinion, it does not make any difference that the contemplated purchasers were stopped by the operation of Treasury or Governmental orders, if that were the case; nor is the case affected by the fact that the purchase was under a Treasury requisition and was not a voluntary one.
It would 986 be a fantastic result, supposing the Company had been able voluntarily, at its own free will, to sell these surplus dollars, if in that case the resulting profit should be regarded as income, whereas if the sale were a compulsory one the resulting profit would be capital.
That is a distinction which, in my opinion, cannot possibly be made." "To reduce the matter to its simplest elements, the Appellant Company has sold a surplus stock of dollars which it had acquired for the purpose of affecting a transaction on revenue account.
If the transaction is regarded in that light, any trader who, having acquired commodities for the purpose of carrying out a contract, which falls under the head of revenue for the purpose of assessment under Schedule D, Case I, then finds that he has bought more than he ultimately needs and proceeds to sell the surplus.
In that case it could not be suggested that the profit so made was anything but income.
It had an income character impressed upon it from the very first.
" This decision clearly laid down that where an assessee in the course of its trade engages in a trading transaction, such as purchase of goods abroad, which involves as a necessary incident of the transaction itself, the purchase of currency of the foreign country concerned, then profit resulting from appreciation or loss resulting from depreciation of the foreign currency embarked in the transaction would prima facie be a trading profit or a trading loss.
The last English decision to which we may refer in this connection is Davis vs The Shell Company of Chine, (supra).
The Company made a practice of requiring its agents to deposit with the company a sum of money usually in Chinese dollars which was repayable when the agency came to an end.
Previously the Company had left on deposit in Shanghai amounts approximately equal to the agency deposits, but because of the hostilities between China and Japan, the Company transferred these sums to the United Kingdom and deposited the sterling equivalents with its parent company which acted as its banker.
Owing to the subsequent depreciation of the Chinese dollar with respect to sterling, the amounts eventually required to repay agency deposits in Chinese currency were much less than the sums held by the Company to meet the claims and a substantial profit accrued to the Company.
The question arose whether this exchange profit was a trading profit or a capital profit.
The Court of 987 Appeal held that it was a capital profit not subject to income tax and the argument which found favour with it may be stated in the words of Jenkins, L. J., who delivered the main judgment : "I find nothing in the facts of this case to divest those deposits of the character which it seems to me they originally bore, that is to say the character of loans by the agents to the company, given no doubt to provide the company with a security, but nevertheless loans.
As loans it seems to me they must prima facie be loans on capital, not revenue account; which perhaps is only another way of saying that they must prima facie be considered as part of the company 's fixed and not of its circulating capital.
As appears from what I have said above, the evidence does not show that there was anything in the company 's mode of dealing with the deposits when received to displace this prima facie conclusion.
In my view, therefore, the conversion of company 's balance of Chinese dollars into sterling and the subsequent re purchase of Chinese dollars at a lower rate, which enabled the company to pay off its agents ' deposits at a smaller cost in sterling then the amount it had realised by converting the deposits into sterling, was not a trading profit, but it was simply the equivalent of an appreciation in a capital asset not forming part of the assets employed as circulating capital in the trade." Since the Court took the view that the deposits were in the nature of fixed capital, any appreciation in their value on account of alteration in the rate of exchange would be on capital account and that is why the Court held that such appreciation represented capital profit and not trading profit.
That takes us to the two decisions of this Court which have discussed the law on the subject and reiterated the same principles for determining when exchange profit or loss can be said to be trading profit or loss.
The first decision in chronological order is that reported in Commissioner of Income Tax, Bombay City vs Tata Locomotive and Engineering Co. Ltd. (supra).
There the assessee, which was a limited company carrying on business of locomotive boilers and locomotives, had, for the purpose of its manufacturing activity, to make purchases of plant and machinery in the United States.
Tata Ink, New York, a company incorporated in the United States, was appointed by the assessee as its purchasing agent in the United States 988 and with the sanction of the Exchange Control Authorities the assessee remitted a sum of $ 33,850/ to Tata Ink, New York for the purpose of purchasing capital goods and meeting other expenses.
The assessee was also the selling agent of Baldwin Locomotive Works of the United States for the sale of their products in India and in connection with this work, the assessee incurred expenses on their behalf in India and these expenses were reimbursed to the assessee in the United States by paying the amount to Tata Ink, New York.
The assessee also earned a commission of $ 36,123/ as selling agent of Baldwin Locomotive Works and this amount received as commission was taxed in the hands of the assessee in the relevant assessment year on accrual basis after being converted into rupees according to the then prevailing rate of exchange and tax was paid on it by the assessee.
Now these amounts paid by Baldwin Locomotive Works in reimbursement of the expenses and by way of commission were not remitted by the assessee to India but were retained with Tata Ink, New York for the purchase of capital goods with the sanction of the Exchange Control Authorities.
The result was that there was a balance of $. 48,572.30 in the assessee 's account with Tata Ink, New York on 16th September, 1949 when, on devaluation of the rupee, the rate of exchange which was Rs. 3.330 per dollar shot upto Rs. 4.775 per dollar.
The consequence of this alteration in the rate of exchange was that the assessee found it more expensive to buy American goods and the Government of India also imposed some restrictions on imports from the United States and the assessee, therefore, with the permission of the Reserve Bank of India, repatriated $ 49,500/ to India.
The repatriation of this amount at the altered rate of exchange gave rise to a surplus of Rs. 70,147/ in the process of converting dollar currency into rupee currency.
The question arose in the assessment of the assessee to income tax whether that part of the surplus of Rs. 70,147/ , which was attributable to $ 36,123/ received as commission from Baldwin Locomotive Works was a trading profit or a capital profit.
The matter was carried to this Court by the Revenue and in the course of the judgment delivered by Sikri, J., this Court pointed out that the answer to the question : ". . depends on whether the act of keeping the money, i.e., $ 36,123/02, for capital purposes after obtaining the sanction of the Reserve Bank was part of or a trading transaction.
If it was part of or a trading transaction then any profit that would accrue would be revenue receipt; if it was not part of or a trading transaction, then the profit made would be a capital profit and not taxable.
There is no doubt that the amount of $ 36,123.02 was a revenue 989 receipt in the assessee 's business of commission agency.
Instead of repatriating it immediately, the assessee obtained the sanction of the Reserve Bank to utilise the commission in its business manufacture of locomotive boilers and locomotives for buying capital goods.
That was quite an independent transaction, and it is the nature of this transaction which has to be determined.
In our view it was not a trading transaction in the business of manufacture of locomotive boilers and locomotives; it was clearly a transaction of accumulating dollars to pay for capital goods, the first step to the acquisition of capital goods.
If the assessee had repatriated $ 36,123.02 and then after obtaining the sanction of the Reserve Bank remitted $ 36,123.02 to the U.S.A., Mr. Sastri does not contest that any profit made on devaluation would have been a capital profit.
But, in our opinion, the fact that the assessee kept the money there does not make any difference specially, as we have pointed out, that it was a new transaction which the assessee entered into, the transaction being the first step to acquisition of capital goods.
" This Court held that the act of retaining $ 36,123/ in the United States for capital purposes after obtaining the sanction of the Reserve Bank of India was not a trading transaction in the business of manufacture of locomotive boilers and locomotives, but it was clearly a transaction of accumulating dollars to pay for capital goods, the first step in the acquisition of capital goods and the surplus attributable to $ 36,123/ was, therefore, capital accretion and not profit taxable in the hands of the assessee.
It would, thus, be seen that the test applied by this Court was whether the appreciation in value had taken place in a capital asset or in a trading asset or in other words, in fixed capital or in circulating capital and since the amount of $ 36,123/ , though initially a trading receipt, was set apart for purchase of capital goods and was thus converted into a capital asset or fixed capital, it was held that appreciation in its value on conversion from dollar currency to rupee currency was a capital profit and not a trading profit.
The position was the same as if the assessee had repatriated $ 36,123/ in the relevant assessment year in which it was earned and then immediately remitted an identical amount to the United States for the purchase of capital goods and profit had accrued on subsequent repatriating of this amount on account of alteration in the rate of exchange.
990 The other decision to which we must refer is the one in Commissioner of Income Tax, Mysore vs Canara Bank Ltd.(1).
The assessee in this case was a public limited company carrying on the business of banking in India and it had opened a branch in Karachi on 15th November, 1946.
After the partition in 1947, the currencies of India and Pakistan continued to be at par until the devaluation of the Indian rupee on September 18, 1949.
On that day the Karachi branch of the assessee had with it a sum of Rs. 3,97,221/ belonging to its Head Office.
As Pakistan did not devalue its currency, the old parity between Indian and Pakistani rupee ceased to exist.
The exchange ratio between the two countries was, however, not determined until 27th February, 1951 when it was agreed that 100 Pakistani rupees would be equivalent to 144 Indian rupees.
The assessee did not carry on any business in foreign currency in Pakistan and even after it was permitted to carry on business in Pakistani currency on 3rd April, 1951, it carried on no foreign exchange business.
The amount of Rs. 3,97,221/, which was lying with the Karachi branch remained idle there and was not utilised in any banking operation even within Pakistan.
On July 1, 1953, the State Bank of Pakistan granted permission for remittance and two days later, the assessee remitted the amount of Rs. 3,97,221/ to India.
This amount, in view of the difference in the rate of exchange became equivalent to Rs. 5,71,038/ in terms of Indian currency and in the process, the assessee made a profit of Rs, 1,73,817/ .
The question arose in the assessment of the assessee whether this profit of Rs. 1,73,817/ was a revenue receipt or a capital accretion.
Ramaswami, J., speaking on behalf of this Court, pointed out that the amount of Rs. 3,97,221/ was lying idle in the Karachi branch and it was not utilised in any banking operation and the Karachi branch was merely keeping that money with it for the purpose of remittance to India and as soon as the permission of the State Bank of Pakistan was obtained, it remitted that money to India.
This money was "at no material time employed, expended or used for any banking operation or for any foreign exchange business".
It was, to use the words of Ramaswami, J., "blocked and sterilised from the period of the devaluation of the Indian rupee upto the time of its remittance to India".
Therefore, even if the money was originally stock in trade, it "changed its character of stock in trade when it was blocked and sterilised and the increment in its value owing to the exchange fluctuation must be treated as a capital receipt".
Since the sum of Rs. 3,97,221/ was, on the finding of fact reached by the Revenue authorities, held on capital account and not as part of the circulating capital em 991 barked in the business of banking, it was held by this Court that the profit arising to the assessee on remittance of this amount on account of alteration in the rate of exchange was not a trading profit but a capital accretion.
The law may, therefore, now be taken to be well settled that where profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency held by it, on conversion into another currency, such profit or loss would ordinarily be trading profit or loss if the foreign currency is held by the assessee on revenue account or as a trading asset or as part of circulating capital embarked in the business.
But if on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature.
Now, in the present case, no finding appears to have been given by the Tribunal as to whether the sums of Rs. 25 lakhs and Rs. 12,50,000/ were held by the assessee in West Pakistan on capital account or Revenue account and whether they were part of fixed capital or of circulating capital embarked and adventured in the business in West Pakistan.
If these two amounts were employed in the business in West Pakistan and formed part of the circulating capital of that business, the loss of Rs. 11 lakhs and Rs. 5,50,000/ resulting to the assessee on remission of these two amounts to India.
On account of alteration in the rate of exchange, would be a trading loss, but if, instead, these two amounts were held on capital account and were part of fixed capital, the loss would plainly be a capital loss.
The question whether the loss suffered by the assessee was a trading loss or a capital loss cannot, therefore, be answered unless it is first determined whether these two amounts were held by the assessee on capital account or on revenue account or on revenue account or to put it differently, as part of fixed capital or of circulating capital.
We would have ordinarily, in these circumstances, called for a supplementary statement of case from the Tribunal giving its finding on this question, but both the parties agreed before us that their attention was not directed to this aspect of the matter when the case was heard before the Revenue Authorities and the Tribunal and hence it would be desirable that the matter should go back to the Tribunal with a direction to the Tribunal either to take additional evidence itself or to direct the Income Tax Officer to take additional evidence and make a report to it, on the question whether the sums of Rs. 25 lakhs and Rs. 12,50,000/ were held in West Pakistan as capital asset or as trading asset or, in other words, as part of fixed capital or part of circulating capital in the business.
The Tribunal will, on the basis of this additional evidence and in the light of the law laid down by us in this judgment, determine whether the loss 992 suffered by the assessee on remittance of the two sums of Rs. 25 lakhs and Rs. 12,50,000/ was a trading loss or a capital loss.
We accordingly set aside the order of the High Court and send the case back to the Tribunal with a direction to dispose it of in accordance with the directions given by us and in the light of the law laid down in this judgment.
There will be no order as to costs of the appeal.
P.H.P. Appeals allowed and case remanded. | It has inter alia a Cotton Mill situated in West Pakistan where it carries on business of manufacturing and selling cotton fabrics.
For the accounting year relevant to the assessment year 1954 55, the assessee made a large profit in the unit in West Pakistan.
The Pakistan profit, according to the official rate of exchange, which was then prevalent, namely, 100 Pakistani rupees being equal to 144 Indian rupees amounted to Rs. 1,68,97,232 in terms of Indian rupees.
Since the assessee was taxed on accrual basis, the sum of Rs. 1,68,97,232 representing the Pakistani profit was included in the total income of the assessee for the assessment year 1954 55 and the assessee was taxed accordingly after giving double taxation relief in accordance with the bilateral agreement between India and Pakistan.
On 8th August, 1955, the Pakistani rupee was devalued and parity between Indian and Pakistani rupee was restored.
The assessee thereafter succeeded in obtaining the permission of the Reserve Bank of Pakistani to remit a sum of Rs. 25 lakhs in Pakistani rupees out of the Pakistani profit for the assessment year 1954 55.
The profit of Rs. 25 lakhs in terms of Pakistani rupees had been included in the total income of the assessee for the assessment year 1954 55 as Rs. 36 lakhs in terms of Indian rupees according to the then prevailing rate of exchange and, therefore, when the assessee received the sum of Rs. 25 lakhs on remittance of the profit of Rs. 25 lakhs in Pakistani rupees during the assessment years 1957 58, the assessee suffered a loss of Rs. 11 lakhs, in the process of conversion on account of appreciation of the Indian rupee qua Pakistani rupee.
Likewise, in the assessment year 1959 60, a further sum of Rs. 12,50,000 was remitted by the assesses to India out of the Pakistani profit for the assessment year 1954 55 and suffered a loss of Rs. 5,50,000.
The assessee claimed in its assessment for the year 1957 58 and 1959 60 that these losses of Rs. 11 lakhs and Rs. 5,50,000 should be allowed in computing the profit from business.
The Income Tax Officer and the Tribunal disallowed the claim.
On a reference to the High Court, the High Court took the view that no loss was sustained by the assessee on remittance of the amounts from West Pakistan and that in any event, the loss could not be said to be a business loss because it was not a loss arising in the course of business of the assessee but it was caused by devaluation which was an act of State.
The High Court accordingly answered the question in favour of the Revenue and against the assessee.
Disposing of the appeals by special leave the Court, 977 ^ HELD: The first question that arises is whether the assessee suffered any loss on the remittance of Rs. 25 lakhs and Rs. 12,50,000.
These two amounts admittedly came out of the Pakistani profit for the assessment year 1954 55 and the equivalent of these two amounts in Indian currency, namely, Rs. 36 lakhs and Rs. 18 lakhs respectively was included in the assessment of the assessee as part of Pakistani profit but by the time these amounts came to be repatriated to India, the rate of exchange had undergone change on account of devaluation of Pakistani rupee and, therefore, on repatriation, the assessee received only Rs. 25 lakhs and Rs. 12.50 lakhs in Indian currency instead of Rs. 36 lakhs and Rs. 18 lakhs.
The assessee thus suffered a loss of Rs. 11 lakhs in one case and Rs. 5.50 lakhs in the other case.
The fact that no loss was reflected in the books of the two accounts of the assessee was not a conclusive factor and the High Court ought not to have relied on it.
It is now well settled that the way in which entries are made by an assessee in his books of account is not determinative of the question whether the assessee has earned any profit or suffered any loss.
[981 A D, 982 A B C] Commissioner of Income Tax vs Tata Locomotive Engineering Co., relied on.
The question arising in the case is whether the loss sustained by the assessee was a trading loss and if it was a trading loss whether it would be liable to be deducted in computing the taxable profit of the assessee under Sec.
10(1) of the Income Tax Act, 1922.
The argument which found favour with the High Court was that because the devaluation was an act of the sovereign power, it could not be regarded as a loss arising in the course of the business of the assessee or incidental, to such business, is plainly erroneous.
It is true that a loss in order to be a trading loss must spring directly from the carrying on of business or be incidental to it, but it would not be correct to say that where a loss arises in the process of conversion of foreign currency which is part of trading asset of the assessee, such loss cannot be regarded as a trading loss because the change in the rate of exchange which occasions such loss is due to an act of the sovereign power.
[982 D G] Badri Das Dada vs C.I.T., relied on.
It is not the factor or circumstance which caused the loss that is material in determining the true nature and character of the loss, but whether the loss has occurred in the course of carrying on the business or is incidental to it.
If there is a loss in trading asset, it would be a trading loss, whatever be its cause, because it would be a loss in the course of carrying on the business.
If the stock in trade of a business is stolen or burnt the loss, though occasioned by external agency or act of God would clearly be a trading loss.
Whether the loss suffered by the assessee is a trading loss or not, would depend on the answer to the query whether the loss is in respect of a trading asset or a capital asset.
In the former case, it would be a trading loss but not so in the latter.
The test may be formulated in another way by asking the question whether the loss is in respect of circulating capital or in respect of fixed capital.
It is, of course, not easy to define precisely what is the line of demarcation between fixed capital and circulating capital but there is a well recognised distinction between the two concepts.
Adam Smith in his 'Wealth of Nations ' describes fixed capital as what the owner turns to profit by keeping it in his 978 own possession and circulating capital as what he makes profit of by parting with it and letting in change masters.
Circulating capital means capital employed in the trading operations of the business and the dealings with it comprise trading receipts and trading disbursements, while 'fixed capital ' means capital not so employed in the business, though it may be used for the purposes of a manufacturing business but does not constitute capital employed in the trading operations of the business.
[982 H, 983 A F] Golden Horse Shoe (new) Ltd. vs Thurgood, ; approved.
Landes Bros. vs Simpson ; Davis vs Shell & Co. of Chine Ltd. ; Imperial Tobacco Co. vs Kelly; ; referred to with approval.
Commr.
of Income tax.
Bombay City vs Tata Locomotive & Engineering Co. Ltd. approved.
Commr.
of Income tax, Mysore vs Canara Bank Ltd. approved.
It is clear from the authorities that where profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency held by it, on conversion into another currency, such profit or loss would ordinarily be trading profit or loss if the foreign currency is held by the assesses on Revenue account or as trading asset or as part of circulating capital embarked in the business.
But if, on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature.
[991 B C] In the present case, no finding has been given by the Tribunal as to whether the sum of Rs. 25 lakhs and Rs. 12.50 lakhs were held by the assessee in West Pakistan on capital account or Revenue account and whether they were a part of fixed capital or of circulating capital embarked and adventured in the business in West Pakistan.
If these two amounts were employed in the business in West Pakistan and formed part of the circulating capital of that business, the loss of Rs. 11 lakhs and Rs. 5.50 lakhs resulting to the assessee on remission of these two amounts on account of alterations in the rate of exchange, would be a trading loss, but if instead these two amounts were held on capital account and mere part of fixed capital the loss would plainly be a capital loss.
[991 C E] The Court was, therefore, unable to answer the question whether the loss suffered by the assessee was a trading loss or a capital loss.
Ordinarily, the Court would have called for a supplementary statement of the case, from the Tribunal but since both the parties agreed that it would be proper that the matter should go back to the Tribunal with a direction to the Tribunal either to take additional evidence itself or to direct the Income Tax Officer to take additional evidence and make a report, the Court made an order accordingly and directed the tribunal to dispose of the case on the basis of the additional evidence and in the light of the law laid down in the Judgment.
[991 E H] |
Civil Appeal No. 96 of 1961.
Appeal by special leave from the award dated December 7, 1959, of the central Government Industrial Tribunal Dhanbad in reference No. 42 of 1959.
S.C. Banerjee and P. K. Chatterjee, for the appellant.
Janardan Sharma, for the respondent.
January 30.
The Judgment of the Court was delivered by SARKAR, J.
The appellants, the Bhowra Kankanee Coal Co. Ltd., own the Bhowra and other collieries.
On the Bhowra Colliery there are a number of residential bungalows belonging to the appellants occupied by their officers employed in the colliery.
The appellants employ certain malis for working as such in these bungalows and their duty is to look after and maintain the gardens there.
A dispute along between the appellants and their workmen as to whether these malis, who were fourteen in number, were entitled to bonus.
By an order made on June 23, 1959, under the , the Government of India referred this dispute along with another with which we are not concerned in this case, for adjudication to the Industrial Tribunal, Dhanbad.
The Points referred concerning the dispute above mentioned were in these terms: (1) Whether the withdrawal of the benefit of bonus provided in the Coal Mines Bonus 885 Scheme by the management of the Bhowra Colliery from the following garden mazdoor/malis is justified.
If not, to what relief are they entitled and from what date? (2) Whether the garden mazdoors/malis referred to above are employed on domestic and personal work within the meaning of paragraph 3 (b) of the Coal Mines bonus Scheme, 1948 and if not, to what relief are they entitled and from what dates The points so referred were decided by the Tribunal against the appellants by an award made on December 7, 1959, and the present appeal is against that award.
Till January 1, 1955, the Bhowra and certain other collieries managed as a group, were owned by the Eastern Coal Company Ltd., and on that date these collieries were sold to the appellants.
At the time when this sale was being arranged, the workmen in these collieries raised a dispute that their services should be treated as continuous inspite of the transfer of the collieries from one owner to another by the sale and that the conditions of their service and the facilities which they were enjoying under the previous owners should be guaranteed and continued by the succeeding owners, that is the appellants, after the latter took over the collieries.
At the instance of the conciliation officer appointed under the Act this dispute was settled by an agreement made on January 14, 1955, to which the Conciliation officer the workmen the previous owners and the appellants were parties.
Paragraph 3 of this agreement provided as follows: "Agreed that the existing service conditions and the facilities will be continued, excepting pension." Now in 1948 an Act called the Coal Mines Provident Fund and Bonus Schemes Act had been passed by section 5 of which the Central Government was 886 empowered to frame a bonus scheme for the payment of bonus to the employees of coal mines, The Central Government had framed a Bonus Scheme under this provision in 1948 and since then the previous owners had been paying the malis employed for the bungalow gardens belonging to the Bhowra Colliery, bonus in terms of it.
In 1951 they once stopped the bonus but that caused an industrial dispute and they thereupon restored the bonus.
Upto the acquisition of the Bhowra Colliery by the appellants they position thus was that these malis had been receiving bonus since 1948 excepting for a short period during which it had been stopped as earlier mentioned.
After they became the owners of the Bhowra Colliery, the appellants however stopped the payment of bonus to these malis.
This raised the industrial dispute which had led to this appeal.
Paragraph 3 of the Bonus Scheme framed under the Act, so far as relevant for this case, is in these terms: Paragraph 3.
Except as hereinafter provided every employee in a coal mine to which this Scheme applies shall be eligible to qualify for a bonus, Exceptions: An employee in a coal mine shall not be entitled to a bonus under the Scheme for the period during which (a) . . . . . . . . (b) he is employed as a mali, sweeper or demestic servant on demestic and personal work; (c) . . . . . . . .
One of the questions raised in this appeal is whether the bungalow malis were entitled to bonus under this paragraph.
The appellants contended before the Tribunal that malis as a class were excepted from the benefit of the Bonus Scheme by the provision 887 in exception (b) in this paragraph.
They further contended in the alternative that these malis were excepted in any event because they were In malis employed on domestic and personal work within the meaning of the exception.
The Tribunal rejected these contentions of the appellants and held (a) that these malis were entitled to bonus under paragraph 3 of the agreement of January 14, 1955 and (b) that they were not employed on domestic and personal work and were therefore not within the exception.
For these reasons the Tribunal held that the withdrawal of the bonus by the appellants was not justified.
It is not clear on what ground the Tribunal held that the malis were entitled to bonus under paragraph 3.
of the agreement of January 14, 1955.
It may be that the Tribunal thought that the Bonus Scheme framed by the Central Government formed a condition of service of the malis or a facility to which they were entitled and which the appellants undertook by the agreement of January 14, 1955, to continue.
If this was the point of view, then of course the further question still remains whether the malis were on domestic and personal work for if they were, then they would not be entitled to the bonus as a facility or a condition of their service under the Scheme.
It was however contended on behalf of the respondent workmen in this Court that the right to bonus was a condition of the service of the malis and a facility to which they were entitled independently of the Bonus Scheme and that this is what the Tribunal had held.
The record however is not very clear on this question.
The appellants dispute the contention of the workmen and further say that in any event the Tribunal had no jurisdiction to decide that question for the question referred to it was the right of the malis to bonus under the Bonus Scheme.
888 We think that the appellants ' contention is well founded.
What had been referred was the question "whether the withdrawal of the benefit of bonus Provided in the Coal Mines Bonus Scheme . is justified".
On the language of the order of reference it seems to us that the dispute referred was as to the right as provided in the Bonus Scheme and not as to any other right.
This also was the workmen 's case before the Tribunal as appears from its written statement filed there.
In the statement of case filed in this appeal also, the respondent took the same position.
We therefore think that if the Tribunal had held that the malis were entitled to the bonus under the agreement of January 14, 1955 independently of the Bonus Scheme it had exceeded its jurisdiction and its award cannot be upheld.
The question still remains as to whether on a proper construction of paragraph 3 of the Bonus Scheme these malis had any right to bonus.
That was undubitably the question referred to the Tribunal.
The words requiring construction are "on domestic and personal work".
The Tribunal held that malis working in bungalows belonging to the appellants were not working for the home or household of private persons or individuals and were therefore not on domestic work.
It also held that as the malis work under the direction and control of the appellants and were liable to be transferred from one bungalow to another or to some other work they were not on personal work.
We are unable to accept this construction of paragraph 3 of the Bonus Scheme.
Domestic means as of the home.
We feel no doubt that the malis who were working in the bungalows occupied by the officers were working in the home of the officers.
They were, therefore, on domestic work.
The work they were doing would not cease to be domestic work because the bungalows belonged not to the officers but to the appellants.
Whether a work 889 is domestic or not would depend on its nature.
Suppose an officer has employed his own mali for working in the bungalow garden, that mali would surely be on domestic work.
This is not disputed.
The nature of that work would not change because the the mali was working not under the orders of the officer occupying the bungalow but under the appellants, nor because the bungalow did not belong to the officer but to the appellants.
Nor for the same reason does the fact that the malis were employed by the appellants and not by the officers make any differences The fact that Malis might be transferred to other jobs and cease to be malis altogether is also irrelevant.
On such transfer they might become entitled to bonus.
The exception in paragraph 3 deprives them of the bonus only for the time they are malis on domestic and personal work.
Paragraph 3, of the Bonus Scheme contemplated malis who were employees of the colliery owners and were yet on domestic work.
The Tribunal thought that paragraph 3 only contemplated cases of malis appointed by the officers who were paid some allowance by the colliery owners for keeping malis in the gardens of the bungalows occupied by them.
It may be that malis to engaged would be the employees of the colliery owners, as the term employee is defined in the Act under which the Bonus Scheme was framed, but we see no reason to restrict malis on domestic work referred to in paragraph 3 to such malis only.
As we have said earlier, whether a malis on domestic work or not would depend on the nature of the work.
As the work which the malis with whom we are concerned did, was domestic work.
these malis must be deemed to be within the exception mentioned in paragraph 3.
They would not cease to be malis on domestic work because they had been working in the bungalows belonging to the appellants or were under their control and orders.
We further feel no difficulty in holding that 890 these malis were on personal work.
The word "personal" is obviously used in the sence of work for an individual as distinguished from work for the Coal mine as an institution.
These malis were undoubtedly working for the officers as individuals.
Therefore they were on personal work.
For these reasons in our view the malis in the present case were not entitled to any bonus under the Bonus Scheme.
As in our opinion the order of reference does not raise any question as to whether the malis were entitled to bonus apart from the Bonus Scheme, it is unnecessary for us to express any opinion on that question and we do not do so.
The result is that this appeal allowed and we set aside the award of the Tribunal in so far as it is concerned with the two points of dispute earlier set out which had been referred to it.
We do not think it a fit case to make any order for costs.
Appeal allowed. | In exercise of the power conferred by 5. 5 of the Coal Mines Provident Fund and Bonus Schemes Act, 1948, the Central Government framed a Bonus Scheme for the payment of bonus to employees of coal mines.
Paragraph 3 of the scheme made every employee in a coal mine eligible for a bonus except, infer alia, "a mali on domestic and personal work".
The question for consideration was whether under this paragraph the malis working in the officers ' bungalows had any right to bonus. ^ Held, that these malis were not entitled to any bonus under the Bonus Scheme.
Paragraph 3 contemplated malis who were employees of the colliery owners and were yet on domestic work.
Domestic meant as of the home.
The malis 884 who were working in the bungalows occupied by the officers, were working in the homes of the officers.
They were therefore, on domestic work.
The work they were doing did not cease to be domestic work because the bungalows belonged not to the officers but to the appellant or because they were under the control and orders of the appellant.
Further, these malis were on personal work.
The word "personal" was used in the sense of work for an individual as distinguished from work for the coal mine as an institution.
These malis were undoubtedly working for the officers as individuals. |
ition No. 644 of 1977.
(Under Article 32 of the Constitution) AND Writ Petition No. 917 of 1977 (Under Article 32 of the Constitution) AND Writ Petition Nos. 959 and 960 of 1977 F. section Nariman, M. F. D. Damania, G. D. Dave and Rameshwar Nath for the Petitioners in W.P. 644 of ]977.
F. D. Damania, K. L. Talsania, 1.
N. Shroff, H. section Parekh and M. R.P. Kapur, for the Petitioners in W.P. 917/77.
K.K. Singhvi, F.D. Damania, I.R. Joshi, P. H. Parekh and M. Mudgal for the Petitioners in W.P. Nos. 959 960/77.
U. R. Lalit (for Union of India), M. C. Bhandare (for the State of Maharashtra), E. C. Agrawala and M. N. Shroff for RR.
1 2 in W.P. Nos. 644, 959, 960 and 917 of 1977.
1015 S.J. Deshmukh, Mrs. section Bhandare, Miss Leela Mehta, A.N. Karkhanis and Miss Malini Podvel for R. 3 in W.P. No. 644 of 1977.
J. Ramamurthi and Miss Vaigai for R. 3 in W.P. 959 960/77.
M. K. Ramamurthi, A. K. Ganguli and G. section Chatterjee for the Intervener in W.P. Nos.
959 960 (State of West Bengal).
C. G. Nadkarni and K. L. Hathi for the intervener in W.P. 917/77 (Mazdoor Congress).
F. section Nariman and O.C. Mathur for the Intervener in W.P. No. 644/77 (Tube Investment).
M. K. Ramamurthi and K.M.K. Nair for the Intervener in W.P. 644/77 (State of Kerala).
The Judgment of the Court was delivered by UNTWALIA, J.
By these four Writ Petitions the employers challenge the constitutional validity of Sections 25 o and 25 R of The (hereinafter to be referred to as the Act).
The facts of the different cases are of a similar nature.
It is not necessary to state them in any detail for the purposes of deciding the constitutional question.
We may, however, just refer to a few in order to indicate the nature of the dispute between the parties.
WRIT PETITION No 644 OF 1977 The petitioner in this case is Excel Wear, a Registered partnership firm, the partners of which are citizens of India.
The petitioner has a factory at Bombay where it manufactures garments for exports.
About 400 workmen were employed in the petitioner 's factory.
According to its case the relation between the petitioner management and its employees started deteriorating from the year 1974 and had become very much worse from 1976.
From August, 1976 the workmen became very militant, aggressive, violent, indulged in unjustifiable or illegal strikes and the labour trouble in the factory became of an unprecedented nature.
Various incidents have been mentioned in the Writ Petition in support of the above allegations.
But since the facts are seriously challenged and disputed on behalf of the Labour Union, which was subsequently added as a party respondent in the Writ petition, we do not propose to refer to them in any detail and express our views in regard to them one way or the other.
The various facts alleged in the petition may be correct may not be correct.
We do not think it necessary to adjudicate upon them for the purpose of deciding the constitutional question.
Suffice it to say that it is legitimate to 1016 take notice of the fact that various kinds of situation, such as, labour trouble of an unprecedented nature, a factory running in a recurring loss, paucity of adequate number of competent and suitable persons in the family of the partners, shareholders or the proprietors of a particular factory, or even outsiders, for the purpose of management, non availability of raw materials, insurmountable difficulty in the replacement of damaged or worn out machineries and so on and so forth, may arise and are said to have arisen in one form or the other in the cases before us.
Although the facts pleaded in all the Writ petitions are instances of one or more of such difficulties, we shall advert to the consideration of the constitutional question on the justifiable assumption that in a given case they may exist.
No body could deny the possibility or probability of the existence of such facts in a particular industry.
Excel Wear, according to its case, finding it difficult, almost impossible, to carry on the business of the factory any longer served a notice dated May 2, 1977 on the State Government of Maharashtra, respondent No. 2 for previous approval of the intended closure of the undertaking in accordance with Section 25 0(1) of the Act.
The State Government refused to accord the approval and communicated their decision in their letter dated the 1st August, 1977.
It would be appropriate to quote here the relevant portion of this letter: "And whereas the Government of Maharashtra, after considering the aforesaid notice is satisfied that the reasons for the intended closure are prejudicial to public interest.
Now, therefore, in exercise of the powers conferred by sub section (2) of Section 25 O of the the Government of Maharashtra hereby directs the Excel Wear, Bombay 400025 not to close down the said undertaking" The petitioner challenges the validity of the order aforesaid.
Mr. F. section Nariman appeared for the petitioner in this case.
The Union of India, respondent No. 1, was represented by Mr. U. R. Lalit and Mr. M. C. Bhandare appeared for respondent No. 2.
The case of the Labour Union, the third respondent, was presented by Mr. section J. Deshmukh.
In the petitions under consideration Mr. Nadkarni appeared for an intervener Labour Union and Mr. M. K. Ramamurthi for two intervener States of West Bengal and Kerala.
WRIT PETITION No. 917 OF 1977 In this case the first petitioner is Acme Manufacturing Co. Ltd. and the second petitioner, citizen of India, is one of its shareholders.
Mr. 1017 Damania, learned counsel for the petitioners briefly drew our attention to the facts of this cases which were of a nature adverted to above.
The Wadala unit of the petitioner company is engaged in the business of manufacturing and selling Diesel oil Engines, Mechanical Lubricators, Engine Valves and Push Rods etc.
The petitioners were obliged to decide to close down the undertaking due to huge losses incurred by them on account of low productivity, serious labour unrest and indiscipline resulting in various incidents of assaults or the like.
The Company, therefore, applied to the State Government of Maharashtra on May 2, 1977 under section 25 O(1) of the Act for approval of the intended closure.
The State Government communicated their refusal in their letter dated the 29th July, 1977 enclosing therewith a copy of their order couched in identical terms as those in the case of Excel Wear.
WRIT PETITIONS 959 AND 960 OF 1977 Mr. K.K. Singhvi, appearing for the petitioners in this case apart from supporting the argument of Mr. Nariman drew our attention to the facts of this case which were more or less of a similar nature as in the case of Acme Manufacturing Co. Ltd. Petitioner No. 2 is a citizen of India and is a shareholder of Apar Private Ltd., petitioner No. 1.
The Company owns a factory at Vithalwadi, Kalyan (Bombay) which manufactures aluminum rods, AAC and ACSR conductors, P.V.C. cables and welding electrodes.
Feeling compelled to take a decision to close down the factory, the Company served a notice on the State Government under section 25 O(1) of the Act on September 16, 1976.
The order of the State Government refusing permission to the petitioner company to close down the undertaking is dated the 23rd December, 1976.
The reasons for refusal given in this order are slightly different.
They are as follows: "And whereas the Government of Maharashtra after considering the aforesaid notice is satisfied that the reasons for the intended closure of the said undertaking are not adequate and sufficient and the intended closure is prejudicial to the public intervener; Broadly speaking the contention on behalf of the employers in all these cases is that a right to close down the business is an integral part of the right to carry on the business guaranteed under Article 19(1) (g) of the Constitution of India.
The impugned law imposes a restriction the said fundamental] right which is highly unreasonable, excessive and arbitrary.
It is not a restriction but almost amounts to the destruction or negation of that right.
The restriction imposed is manifestly beyond the permissible bounds of clause (6) of Article 19 of the 1018 Constitution.
The proposition canvassed for our consideration was sometimes too bald and wide.
It was submitted that a right to carry on the business includes a right not to carry on the business, just like any other right mentioned in clause (1) of Article 19, such as, the right to freedom of speech includes a right not to speak and the right not to form an association is inherent in the right to form associations.
Similarly a right to acquire and hold property embraces within it a right not to acquire or hold property.
The submission was that no body can be compelled to speak or to form an association, to acquire or hold property and similarly no body can be compelled to carry on any business.
M/s. Lalit and Bhandare did not dispute the proposition that the right to close down the business is an integral part of the right to carry on the business.
They, however, strenuously urged That the restrictions imposed by the impugned law are quite reasonable and justified to put a stop to the unfair labour practice and for the welfare of the workmen.
It is a progressive legislation for the protection of a weaker section of the society.
Mr. Deshmukh, however, did not accept that a right to close down a business is an integral part of the right to carry on any business.
He submitted that a right to closure is appurtenant to the ownership of the property, namely, the undertaking.
The total prohibition of closure only affects a part of the right to carry on the business and not a total annihilation of this.
The restriction imposed was in public interest and there is a presumption of reasonableness in its favour.
Mr. Nadkarni endeavored to submit with reference to the high philosophies of Jurisprudence in relation to the social and welfare legislations, as expounded by renowned jurists and judges abroad, that the action of closing down a business is no right at all in any sense of the term.
Mr. Ramamurthi while supporting the main arguments put forward on behalf of others led great stress in the point that the law is protected by Article 31 C of the Constitution, a point which was merely touched by them but was seriously taken over by Mr. Ramamurthi.
Before we enter into the focus of the discussion of the main points and their important aspects and facts it would be advantageous to refer to the relevant history of the development of this branch of the law.
The Act being Central Act 14 of 1947 was passed in the year 1947.
In 1953, an ordinance was promulgated followed by Amending Act 43 of 1953 inserting Chapter VA containing Sections 25A to 25J. New definitions of "Lay off" and "Retrenchment" were furnished in the Act in clauses (kkk) and (oo) of Section 2.
The heading of Chapter VA is "Lay off and Retrenchment".
The relevant provisions of this Chapter were not meant to cover the small industrial 1019 establishment in which less than SO workmen were employed or establishments of a seasonal character.
Section 25C made a provision for certain amounts of compensation for workmen in case they are laid off.
Section 25F imposes certain conditions on the employers which are conditions precedent to retrenchment of workmen, such as, the giving of one month 's notice or wages in lieu thereof.
Provision has also been made for payment of retrenchment compensation.
Section 25FF dealt with compensation to workmen in case of transfer of undertakings.
In Hariprasad Shivshankar Shukla vs A. D. Divikar this Court had occasion to consider the meaning of the term "retrenchment".
It was opined that the word "retrenchment" means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action and does not include termination of services of all workmen on a bona fide closure of an industry.
The question posed at page 134 by section K. Das J., who delivered the judgment on behalf of the Constitution Bench of this Court was whether the definition clause of the word 'retrenchment ' covers cases of closure of business when the closure is real and bona fide ? The answer given at page 137 was in the negative.
Discharge of workmen on bona fide closure of business was held to be not retrenchment.
On the view that Section 25F of the Act had no application to a closed or dead industry, no pronouncement was made in regard to the constitutional validity of the section if it were to take within its ambit a case of closure also.
After the decision of this Court in the case of Hariprasad Shivshanker (supra) was handed down the law was amended by an ordinance followed by Amending Act 18 of 1957 with retrospective effect from November 28, 1956.
Section 25FF was amended to make a provision for payment of compensation to workmen in case of transfer of undertakings and a provision was made in Section 25FFF for payment of compensation to workmen in case of closing down of an undertaking.
It will be of use to read here sub section (1) of Section 25FFF for the purpose of deciding some of the contentious questions in this case.
It reads as follows : "Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched.
1020 Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months.
Explanation An undertaking which is closed down by reason merely of (i) financial difficulties (including financial losses); or (ii) accumulation of undisposed of stocks; or, (iii)the expiry of the period of the lease or licence granted to it; or (iv) in a case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which operations are carried on; shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub section.
" It would be noticed from the provision extracted above that normally it became necessary for an employer in a case of closure for any reason whatsoever to give notice and compensation to the workmen in accordance with the provisions of section 25F as if the workman had been retrenched.
But the proviso clearly postulated that an undertaking may have to be closed down on account of unavoidable circumstances beyond the control of the employer.
In that event a ceiling was put in the proviso on the amount of normal compensation payable.
The explanation added by Amending Act 45 of 1971 merely indicates that the reasons enumerated in clauses (i) to (iv) of the Explanation will not be deemed to be a closure brought about on account of unavoidable reasons beyond the control of the employer within the meaning of the proviso.
Factually and really the said reasons may be said to fall within the expression "unavoidable circumstances beyond the control of the employer.
" But the said reasons will not be deemed to be such that a workman should be made to get only a limited compensation and not the full normal compensation provided in section 25F.
The constitutional validity of section 25FFF(l) came to be considered by this Court in M/s Hatisingh Mfg. Co. Ltd. and another vs Union of India and Ors.
The provision was construed in a manner which saved it from the attack on its vires.
Since we are on this case.
1021 at this very stage we may refer to some very important views expressed therein which are decisive of some of the points raised in this case and cf great help in deciding some others.
Shah J., as he then was, speaking for the Court pointed out at page 535: "By Article 19(1) (g) of the Constitution freedom to carry on any trade or business is guaranteed to every citizen, but this freedom is not absolute." "In the interest of the general public", says the learned Judge, "the law may impose restrictions on the freedom of the citizens to start, carry on or close their undertakings.
" This clearly indicates, and the whole ratio of the case is based upon this footing, that the right to carry on any business includes a right to start, carry on or close down any undertaking.
It has further been pointed out on the same page that "by section 25FFF(l), termination of employment on closure of the undertaking without payment of compensation and without either serving notice or paying wages in lieu of notice, is, not prohibited.
Payment of compensation and payment of wages for the period of notice are not therefore conditions precedent to closure.
" This is one of the main reasons given in the judgment to repel the attack on the constitutional validity of the provision.
We, however, must hasten to add that it does not necessarily follow therefrom that if such payments are made conditions precedent to closure the provision will necessarily be bad.
While judging the question as to whether the restrictions imposed by Sections 25 O and 25 R are reasonable or not within the meaning of clause (6) of Article 19, we will have to keep in mind the principles enunciated in Hatising 's case at page 535 thus : "Whether an impugned provision imposing a fetter on the exercise of the fundamental right guaranteed by article 19(1) (g) amounts to a reasonable restriction imposed in the interest of the general public must be adjudged not in the background of any theoretical standards or predeterminate patterns, but in the light of the nature and incidents of the right the interest of the general public sought to be secured by imposing the restriction and the reasonableness of the quality and extent of the fetter upon the right.
" At pages 536 37 are to be found some important observations in the interest of the labour and we respectfully agree with them.
They are as follows: "Closure of an industrial undertaking involves termination of employment of many employees, and throws them into the ranks of the unemployed, and it is in the interest of the general public that misery resulting from unemployment 1022 should be redressed.
In Indian Hume Pipe Co. Ltd. vs The Workmen [1960] 2 SCR 32 this Court considered the reasons for awarding compensation under section 25F (though not its constitutionality).
It was observed that retrenchment compensation was intended to give the workmen some relief and to soften the rigour of hardship which retrenchment brings in its wake when the retrenched workman is suddenly and without his fault thrown on the streets, to face the grim problem of unemployment.
It was also observed that the workmen naturally expects and looks forward to security of service spread over a long period, but retrenchment destroys his expectations.
The object of retrenchment compensation is therefore to give partial protection to the retrenched employee to enable him to tide over the period of unemployment.
Loss of service due to closure stands on the same footing as loss of service due to retrenchment, for in both cases, the employee is thrown out of employment suddenly and for no fault of his and the hardships which he has to face are, whether unemployment is the result of retrenchment or closure of business, the same.
In case of retrenchment only a specified number of workmen loses their employment while in closure all the workmen become unemployed.
By Amending Act 32 of 1972 section 25FFA was inserted in Chapter VA of the Act providing for the giving by the employer of 60 days ' prior notice to the appropriate Government of his intention to close down any undertaking.
Failure to do so entailed a liability to be punished under section 30A inserted in the Act by the same Amending Act.
Chapter VB was inserted in the Act by Amending Act 32 of 1976 with effect from the 5th March, 1976.
Under section 25K the provisions of this Chapter were made applicable to comparatively bigger industrial establishments in which not less than 300 workmen were employed.
Only three kinds of industries were roped in for the purpose of the rigour of the law provided in Chapter VB by defining "industrial establishment" in clause (a) section 25L to mean: "(i) a factory as defined in clause (m) of section 2 of the ; (ii) a mine as defined in clause (j) of sub section (1) of section 2 of the ; or 1023 (iii)a plantation as defined in clause (f) of section 2 of the .
" Section 25M dealt with the imposition of further restrictions in the matter of lay off.
Section 25N provided for conditions precedent to retrenchment of workmen.
In these cases the vires of neither of the two sections was attacked.
Rather, a contrast was made between the said provisions with those of section 25 O to attack the latter.
The main difference pointed out was that in sub section (3) of Section 25M the authority while granting or refusing permission to the employer to lay off was required to record reasons in writing and in sub section (4) a provision was made that the permission applied for shall be deemed to have been granted on the expiration of the period of two months.
The period provided in sub section (4) enjoins the authority to pass the order one way or the other within the said period.
Similarly in sub section
(2) of section 25N reasons are required to be recorded in writing for grant or refusal of the permission for retrenchment and the provision for deemed permission was made in sub section
(3) on the failure of the governmental authority to communicate the permission or the refusal within a period of three months.
We must now read section 25 o impugned provision in full: "(1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall serve, for previous approval at least ninety days before the date on which the intended closure is to become effective, a notice, in the prescribed manner, on the appropriate Government stating clearly the reasons for the intended closure of the undertaking: Provided that nothing in this section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.
(2) On receipt of a notice under sub section (1) the appropriate Government may, if it is satisfied that the reasons for the intended closure of the undertaking are not adequate and sufficient or such closure is prejudicial to the public interest, by order, direct the employer not to close down such undertaking.
(3) Where a notice has been served on the appropriate Government by an employer under sub section (1) of 1024 section 25FFA and the period of notice has not expired at the commencement of the Industrial Disputes (Amendment) Act, 1976, such employer shall not close down the undertaking but shall, within a period of fifteen days from such commencement, apply to the n r appropriate Government for permission to close down the undertaking.
(4) Where an application for permission has been made under sub section (3) and the appropriate Government does not communicate the permission or the refusal to grant the permission to the employer within a period of two months from the date on which the application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of two months.
(5) Where no application for permission under sub section (1) is made, or where no application for permission under sub section ( 3 ) is made within the period specified therein or where the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of closure and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.
(6) Notwithstanding anything contained in sub section (1) and sub section (3), the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like it is necessary so to do, by order, direct that the provisions of sub section (1) or sub section (3) shall not apply in relation to such undertaking for such period as may be specified in the order.
(7) Where an undertaking is approved ar permitted to be closed down under sub section (1) or sub section (4), every workman in the said undertaking who has been in continuous service for not less than one year in that undertaking immediately before the date of application for permission under this section shall be entitled to notice and compensation as specified in section 25N as if the said workman had been retrenched under that section.
" 1025 Special provision as to the restarting of an undertaking closed down before the commencement of the Amending Act 32 of 1976 was made in section 25P.
Whether the said provision is constitutionally valid or invalid does not fall for determination in these cases.
What is, however, of some importance to point out is that only on the existence of the four situations mentioned in clauses (a) to (d) of section 25P the undertaking could be directed to be restarted within such time (not being less than one month from the date of the order) as may be specified in the order.
Section 25Q provides for penalty for lay off and retrenchment without previous permission and section 25 R deals with the question of imposition of penalty for closure under certain circumstances.
Section 25 R reads as follows : "(1) Any employer who closes down an undertaking with out complying with the provisions of sub section (1) of Section 25 O shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both.
(2) Any employer, who contravenes a direction given under sub section (2) of section 25 O or section 25P, shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to five thousand rupees, or with both, and where the contravention is a continuing one, with a further fine which may extend to two thousand rupees for every day during which the contravention continues after the conviction.
(3) Any employes who contravenes the provisions of sub section (3) of section 25 O shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or with both.
" Let us now analyse the provisions of section 25 O. Sub section (1) requires 90 days notice to the appropriate Government for previous approval of the intended closure.
Our attention was drawn to the Bombay Industrial Rules and the form prescribed therein for the filing of an application for permission to close down an undertaking.
A very comprehensive history of the undertaking and many facts and figures in relation thereto, apart from the reasons to be stated for the intended closure of the undertaking, are required to be given in the application form.
Under sub section (2), if in the opinion of the 1026 appropriate Government, the reasons for the intended closure are not adequate and sufficient or if the closure is prejudicial to the public interest, permission to close down may be refused.
The reasons given may be correct, yet permission can be refused if they are thought to be not adequate and sufficient by the State Government.
No reason is to be given in the order granting the permission or refusing it.
The appropriate Government is not enjoined to pass the order in terms of sub section (2) within 90 days of the period of notice.
Sub section (3) is a special provision in respect of an undertaking where an employer had given a notice under section 25FFA(1) before the commencement of Act 32 of 1976.
In that event he is required to apply within a certain period for permission to close down an undertaking.
Under sub section (4) in a case covered by sub section (3) it is incumbent upon the Government to communicate the permission or the refusal within a period of two months, otherwise the permission applied for shall be deemed to have been granted.
Sub section (5) brings about the real object of the impugned provisions by stating that the closure of the undertaking shall be deemed to be illegal from the date of the closure if the undertaking has been closed down without applying for permission under sub section (1) or sub section (3) or where the permission for closure has been refused.
In that event the workman shall be entitled to all the benefits under ally law for the time being in force as if no notice had been given to him.
It is to be noticed that sub section (5) does not say as to whether the closure will be illegal or legal in case a notice under section (1) has been given by the employer but in absence of any communication from the Government within a period of 90 days granting or refusing permission, the employer closes down the undertaking on the expiry of the said period.
Sub section (6) postulates that there may be a sudden closure of an undertaking due to some exceptional circumstances as accident in the undertaking or death of the employer or the like.
In such a situation the appropriate Government is empowered to direct that the provisions of sub section (1) or sub section (3) shall not apply in relation to such undertaking, for such period as may be specified in the order.
Under sub section (7) where an undertaking is approved or permitted to be closed down, then the workman becomes entitled to notice and compensation as specified in section 25N as if the said workman had been retrenched under that section.
In other words requirement of section 25N is to be complied with on the grant of the permission to close.
Section 25 R while providing for awarding of punishment to an employer who closes down an undertaking without complying with the provisions of sub section (1) of section 25 O or who contravenes a direction given under section 25 O(2) is silent on the question of 1027 entailing any penal consequences in case where an employer had applied for permission under sub section (1) of section 25 O but the Government had failed to communicate its order to him within a period of 90 days and the undertaking is closed down on the expiry of the said period.
We propose first to briefly dispose of the two extreme contentions put forward on either side as to the nature of the alleged right to close down a business.
If one does not start a business at all, then, perhaps, under no circumstances he can be compelled to start one.
Such a negative aspect of a right to carry on a business may be equated with the negative aspects of the right embedded in the concept of the right to freedom of speech, to form an association or to acquire or hold property.
Perhaps under no circumstances a person can be compelled to speak; to form an association or to acquire or hold a property.
But by imposing reasonable restrictions he can be compelled not to speak; not to form an association or not to acquire or hold property.
Similarly, as held by this Court in Cooverjee Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer, and Ors.
Narendra Kumar & Ors.
vs The Union of India and Ors total prohibition of business is possible by putting reasonable restrictions within the meaning of Article 19(6) on the right to carry on the business.
But as pointed out at page 387 in the case of Narendra Kumar (supra) "The greater the restriction, the more the need for strict scrutiny by the Court" and then it is said further: "In applying the test of reasonableness, the Court has to consider the question in the background of the facts and circumstances under which the order was made, taking into account the nature of the evil that was sought to be remedied by such law, the ratio of the harm causes to individual citizens by the proposed remedy, to the beneficial effect reasonably expected to result to the general public.
It will also be necessary to consider in that connection whether the restraint caused by the law is more than was necessary in the interests of the general public.
" But then, as pointed out by this Court in Hatisingh 's case (supra) the right to close down a business is an integral part of the right to carry it on.
It is not quite correct to say that a right to close down a business can be equated or placed at par as high as the right not to start and carry on a business at all.
The extreme proposition urged on behalf of the employers by equating the two right 1028 and then placing then at par is not quite apposite and sound.
Equally so, or rather, more emphatically we do reject the extreme contention put forward on behalf of the Labour Unions that right to close down a business is not an integral part of the right to carry on a business, but it is a right appurtenant to the ownership of the property or that it is not a fundamental right at all.
It is wrong to say that an employer has no right close down a business once he starts it.
If he has such a right as obviously he has, it cannot but be a fundamental right embedded in the right to carry on any business guaranteed under Article 19(1) (g) of the Constitution.
In one sense that right does appertain to property.
But such a faint overlapping of the right to property engrafted in Article 19(1) (f) or Article 31 must not be allowed to case any shade or eclipse on the simple nature of the right as noticed above.
We now proceed to examine whether the restriction imposed under the impugned law are reasonable within the meaning of Article 19(6).
this is undoubtedly on the footing as held by us above, that the right to close a business is an integral part of the fundamental right to carry on a business.
But as no right is absolute in its scope, so is the nature of this right.
It can certainly be restricted, regulated or controlled by law in the interest of the general public.
On behalf of the petitioners, the restrictions imposed by the impugned law are said to be unreasonable because (i) Section 25 O does not require giving of reasons in the order.
(ii) No time limit is to be fixed while refusing permissions to close down.
(iii)Even if the reasons are adequate and sufficient, approval can be denied in the purported public interest of security of labour.
Labour is bound to suffer because of unemployment brought about in almost every case of closure.
(iv) It has been left to the caprice and whims of the authority to decide one way or the other.
No guidelines have been given.
(v) Apart from the civil liability which is it be incurred under sub section (5), the closure, however, compulsive it may be, if brought about against the direc 1029 tion given under sub section (2) is visited with penal consequences as provided in section 25 R. (vi) There is no deemed provision as to the according of approval in sub section (2) as in sub section (4).
(vii)Refusal to accord approval would merely mean technically that the business continues but a factory owner cannot be compelled to carry on the business and go on with the production and thus one of the objectives sought to be achieved by this provision cannot be achieved.
(viii)There is no provision of appeal, revision or review of the order even after sometime.
(ix) The employer is compelled to resort to the provisions of Section 25N only after approval of the closure.
(x) Restriction being much more excessive than is necessary for the achievement of the object is highly unreasonable.
(xi) There may be several other methods to regulate and restrict the right of closure by providing for extra compensation over and above the retrenchment compensation if the closure is found to be mala fide and unreasonable.
(xii)To direct the employer not to close down is altogether a negation of the right to close.
It is not regulatory.
(xiii)If carrying on any business is prohibited in public interest, a person can do another business.
But to prohibit the closure of a running business is destruction of the right to close.
(xiv)That reasons should be adequate and sufficient from whose points of view is not indicated in the Statute.
(xv) The reasonableness of the impugned restrictions must be examined both from procedural and substantive aspects of the law.
Sub section (2) of section 25 O does not make it obligatory for any 1030 higher authority of the Government to take a decision.
It may be taken even by a lower officer in the hierarchy.
On behalf of the respondents and the interveners all the above arguments were combated and it was asserted that the restriction imposed is reasonable in the interest of the general public.
The dominant interest was of labour but the other interests are also protected by the restriction, such as, interest of ancillary industry and preventing fall in production of a particular commodity which may effect the economic growth.
The application form requires the employer applying for permission to close down to give such comprehensive and detailed information that it will enable the appropriate Government to take appropriate decisions in appropriate cases.
It was also urged that the word "Socialist" has been added in the Preamble of the Constitution by the Forty Second amendment and the tests of reasonableness, therefore, must change and be necessarily different from the dogmatic and stereo type tests laid down in the earlier decisions of this Court.
Apart from invoking the bar of Article 31C in terms, it was also urged that the spirit behind the said Article for the progress of the law meant for social justice has got to be kept in view while judging the reasonableness of the restriction in the light of its endeavour to advance the directive principles enshrined in Part IV of the Constitution.
In order to overcome the various obvious lacunae in the section, we were asked, by a rule of construction, to read down the section and save its constitutionality.
It was urged that successive applications can be made on the change of a situation.
No amount of compensation can be a substitute for the preventive remedy of the evil of unemployment.
We now proceed to deal with the rival contentions.
But before we do so, we may make some general observations.
Concept of socialism or a socialist state has undergone changes from time to time from country to country and from thinkers to thinkers.
But some basic concept still holds the field.
In the case of Akadasi Padhan vs State of Orissa the question for consideration was whether a law creating a State monopoly is valid under the latter part of Article 19(6) which was introduced by the (first Amendment) Act, 1951.
While considering that question, it was pointed out by Gajendragadkar J., as he then was, at page 704: 1031 "With the rise of the philosophy of Socialism, the doctrine of State ownership has been often discussed by political and economic thinkers.
Broadly speaking, this discussion discloses a difference in approach.
To the socialist, nationalisation or State ownership is a matter of principle and its justification is the general notion of social welfare.
To the rationalist, nationalisation 1 or State ownership is a matter of expediency dominated by considerations of economic efficiency and increased output only production.
This latter view supported nationalisation only when it appeared clear that State ownership would be more efficient, more economical and more productive.
The former approach was not very much influenced by these considerations, and treated it a matter of principle that all important and nation building industries should come under State control.
The first approach is doctrinaire, while the second is pragmatic.
The first proceeds on the general ground that all national wealth and means of producing it should come under national control, whilst the second supports nationalisation only on grounds of efficiency and increased output.
" The difference pointed out between the doctrinaire approach to the problem of socialism and the pragmatic one is very apt and may enable the courts to lean more and more in favour of nationalisation and State ownership of an industry after the addition of the word `Socialist in the Preamble of the Constitution.
But so long as the private ownership of an industry is recognised and governs an overwhelmingly large proportion of our economic structure, is it possible to say that principles of socialism and social justice can be pushed to such an extreme so as to ignore completely or to a very large extent the interests of another section of the public namely the private owners of the undertakings ? Most of the industries are owned by limited companies in which a number of shareholders, both big and small, holds the shares.
There are creditors and depositors and various other persons connected with or having dealings with the undertaking.
Does socialism go to the extent of not looking to the interests of all such persons? In a State owned undertaking the Government of the Government company is the owner.
If they are compelled to close down, they, probably, may protect the labour by several other methods at their command, even, sometimes at the cost of the public exchequer.
It may not be always advisable to do so but that is a different question.
But 1032 in a private sector obviously the two matters involved in running it are not on the same footing.
One part is the management of the business done by the owners or their representatives and the other is running the business for return to the owner not only for the purpose of meeting his livelihood or expenses but to for the purpose of the growth of the national economy by formation of more and more capital.
Does it stand to reason that by such rigorous provisions like those contained in the impugned sections all these interests should be completely or substantially ignored ? The questions posed are suggestive of the answers.
In contrast to the other provisions, section 25 o(2) does not require the giving of reasons in the order.
In two of the impugned orders communicated to the petitioners, Excel Wear and Acme Manufacturing Co. Ltd., it is merely stated that the reasons for the intended closure are prejudicial to public interest suggesting thereby that the reasons given by the employers are correct, adequate and sufficient, yet they are prejudicial to the public interest.
In cases & band fide closures it would be generally so.
Yet the interest of labour for the time being is bound to suffer because it makes worker unemployed.
Such a situation as far as reasonably possible, should be prevented.
Public interest and social justice do require the protection of the labour.
But is it reasonable to give them protection against all unemployment after affecting the interests of so many persons interested and connected with the management apart from the employers? Is it possible to compel the employer to manage the undertaking even when they do not find it safe and practicable to manage the affairs ? Can they be asked to go on facing tremendous difficulties of management even at the risk of their person and property ? Can they be compelled to go on incurring losses year after year ? As we have indicated earlier, in section 25FFF retrenchment compensation was allowed in cases of closure and if closure was occasioned on account of unavoidable circumstances beyond the control of the employer a ceiling was put on the amount of compensation under the proviso.
The Explanation postulates the financial difficulties including financial losses or accumulation of undisposed stocks etc.
as the closing of an undertaking on account of unavoidable circumstances beyond the control of the employer but by a deeming provision only the ceiling in the matter of compensation is not made applicable to the closure of an undertaking for such reasons.
In 1972 by insertion of section 25FFA in Chapter VA of the Act, an employer was enjoined to give notice to the Government of an intended closure.
But gradually the net was cast too wide and the freedom of the employer tightened to such an extent by introduction of the impugned provisions that 1033 it has come to a breaking point from the point of view of the employers.
As in the instant cases, so in many others, a situation may arise both from the point of view of law and order and the financial aspect that the employer finds it impossible to carry on the business any longer.
He must not be allowed to be whimsical.
Or capricious in the matter ignoring the interest of the labour altogether.
But that can probably be remedied by awarding different slabs of compensation in different situations.
It is not quite correct to say that because compensation is not a substitute for the remedy of prevention of unemployment, the later remedy must be the only one.
If it were so, then in no case closure call be or should be allowed.
In the third case namely that of Apar Private.
Ltd. the Government has given two reasons, both of them being too vague to give any exact idea in support of the refusal of permission to close down.
It says that the reasons are not adequate and sufficient (although they may be correct) and that the intended closure is prejudicial to the public interest.
The latter reason will be universal in all cases of closure.
The former demonstrates to what extent the order can be unreasonable.
If the reason given by the petitioner in great detail are correct, as the impugned order suggests they are, it is preposterous to say that they are not adequate and sufficient for a closure.
Such an unreasonable order was possible to be passed because of the unreasonableness of the law.
Whimsically and capriciously the authority can refuse permission to close down.
Cases may be there, and those in hand seem to be of that nature, where if the employer acts according to the direction given in the order he will have no other alternative but to face ruination in the matter of personal safety and on the economic front.
if he violates it, apart from the civil liability which will be of a recurring nature, he incurs the penal liability not only under section 25 R of the Act but under many other Statutes.
We were asked to read in section 25 o(2) that it will be incumbent for the authority to give reasons in his order and we were also asked to cull out a deeming provision therein.
If the Government order is not communicated to the employer within 90 days, strictly speaking, the criminal liability under section 25 R may not be attracted if on the expiry of that period the employer closes down the undertaking.
but it seems the civil liability under section 25 o(5) will come into play even after the passing of the order of refusal of permission to close down on the expiry of the period of 90 days.
Intrinsically no provision in Chapter VB of the Act suggests that the object of carrying on the production can be achieved by the refusal to grant permission although in the objects and 1034 Reasons of the Amending Act such an object seems to be there, although remotely, and secondly it is highly unreasonable to achieve the object by compelling the employer not to close down in public interest for maintaining the production.
The order passed by the authority is not subject to any scrutiny by any higher authority or tribunal either in appeal or revision.
The order cannot be reviewed either.
We were again asked to read into the provisions that successive applications can be made either for review of the order or because of the changed circumstances.
But what will the employer do even if the continuing same circumstances make it impossible for him to carry on the business any longer ? Can he ask for a review ? Again, by interpretation we were asked to say that steps under section 25N can be taken simultaneously when a notice under section 25 o(1) is given.
Firstly, the language of sub section (7) does not warrant this construction.
The action of giving notice and compensation in accordance with section 25N is to be taken when an undertaking is approved or permitted to be closed down and not before that.
Secondly, it is not practicable to give three months notice in writing or wages for the said period in lieu of notice or to pay the retrenchment compensation in advance as required by section 25N before the employer gets an approval from the Government.
It is not always easy to strike a balance between the parallel and conflicting interests.
Yet it is not fair to unreasonably tilt the balance in favour of one interest by ignoring the other.
Mr. Nadkarni relied upon the following passage of Frankfurter J., while expressing his view on "Balance of Interest": "I cannot agree in treating what is essentially a problem of striking balance between the competing interest as an exercise in absolutes.
" Learned counsel also referred to a note on `Government and liberty ' from `Paradoxes of Legal Science ' by Banjamin Cardozo which is to the following effect: "As the social conscience is awakened, the conception of injury is widened and insight into its cause is deepened the area of restraint is therefore increased." No body can have a quarrel with these basic principles however, high sounding or unreasonable they may appear to be on their face.
But 1035 yet no jurisprudence of any country recognizes that the concept of injury is widened and the area of restraint is broadened to an extent that it may result in the annihilation of the person affected by the restraint.
In case of fixation of minimum wages the plea of the employer that he has not got the capacity to pay even minimum wages and, therefore, such a restriction on his right to carry on the business is unreasonable has been repeatedly rejected by this Court to wit U. Unichoy and Ors.
vs The State of Kerala.
But the principle, rather in contrast, illustrates the unreasonableness of the present impugned law.
No body has got a right to carry on the business if he cannot pay even the minimum wages to the labour.
He must then retire from business.
But to tell him to pay and not to retire even if he cannot pay is pushing the matter to an extreme.
In some cases of this Court, to wit Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union it has been opined that where the industry had been closed and the closure was real and bona fide, there cannot be an industrial dispute after closure.
At page 881 Venkatarama Ayyar J., has said: "Therefore, where the business has been closed and it is either admitted or found that the closure is real and bona fide, any dispute arising with reference thereto would, as held in K. N. Padmanabha Ayyar vs The State of Madras (supra), fall outside the purview of the .
And that will a fortiori be so, if a dispute arises if one such can be conceived after the closure of the business between the quondam employer and employees.
" But the observations at page 882 indicate that if the dispute relates to a period prior to closure it can be referred for adjudication even after closure.
The very apt observations are to the following effect: "If the contention of the appellant is correct, what is there to prevent an employer who intends, for good and commercial reason, to close his business from indulging on a large scale in unfair labour practices, in victimisation and in wrongful dismissals, and escaping the consequences thereof by closing down the industry ? We think that on a true construction of section 3, the power of the State to make a 1036 reference under the section must be determined with reference not to the date on which it is made but to the date on which the right which is the subject matter of the dispute arises, and that the machinery provided under the Act would be available for working out the rights which had accrued prior to the dissolution of the business.
" It would thus be seen that in the matter of giving appropriate and reasonable relief to the labour even after the closure of the business the facts which were in existence prior to it can form the subject matter of an industrial dispute.
Even assuming that strictly speaking all such matters cannot be covered in view of the decisions of this Court we could understand a provision of law for remedying these drawbacks.
The law may provide to deter the reckless, unfair, unjust or mala fide closures.
But it is not for us to suggest in this judgment what should be a just and reasonable method to do so.
What we are concerned with at the present juncture is to see whether the law as enacted suffers from any vice of excessive and unreasonable restriction.
In our opinion it does suffer.
The reasonableness has got to be tested both from the procedural and substantive aspects of the law.
In the case of State of Bihar vs K. K. Misra & Ors.
it has been said at page 196: "As observed in Dr. Khare vs State of Delhi, ; and reiterated in V.G. Raw 's case(1952) SCR 597 that in considering reasonableness of laws imposing restrictions on fundamental rights both substantive and procedural aspects of the law should be examined from the point of view of reasonableness and the test of reasonableness wherever prescribed should be applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases.
It is not possible to formulate an effective test which would enable the court to pronounce any particular restriction to be reasonable or unreasonable per se.
All the attendant circumstances must be taken into consideration and one cannot dissociate the actual contents of the restrictions from the manner of their imposition or the mode of putting them into practice.
" It is no doubt true that Chapter VB deals with certain comparatively bigger undertakings and of a few types only.
But with all this 1037 difference it has not made the law reasonable.
It may be a reasonable classification for saving the law from violation of Article 14 but certainly it does not make the restriction reasonable within the meaning of Article 19(6).
Similarly the interest of ancillary industry cannot be protected by compelling an employer to carry on the industry although he is incapacitated to do so.
All the comprehensive and detailed information given in the application forms are of no avail to the employer if the law permits the authority to pass, a cryptic, capricious, whimsical and one sided order.
Mr. Deshmukh relying upon the decision of this Court in the case of Akadasi Padhan (supra) urged that there will be presumption of reasonableness in a legislation of this kind.
But reliance upon this principle enunciated in the case of State Monopoly of Kendu leaves seems to be misconceived.
Gajendragedkar J., pointed out at page 704: "The amendment made by the Legislature in article 19(6) shows that according to the Legislature, a law relating to the creation of State monopoly should be presumed to be in the interests of the general public.
article 19(6) (ii) clearly shows that there is no limit placed on the power of the State in respect of the creation of State monopoly.
" This proposition cannot be pressed into service in a case of the kind which we are dealing with.
Mr. Deshmukh 's argument that a right to close down a business is a right appurtenant to the ownership of the property and not an integral Art of the right to carry on the business is not correct.
We have already said so.
The properties are the undertaking and the business assets invested therein.
The owner cannot be asked to part with them or destroy them by not permitting him to close down the undertaking.
In a given case for his mismanagement of the undertaking resulting in bad relationship with the labour or incurring recurring losses the undertaking may be taken over by the State.
That will be affecting the property right with which we are not concerned in this case.
It will also be consistent with the object of making India a Socialist State.
But not to permit the employer to close down is essentially an interference with his fundamental right to carry on the business.
On the basis of the decision of this Court in The State of Gujarat and Anr.
vs Shri Ambica Mills Ltd., Ahmedabad, etc.
it was 1038 urged that even if there is a violation by impugned law of the fundamental right guaranteed under Article 19(1)(g) and not saved by clause (6) thereof, the said right has been conferred only on the citizens of India and not upon the corporate bodies like a company.
Counsel submitted that the company cannot challenge the law by a writ petition merely by making a shareholder join it.
Nothing of the kind was said by Mathew J., who spoke for the Court in the above case.
The question which was posed at page 773 was whether a law which takes away or abridges the fundamental right of citizens under Article 19(1)(f) would be void and, therefore non est as respects non citizens.
On a consideration of a number of authorities of this Court the principle which was culled out and applied in the case of Ambica Mills (supra) at page 780 is in these words "For our purpose it is enough to say that if a law is otherwise.
good and does not contravene any of their fundamental rights, non citizens cannot take advantage of the voidness of the law for the reason that it contravenes the fundamental right of citizens and claim that there is no law at all.
" Contrary to the above submission there are numerous authorities of this Court directly on the point.
A reference to the case of Bennet Coloman & Co. & ors.
vs Union of India & Ors. will be sufficient.
Following the decision of this Court in Rustom Cavasjee Cooper vs Union of India it was held that if a shareholder 's right is impaired the State cannot impair the right of the shareholders as well as of the company and the Court can strike down the law for violation of a fundamental right guaranteed only to the citizens of the challenge is by the company as well as the shareholder.
Referring to the bank nationalistion case it is said at page 773 by Ray J., as he then was: "A shareholder is entitled to protection of Article 19.
That individual right is not lost by reason of the fact that he is a shareholder of the company.
The Bank Nationalisation case (supra) has established the view that the fundamental rights of shareholders as citizens are not lost when they associate to form a company.
When their fundamental rights as shareholders are impaired by State action their rights as shareholders are protected.
The reason is that the shareholders ' rights are equally and necessarily affected if the rights of the company are affected.
" Excel Wear is a partnership concern.
The partners in the name of the firm can challenge the validity of the law.
In each of the other 1039 two petitions, as already stated, a shareholder has joined with the company to challenge the law.
The contention of Mr. Ramamurthi, therefore, must be rejected.
Now we proceed to consider whether the law is saved by Article 31C of the Constitution.
This point, as indicated earlier, was just touched in passing by other counsel.
But Mr. Ramamurthi endeavoured to advance a full dressed argument on this aspect of the matter.
His submission was that Article 31C inserted in the Constitution by the (Twenty fifth Amendment) Act, 1971 as amended by the (Forty second Amendment) Act, 1976 makes the law beyond the pale of challenge on the ground of violation of Article 19.
Mr. Ramamurthi 's argument proceeds thus.
A declaration of Emergency on the ground of external danger was made by the President in 1971.
While the.
imposition of external Emergency was in force, internal Emergency was also imposed on June 25, 1975.
The Emergency both external and; internal, was lifted on March 21, 1977.
Article 31C, as originally inserted read as follows: "Notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing the principles specified in Clause (b) or clause (c) of article 39 shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14, Article 19 or Article 31. . "[We have omitted from this quotation that part of Article 31C which was declared void by majority decision in the case of His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala (1973) Suppl.
S.C.R. 1.]" The Forty second Amendment made the application of the Article more comprehensive by substituting the words "all or any of the principles laid down in place of the words "the principles specified in clause (b) or clause (c) of Article 39." A feeble attempt in the first instance was made to show that the impugned law was covered by clause (b) or clause (c) of Article 39.
But this attempt could not be pursued with any force or success.
What was, however, strenuously contended was that surely the law is for giving effect to the policy of the State towards securing the principles laid down in Articles 39(1), 41 and 43 of Part IV and thus within the ambit of the amended Article 31C.
No attack on the validity of the law, therefore, could be made.
In the first instance, we may point out that we are not impressed with the argument and do not accept it as correct that the impugned law is for giving effect to the policy of the State towards securing any of the principles in Articles 1040 39(a) or 41.
Clause (a) of Article 39 concerns itself with the policy towards securing "that the citizens, men and women equally, have the right to an adequate means of livelihood.
" The impugned law obviously does not fit in with this directive principle.
Article 41 deals with right to work, to education and to public assistance in certain cases.
The impugned law is not concerned with this policy.
The directive principle which might be brought nearest to the impugned law is to be found in the following words of Article 43 "The State shall endeavour to secure, by suitable legislation. to all workers . work . " without deciding the question whether the impugned law can be said to be a law giving effect to the directive principle enshrined in Article 43 or not, we shall assume in favour of the respondents and the interveners that it is so.
Yet we shall presently show that the amended Article 31C cannot put this law beyond the pale of challenge.
Chapter VB was introduced by Amending Act 32 of 1976 with effect from 5th of March, 1976.
The amendment aforesaid made in Article 31C was with effect from 3rd January, 1977.
Section 4 of the (Forty second Amendment) Act, 1976 which brought about the amendment merely uses the expression "the words and figures. . shall be substituted.
" It did not say, and probably it could not have said so, that "they will always be deemed to have been substituted.
" It is, therefore, clear that the amendment was prospective in operation and was not made retrospective.
To overcome this difficulty Mr. Ramamurthi advanced an ingenious argument.
He submitted that Chapter VB was inserted in the Act when the Emergency was in operation.
Under Article 358, the State during the period of Emergency was competent to enact the impugned law even though it violated Article 19.
By the time the Emergency was lifted amended Article 31C had come into operation.
Thus by the continuous process the latter became immune from challenge on the ground of violation of Article 19.
Counsel relied upon the following decisions of this Court, apart from some others which are not necessary to be referred to, viz. (1) Keshavan Madhava Menon vs The state of Bombay ; (2) Dhirubha Devisingh Gohil vs The State of Bombay; (3) M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh & Anr; (4) Jaganath etc.
vs Authorised officer, Land Reforms & Ors.
We shall presently point out 1041 the fallacy in the argument and show that none of the decisions supports the contention.
Rather, in contrast, some of them demolish it.
Article 358 says: "While a Proclamation of Emergency is in operation, nothing in article 19 shall restrict the power of the State as defined in Part III to make any law or to take any executive action which the State would but for the provisions contained in that part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the Proclamation ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect :" Sometimes a distinction has been drawn between the lack of legislative competency of a State to make and enact a law on a particular topic covered by any of the Lists in the Seventh Schedule and its incompetency to make a law abridging or abolishing the fundamental rights or in violation of any other provisions of the Constitution.
When there is a lack of legislative competence, the law made is void ab initio, non est and a still born law.
But Article 13(2) also says : "The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void.
" Such a law is void to the extent of the contravention and in case of Article 19 the contravention is of the fundamental rights guaranteed to a citizen.
It has been said in some different contexts that for non citizens the law is not void but it is merely unenforceable.
Article 358 says that a law made in contravention of Article 19 during the operation of Proclamation of Emergency is not to be treated incompetently made by the State.
But as soon as the Proclamation ceases to operate the law so made ceases to have effect to the extent of the incompetency.
In other words, the Article clearly postulates that the law which was incompetently made and bad for violation of Article 19 will not be taken to be so during the period of Emergency.
But as soon as the Emergency is lifted the law becomes bad because it was bad when it was enacted, although it could not be taken to be so during the period of Emergency.
The amended Article 31C says that if the law gave effect to the policy 1042 of the State towards securing any of the principles laid in Part IV it shall not be deemed to be void on the ground of violation of Article 19.
The law which was enacted in March, 1976 could, by no stretch of imagination, be said to be a law giving effect to the policy of the State towards securing any of the principles laid down in Part IV within the meaning of the amended Article 31C which came into force in January, 1977.
The Legislature could not have thought of enacting a law within the meaning of amended Article 31C at a point of time when the Article stood unamended.
It is, therefore, difficult to accept the argument of the learned counsel that the law was not bad during the operation of the Emergency because of Article 358 and the same position was continued by Article 31C by its amendment by the (Forty second Amendment) Act.
The purport, content and the principles underlying the two Articles is so very different that it is difficult to tag the effects of the two together and make it a continuous effect like a relay race in a game.
In our view the law was bad for violation of Article 19(1) (g) when it was enacted, but it was not to be taken to be so during the period of Emergency; its invalidity sprouted out with full vigour on the lifting of the Emergency.
The amended Article 31C did not save it.
In Keshavan 's case (supra) Das J., as he then was, in the majority judgment of this Court was interpreting clause (1) of Article 13 and while doing so, he said at page 234: "In other words, on and after the commencement of the Constitution no existing law will be permitted to stand in the way of the exercise of any of the fundamental rights.
Therefore, the voidness of the existing law is limited to the future exercise of the fundamental rights.
article 13(1) cannot be read as obliterating the entire operation of the inconsistent laws, or to wipe them out altogether from the statute book, for to do so will be to give them retrospective effect which, we have said, they do not possess.
Such laws exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the Constitution.
" This case is of no help to the respondents.
In Dhirubha 's case (supra) the wordings of Article 31B were being construed.
Because of the presence of the words "or ever to have become void" in the said Article it was said at page 696 97 : 1043 "The intention of the Constitution to protect each and every one of the Acts specified in the Ninth Schedule from any challenge on the ground of violation of any of the fundamental rights secured under Part III of the Constitution, irrespective of whether they are pre existing or new rights, is placed beyond any doubt or question by the very emphatic language of article 31 B which declares that none of the provisions of the specified Acts shall be deemed to be void or ever to have become void on the ground of the alleged violation of the rights : . .
In contrast to the language of Article 31C which merely uses the phrase "shall be deemed to be void" and not the phrase "or ever to have become void" as used in Article 31B the decision of this Court n Dhirubha 's case, rather, goes against the contention of the learned counsel.
In the Sundararamier 's case (supra) Venkatarama Aiyar J., summed up the result of the various authorities at page 1474 thus : "Where an enactment is unconstitutional in part but valid as to the rest, assuming of course that the two portions are severable, it cannot be held to have been wiped out of the statute book as it admittedly must remain there for the purpose of enforcement of the valid portion thereof, and being on the statute book, even that portion which is unenforceable on the ground that it is unconstitutional will operate proprio vigore when the constitutional bar is removed, and there is no need for a fresh legislation to give effect thereto." These observations were made in connection with the removal of the constitutional bar of imposition of sales tax under Article 286.
The distinction so drawn in the above case is not of universal application.
In the legislative field there is nothing like "void or voidable".
The application of the principle has been restricted later to only a limited field, namely, in connection with the question whether the legislation requires fresh enactment or not when the bar of incompetency is removed.
This Court has considered the question whether an enactment subsequently saved by Article 31B by being included in the Ninth Schedule requires a fresh legislation to make it valid.
The answer given was in the negative.
In the case of Ambica Mills (supra), Mathew, J., referred to some of the cases aforesaid and the principles decided therein as also the decision of this Court in 1044 Bhikaji Narain Dhakras & Ors.
vs The State of Madhya Pradesh and Anr.
wherein Das, Acting C.J., has said at pages 599 600 : "All laws, existing or future, which are inconsistent with the provisions of Part III of our Constitution are, by the express provision of Article 13, rendered void "to the extent of such inconsistency".
Such laws were not dead for all purposes.
They existed for the purposes of pre Constitution rights and liabilities and they remained operative, even after the Constitution, as against non citizens.
It is only as against the citizens that they remained in a dormant or moribund condition.
" Referring to Sundaramaier 's case the learned Judge said at page 775 in Ambica Mills case: "The proposition laid down by the learned Judge was that if a law is enacted by a legislature on a topic not within its competence, the law was a nullity but if the law was on a topic within its competence but if it violated some constitutional prohibition, the law was only unenforceable and not a nullity.
In other words, a law if it lacks legislative competence was absolutely null and void and a subsequent cession of the legislative topic would not revive the law which was still born and the law would have to be reenacted; but a law within the legislative competence but violative of constitutional limitation was unenforceable but once the limitation was removed, the law became effective.
" But later on he hinted at the restricted application of this principle.
It may also be pointed out here that in the case of Basheshar Nath vs The Commissioner of Income Tax, Delhi & Rajasthan & Another, Subba Rao J., as he then was, held that there was no distinction between lack of legislative competence and violation of constitutional limitations.
Subba Rao J., reiterated the same view in the case of Deep Chand vs The State of Uttar Pradesh and Others.
In the case of Mahendra Lal Jaini vs The State of Uttar Pradesh and others: 1045 "the Supreme Court again reviewed the authorities, and held (i) that the doctrine of eclipse applied only to pre Constitution and not to post Constitution laws; (ii) that the words "to the extent of the inconsistency" or "to the extent of the contravention" were designed to save parts of a law which did not contravene, or were not inconsistent with, fundamental right; (iii) that the meaning of the word "void" in article 13(1) and (2) was the same; (iv) however, pre Constitution laws violating fundamental rights were valid when enacted and could therefore be revived under the doctrine of eclipse, whereas post Constitution laws violating fundamental rights were "still born" and non est and could not be revived.
In dealing with the argument, based on Supreme Court decisions, that a law violating article 19 would be void qua citizens but valid qua non citizens, Wanchoo J. said: Theoretically the laws falling under the latter category (i.e. contravening article 19) may be valid qua non citizens; but that is a wholly unrealistic consideration and it seems to us that such nationally partial valid existence of the said laws on the strength of hypothetical and pedanic considerations cannot justify the application of the doctrine of eclipse to them." (Vide Seervai 's Constitutional Law of India, 2nd edition, page 180).
Of course, in none of the three cases aforesaid the decision of this Court in Sundararamaier 's case was considered.
For our purpose we have merely pointed out the divergence of opinion on this aspect of the matter, although for the decision of the point at issue, even Sundararamaier 's case does not make good the submission of Mr. Ramamurthi.
Mr. Ramamurthi was not right in pressing this ratio in support of his contention.
The content of Article 358 and 31C is entirely different.
The former Article, rather, works in the reverse gear.
It does not lift the ban in the way of the State to enact a law in violation of Article 19.
It puts the ban under suspension during the period of Emergency and the suspension comes to an end on its lifting.
Article 31C has no words to indicate that the ban is removed by it.
It merely saves the law enacted after coming into force of the said Article.
We, therefore, must reject the argument of Mr. Ramamurthi with reference to Article 31C of the Constitution.
1046 In the result all the petitions are allowed and it is declared that Section 25 O of the Act as a whole and Section 25 R in so far as it relates to the awarding of punishment for infraction of the provisions of Section 25 O are constitutionally bad and invalid for violation of Article 19(1) (g) of the Constitution.
Consequently, the impugned orders passed under sub section (2) of Section 25 O in all the cases are held to be void and the respondents are restrained from enforcing them.
We must, however, make it clear that since the orders fall on the ground of the constitutional invalidity of the law under which they have been made, we have not thought it fit to express any view in regard to their merits otherwise.
We make no order as to costs in any of the petitions. | The facts of only one petition are set out because they are similar to facts in other petitions.
Excel Wear is a partnership firm manufacturing garments for export.
About 400 workmen were employed in the petitioners ' factory.
The case of the petitioners is that the relations between the management and the employees started deteriorating and became very strained from 1976.
The workmen became very militant, aggressive, violent and indulged in unjustifiable or illegal strikes.
Various incidents have been mentioned in the Writ Petition in support of the said allegations.
However, since those facts were seriously challenged and disputed by the workmen, the Court did not refer to them in any detail nor expressed any view one way or the other.
(2) According to the petitioners it became almost impossible to carry on the business.
The petitioners, therefore, served a notice dated 2nd May, 1977 on the Government of Maharashtra, respondent No 2 for previous approval of the intended closure of the undertaking in accordance with section 25(O)(1).
The State Government refused to accord the approval on the ground that the intended closure was prejudicial to public interest.
(3 ) The petitioners contended: (a) A right to close down a business is an integral part of the right to carry on a business guaranteed under article 19(1)(g) of the Constitution.
The impugned law imposes a restriction on the said fundamental right which is highly unreasonable.
excessive and arbitrary.
It is not a restriction but almost amounts to the destruction or negation of that right.
The restrictions imposed is manifestly beyond the permissible bounds of article 19(6) of the Constitution.
(b) A right to carry on a business includes a right not to carry on a business which is like any other right mentioned under Article 19(1) such as the right to freedom of speech includes a right not to speak and the right not to form an association is inherent under the right to form association.
(c) The restrictions are unreasonable because (i) Section 25(o) does not require giving of reasons in the order.
(ii) No time limit is to he fixed while refusing permission to close down.
(iii)Even if the reasons are adequate and sufficient, approval can be denied in the purported public interest of security of labour.
Labour is bound to suffer because of unemployment brought about in almost every case of closure.
1010 (iv) It has been left to the caprice and whims of the authority to decide one way or the other.
No guidelines have been given.
(v) Apart from the civil liability which is to be incurred under sub section (5), the closure, however, compulsive it may be, if brought about against the direction given under sub section (2) is visited with penal consequences as provided in section 25 R. (vi) There is no deemed provision as to the according of approval in sub section (2) as in sub section (4).
(vii)Refusal to accord approval would merely mean technically that the business continues but a factory owner cannot be compelled to carry on the business and go on with the production and thus one of the objectives sought to be achieved by this provision cannot be achieved.
(viii)There is no provision of appeal, revision or review of the order even after sometime.
(ix) Restriction being much more excessive than is necessary for the achievement of the object is highly unreasonable.
(x) There may be several other methods to regulate and restrict the right of closure by providing for extra compensation over and above the retrenchment compensation if the closure is found to be mala fide and unreasonable.
(xi) To direct the employer not to close down is a negation of the right to close.
It is not regulatory.
(xii)If carrying on any business is prohibited in public interest, a person can do another business.
But to prohibit the closure of a running business is destruction of the right to close.
(xiii) The reasonableness of the impugned restrictions must be examined both from procedural and substantive aspects of the law.
Sub section (2) of section 25 D does not make it obligatory for any higher authority of the Government to take a decision.
It may be taken even by a lower officer in the hierarchy.
(4) The respondents ' contentions: (a) Some counsel for the respondents did not dispute that the right to close down a business is an integral part of the right to carry on a business.
They however, contended that the restrictions imposed by the impugned law are quite reasonable and justified to put a stop to the unfair labour practice and for the welfare of the workmen.
It is a progressive legislation for the protection of a weaker section of society.
(b) Some other counsel for the respondents, however, did not accept that a right to close down a business is an integral part of the right to carry on any business.
According to them, the total prohibition of closure only affects a part of the right to carry on the business and not a total annihilation of this.
The restriction imposed was in public interest and there is a presumption of reasonableness in favour of a statute.
Reliance was also placed on social and welfare legislation as expounded by renowned jurists and judges abroad.
It was also contended that the legislation was protected by Article 31C of the Constitution.
1011 (5) Allowing the petitions, the Court ^ HELD: The right to close down a business cannot be equated with a right not to start or carry on n business at all.
The extreme proposition urged on behalf of the employer by equating the two rights and placing them at par is not quite apposite and sound.
If one does not start a business at all, then perhaps under no circumstances, he can be compelled to start one.
Such a negative aspect of a right to carry on a business may be equated with the negative aspect of the right embedded in the concept of the right to freedom of speech, to form an association or to acquire or hold property.
Perhaps under no circumstances, a person can be compelled to speak, to form an association or to acquire or hold a property.
But by imposing reasonable restrictions, he can be compelled not to speak, not to form an association or not to acquire or not to hold property.
A total prohibition of business is possible by putting reasonable restrictions under Article 19(6) on the right to carry on a business.
[1027 B D, 1028 A] Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer & Ors.; ; ; Narendra Kumar & ors.
vs The Union of India & ors. ; relied on.
However, the greater the restriction, the more the need for strict scrutiny by the Court.
The contention put forward on behalf of the labour unions that the right to close down a business is not an integral part of the right to carry on a business or that it is not a fundamental right at all is also wrong.
In one sense the right does appertain to property.
But such a faint overlapping of the night to property engrafted in article 19(1)(f) or article 31 must not be allowed to cast any shade or eclipse on the simple nature of the right.
However, the right to close down is not an absolute right.
It can certainly be restricted, regulated or controlled by law in the interest of the general public.
[1027 1028 A C] Concept of socialism or socialistic state has undergone changes from time to time, from country to country and from thinkers to thinkers.
But some basic concept still holds the field.
In the case of Akadasi Padhan the question for consideration was whether a law creating a state monopoly is valid under the latter part of Article 19(6).
The Court pointed out the difference between the doctrinaire approach to the problem of socialism and the pragmatic one.
But so long as the private ownership of an industry is recognised governs an overwhelmingly large proportion of our economic structure, it is not possible to say that principles of socialism and social justice can be pushed to such an extreme so as to ignore completely or to a very large extent the interests of another section of the public namely the private owners of the undertakings.
[1030 G H. 1031 E G] Akadasi Padhan vs State of Orissa, [1963] Suppl.
2 SCR 691 referred to.
There are creditors and depository and various other persons connected with or having dealings with the undertaking, whose rights are also affected by the impugned legislation.
[1031 G] Section 25 O (2) does not require the giving of reasons in the order.
In two of the orders in the present cases, it is merely stated that the reasons for the intended closure are prejudicial to public interest suggesting thereby that the reasons given by the employers are correct, adequate and sufficient, yet they are prejudicial to the public interest.
In case of bona fide closures, it would be 1012 generally so.
Yet the interest of labour for the time being is bound to suffer because it makes a worker unemployed.
Such a situation as far as reasonably possible should be prevented.
Public interest and social justice do require the protection of the labour.
But it is not reasonable to give them protection against all unemployment after affecting the interests of so many persons interested including persons who have no connection with the management.
It is not possible to compel the employers to manage the undertaking even if they find that it is not safe or practicable to do so.
They cannot be asked to go on facing tremendous difficulties of management even at the risk of their person and property.
They cannot be compelled to go on incurring losses year after year.
[1032 C F] In the third Writ Petition, the Government has given two reasons, for refusing to grant permission.
Both of them are too vague to give an exact idea in support of the refusal of permission, to, close down.
It says that the reasons are not adequate and sufficient and that the intended closure is prejudicial to the public interest.
The latter reason will be universal in all cases of closure.
The former demonstrates to what extent the order can be unreasonable.
If the reasons given by the petitioner in great detail are correct, as the impugned order suggests they are, it is preposterous to say that they are not adequate and sufficient for a closure.
Such an unreasonable order was possible to be passed because of the unreasonableness of the law.
Whimsically and capriciously, the authority can refuse permission to close down.
[1033 B E] If the Government order is not communicated to the employer within 90 days, strictly speaking, criminal liability in section 25(R) may not be attracted, if on the expiry of that period an employer closes down the undertaking.
But it seems the civil liability under Section 25(O) (5) will come into play even after the passing of the order of refusal of permission to close down on the expiry of the period of 90 days.
Provision in Chapter V(B) of the Act suggests that the object of carrying on production can be achieved by the refusal to grant permission although in the objects and reasons of the amending act such an object seems to be there although remotely and secondly it is highly unreasonable to achieve the object by compelling the employee not to close down in public interest for maintaining production.
The order passed by the authority is not subject to any scrutiny by any higher authority or tribunal either in appeal or revision.
The order cannot be reviewed either.
[1033 F H, 1034 A B] It is not always easy to strike the balance between the parallel and conflicting interest, and it is not fair to unreasonably tilt the balance in favour of one interest by ignoring the other.
In the case of fixation of minimum wages this Court has repeatedly rejected the contention of the employers that he has no capacity to pay minimum wages and therefore his right to carry on the business is affected.
[1034E, 1035 A B] U. Unichoyi & Ors.
vs The State of Kerala. ; relied on.
But this principle, rather, in contrast, illustrates the unreasonableness of the present impugned law.
Nobody has got a right to carry on business if he cannot pay even the minimum wages.
He must then retire from business, But to tell him to pay and not to retire if he cannot pay is pushing the matter to an extreme.
It has been observed that where an industry had been closed and the closure was real and bona fide, there cannot be an industrial dispute after closure.
[1035 B D] 1013 Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union, referred to.
The law may provide to prevent and regulate unfair unjust or mala fide closure.
[1036 C] The reasonableness has got to be tested both from the procedural and substantive aspects of the law.
It is true that Chapter V (B) deals with certain comparatively bigger undertakings and for a few types only but with all this it has not made the law reasonable.
It may be a reasonable law for saving the law from violation of article 14 but certainly it does not make the restriction reasonable within the meaning of article 19(6).
Not to permit the employer to close down is essentially an interference with the fundamental right to carry on the business.
[1036 D, H, 1037 A, G] If a law is otherwise good and does not contravene any of the fundamental rights of the non citizens, non citizens cannot take advantage of the voidness of law for the reason that it contravenes the fundamental rights of the citizens and claim that there is no law at all.
In the case of Ambica Mills this Court has not said that even if there is violation of the fundamental rights guaranteed by article 19(1)(b) and not saved by clause (6) of the said right has been conferred only on the citizens of India and not upon the corporate bodies like a company.
[1()38 A D] State of Gujarat and Anr.
vs Shri Ambica Mills Ltd., Ahmedabad, etc.
; explained.
Bennet Coleman & Co. & ors.
vs Union of India & Ors.
, ; , Rustom Cavasjee Cooper vs Union of India, ; relied on.
It was laid down in the case of Bennet Coleman & Co. & Ors.
and Rustom Cavasjee Cooper that if a shareholder 's right is impaired the State cannot impair the right of the shareholder as well as of the company and the Court can strike down the law for violation of fundamental right guaranteed only to the citizens if the challenge is by the company as well as by the shareholders.
The partners can challenge the validity in the name of firm.
In the present case where company is petitioner a shareholder has also been joined with the company to challenge the law. [1038 E F, H, 1039 A] The impugned law is not for giving effect to the policy of the State towards securing any of the principles in Articles 39(1) or 41.
The law does not fit in with the said directive principles.
The argument that it is protected by article 31(C) is not sustainable.
The amendment was prospective and not retrospective.
[1039 H, 1040 A B, E] The argument that when the amendment was brought the proclamation of emergency was in operation and thereafter before emergency was lifted, the amend article 31C had come into force and thus by the continuous process the latter became immune on the ground of violation of article 19 is not maintainable.
[1042 C] As soon as the emergency is lifted the law becomes bad because it was bad when it was enacted, although it could not be taken to be so during the period 1014 of Emergency.
Therefore, article 31C cannot protect the law.
Apart from the fact that article 31C has no application the law was bad for violation of article 19(1)(b) when it was enacted but it was not taken to be bad during the period of emergency.
Its invalidity sprouted out with full vigour on the lifting of emergency.
[1041 H, 1042 C D] Keshavan Madhava Menon vs The State of Bombay, ; Dhirubha Devi Singh Gohil vs The State of Bombay ; ; M.P.V. Sunderaramier & Co. vs The State of A. P. & Anr., ; , Jagannath etc., etc.
vs Authorised Officer, Land Reforms and Ors.
; , ; distinguished.
Bhikaji Narain Dhakras and Ors vs The State of M.P. & Anr., ; ; Basheshar Nath vs The Commissioner of Income Tax, Delhi and Rajasthan and Anr., [1959] Suppl.
1 SCR 528; Deep Chand vs The State of U.P. & ors.
, [1559] Suppl.
2 SCR 8; Mahendra Lal Jaini vs The State of U.P. and ORS.
, [1963] Suppl.
1 SCR 912 referred t(b.
The Court declared section 25 (o) as a whole and Section 25R in so for as it relates to the awarding of punishment for infringement of the provisions of Section 25(o) constitutionally bad and invalid for violation of article 19(1) of the Constitution.
The Court declared the impugned order passed in all the cases to be void and restrained the respondents from enforcing them.
The Court however did not express any opinion on the merits of the case, since the orders fall on the ground of constitutional invalidity.
[1046 A C] |
Civil Appeals Nos. 171, 171A 171D of 1969.
From the Judgment and decree dated 10 12 1963 of the Allahabad High Court in First Appeal No. 511/55.
Lal Narain Sinha, P. P. Singh, J. B. Dadachanji, K. John and J. Sinha for the Appellants.
G. N. Dikshit and M. V. Goswami for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
These five appeals by certificates under Article 133(1)(c) of the Constitution granted by the High Court of Judicature at Allahabad shall be disposed of by this judgment as they raise a common question relating to the interpretation of section 39(1) (e) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (Act No. 1 of 1951) (hereinafter referred to as 'the Act ').
As the facts giving rise to these appeals are identical, it shall suffice to narrate the facts of the case culminating in Appeal No. 171 of 1969.
The predecessor in interest of the appellants, the late Jodha Mal, owned several private forests in the State of U.P. including the one consisting of three compartments comprising a total area of 484.57 acres in village Rajiwala Attick Farm, Mahal Sansar in District Dehradun.
On the vesting of the said forest in the State of U.P. by virtue of section 4 of the Act, the question arose about the assessment and payment of compensation therefor to the heirs of the intermediary.
On service of draft compensation roll prepared under section 40 of the Act, each one of the appellants, filed separate objections in regard thereto before the Compensation officer, Dehradun, who disposed of the same by his order dated August 31, 1953 holding that the average annual income for the said forest which could be taken into consideration while computing its compensation was Rs. 4,551/ as disclosed by the appellants ' accounts for a period of 22 years preceding the date of vesting in terms of clause (i) of section 39(1)(e) of the Act and Rs. 450/ was its annual yield on the date of vesting as per terms of clause (ii) of section 39(1) (e) of the Act.
Dividing the sum total of these two figures by 2, the Compensation officer held that Rs. 5,001/ was the annual income from the aforesaid forest to the intermediaries.
Aggrieved by the computation of compensation, the respondent preferred an appeal to the High Court of Judicature at Allahabad under section SO of the Act.
The appellant 's also filed cross appeals claiming that the average annual income as assessed by the Compensation officer was too low.
Being of the view that while com 30 puting the average annual income from the forest, both the results arrived at by working both the clauses of section 39(1)(e) of the Act had to be looked into and considered and it had to be objectively decided as to what the average annual income from the forest would be, the High Court held that Rs. 2,000/ and not Rs. 450/ was the income under clause (ii) of section 39(1)(e) of the Act.
On the aforesaid basis, the High Court came to the conclusion that Rs. 3,000/ and not Rs. 5,001/ was the average annual income on the basis of which gross assets had to be calculated in computation of compensation in respect of the aforesaid forest.
The High Court by its judgment and decree dated December 10, 1963, disposed of the appeal and the cross appeal in the manner indicated above.
Aggrieved by the judgment and decree of the High Court, the appellants have come up in appeal to this Court.
The respondent has also filed objections with regard to the item of Rs. 2,000/ .
Mr. Lalnarayan Sinha appearing on behalf of the appellants has raised a very short point.
Assailing the method adopted by the High Court in computing the compensation, he has urged that the High Court has missed the real purport and meaning of the provisions relating to the computation of compensation and that the relevant portion of section 39 of the Act did not authorise the High Court to calculate the compensation by taking a mean of the aforesaid two figures.
He has further urged that having worked out the average annual income according to the method indicated in clause (i) of section 39(1)(e) of the Act, the High Court was not required to work out the annual yield of the forest on the date of vesting.
We regret, we cannot accede to this contention.
Section 39(1) (e) of the Act provides as follows: "39.Gross assets of a mahal. (1) Gross assets as respects a mahal shall be the aggregate gross income of the land or estate comprised in the mahal and such income shall comprise . . . (e)average annual income from forests, which shall be computed (i) on the basis of the income for a period of twenty to forty agricultural years immediately preceding the date of vesting as the Compensation officer may consider reasonable, and (ii) on the appraisement of the annual yield of the forest on the date of vesting.
" 31 It will be noticed that the opening words of the above quoted section which is couched in very emphatic terms govern not only clause (i) but also clause (ii ) of section 39 ( 1 ) (e) of the Act.
Consequently neither of the two factors mentioned in section 39(1)(e) of the Act can be ignored while computing the average annual income.
Now so far as the connotation of the word 'average ' is concerned, it does not admit of any doubt.
According to shorter oxford English Dictionary, the word 'average ' means arithmetical mean to estimate by dividing the aggregate of a series by the number of its units '.
The same is the connotation of the word 'average ' according to the Random House Dictionary of the English Language where the total receipt has been stated to mean the total receipt from sales divided by the number of the units sold.
On a true construction of section 39(1)(e) of the, Act, it appears to us that the legislature cast an obligation on the Compensation officer to work out the compensation by computing the average annual income giving due weight to both the factors mentioned in the aforesaid clauses (i) and (ii).
Accordingly, we are of the view that the High Court was correct in computing the average income by adding up to two figures i.e. Of Rs. 4,551/ and Rs. 2,000/ and arriving at a mean on that basis.
The position is also not res integra as in Smt.
Durgi Devi & Ors.
vs State of U.P.(l) this Court held that the average annual income has to be arrived at by taking into consideration not only the income referred to in clause (i) of section 39(1) (e) but also the estimated annual yield of the forest on the date of vesting.
The following observations made therein are apposite.
"A plain reading of clause (e) of section 39(1) shows that its sub clauses (i) and (ii) do not provide for two alter native methods of calculating the average annual income of the forest.
The conjunction 'and ' at the end of sub clause (i) cannot be read as "or".
It conjoins the two sub clauses, and in effect, read in the context of "shall" in the opening part of clause (e), mandates the compensation officer to take both the factors into consideration in assessing the average annual income from the forest.
The reason why the legislature has made compliance with the requirement of this sub clause (ii), also, obligatory, appears to be to ensure that the compensation assessed has a reasonable nexus and proportion to the actual and potential value of the forest as on the date of vesting.
If a forest has been repeatedly, wholly and indiscriminately exploited within forty years or less imme (1) ; 3 S.C.C. 101.
32 diately before the vesting, its actual and potential value as a forest on the date of the vesting might be far less than the one calculated on the basis of its average annual income of the preceding 20 to 40 years as the case may be.
In such a case, average annual income calculated merely on the basis of the income for a period of 20 to 40 years preceding the vesting, may cause fortuitous inflation in the assessment of compensation.
Conversely, if a forest has been very little exploited in the preceding forty years and is well preserved and well developed on the date of vesting than calculation of its average annual income on the basis of sub clause (i) alone, without taking into account its potential yield on the date of the vesting, will make the compensation assessed wholly illusory, having no relation whatever to the value of the forests as at the date of vesting.
Entry of the appraised annual yield of the forest on the date of vesting, into computation under clause (e), operates as a counterpoise against fortuitous inflation or deflation in the assessment.
" Again in Ganga Devi vs State of Uttar Pradesh(1) it was pointed out by this Court that in computing the average annual income under clause (e) of section 39(1), the compensation officer has to refer to both these sub clauses (i) and (ii).
He cannot adopt either of these sub clauses.
It was also pointed out that under sub clause (ii) the annual yield on the date of vesting is to be appraised by taking into consideration, inter alia the number and age of the trees, the area under forest and the produce.
For the foregoing reasons, we find no merit in these appeals which are dismissed with costs.
S.R. Appeals dismissed. | on the vesting of the forests belonging to the appellants in the State of U.P. by virtue of Section 4 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (Act 1 of 1951), the question arose about the assessment and payment of compensation therefor to the heirs of the intermediary.
The compensation officer held that the average annual income from the said forests which could be taken into consideration while computing its compensation was Rs. 4551/ as disclosed by the appellants ' accounts for a period of 22 years preceding the date of vesting in terms of clause (i) of Section 39(1)(e) of the Act and Rs. 450/ was its annual yield on the date of vesting as per terms of clause (ii) of Section 39(1)(e) of the Act.
The compensation officer held that Rs. 5001/ was the annual income from the aforesaid forest to the intermediaries.
The High Court in appeal held that Rs. 2000/ and not Rs. 450/ was the income under clause (ii) of Section 39(1)(e) of the Act and therefore came to the conclusion that Rs. 3000/ was the average annual income on the basis of which gross assets had to be calculated in computation of compensation in respect of the said forest.
Dismissing the appeals by certificate the Court, ^ HELD: 1.
The opening words of Section 39(1)(e) of the U.P. Zamindari Abolition Act, 1950 which is couched in very emphatic terms govern not only clause (1), but also clause (ii) of the Section.
Consequently neither of the two factors mentioned in Section 39(1)(e) of the Act can be ignored while computing the average annual income.
The connotation of the word 'average ' does not admit of any doubt.
[31A B] (ii) On a true construction of Section 39(1)(e) of the Act, it is clear that the Legislature cast an obligation on the compensation officer to work out the compensation by computing the average annual income giving due weight to both the factors mentioned in the aforesaid clauses (i).
and (ii).
He cannot adopt either of these sub clauses.
Under sub clause (ii) the annual yield on the date of vesting is to be appraised by taking into consideration, inter alia, the number and age of the trees, the area under forest and the produce.
[31C, 32E] Durgi Devi and Ors.
vs State of U.P. [1978] 3 SCR p. 595, Ganga Devi vs State of U.P., ; applied. 29 |
Civil Appeal No. 634 or 1975.
Appeal by Special Leave from the Judgment and order dated 1 10 1974 of the Punjab and Haryana High Court in Civil Writ No. 5126 of 1974.
O. P. Malhotra, N. section Das Behl and Sat Pal Arora for the Appellant.
Madan Mohan for Respondents 3 4.
The Judgment of the Court was delivered by DESAI, J.
Socio economic justice, the corner stone of industrial jurisprudence to be achieved by the process of give and take, concessions and adjustments of conflicting claims would hardly advance if the industrial dispute involved in this appeal by special leave brought by the appellant M/s. Avon Services (Production Agencies) Pvt. Ltd. convassing some technical legal nicety rendering the two employees jobless for more than seven years is encouraged.
A brief recital of few facts touching upon the controversy would reveal the arena of dispute.
The appellant is a Private Limited Company incorporated under the , and is engaged in the business of manufacturing Fire Fighters Foam Compound.
It has set up two factories, one at Bombay and the other at Ballabhgarh.
The industrial dispute which is the subject matter of appeal relates to Ballabhgarh factory.
According to the appellant this factory, when commissioned in 1962, was divided into two sections, now styled as two separate undertakings: (i) manufacturing section; and (ii) packing material making section.
The manufacturing section comprised two sub sections, viz., the chemical section, i.e. Foam Compound manufacturing section, and the boiler section.
The packing material section was again composed of two sub sections, one manufacturing containers, and the other painting of the containers.
Respondents 3 and 4 according to the appellant were employed in the painting section.
Around 1964 the appellant decided to buy containers from the market and consequently closed down its packing material 49 making section but continued the painting sub section.
On 13th July 1971 the appellant purported to serve a notice on respondents 3 and 4 and one Mr. Ramni intimating to them that the management has decided to close the painting section effective 13th July 1971 due to unavoidable circumstances and hence the services of the three workmen would no longer be required and, therefore, they are retrenched.
Even though it is alleged that the notice was served upon the three workmen, the Tribunal found that the notice never reached respondents 3 and 4.
By the notice the workmen concerned were also informed that they should collect their dues under section 25FFF of the , from the office of the Company.
Since 13th July 1971 respondents 3 and 4 have been denied employment by the appellant.
A Trade Union of the employees of the appellant affiliated to Bharatiya Mazdoor Sangh served a notice of demand, Annexure P l dated 16th July 1971 inter alia calling upon the appellant to reinstate respondents 3 and 4 and the third workman and also to pay the full back wages.
On 19th February 1972 as per Annexure P 2, the Secretary to the Government of Haryana, Labour and Employment Department, intimated to the President of the Union that from amongst the demands contained in Annexure P l, Demands 2 to 9 have been referred to Industrial Tribunal for adjudication.
In respect of demand No. l relating to the reinstatement of the three workmen in the painting section, the reference was refused on the ground that there was no work for painting in the factory where these two workmen were working.
This refusal to refer the demand concerning respondents 3 and 4 has been the subject matter of a very serious submission on behalf of the Company that the reference subsequently made by the Government was invalid.
To proceed further with the narrative.
subsequently the Government of Haryana by its order dated 23rd November, 1972 referred the following dispute to the Industrial Tribunal for adjudication: "Whether the retrenchment of Sarvashri Mohammed Yamin and Mohammad Yasin was justified and in order ? If not, to what relief they are entitled ?" The Tribunal registered the reference at No. 81/72 and proceeded to adjudicate upon the dispute.
Three issues were raised before the Tribunal and it is necessary to set down the three issues here in order to point out that one of the contentions raised at the hearing of this appeal was never put forth before the Tribunal.
The issues framed by the Tribunal are: "1.
Whether the present reference is bad in law for the reasons given in para No. 1 of the preliminary objection in the written statement ? (On management).
Whether the statement of claim filed on behalf of the workmen is not in order ? (On management).
Whether the retrenchment of Sarvashri Mohammed Yamin and Mohammad Yasin was justified and in order ? If not, to what relief they are entitled?" The management, in support of its contention covered by issue No. 1, urged before the Tribunal that once the Government declined to make a reference in respect of termination of service of respondents 3 and 4, the Government was not competent to refer the dispute for adjudication at a later date.
The Tribunal negatived the contention observing that there is abundant authority in support of the proposition that the Government having once declined to make a reference, is not rendered incompetent from making a reference of the same dispute at a later date.
Issue No. 2 was also answered against the appellant but as that contention was not raised before us, we need not go into the details of it.
On issue No. 3, the Tribunal held that respondents 3 and 4 were retrenched and the case would squarely fall under section 25F of the (for short 'the Act ') and as the appellant employer has not complied with the pre condition laid down in section 25F (a) and (b) of the Act to wit, serving of one month 's notice or wages in lieu of such notice and payment of retrenchment compensation, the retrenchment was invalid.
The Tribunal was further of the opinion that as both the workmen have been in service for 15 years or so, they could have been conveniently absorbed in some other department and, therefore, the retrenchment was unjustified.
the Tribunal accordingly directed reinstatement of respondents 3 and 4 with full back wages.
The appellant moved the High Court of Punjab & Haryana for a writ of certiorari but the writ petition was dismissed in limine.
Mr. O. P. Malhotra, learned counsel for the appellant canvassed two contentions before US.
He submitted that the Government having declined to make a reference under section 10(l) of the Act in respect of termination of service of respondents 3 and 4 as per its order dated 19th February 1972 Annexure P 2, the Government was not competent or had no power or authority to make a reference in respect of the same dispute unless the Government must have come up with some fresh or additional material which, when the validity of the reference was challenged, must be disclosed or it must appear on the face of the reference itself.
Alternatively it was contended that after having declined to make a reference in respect of termination of service of respondents 3 and 4, the Government was not competent to make a reference of an entirely different dispute touching the question of reinstatement 51 of respondents 3 and 4 which was a materially different dispute, from A the one raised by the Union as per its charter of demands Annexure P 1, dated 16th July 1971 because the demand as is now referred to the Tribunal was never raised before the management and, therefore, no such demand existed which the Government could have referred to the Tribunal under section 10(1) of the Act.
The second contention was that the termination of service of respondents 3 and 4 was consequent upon the closure of painting undertaking which was a separate and independent undertaking of the appellant and the case would, therefore, be governed by section 25FFF and not by section 25F as held by the Tribunal and even if wages in lieu of notice and retrenchment compensation were not paid at the time or retrenchment the termination would not be invalid because the conditions for payment of wages in lieu of notice and retrenchment compensation are not conditions precedent when termination of service is brought about on account of closure of the undertaking.
Section 10(1) of the Act confers power on the appropriate Government to refer at any time any industrial dispute which exists or is apprehended to the authorities mentioned in the section for adjudication.
The opinion which the appropriate Government is required to form before referring the dispute to the appropriate authority is about the existence of a dispute or even if the dispute has not arisen, it is apprehended as imminent and requires resolution in the interest of industrial peace and harmony.
Section 10(1 ) confers a discretionary power and this discretionary power can be exercised on being satisfied that an industrial dispute exists or is apprehended.
There must be some material before the Government on the basis of which it forms an opinion that an industrial dispute exists or is apprehended.
The power conferred on the appropriate Government is an administrative power and the action of the Government in making the reference is an administrative act.
The formation of an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character.
Thus the jurisdictional facts on which the appropriate Government may act are the formation of an opinion that an industrial dispute exists or is apprehended which undoubtedly is a subjective one, the next step of making reference is an administrative act.
The adequacy or sufficiency of the material on which the opinion was formed is beyond the pale of judicial scrutiny.
If the action of the Government in making the reference is impugned by a party it would be open to such a party to show that what was referred was not an industrial dispute and that the Tribunal had no jurisdiction to make the Award but if the dispute 52 was an industrial dispute, its factual existence and the expediency of making a reference in the circumstances of a particular case are matters entirely for Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before Government on which it could have come to an affirmative conclusion on those matters (see State of Madras vs C. P. Sarathy) (1).
The contention, however, is that once the appropriate Government applies its mind to the question of referring an industrial dispute to the appropriate authority and declines to make a reference, it cannot subsequently change its mind and make the reference of the dispute unless there is some fresh or additional material before it.
It was said that once an industrial dispute is raised and the Government declines to make a reference, the opposite party is entitled to act on the supposition that the dispute in question was not worth referring and such a dispute would no more be in existence between the employee 1) and the concerned employer and that the Government cannot spring a surprise by subsequently unilaterally making the reference without any fresh or additional material being brought to its notice.
Section 10(l) enables the appropriate Government to make reference of all industrial dispute which exists or is apprehended at any time to one of the authorities mentioned in the section.
How and in what manner or through what machinery the Government is apprised of the dispute is hardly relevant.
Section 12 casts a duty upon the Conciliation officer to hold conciliation proceedings in respect of the industrial dispute that exists or is apprehended.
It is mandatory for the Conciliation officer to so hold the conciliation proceedings where dispute relates to a public utility service and a strike notice has been served under 6. 22.
The conciliation officer must try to promote a settlement between the parties and either he succeeds in bringing the parties to a settlement or fails in his attempt, he must submit a report to the appropriate Government, but this procedure for promoting settlement cannot come in the way of the appropriate Government making a reference even before such a report is received.
The only requirement for taking action under section 10(1) is that there must be some material before the Government which will enable the appropriate Government to form an opinion that an industrial dispute exists or is apprehended.
This is an administrative function of the Government as the expression is understood in contradistinction to judicial or quasi judicial function.
Merely because the Government rejects a request for a reference or declines to make a reference.
it cannot be said that the industrial dis (1) , 53 pute has ceased to exist, nor could it be said to be a renew of any A judicial or quasi judicial order or determination.
The industrial dispute may nonetheless continue to remain in existence and if at a subsequent stage the appropriate Government is satisfied that in the interest of industrial peace and for promoting industrial harmony it is desirable to make a reference, the appropriate Government does not lack power to do so under section 10(1), nor is it precluded from making the reference o l the only ground that on an earlier occasion it had declined to make the reference.
The expression "at any time" is section 10(l) will clearly negative the contention that once the Government declines to make a reference the power to make a reference under section 10(1) in respect of the same dispute gets exhausted.
Such a construction would denude a very vital power conferred on the Government in the interest of industrial peace and harmony and it need not be whittled down by interpretative process.
In Western India Match Co. Ltd., vs Western India Match Co. Workers Union & Ors.,(1) an identical contention was raised in respect of a reference made under section 4(k) of the U.P. which is in pari materia with section 10(1) of the Act.
Negativing this contention this Court observed as under: "In the light of the nature of the function of the Government and the object for which the power is conferred on it, it would be difficult to hold that once the Government has refused to refer, it cannot change its mind on a reconsideration of the matter either because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration and decide to make the reference.
But where it reconsiders its earlier decision it can make the reference only if the dispute is an industrial one and either exists at that stage or is apprehended and the reference it makes must be with regard to that and no other industrial dispute".
It follows that the Government does not lack the power to make the reference in respect of the same industrial dispute which it once declined to refer.
But it was urged that the ratio of the decision would show that the Government must have some fresh material made available to it, subsequent to its refusal to make a reference, for the formation of a fresh opinion, for making the reference.
It is not absolutely necessary that there ought to be some fresh material before the Government for reconsideration of its earlier decision.
The Government may reconsider its decision on account of some new facts brought to its notice or for any other relevant considera (1) ; 54 tion and such other relevant consideration may include the threat to industrial peace by the continued existence of the industrial dispute without any attempt at resolving it and that a reference would at least bring the parties to the talking table.
A refusal of the appropriate Government to make a reference is not indicative of an exercise of power under section 10(1), the exercise of the power would be a positive act of making a reference.
Therefore, when the Government declines to make a reference the source of power is neither dried up nor exhausted.
It only indicates that the Government for the time being refused to exercise the power but that does not denude the power.
The power to make the reference remains intact and can be exercised if the material and relevant considerations for exercise of power are available; they being the continued existence of the dispute and the wisdom of referring it, in the larger interest of industrial peace`and harmony.
Refusal to make the reference does not tantamount to saying that the dispute, if it at all existed, stands resolved.
On the contrary the refusal to make a reference not compelling the parties to come to a talking table or before a quasi judicial Tribunal would further accentuate the feelings and a threat to direct action may become imminent and the Government may as well reconsider the decision and make the reference.
It is, therefore, not possible to accept the submission that if the Government had on an earlier occasion declined to make a reference unless it be shown that there was some fresh or additional material before the Government the second reference would be incompetent.
It has not been shown that the dispute had ceased to exist and the very existence of the dispute enables the Government to exercise the power under section 10(l) and it has been rightly exercised.
The view which we are taking is in accord with the decision of this Court in Binny Ltd. vs Their Workmen & Anr.(1) wherein it was found that the Government had declined to make a reference of the dispute on two previous occasions on the basis of which it was contended that the reference was invalid.
The contention was negatived observing that the mere fact that on two previous occasions the Government had taken the view that no reference was called for does not entitle the Court to conclude that there could be no cause for a reference at a later date.
Alternatively it was contended that even if the appropriate Government has power to make a reference after having once declined to make the reference, it can only refer that industrial dispute which it had once declined to refer and no other dispute and that in this case the Government has referred an entirely different dispute than (1) 55 the one raised by the Union and that in respect of the referred dispute A the demand having not been made from the employer there was no such dispute in existence and, therefore, the reference was invalid.
The contention in the form in which it is now canvassed was not raised before the Industrial Tribunal and even before the High Court.
However, as we find substance in the contention we would not reject it on the technical ground that it was not raised before the Industrial Tribunal or the High Court.
The Avon Employees Union by its notice of demand Annexure P l dated 16th July 1971 requested the appellant company to consider the demands set out in the notice.
The relevant demand for the purpose of present discussion is demand No. 1 which reads as under: "That our three (?) companions Mohamed Yamin and Mohamed Yasin who had been working in the above mentioned factory for the last 15/15 years and 8 years, their termination of service and denying their gate passes are illegal and against the principle of justice, therefore, they be reinstated to their jobs and by giving back the full wages from the date of their termination, injustice be ended," The demand as hereinabove set out appears to be a translation of a demand originally served in Hindi.
The substance of the matter is that the Union complained about the termination of service of the two named workmen who are respondents 3 and 4 and one other whose services were terminated by the appellant and which termination was styled as illegal and the crucial industrial dispute was to reinstate them with full back wages and continuity of service.
There were seven other demands with which we are not concerned.
The appropriate Government while making the reference Annexure P 2, informed the Union that the demands 2 to 9 have been referred to Industrial Tribunal and in respect of demand No. 1, the Government, while declining to make the reference, stated its reasons as under: "There is no work for painting in the factory where these two workmen were working." Subsequently the appropriate Government by its order No. ID/FD 72/40688, dated 23rd November 1972, referred the following dispute to the Industrial Tribunal for adjudication: "Whether the retrenchment of Sarvashri Mohamad Yamin and Mohmad Yasin was justified and in order ? If not, to what relief they are entitled ?" 56 The submission is that the Union espoused the cause of the aforementioned two workmen respondents 3 and 4 complaining that the termination of their services is illegal and for reinstatement, and that demand made by the Union was not referred to the Industrial Tribunal by the Government and subsequent to the decision of the Government respondents 3 and 4 did not make any demand from the employer nor did they raise an industrial dispute with regard to termination of their services and, therefore, the Government could not have referred an entirely different demand in respect of respondents 3 and 4 and the reference is invalid.
A mere comparison of the demand raised by the Union and the demand subsequently referred to the Industrial Tribunal would clearly negative the contention.
The dispute arose from the termination of services of respondents 3 and 4 and one other workman.
Retrenchment comprehends termination of service.
Termination of service may be brought about by dismissal, discharge, removal from service or even retrenchment apart from resignation or voluntary retirement.
Retrenchment is defined in section 2(oo) of the Act to mean termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include termination in the manner stated therein.
The definition clearly indicates that retrenchment is a mode of termination of service.
The Union complained about the termination of service of respondents 3 and 4 and demanded reinstatement with full back wages and the Government referred the dispute, about termination of service brought about by way of retrenchment and for con sequential relief for adjudication to the Industrial Tribunal.
There fore, there is no substance in the contention that the original demand was someone other than the one which is now referred to the Industrial Tribunal.
The Union had espoused the cause of two specified workmen and one other and the reference is with regard to the termination of service by retrenchment in respect of the same two workmen.
The language or the format in which the demand is couched is hardly decisive of the matter The substance of the matter is as to what was the grievance of the workmen complained of by them or espoused by the Union and what the Industrial Tribunal is called upon to adjudicate.
Viewed from this angle the demand referred to the Industrial Tribunal for adjudication is the same which was espoused and raised by the Union.
Reference was made in this connection to the Sindhu Resettlement Corporation Ltd. vs The Industrial Tribunal of Gujarat & ors.
(I) The appellant employer in that case contended that the demand raised before the employer was about retrenchment compensation and not about reinstatement of the retrenched workmen and, therefore, the (1) ; 57 Government was not competent to make a reference as if the demand was one of reinstatement.
The demand which was referred to the Tribunal was whether Shri R. section Ambwaney should be reinstated in the service of Sindhu Resettlement Corporation Ltd. and he should be paid his wages from 21st February 1958 ? After examining the evidence this Court held that the retrenched workmen in their claim put forward before the management of the employer requested for payment of retrenchment compensation and did not raise any dispute for reinstatement.
In this background this Court held that the only reference which the Government could have made had to be related to the payment of retrenchment compensation which was the only subject matter of dispute between the appellant and the respondents and therefore, the reference to the extent of adjudication for reinstatement was held to be incompetent.
The decision turns purely on the facts of the case.
In the case before us the Union complained about illegal termination of service and demanded reinstatement with back wages.
The Government subsequently made a reference about the validity of the retrenchment and the relief to which the workmen would be entitled.
It is thus crystal clear that there was a demand about reinstatement, complaining about the illegality of termination of service and the same has been referred to the Tribunal.
Therefor, it is not possible to accept the contention that on this account the reference is incompetent.
In this view of the matter it is not necessary to examine the contention raised on behalf of the respondents that the decision in Sindhu Resettlement Corporation Ltd. (Supra) ignores or omits to take note of the expression "difference" used in the definition of industrial dispute in section 2(k) as also the power of the Government not only to refer a dispute which exists but one which is apprehended in the sense which is imminent or is likely to arise in near future and which in order to arrest in advance threatened or likely disturbance to industrial peace and harmony and a threat to production has to be referred to the Industrial Tribunal for adjudication.
The last contention is that the Tribunal was in error in holding that respondents 3 and 4 were retrenched from service and, their case would be governed by section 25F while in fact the services of respondents 3 and 4 were terminated on account of closure of the painting undertaking of the appellant company and, therefore, the case would be governed by section 25FFF and failure to pay compensation and notice charges simultaneously with termination of service being not a pre requisite, the termination would neither be illegal nor invalid.
Section 25F prescribes conditions precedent to retrenchment of workmen.
The conditions precedent are: (a) giving of one month 's 5 817 SCI/78 58 notice in writing to the workman sought to be retrenched indicating the reasons for retrenchment and the retrenchment can be brought about on the expiry of the notice period or on payment of wages in lieu of such notice for the period of notice; (b) payment of retrenchment compensation as per the formula prescribed therein.
No notice to the workman would be necessary if the retrenchment is under an agreement which specifies a date for the termination of service.
Section 25FFF prescribes liability of an employer to pay compensation to workmen in case of closing down of undertaking.
The relevant portion of section 25FFF reads as under: "25FFF.
(1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that under taking immediately before such closure shall, subject to the provisions of sub section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched: Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the work man under clause (b) of section 25F, shall not exceed his average pay for three months".
A comparison of the language employed in section 25F and section 25F (1) would bring about in bold relief the difference between the phraseology employed by the Legislature and its impact on the resultant rights of the workmen.
Under section 25F a workman employed in an industrial undertaking cannot be retrenched by the employer until the payment is made as provided in clauses (a) and (b).
Section 25FFF (1) provides that the workman shall be entitled to notice and compensation in accordance with the provisions of section 25F if the undertaking is closed for any reason, as if the workman has been retrenched.
Taking note of this difference in language, this Court in State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors.,(1) held that the failure to comply with the provision prescribing conditions precedent for valid retrenchment in c. 25F renders the order of retrenchment invalid and inoperative.
Expounding this position, a Constitution Bench of this Court in M/s. Hatisingh Mfg. Co. Ltd. & Anr.
vs Union of India & Ors.
,(2) held that the Legislature has not sought to place closure of an undertaking on the same footing as retrenchment under section 25F.
By section 25F a prohibition against retrench (1) ; at 871.
(2) ; 59 ment until the conditions prescribed by that section are fulfilled, is imposed; by section 25FFF ( 1 ) termination of employment on closure of the undertaking without payment of compensation and without either serving notice or paying wages in lieu of notice is not prohibited.
Payment of compensation and payment of wages for the period of notice are not, therefore, conditions precedent to closure.
Is this then a case of retrenchment or closure ? What constitutes retrenchment is no more res integra.
In State Bank of India vs N. Sundara Mortey,(1), one of us, Krishna Iyer, J. examined the definition of the expressioin "retrenchment" under section 2(oo) to ascertain the elements which constitute retrenchment.
It was observed as under: "A break down of section 2(oo) unmistakably expands the semantics of retrenchment. 'Termination. for any reason whatsoever ' are the key words.
Whatever the reason, every termination spells retrenchment.
So the sole question is has the employee 's service been terminated ? Verbal apparel apart, the substance is decisive.
A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term.
To protect the weak against the strong this policy of comprehensive definition has been effectuated.
Termination em braces not merely the act of termination by the employer, but the fact of termination howsoever produced.
May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of section 25F and section 2(oo).
Without speculating on possibilities, we may agree that 'retrenchment ' is no longer terra incognita hut area covered by an expansive definition.
It means 'to end, conclude, cease '." As against this, reference was made to Management of Hindustan Steel Ltd. vs The Workmen & Ors.,(2) wherein the management contended that it is a case of closure and the workmen contended that the termination was on account of retrenchment.
The entire decision turns on the facts of the case.
Hindustan Steel Ltd. had set up what was described as Ranchi Housing Project and this Project was completed in 1966.
After completion of the residuary work, the services of certain employees were terminated.
This termination was questioned alleging that it was a case of retrenchment and (1) ; at 165.
(2) ; 60 as the condition precedent was not complied with, the retrenchment was invalid.
The employer contended that it is a case of closure and payment of compensation was not a condition precedent and did not invalidate the termination of service.
This Court held that the word 'undertaking ' as used in section 25FFF appears to have been used in its ordinary sense connoting thereby any work, enterprise, project or business undertaking.
It is not intended to cover the entire industry or business of the employer.
Even closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by this sub section.
This question has to be decided on the facts of each case.
Examining the facts of the case, this Court came to the conclusion that it was a case of closure.
In the present case the appellant attempted to serve notice dated 13th July 1971 on respondents 3 and 4 and one Mr. Ramni.
Tn this notice it was stated that the management has decided to close the painting section with effect from Tuesday, 13th July 1971 due to unavoidable circumstances and the services of the workmen mentioned in the notice would no longer be required and hence they are retrenched.
The workmen were informed that they should collect their dues under section 25FFF from the office of the Company.
The tenor of the notice clearly indicates that workmen were rendered surplus and they were retrenched.
It is thus on the admission of appellant a case of retrenchment.
It was, however, urged that notice refers to section 25FFF and there fore employer intended it to be a notice of termination of service consequent upon closure of painting undertaking.
Now, even if a closure of an undertaking as contemplated by section 25FFF need not necessarily comprehend a closure of the entire undertaking and a closure of a distinct and separate unit of the Undertaking would also be covered by section 25FFF, the question is whether painting subsection was itself an undertaking ? The expression 'undertaking ' is not defined in the Act.
It also finds its place in the definition of the expression 'industry ' in section 2(j).
While ascertaining the amplitude of the expression 'undertaking ' in the definition of the expression 'industry ', noscitur a sociis cannon of construction was invoked and a restricted meaning was assigned to it in Bangalore Sewerage Board vs Rajappa.(1) While, thus reading down the expression, in the context of section 25FFF it must mean a separate and distinct business or commercial or trading or industrial activity.
It cannot comprehend an infinitismally small part of a manufacturing process.
(1) ; at 227.
61 The Tribunal found that the alleged retrenchment notice was not served upon workmen and that finding was not controverted by pointing out some evidence which may point to the contrary.
The notice expressly states that ' the workmen are retrenched though it simultaneously states that the action is taken under section 25FFF.
But if the Company had a container making section which was closed way back in 1964 and yet these three workmen who used to paint the containers were retained, it cannot be said that painting section was a recognised sub section eligible for being styled as a part of the undertaking.
If such mini classification is permitted it would enable the employed to flout section 25 with impunity.
These workmen appear not to have been employed initially as painters.
They were doing some other work from which they were brought to painting section.
They could have as well been absorbed in some other work from which they were capable of doing as observed by the Tribunal.
If painting was no more undertaken as one of the separate jobs, the workmen would become surplus and they could be retrenched after paying compensation as required by section 25.
To style a job of a particular worker doing a specific work in the process of manufacture as in itself an undertaking is to give meaning to the expression 'undertaking ' which it hardly connotes.
An employer may stop a certain work which was part of an undertaking but which could not be classified as an independent undertaking, the stoppage of work in this context would not amount to closure of the undertaking.
The three workmen were doing work of painting the containers.
No records were shown that there was a separate establishment, that it was a separate sub section of that it had some separate supervisory arrangement.
In fact, once the container making section was closed down, the three painters became part and parcel of the manufacturing process and if the painting work was not available for them they could have been assigned some other work and even if they had to be retrenched as surplus, the case would squarely fall in section 25F and not be covered by section 25FFF, on a specious plea of closure of an undertaking.
The Tribunal in our opinion was right in holding that this was a case of retrenchment and as conditions precedent were not complied with, the retrenchment was invalid and the relief of reinstatement with full back wages was amply deserved.
Accordingly this appeal fails and is dismissed with costs quantified at Rs. 2,000/ .
N.V.K. Appeal dismissed. | The appellant 's factory was divided into two sections; manufacturing section and packing material making section.
The packing material making section comprised two sub sections: manufacturing containers and painting containers.
The appellant decided to buy containers from the market and consequently closed down its packing material making section but continued the painting section.
After a lapse of years, the employer served a notice of retrenchment on the two workmen (respondents nos.
3 and 4) and another employee all of whom at that time were working in the painting section alleging that the undertaking is closed.
They were asked to collect their dues under section 25FFF of the .
The Trade Union of the employees submitted a number of demands one of which related to the reinstatement of the two retrenchment workmen with full back wages.
The Government referred all their demands to the Industrial Tribunal but declined to refer the demand relating to reinstatement of the two retrenched workmen.
A few months later, however, the Government referred this demand as well for adjudication.
The Tribunal held ( 1 ) that though in the first instance the Government l? refused to refer the dispute it was competent to make a reference at a later date and (2) that the retrenchment of the workmen was invalid because the appellant did not comply with the provision of section 25F. The appellant 's writ petition was dismissed in limine.
In appeal to this Court it was contended that (1) the Government having once declined to make a reference, had no power to make a reference in respect of the same dispute at a later date unless it had some fresh or additional material before it; and (2) since the painting undertaking was a separate and independent undertaking, the case was governed by section 25FFF and not by section 25F. Dismissing the appeal.
^ HELD: 1.
(i) The Government does not lack the power to make reference in respect of the same industrial dispute which it once declined to refer.
[53G] 46 (ii) The opinion which the appropriate Government is required to form before referring a dispute to the appropriate authority under section 10(1) is about the existence of a dispute or even if the dispute has not arisen it is apprehended as imminent and requires resolution in the interest of industrial peace and harmony.
The power under this section, which is discretionary, can be exercised when the Government is satisfied that an industrial dispute exists or is apprehended.
There must be some material before the Government forms an opinion in respect of the two relevant considerations.
Moreover, the power conferred being administrative in nature the action of the Government in making the reference is an administrative act.
The jurisdictional facts on which the appropriate Government may act are the formation of opinion that an industrial dispute exists or is apprehended, which is a subjective one.
That being so the adequacy or sufficiency of the material on which the opinion was formed is beyond the pale of judicial scrutiny.
If the Governments action is impugned by a party it would be open to such a party to show that what was referred was not an industrial dispute and that the tribunal had no jurisdiction to make the award.
If the dispute was an industrial dispute its factual existence and the expediency of making a reference being matters entirely for the Government to decide, it will not be competent for the court to hold the reference bad merely because there was, in its opinion, no material before the Government on which it could have come to an affirmative conclusion on those matters.
[51E 52B] State of Madras vs C. P. Sarathy, referred to.
(iii) The Government does not lack the power to make the reference in respect of the same industrial dispute which it once declined to refer.
The only requirement for taking action under section 10(l) is that there must be some material before the Government enabling it to form, an opinion that an industrial dispute exists or is apprehended.
How and in what manner or through what machinery the Government is apprised of the dispute is hardly relevant.
Merely because ' the Government rejects a request for a reference or declines to make a reference, it cannot be said that the dispute has ceased to exist.
An industrial dispute may nonetheless continue to remain in existence and if at a subsequent stage.
the appropriate Government is satisfied that it is desirable to make a reference the Government does not lack the power to do so nor is it precluded from making the reference on the only ground that on an earlier occasion it had declined to make the reference.
The expression "at any time" clearly negatives that contention.
[53G, 52G, E, H, 53A B] Western India Match Co. Ltd. vs Western India Match Co. Workers Union & Ors., ; followed.
(iv) Nor again is it necessary that there should be some fresh material before the Government for reconsideration of its earlier decision.
It may re consider its decision on some new facts brought to its notice or for any relevant consideration.
Such relevant consideration may include threat to industrial peace by the continued existence of the industrial dispute and that a reference would at least bring the parties to the talking table.
When the Government declined to make the reference the source of power is neither dried up nor exhausted.
It only indicates that the Government for the time being refused to exercise the power but that does not denude the power.
The power to make a reference remains intact.
Similarly refusal 47 to make the reference does not tantamount to saying that the dispute stands resolved.
On the contrary, refusal to make a reference would further accentuate the feelings and a threat to direct action may become imminent and the Government may as well consider the decision to make the reference.
[53H 54A, 54R D] In the instant case it has not been shown that the dispute had ceased to exists and the very existence of the dispute enables the Government to exercise the power under section 10(i).
[54F] Binny Ltd. vs Their Workmen & Anr.
[19721 3 SCR 518 referred to.
(2) There is no substance in the appellant 's contention that The original demand was some one other than the one which was referred to the Industrial Tribunal later.
The Union had espoused the cause.
Of two workmen and the reference was with regard to the termination of services by retrenchment in respect of the same two workmen.
The language or the format in which the demand is couched is hardly decisive of the matter.
The substance of the matter, is as to what is the grievance of the workmen, complained of by them, or espoused by the Union and what the Industrial Tribunal is called upon to adjudicate.
In this case the demand referred to the Tribunal was the same which was espoused by the Union earlier.
[56F G] Sindhu Resettlement Corporation Ltd. vs The Industrial Tribunal of Gujarat & Ors., [1968] 1 scr 515 held inapplicable.
(3) The tenor of the notice served on the workmen clearly indicated that workmen were rendered surplus and they were retrenched.
On the admission of the appellant it was a case of retrenchment.
[60E] State Bank of India vs N. Sundara Money, ; at 165; Management of Hindustan Steel Ltd. vs The Workmen & Ors., ; referred to.
(4) (i) The notice expressly stated that the workmen were retrenched though it simultaneously stated that the action was taken under section 25FFF However on the facts found by Industrial Tribunal, case of closure of undertaking is not made out.
[60D, F] (ii) The expression "undertaking" cannot comprehend an infinitismally small part of a manufacturing process.
While ascertaining the amplitude of the expression 'undertaking.
in the definition of the expression 'industry this Court gave a restricted meaning to it.
While thus reading down the expression, in the context of section 25FFF, it must mean a separate and distinct business or commercial or trading or industrial activity.
[60G H] Bangalore Sewerage Board .
Rajappa; , 227 referred to.
(iii) The case would squarely fall in section 25F and not be covered by section 25FFF, on a specious plea of closure of an undertaking.
As the company had a container making section which was closed a long time back and yet 48 these three workmen were retained, it cannot be said that the painting section was a recognised sub section eligible for being styled as a part of the undertaking.
If such mini classification is permitted it would enable the employer to flout section 25F with impunity.
These workmen appear not to have been employed initially as painters.
They were doing some other work from which they were brought to the painting section.
They could have as well been absorbed in some.
Other work which they were capable of doing.
If painting was no more undertaken as one of the separate jobs, the workmen would become surplus and they could be retrenched after paying compensation as required by section 25F.
To style a job of a particular worker doing a specific work in the process of manufacture as in itself an undertaking is to give meaning to the expression `undertaking which it hardly connotes.
[61F, B D] |
N: Criminal Appeals Nos.
86 93 of 1974.
From the Judgment and Order dated 25 7 73 of the Orissa High Court in Criminal Misc.
Case Nos.
131 138 of 1972.
D. Mukerjee and B. Parthasarthy for the Appellant.
D. V. Patel and Vinoo Bhagat for the Respondent in (all the appeals).
The Judgment of the Court was delivered by KAILASAM, J.
These appeals are by State of Orissa by certificate granted by the Orissa High Court against the judgment in Criminal Miscellaneous Cases Nos. 131 to 138 of 1973.
The eight respondents before this Court filed a batch of eight criminal miscellaneous petitions under Section 561 A/ and 562 of the Code of Criminal Procedure for a review of the orders passed by the High Court in Criminal Reference Nos. 13 and 15 to 21 of 1972 on 7 5 73, enhancing their sentence of fine of Rs. 2,000/ to one of rigorous imprisonment for six months.
The facts of the case are briefly as follows: On 1 2 1967, the Vigilance police filed nine criminal cases against certain firms and their partners or proprietors under Section 20(e) of the Forward Contracts (Regulation) Act, 1952 (Act 74 of 1952).
The cases were tried by the Additional District Magistrate (Judicial), Cuttack.
The District Magistrate found the firms and persons, in management of the business, guilty of the offences with which they were charged and inflicted a consolidated fine of Rs. 2,000/ with the direction that, they would suffer simple imprisonment for three months in default of payment of fine.
Against their conviction and sentence, the accused preferred an appeal to the Sessions Judge.
The Sessions Judge, while dismissing the appeals, found that the law required imposition of a minimum sentence of fine of Rs. 1,000/ for each offence and as the sentence passed by the trial court was not in accordance with the law, he referred the matter to the High Court for passing of appropriate sentence.
The accused preferred Revision Petitions against the order of the Sessions Judge.
The Reference made by the Sessions Judge as well as the revision Petitions by the High Court.
The High Court, while dismissing the Revision Petitions preferred by the accused, accepted the Reference by the Sessions Judge and enhanced the sentence so far as the firms are concerned, to a sum of Rs. 3,900/ at the rate of rupees one thousand and three hundred for each offence.
As regards the Managers or the managing partners, the High Court 1117 sentenced them to six months rigorous imprisonment, i.e., two months for each deal The firms paid up their fines but the persons, who were awarded substantive sentence of imprisonment, filed criminal miscellaneous petitions before the High Court for a review of its order.
The High Court accepted the petitions for review and recalled its previous judgment imposing substantive sentence of six months rigorous imprisonment on the petitioners but imposed a fine of Rs. 3,900/ at the rate of Rs. 1,300/ for each of the offence on each of the petitioners who are the respondents in this Court.
Against the decision of the High Court, the State of Orissa applied for a certificate for preferring an appeal to this Court which was granted.
Before the High Court it was urged that the petitioners were not given notice of enhancement in the Reference cases in respect of fines imposed.
It was submitted that the notice was based on the recommendation of the learned Sessions Judge to pass appropriate sentence, but there was no indication in the notice, that the sentence would be enhanced to a substantive term of imprisonment.
The order of Reference by the Sessions Judge provided that, the sentence imposed by the trial court was illegal and therefore while maintaining the convictions, he set aside the consolidated sentence of fine and referred the matter to the High Court for passing appropriate sentences.
The learned Judge who dealt with the References made by the Sessions Judge passed an order in the following terms : "Admit.
Issue notice fixing 20.3.72 for appearance.
The acceptance of the reference may have the effect of enhancement of the sentence.
Let clear notice be given to show cause against enhancement of sentence.
" In pursuance of the order, the High Court sent a notice, directing the respondents to appear and show cause as to why the sentences, inflicted on them, should not be enhanced.
The submission, that was made on behalf of the respondents, was that, neither the parties nor the lawyers ever took it, that the notices were comprehensive notices, which would include enhancement of sentence by way of converting the fine into imprisonment.
The High Court accepted the plea on behalf of the respondent that the Criminal References read with the revisions would establish that the petitioners merely were given notice to show cause why the sentence of fine should not be regularised by way of enhancement of fine and that the notices ruled out enhancement by way of imprisonment since in this setting the notices were specifically in respect of fine and therefore imposition of sentence of imprisonment.
1118 was without jurisdiction.
We do not find any basis for the conclusion arrived at by the High Court.
The notice, under Section 439 (2) of the Criminal Procedure Code requires that no order, under Section 439, shall be made to the prejudice of the accused unless he has had an opportunity of being heard either personally or by pleader in his own defence, and sub section (6) states that "notwithstanding anything contained in this section, any convicted person, to whom an opportunity has been given under sub section (2) of showing cause why his sentence should not be enhanced, shall, in showing cause, be entitled also to show cause against his conviction.
The order of the learned Judge by whom the reference was received and the notice issued by the High Court clearly show that, the respondents were asked to show cause why their sentence should not be enhanced.
The view, taken by the High Court, that notice was only to show cause why the sentence should not be regularised by enhancement of the fine and not to a term of imprisonment is not borne out by the record.
Mr. Mukherjee, learned counsel appearing for the State of Orissa submitted that, apart from the merits, the High Court had no jurisdiction to review its own judgment, and as such, the order of the High Court passed in review will have to be set aside as being without jurisdiction.
On behalf of the respondent, Mr. D. J. Patel, submitted that, so far as the High Court is concerned, it has ample jurisdiction under Section 561 (A) and other provisions of the Code to review its own judgment.
Mr. Patel further submitted that Section 369 of the Criminal Procedure Code is not applicable to judgments on appeal passed by the High Court, much less to judgments of the High Court passed in exercise of its criminal jurisdiction under Section 439.
To support this contention, the learned counsel submitted that Chapter XXVI refers only to judgments of the trial court and cannot be made applicable to appellate judgments.
We referred to Section 424 which provides that, the rules, contained in Chapter XXVI as to the judgement of criminal court of original jurisdiction, shall apply, so far as may be applicable to the judgment to any appellate court other than the High Court.
The plea is that if Section 369 could be understood as being applicable to appellate judgments of the High Court also, there is no need for providing separately for the applicability of Chapter XXVI to the judgments of appellate courts other than the High Courts.
Reliance was placed on Section 430 for the submission that the finality provided for judgments, orders passed by the appellate court would also indicate that, Section 369 is not intended to apply to judgments of the appellate courts and to the High Court in appeals and in revisions.
In order to appreciate the contention of the parties the relevant sections may be set out.
1119 Section 369 as enacted in 1898, provided that "No Court other than a High Court, when it has signed its judgment, shall alter or review the same, except as provided in Section 395 and 484 or to correct a clerical error.
Despite the express exclusion of the High Courts from the operation of this provision, it was held that the High Court had no implied power to alter or review their own judgments whether under Section 369 or under Section 439 or otherwise.
It was accordingly proposed in 1921 that the words "other than a High Court" should be omitted to make it clear that Section 369 conferred no such power on the High Courts, as it was noticed that one or two other sections of the Code besides 395 and 484 and clause 26 of the Letters Patent of the High Courts empowered the High Courts to revise their judgments.
Hence the Section was redrafted.
Section 369 of the Code of Criminal Procedure 1898 reads as follows : "Save as otherwise provided by this Code or by any other law for the time being in force or, in the case of a High Court, by the Letters Patent or other instrument constitute such High Court, no court, when it has signed its judgment shall alter or review the same, except to correct a clerical error".
Under the Code of Criminal Procedure (Act 2 of 1974) the new Section 362 provides "Save as otherwise provided by this Code or by any other law for the time being in force, no Court, when it has signed its judgment or final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error".
The words "or in the case of a High Court, by the Letters Patent or other instrument constituting such High Court" which were found in the corresponding Section 369 of the old Code have been omitted in the present section.
Hence an alteration or review by a High Court would be permissible as in the case of other Courts, where provision therefore is made in this Code or by any other law for the time being in force.
A reading of Section 369 discloses that the section prohibits all courts when it has signed its judgment to alter review the same except to correct a clerical error.
While, regarding other courts, the prohibitions subject to any provision in the Code of. . or any provision of any other law in force, in the case of the High Court it is provided that the prohibition will be subject to the Letters Patent or other instrument constituting such High Court.
Thus so far as the High Court is concerned, the prohibition against alteration and the 1120 review of the judgment will be subject to the Letters Patent or other instrument constituting such High Court.
The Letters Patent of the High Courts of Bombay, Calcutta and Madras provide that the High Courts will have original criminal jurisdiction as well as the appellate criminal jurisdiction as provided by clauses 22 to 24.
Clause 26 provides that such point or points of law reserved under clause 25 or on its being certified by the Advocate General that there is an error and that the points should be further considered, the High Court shall have full power to review the case.
No other provision is found in the Letters Patent enabling the High Court to review its own judgment.
No other instrument, relating to the power to review, in the constitution of the High Court, was brought to our notice.
Giving the plain meaning to Section 369, it is clear that no court, subject to exceptions made in the section, shall alter or review its judgment.
Two other sections were relied on by the defence as providing an exception to the rule laid down in Section 369.
They are Sections 424 and 430 of Code of Criminal Procedure.
Section 424 runs as follows: "424.
The rules contained in Chapter XXVI as to the judgment of a Criminal Court of original jurisdiction shall apply, so far as may be practicable, to the judgment of any appellate Court other than a High Court: Provided that unless the Appellate Court otherwise directs, the accused shall not be brought up, or required to attend, to hear judgment delivered".
The first part of Section 424 provides that the rules, contained in Chapter XXVI as to the judgment of a Criminal Court of original jurisdiction, shall apply, so far as may be practicable, to the judgment of any Appellate Court other than a High Court.
Chapter XXVI relates to the judgment.
Section 366 is the first section in the Chapter.
It prescribes the mode of delivering judgment, i.e. it shall be delivered in the open court and in the language of the court.
Sub Section (2) provides that the accused shall be required to attend, to hear judgment delivered.
Section 367 prescribes the language and contents of the judgment and provides that the judgment may be in the alternative.
When read with Section 424, it is seen that Sections 366, 367 and 368, which relate to the judgment of a criminal court of original jurisdiction, are made applicable, as far as may be to the judgment of the appellate court other than the High Court.
The effect of Section 424 Crl.
P.C. would be that the judgment of the appellate court should, as far as applicable, be in accordance with the requirements of Sections 366, 367 and 368 of the Code.
This rule is not made applicable 1121 to a High Court hearing an appeal.
The proviso to Section 424 is significant, in that, it states that unless the appellate court otherwise directs, the accused, shall not be brought up or required to attend to hear the judgment delivered.
This proviso makes an exception to the requirement, that is found in Section 366(2), which requires that the accused should attend when the judgment is delivered.
Section 367 prescribes the language of the judgment and requires the points for determination, the decision thereon, the reasons for the decision that it shall be dated and signed in open court.
While Section 369 prohibits altering or reviewing the judgment after a court has signed its judgment, section 424 requires that the judgment of the appellate court shall, as far as applicable, be in accordance with Sections 366, 367 and 368 of the Criminal Procedure Code, which deals with the trial court.
Sections 369 and 424 do not restrict the prohibition under Section 369 to the trial court alone.
The purpose of Section 424 is to prescribe mode of delivering of judgment, the language and the contents of the judgment while Section 369 is general in its application and prohibits all courts from altering or reviewing its judgment when once it has signed it.
The second section, that is relied on, is Section 430.
Section 430 provides, "When the judgment passed by an appellate court upon appeal shall be final except in the cases provided for in Section 417 and Chapter XXXII".
The section deals with the finality of orders on appeal.
An exception is made in the case of a judgment under Section 417 that is, in an appeal by a public prosecutor against an order of acquittal, whether made by the trial court or the appellate court.
So also, the provisions of Chapter XXXII is excepted in that the judgment of an appellate court will not be final when provision is made for reference and revision.
Neither Section 424 nor Section 430 deal with the prohibition imposed under Section 369 prohibiting the court from altering or reviewing its judgment when once it has signed it.
It was next submitted that in any event Section 561 A is wide enough to include a power of review by the High Court.
Section 561 A of Criminal Procedure Code runs as follows : "561A.
Nothing in this Code shall be deemed to limit or effect the inherent power of the High Court to make such orders, as may be necessary, to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice".
The inherent power of the High Court is restricted to making such orders, as may be necessary, to give effect to any order, under the Code or to prevent abuse of the process of any court or otherwise to 1122 secure the ends of justice.
The scope of the section has been explained.
In the two decisions of the Privy Council, which have been uniformly followed by this Court.
In Emperor vs Khwaja Nazir Ahmad the Privy Council, repelling the view that Section 561A of Criminal Procedure Code gave increased powers to the court which it did not possess before that section was enacted, observed, that "it was not so" and proceeded to state "The section gives no new powers, it only provides that those powers which the Court already inherently possess shall be preserved, and is inserted as.
Their Lordships think lest it should be considered, that the only powers possessed by the Court are those expressly conferred by the Criminal Procedure Code and that no inherent power had survived the passing of that Act.
Reiterating the same view the Privy Council in Lala Jairam Das and Others vs Emperor observed: that Section 561A of the Code confers no new powers.
It merely safeguards all existing inherent powers possessed by a High Court necessary (among other purposes) to secure the ends of justice.
This Court in State of Uttar Pradesh vs Mohammad Naim cited with approval the two decisions of the Privy Council referred to above.
Section 561A was added to the Code in 1923.
It purports to save the inherent powers of the High Court to make such orders as may be necessary to give effect to any order passed under the Code, to prevent abuse of the process of the Court and otherwise to secure the ends of justice.
The introduction of the section was because doubts were expressed about the existence of such inherent powers in the High Courts after the passing of the Criminal Procedure Code.
By the introduction of the section it was made clear that, the inherent powers of the High Court, for the purposes mentioned in the section, shall not be deemed to be limited or affected by the provisions of the Criminal Procedure Code.
Thus, inherent power cannot relate to any of the matters specifically dealt with by the Code.
It would follow that inherent powers cannot be invoked to exercise powers which would be inconsistent with any of the specific provisions of the Code.
The saving of inherent power is only for giving effect to orders passed under the Code, to prevent abuse of the process of any court or otherwise to secure the ends of justice.
Section 369 of the Criminal Procedure Code is understood as applying to judgments on appeal by the High Court, Section 561A cannot be invoked for enabling the Court to review its own order which 1123 is specifically prohibited by Section 369 by providing that, no court when it has signed its judgment, shall alter or review the same except to correct a clerical error.
Section 424 read along with Sections 366 and 367 would show that the requirements of the two sections in a judgment by a criminal court of original jurisdiction, shall also apply, as far as applicable to the judgment of the appellate court other than the High Court.
The proviso is significant.
It states that the appellate court, when delivering the judgment the accused shall not be brought up or required to attend unless otherwise directed to hear the judgment delivered.
The provisions of Section 366(2) require the court to secure the personal attendance of the accused at the time of delivery of the judgment, except where his personal attendance during the trial has been dispensed with.
The effect of Section 424 is generally that, the appellate court should comply with the requirements prescribed under Sections 366 and 367.
Section 430 deals with finality of orders on appeal, that is, the judgment passed by an appellate court shall be final unless otherwise provided for, but the finality of the appeal is subject to the provisions of section 417 of the Criminal Procedure Code which enable the State to prefer an appeal against an order of the trial court or by an appellate court.
Similarly a judgment by an appellate court is final subject to the Chapter which provides for reference and revision.
Section 424 deals with the general requirements of judgments and Section 430 with the finality of judgment on appeal unless otherwise provided for.
These two sections, it may be noted, do not deal with restriction against altering or reviewing the judgment except for correcting a clerical error.
A reading of Section 369 of Criminal Procedure Code would reveal that this Section is intended to apply to all courts, the provision being "no court when it has signed its judgment shall alter or review the same". 'no court ' would include 'all courts '.
The operation of the section is saved if it is provided by the Code or by any other law for the time being in force.
So far as the High Court is concerned, the Section provides that the prohibition will not apply if the Letters Patent or other instrument constituting such High Courts confers such a power.
We see no justification for restricting the application of the Section to judgments delivered by the High Court in criminal trials alone.
The reference to the High Court in the section would indicate that the High Court is also covered by the provisions of the section subject to the exception provided for.
The criminal jurisdiction as conferred by the Letters Patent on the High Court covers not only the original criminal jurisdiction but also appellate powers.
Though Section 369 appears in Chapter XXVI, we 1124 are not inclined to accept the contention put forward on behalf of the defence that it is applicable only to trial courts and in any event not to appellate judgments of the High Court.
Section 362 of the new Act has done away with the special provisions regarding the High Court and has made the section applicable to all courts.
On a careful reading of Sections 369 and 424 and 430, we are satisfied that Section 369 is general in its application.
The word 'no court ' would include all courts and apply in respect of all judgments.
Section 424 in confined, in its application, only to the mode of delivery of judgment, the language of the judgment, the contents of judgment etc.
and section 430 of Criminal Procedure Code to the finality of judgments on appeal, except as provided for.
Whether the judgment is by the trial court or the appellate court, Section 369 is universal in its application and when once a judgment is signed, it shall not be altered or reviewed except for correcting a clerical error.
Mr. Patel, the learned counsel for the respondents, submitted that this Court has laid down that Section 369 is applicable only to judgments of the trial court and therefore Section 369 cannot be construed as being applicable to appellate court, especially to High Court.
He relied on the decision in U.J.S. Chopra vs State of Bombay.
The question that arose for decision in the case was whether a revision preferred by the State of Bombay to the High Court praying for enhancement of sentence, passed on the accused, is maintainable after the appeal preferred by the accused to the High Court of Bombay, was summarily dismissed.
This court held that the summary dismissal of the appeal, preferred by the appellant, did not preclude him, from taking advantage of the provision of Section 439(6) of the Code of Criminal Procedure, and showing cause against his conviction when he was subsequently called upon to show cause why the sentence imposed on him should not be enhanced.
Two separate judgments were delivered by the three Judge Bench.
Justice Bhagwati along with Imam, J. spoke for the court while S.R. Das, J. delivered a separate judgment.
Justice Das, while repelling the contention that the power under Section 439(6) is conditioned or controlled by the provisions relating to finality of judgment embodied under Section 369 and 430 at page 108, observed: "There is indication in the Code itself that the purpose of Section 369 is not to prescribe a general rule of finality of all judgments of all criminal courts but is only to prescribe the finality of the judgment so far as the trial court is concerned.
That this Section does not, by itself, apply to the judgment of an appellate court is quite obvious, because if it did, there 1125 would have been no necessity for enacting Section 424 specifically making the rules contained in Chapter XXVI which includes Section 369 applicable to the judgment of any appellate Court other than High Court, nor for again prescribing by Section 430 a rule of finality for judgments and orders passed by an appellate Court".
The learned Judge concluded that the finality of section 369 attaches to the judgments pronounced by all trial courts including the High Court in the exercise of its original criminal jurisdiction, it certainly has no bearing on the question of finality of appellate judgments which is specifically provided by section 430 of the Code.
Bhagwati J. who spoke for the Court has not held that the provisions of section 369 are applicable only to judgments of the trial courts.
On the other hand, a reading of the judgment of Bhagwati J. would indicate that the learned Judge was inclined to hold that the finality provided for in section 369 of the Criminal Procedure Code is also applicable to the judgments rendered by the High Court in the exercise of its appellate or criminal jurisdiction.
At p. 144 of the Reports the learned Judge observed that once a judgment of the lower court is replaced by the judgment of the High Court, the High Court has no further powers to review or revise its own judgment and enhance the sentence which is thus passed by it upon the accused.
The principle as to the finality of judgments applied by the Court by virtue of the provisions of section 369 and section 430 of the Criminal Procedure Code should not have been confined merely to the question of con firming the conviction but also should have been extended to the con firming of the sentence insofar as the High Court did not see any reason to reduce the sentence already passed by the lower Court upon the accused.
Again dealing with the principle of finality the learned Judge observed that the principle of finality of judgments should therefore be extended not only to the question of the confirming of the conviction but also to the question as to the adequacy of the sentence, whether the sentence which is passed upon the accused by the lower Court should be reduced, confirmed or enhanced.
Once therefore the judgment of the High Court replaces that of the lower Court there is no question which can ever arise of the exercise by the High Court of its revisional powers under section 469 ( 1 ) of the Criminal Procedure Code.
Again at p. 162 the learned Judge reiterated the principle and observed "As we have observed that principle comes into operation when once a judgment of the High Court has replaced that of the lower Court and in those cases the High Court would not be competent to review or revise its own judgment." In referring to the import of section 369 on the powers of the High Court under section 439(6), Bhagwati J. held that section 369 in terms provides, 1126 "save as otherwise provided in this Code" and section 439(6) would be an otherwise provision which is saved by this non obstante clause appearing in section 369.
It is significant to note that both these amendments the one is section 369 and the other is section 439, were enacted by section 119 of Act XVIII of 1923 and the very purpose of these simultaneous amendment would appear to be to effectuate the right given to the accused to show cause against his conviction as enacted in section 439(6) of the Criminal Procedure Code".
As the majority judgment does not share the view expressed by Das J. quoted above reliance cannot be placed on the view of Das J.
The view expressed by Privy Council in Jai Ram Das 's(1) case that alteration by the High Court of its judgment is prohibited by section 369 of the Code was not brought to the notice of Das J. Later decision Of this Court particularly the decision in Superintendent and Remembrance of Legal Affairs, W.B. vs Mohan Singh and Others (2) held that when once the judgment has been pronounced by the High Court either in exercise of its appellate or its revisional jurisdiction, no review or revision can be entertained.
In the Full Bench decision of the Allahabad High Court in Raj Narain and other vs The State (2), Moothem J. observed: "It has commonly been assumed, even it would appear by the Privy Council in Jairam Das 's case, that this section applies also to the judgment of the appellate Court but it is clear that this is not so: U.J.S. Chopra vs State of Bombay ; In a latter decision in Nirbhay Singh vs State of Madhya Pradesh, (4) this Court, dealing with section 369, after referring to Chopra 's case observed that section 369 occurs in Chapter XXVI and prima facie applies to judgments of the court of first instance.
The Court did not proceed on the basis that it was settled law that section 369 is applicable only to judgments of trial courts.
Before concluding we will very briefly refer to cases of this Court cited by counsel on both sides.
1958 S.C.R.1226 relates to the power of the High Court to cancel bail.
The High Court took the view that under section 561A of the Code, it had inherent power to cancel the bail, and finding that on the material produced before the Court it would not be safe to permit the appellant to be at large cancelled the bail distinguishing the decision in 1945 Law Reports and 72 Indian Appeals (supra) and stated that the Privy Council was not called upon to consider the question about the inherent power of the High Court 1127 to cancel bail under section 561A.
In Sankata Singh vs State of U.P.,(1) this Court held that section 360 read with section 424 of the Code of Criminal Procedure specifically prohibits the altering or reviewing of its order by a court.
The accused applied before a succeeding Sessions Judge for re hearing of all appeal.
The learned Judge was of the view that the appellate court had no power to review or restore an appeal which has been disposed of.
The Supreme Court agreed with the view that the appellate court had no power to review or restore an appeal.
This court, expressing its opinion that the Sessions Court had no power to review or restore an appeal observed that a judgment.
which does not comply with the requirements of section 369 of the Code, may be liable to be set aside by a superior court but will not give the appellate court any power to.
set it aside himself and rehear the appeal observing that "section 369 read with section 424 of the Code makes it clear that the appellate court is not to alter or review the judgment once signed, except for the purpose of correcting a clerical error.
Reliance was placed on a decision of this Court in Superintendent and Remembrance of Legal Affairs W.B. vs Mohan Singh and others(2) by Mr. Patel, learned counsel for the respondent wherein it was held that rejection of a prior application for quashing is no bar for the High Court entertaining a subsequent application as quashing does not amount to review or revision.
This decision instead of supporting the respondent clearly lays down, following Chopra 's case (supra) that once a judgment has been pronounced by a High Court either in exercise of its appellate or its revisional jurisdiction, no review or revision can be entertained against that judgment as there are no provisions in the Criminal Procedure Code which would enable the High Court to review the same or to exercise revisional jurisdiction.
This Court entertained the application for quashing the proceedings on the ground that a subsequent application to quash would not amount to review or revise an order made by the Court.
The decision clearly lays down that a judgment of the High Court on appeal or revision cannot be reviewed or revised except in accordance with the provisions of the Criminal Procedure Code.
The provisions of section 561A of the Code cannot be revoked for exercise of a power which is specifically prohibited by the Code.
In the result we accept the contention put forward by Mr. Mukerjee for the State and hold that High Court has no power to revise its own order.
The appeal is allowed.
P.H.P. Appeal allowed. | The respondents were convicted under Section 20 of the Forward Contracts.
(Regulation) Act, 1952.
The District Magistrate found the firms and persons in management of business guilty of the offences with which they were charged and inflicted a consolidated fine of Rs. 2000/ with the direction that they would suffer simple imprisonment for three months in default of payment of fine.
Against their conviction and sentence the accused preferred an appeal to the Sessions Judge.
The Sessions Judge while dismissing the appeals found that the law required imposition of a minimum sentence of fine of Rs. 1000/ for each offence and as the sentence passed by the Trial Court was not in accordance with the law, he referred the matter to the High Court for passing an appropriate, sentence.
The accused also preferred revision petition against the order of the Sessions Judge.
Both the proceedings were heard together The High Court dismissed the revision petition preferred by the accused and accepted the reference by the Sessions Judge and enhanced the sentence so far as the firms are concerned, to a sum of Rs. 3,900/ .
As regards the Managers or the Managing partners the High Court sentenced them to six months rigorous imprisonment.
The Managers or Managing Partners filed miscellaneous petitions before the High Court for review of its order.
The High Court accepted the petition for review and recalled its previous judgment imposing sentence of six months rigorous imprisonment on the petitioners and instead imposed a fine of Rs. 3900/ .
The High Court came to the conclusion that no comprehensive notice was given to the accused to show cause why sentence of film should not have been enhanced to true sentence of substantive imprisonment and that the notice was only to show cause why the fine should not be increased.
The State of Orissa filed an appeal by certificate in this Court The appellants contended.
(1) The High Court had no jurisdiction to review its own judgment.
(2) The High Court erred in holding that proper notice was not issued.
(3) The notice issued to the accused was clear and wide enough to include the imposition of substantive sentence of imprisonment.
The respondent contended: 1.
The High Court has ample jurisdiction under section 561(A) and other provisions of the Criminal Procedure Code to review its own judgment.
Section 369 of the Criminal Procedure Code is not applicable to judgments on appeal passed by the High Court much less to the judgment of the High Court passed in exercise of its criminal jurisdiction, under section 439 1115 Allowing the appeal the Court, ^ HELD: (1) Section 369 as enacted in 1898 provided that no Court other than High Court, when it has signed its judgment shall alter or review the same except as provided in Section 395 and 484 or to correct a clerical error.
The section was redrafted in 1921 which gave power to the High Court to review its judgment only if it is provided by the code or by any other law for the time being in force.
Section 362 of the Criminal Procedure Code 1974 also provides: "that save as otherwise provided by the Code or by any other law no court, when it has signed its judgment or final order disposing of a case shall alter or review the same except to correct a clerical or arithmetical error." [1119 A E] (2) The Letters Patent of the High Court at Bombay, Calcutta and Madras provide that the High Court shall have full power to review a case if such points or points of law are reserved under clause 25 or on it being certified by the Advocate General that there is an error and the points should be further considered.
No other provisions relating to the power of review of the consideration of the High Court was brought to the notice of the Court.[1120 A C] (3) The provisions of Sec. 424 which make the procedure of the Court of original Jurisdiction applicable to the Appellate Court cannot confer the power of review.
[1127 C] (i) The inherent power of the High Court conferred by Sec.
561(A) are restricted to making orders to give effect to any order under the Code or to prevent abuse of the process of any court or otherwise to secure the ends of justice.
Section 561 (A) does not confer increased powers to the Court which it did not possess before that section was enacted.
It only provides that those powers which the Court inherently possessed shall be preserved.
[1121 ,H, 1122 A C] Emperor vs Khweja Nazir Ahmad, AIR 1945 Privy Council 18; Lala Jairam Das & Ors.
vs Emperor, 1945 Law Reports 72 I.A. 120 State of U.P. vs Mohammad Naim, ; at 370 relied on.
(2) Sec.
561(A) was added to the Code in 1923 because doubts were expressed about the existence of such inherent powers in the High Court after the passing of the criminal procedure code.
The inherent powers cannot relate to any of the matters specifically dealt with by the Code.
Inherent powers cannot be invoked to exercise powers which would be inconsistent with any of the specific provisions of the Code.
The inherent power is only for giving effect to orders passed under the code, to prevent abuse of process of any court or otherwise to secure the ends of justice.
[1122 D G] R. J. section Chopra vs State of Bombay, ; distinguished.
Raj Narain & Ors.
vs The State, AIR 1959 All. 315, U. J. section Chopra vs State of Bombay, ; ; Nirbhay Singh vs State of M.P., ; Sankatha Singh vs State of U.P.; , ; Superintendent and Remembrance of Legal Affairs W.B. vs Mohan Singh & Ors., referred to. 1116 |
ivil Appeal Nos.
372 382 of 1969.
Appeals by Special Leave from the Judgment and order dated 10 10 1968 of the Rajasthan High Court in C.S.A. Nos. 18 and 29, 27, 28.
30 35 of 1960 and 54 and 58 of 1961.
section N. Jain and section K. Jain for the Appellants.
B. P. Maheshwari and Suresh Sethi for the Respondent.
The Judgment af the Court was delivered by SHINGHAL, J., These appeals by special leave arise out of a common judgment of the Rajasthan High Court dated October 10, 1968, by which the suits which were filed by the present appellants were dismissed in pursuance of the earlier judgment of the same court dated November 9, 1964, on the ground that they were governed by section 179(2) of the Rajasthan Town Municipalities Act, 1951, hereinafter referred to as the Act, and were barred by limitation.
The facts giving rise to the appeals were different in details, but they were examined in the High Court with reference to the common questions of law which arose in all of them and formed the basis of that Court 's, decision against the plaintiffs.
We have heard these as companion appeals, and will decide them by a common judgment.
It is not necessary to give the detailed facts of all the cases as it will be enough to refer to the suit which was filed by M/s Surajmal Banshidhar and the developments connected with it, in order to appreciate the controversy.
The plaintiff firm referred to above carried on business in "pakka arat" and exported goods of various kinds from Ganganagar.
The Municipal Board of Ganganagar realist "export duty", by way of ter 171 minal tax, on the exported goods.
The plaintiff therefore raised a suit on October 19, 1957, challenging the Board 's right to "impose or to reales" any export duty during the period June 5, 1954 to March 10 1957, amounting to Rs. 10,729/ .
It however confined the suit to the recovery of Rs. 10,000/ alongwith interest and gave up the balance.
The Board denied the claim in the suit and pleaded, inter alia, that the levy of the terminal tax was in accordance with the law and the suit was barred by limitation.
The trial court rejected the defence and decreed the suit, and its decree was upheld by the District Judge on appeal.
Similar decrees were passed in the other suits, for various sums of money.
The Board took the matter to the High Court in second appeals.
The appeals were heard by a Single Judge who, while deciding that the suits were governed by section 179(2) of the Act, referred the question on the legality of the levy to a larger Bench.
A Full Bench of the High Court held that the levy of the terminal tax was illegal, and sent the cases back to the Single Judge who allowed the appeals only for those amounts which were found to be within limitation under section 179(2) of the Act and dismissed the other suits.
The plaintiffs obtained special leave and have come up to this Court in these circumstances.
The question which arises for consideration is whether the suits fall within the purview of section 179(2) of the Act.
The first two subsection of section 179 which bear on the controversy read as follows, "179.
Limitation of suits, etc.
(1) No suit shall be instituted against any municipal board, president, member, officer, servant or any person acting under the direction of such municipal board, chairman, member, officer or servant for anything done or purporting to be done under this Act, until the expiration of two months next after notice in writing, stating the cause of action, the name and place of abode of the intending plaintiff and the relief which he claims, has been, in the case of a municipal board, delivered or left at its office, and, in case of a chairman, member, officer, or servant, or person as aforesaid, delivered to him or left at his office or usual place of abode; and the plaint shall contain a statement that such notice has been so delivered or left.
(2) Every such suit shall, unless it is a suit for the recovery of immovable property or for a declaration of title thereto, be dismissed if it is not instituted within six months after the accrual of the alleged cause of action.
" The question therefore is whether the illegal levy of terminal tax (assuming that it was illegal as held by the High Court) could be said to 172 be a thing "done or purporting to be done" under the Act.
A similar question arose for the consideration of this Court ill Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar(l) with reference to the provision in section 127 (4) of the Bombay Provincial Municipal Corporation Act, 1949, and it was held that if the levy of a tax was prohibited by the Act concerned and was not in pursuance of it, it 'could not be said to be 'purported to be done in pursuance of execution or in tended execution of the Act '.
" It was observed that what was plainly prohibited by the Act could not be "claimed to be purported to be done in pursuance or intended execution of the Act.
" It was therefore held that the suit was outside the purview of the section 127(4) and was not barred by limitation.
We are in respectful agreement with that view, and we have no hesitation in holding, in the circumstances of the pre sent cases, which are governed by a provision similar to section 127(4) or the Poona City Municipal Corporation Act, that the suits did not fall within the purview of section 179 of the Act and were not barred by limitation.
It may be mentioned that it has not been argued before us, and is nobody 's case, that the suits would be barred by limitation even if they did not fall within the purview of section 179(2) of the Act.
The decision of the High Court to the contrary is not correct and will have to be set aside.
It has however been argued on behalf of the respondents that the High Court erred in taking the view that the levy of the terminal tax was illegal, and our attention has been invited to the relevant provisions of the law including the Bikaner State Municipal Act, 1923, article 277 of the Constitution and section 2 of the Act.
It is not in controversy before us that the Bikaner State Municipal Act, 1923, authorised the levy of terminal tax and such a tax was levied by the Ganganagar Municipal Board under the authority of that law upto January 26, 1950, when the Constitution came into force.
On and from that date, the power to levy export duty vested in the Parliament but article 277 saved that and some other taxes as follows, "277.
Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being law fully 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, not withstanding that 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. ' (1) ; 173 it was therefore permissible for the Municipal Board to continue to levy A the terminal tax until provision to the contrary was made by Parliament by law.
But it so happened that the Bikaner Municipal Act, 1923 was repealed and the Act was brought into force with effect from December 22, 1951.
Section 2(b) of the Act, which dealt with the repeal of the Bikaner Act and the saving of some of its provisions, expressly provided that on the coming into force of the Act, the laws and enactments specified in the First Schedule of the Act shall be repealed in so far as they relate to the Town Municipalities covered by the Act.
So as the Bikaner State Municipal Act, 1923, was included in the first Schedule, it was repealed by the aforesaid section 2.
That section however contained a proviso, clause (b) whereof was to the following effect, "(b) all town municipalities constituted under the said laws or enactments, and members appointed or elected, committees established, limits defined, appointments, rules, orders and bye laws made, notifications and notices issued, taxes imposed, contracts entered into, and suits and other proceedings instituted, under the said laws or enactments or under and laws or enactments thereby repealed shall, so far as may be and so far as they relate to town municipalities be deemed, unless the Government directs otherwise, to have been respectively constituted, appointed, elected, establish ed" defined, made, issued, imposed, entered into and instituted under this Act.
" The repeal did not therefore affect the validity of those taxes which had already been imposed and which could be "deemed" to have been imposed under the Act, unless there was a direction to the contrary by the State Government.
It is quite clear from the provisions af the Act, and is in fact not disputed before us, that the terminal tax in question could not be imposed under any of the provisions of the Act.
Its, levy could not therefore be saved by clause (b) of the proviso to section (2) of the Act.
On the other hand, it could be said with justification that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clause.
The further levy of the tax therefore became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue the levy if it so desired.
So as the levy of the tax after December 22, 1951, was illegal, there is nothing wrong with the view taken by the High Court that the amounts 174 paid by the plaintiffs by way of terminal tax were recoverable by the suits which have given rise to these appeals, and there is no force in the argument to the contrary.
The appeals are allowed with costs, the decrees of the High Court are set aside and those of the lower appellate court restored.
P.B.R. Appeals allowed. | The respondent Board realised terminal tax on goods experted by the appellants.
In suits filed by the appellants for refund of the amounts which they claimed were collected without authority of law, the respondent Board pleaded that the levy was in accordance with law and that the suits where barred by limitation.
The trial court decreed the suits and on appeal the District Judge affirmed the trial Court 's decrees.
In second appeal the High Court held that the levy was illegal.
The High Court, however, allowed the appeals in respect of those amounts which were found to be within limitation under section 179(2) of the Act and dismissed the others.
On the question whether the levy could be said to be a thing done or purported to be done under the Act.
Allowing the appeal, ^ HELD: The suits did not fall within the purview of section 179 of the Act and were not barred by limitation.
[172 D] 1.
(a) It is well established that if levy of a tax is prohibited by an Act and is not in pursuance of it, it could not be said to be purported to be done in pursuance of the execution or intended execution of the Act.
[172 B] Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar, ; followed.
(b) The terminal tax could not be imposed under any of The provisions of the Act.
The High Court was right in holding that the amounts ` paid by the appellants by way of terminal tax were recoverable by the suits.
[173 F G 174 Al 2.
The Bikaner State Municipal Act, 1923 (which was the predecessor of the present Act) authorised the levy of terminal tax and the Board accordingly levied the tax until January 26, 1950.
With the coming into force 12 SCI/78 170 of the Constitution, by virtue of article 277 it was permissible for the Board to continue to levy the terminal tax until provision to the contrary was made by Parliament by law.
But with effect from December 22, 1951 the Bikaner Act was repealed and the present Act was brought into force.
the repeal, however, did not affect the validity of those taxes which had already been imposed and which could be "deemed` ' to have been imposed under the Act.
But the provisions of the Act the clear that the terminal tax in question could not be imposed thereunder.
The levy could not, therefore, be saved by cl.
(b) of the proviso to section 2.
on the other hand it is clear that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clauses.
The further levy of the tax, therefore, became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue to levy if it so desired.
[173A, F G] |
Civil Appeal NOS.
64 65 of 1969.
(From the Judgment and Decree dated 1 12 61 of the Madhya Pradesh High Court in Misc.
First Appeal No. 43 of 1959).
section K. Gambhir for the appellant in CA 64 and Respondent in CA 65/69.
L. Sanghi, K. John and J. Sinha for the respondent in CA 64 and appellant in CA 65/69.
The Judgment of Jaswant Singh and R. section Pathak, JJ. was delivered by Jaswant Singh, J. A. P. Sen, J. gave a dissenting opinion.
JASWANT SINGH, J.
These two cross appeals by certificates of fitness granted by the High Court of Madhya Pradesh at Jabalpur are directed against the judgment and decree dated December l, 1961 of the said High Court dismissing the Misc.
(First) Appeal No. 42 of 1959 preferred by the appellant from the Award dated December 20, 1958 of the II Additional District Judge, Raigarh in Miscellaneous Judicial Case No. 59 of 1958 being a reference under section 18 of the Land Acquisition Act, made at the instance of the appellant in 13 817SCI/78 186 respect of the Award dated August 23, 1957 of the Land Acquisition officer, Raigarh.
The facts giving rise to these appeals are: on an undertaking given by him to pay full compensation with interest from the date of possession to the date of payment of compensation as provided in the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act ') the District Engineer, South Eastern Railway, Raigarh, took advance possession on January 17, 1957 of five plots of agricultural land admeasuring 3.38 acres and another plot of agricultural land admeasuring 0.14 acres adjoining the railway track situate in village Darogamuda, Tehsil and District Raigarh, a suburb of Raigarh belonging to respondents I and 2 respectively for doubling the railway line between Rourkela and Durg in the South Eastern Railway.
Subsequently Notification dated February 8, 1957 under section 4(1) of the Act for acquisition of the aforesaid plots of land was issued and published in the Government Gazette dated February 15, 1957.
This was followed on March 21, 1957 by a notification under section 6 of the, Act.
Although in the r statements filed by them under section 9(2) of the Act the respondents claimed compensation at the rate of Rs. 32,670/ per acre i.e. at the rate of /12/ per square foot on the ground that the plots of land in question had a great potential value as a building site and Rs. 500/ for improvements and Rs. 100/ as the value of one tree, the Special Land Acuisition officer, Raigarh by his award dated August 23, 1957 awarded compensation at the rate of Rs. 3,327/14/ per acre which roughly worked out at /1/6 per square foot on the basis of the statement of sales furnished by A.S.L.R. (L.A.) prepared by Jujhar Singh N.A.W.I. Not satisfied with the quantum of compensation, the respondents made an application to the Special Land Acquisition officer requesting him to refer the matter to the court under section 18 of the ;1 Act.
According to the request of the respondents, the Special Land .
Acquisition officer made the aforesaid references to the II Additional District Judge, Raigarh, who by his award dated December 20, 1958 enhanced the rate of compensation to /4/ per square foot and awarded Rs. 36,808/4/ and Rs. 1,524/8/ to respondents l and 2 respectively as compensation.
The Additional District Judge also allowed the solatium at the rate of 15% amounting to Rs. 5.521/4/ and Rs. 228/12/ to respondents 1 and 2 respectively.
Aggrieved by the said , Award of the II Additional District Judge, the appellant preferred an appeal to the High Court of Madhya Pradesh at Jabalpur which was registered as Miscellaneous (First) Appeal No. 43 of 1959.
In the said appeal, the respondents filed cross objections claiming enhancement of compensation by Rs. 84,518.39 P.
The High Court by its 187 judgment dated December 1, 1961 dismissed the aforesaid appeal preferred by the appellant but allowed the cross objections filed by the respondents holding the reasonable rate of compensation to be /8/per square foot.
Consequently respondent No. 1 was held entitled to Rs. 73,616 8 O as compensation and Rs. 11,042 8 0 as solatium and respondent No. 2 was held entitled to Rs. 3,049 0 0 as compensation and Rs. 457 8 O as solatium.
It is against this judgment of the High Court that the present appeals are directed.
Appearing for the appellant, Mr. Gambhir while admitting that in an appeal under Article 136 of the Constitution, the Court is only concerned with finding out whether the principles on the basis of which compensation has been computed for acquisition of land under the Act have been rightly applied or not and cannot re appraise the evidence, has urged that the Additional District Judge and the High Court have erred in treating the land in question which was primarily an agricultural land as abadi land overlooking that it had not been declared as such.
Mr. Sanghi has on the other hand urged that even according to the findings of the Additional District Judge, who made the spot inspection, as also of the High Court, it is abundantly clear that the land in question was Abadi land and has been rightly treated as such.
Mr. Sanghi has further urged that the said site has great potentialities as building site.
The question as to whether a land has potential value of a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing, or a prospering town with prospects of development schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof.
the instant case, the fact that the land in question has a great potential value as a building site is evident not only from the observations made by the Special Land Acquisition officer himself in his aforesaid award to the effect that the land has assumed semi abadi site hut also from the following observations made in his judgment dated December 20, 1958 by the Additional District Judge who had the advantage of inspecting the site: "The land abuts Raigarh town.
It is within Municipal limits and the nazul perimeter extends upto it.
To the east of 188 the plot there are some kutcha buildings inhabited by respectable persons.
To the North is a Municipal road leading to the railway quarters to the west.
To the west beyond the railway quarters, there is further habitation` and the locality is called "Banglapara" within Municipal limits.
The plot did have a potential value as a building site and it is further supported by the fact that the plot has been used by the Railway authorities for construction of staff quarters thereon though the land was acquired for doubling the rail way line.
" It is also not disputed that the Special Land Acquisition officer did not lead any evidence worth the name to show the price of the comparable sites in question and remained content with the production only of the sale statement made by Jujhar Singh, N.A.W.I.
Now the sale statement consisted mostly of sales relating to the year 1951 which is not relevant for the question in hand.
Moreover, the sale statement by it self without examining either the vendors or the vendees or the persons attesting the sale deeds is not admissible in evidence and can not be relied upon.
The sale deed dated December 14, 1956 in favour of Dr. Das for 4,800 square feet of land out of contigious Khasra No. 256 in lieu of Rs. 2,000/ i.e., at approximately 6 1/2 annas per square foot (which has been relied upon by the Additional District Judge and the High Court) could be taken as a safe guide for determine nation of the compensation.
From the material adduced in the case, it appears that Raigarh is a growing town, that instead of utilising the land for doubling the railway track, the railway has built staff quarters thereon, that on three sides of the acquired land, there already existed pucca buildings and on the fourth side, there is a metalled road.
It is also in evidence that some lawyers have put up some constructions near the sites in question.
Taking all the facts into consideration.
it cannot be said that the basis on which the Additional District Judge and the High Court proceeded is wrong or that the quantum of compensation awarded by the High Court is in any way excessive or exorbitant.
As neither the interest nor compensation on account of severance was claimed in the High Court either by Dr. Harisingh Thakur or by Tikam Singh Thakur, we do not think they can justifiably put up claims in that behalf.
Mr. Sanghi appearing on their behalf has fairly stated that he would not like to press his cross appeal.
In the result, we do not find any merit in either of the aforesaid appeals.
W. would accordingly dismiss them with costs.
SEN J. I have had the advantage of reading the judgment by my learned brother Jaswant Singh.
Since the appeal involves an important 189 question affecting valuation which has been overlooked by the High Court, I would like to say a few words of my own.
Normally, this Court does not interfere in appeal with the valuation by the High Court in land acquisition cases, unless the judgment cannot be supported, as it stands, either by reason of a wrong application of principles or because some important point in evidence has been overlooked or mis applied: The Special Land Acquisition officer, Bangalore vs Adinarayan Setty(1).
With respect, I venture to say that the judgment of the High Court cannot be supported by reason of a wrong application of principles.
It overlooked the fact that there was no discernible basis on which the Additional District Judge could have changed the mode of valuation adopted by the Special Land Acquisition officer treating the land acquired to be agricultural land and in awarding compensation upon the basis as if it were a building site.
Indeed, there was no atempt on their part to determine the ' 'intrinsic character of the land", namely, whether the land acquired should be classified as agricultural land or not.
In the present case, the High Court obviously fell into an error in overlooking the, fact that the acquired land situate in village Darogamuda, admeasuring 3.52 acres, was, on the 8th February, 1957 i.e. On the date of the issue of the notification under section 4(1) of the Act, agricultural land.
It was recorded as a raiyati land belonging to the two claimants, Dr. Harisingh Thakur and his brother Vikram Singh Thakur who were ex gaontiyas of village Darogamuda.
The land was not recorded as abadi as wrongly assumed by the High Court.
Perhaps it was misled by the mis description of the land as abadi in the reference made by the Collector under section 18(1).
This is an admitted position between the parties.
In response to the notice of admissions and denials of documents served by the claimants, the Collector admitted panchsala khasra for the years 1952 53 to 1953 54 and kistbandi khatouni for the years 1952 53 and 1953 54.
The claimant Dr. Harisingh Thakur, AW1 admits during his crossexamination that till the month of December 1956, the lands were actually under his cultivation and he had reaped the crops before delivering possession of the same on the 17th January, 1957 to the District Engineer, South Eastern Railway.
He further admits that throughout the land was under cultivation i.e. from the time, of his forefathers.
In fact, Jujhar Singh NAW1, Assistant Superintendent Land Records, who was at the relevant time a Revenue Inspector, states that the,. land (1) [1959] Supp.
(1) S.C.R. 404.
190 acquired was a paddy field and was surrounded by agricultural lands.
That being so, the District Judge, was clearly wrong in treating the land to be abadi and calculating compensation on the footing of its being a building site.
In awarding compensation at a flat rate of Rs. 3,327.87 P. per acre, the Special Land Acquisition officer took notice of the fact that the land is situate in village Darogamuda, a suburb of Raigarh, which is a town of great commercial importance, though beyond its nazul perimeter.
He also took notice of the fact that the land abuts the railway track and there were agricultural fields on two sides.
On the other two sides, there existed kutcha hutments of backward classes and a few railway buildings.
The award of compensation at the rate of Rs. 3,327.87 P. per acre was based on average of sales of lands in recent years as prepared by Jujhar Singh, Revenue Inspector NAW 1.
The Special Land Acquisition officer accordingly observed: "The average value based on the above noted sales comes to Rs. 3,327/14/ per acre and in my opinion it truly re presents the average market value of lands in this predominantly agricultural locality which has assumed semi abadi site value due to the constructions of houses mostly by low class people besides a few buildings of Railway Department.
It is for this reason that the average value per acre comes to as much as Rs. 3,327/14/ per acre else the lands in question would have fetched lower price, available in respect of agricultural lands to which class they really belong and stand assessed as such till today.
" While it is no doubt true, as my learned brother Jaswant Singh has rightly observed, that the statement of average of sales, prepared by Jujhar Singh NAW 1, was not admissible in evidence unless the Collector proved the transactions in question, upon which it was based, there is no denying the fact that the acquired land was nothing but agricultural land and the mode of valuation had necessarily to be upon that basis.
Now, if the purpose for which the land was acquired, i.e., for the construction of staff quarters in connection with the doubling of the railway line by the South Eastern Railway, has no bearing on the question of valuation, the future possibilities of the land, which admittedly was agricultural land, lying in the vicinity of Raigarh if applied to the most lucrative use, having regard to its the then condition, was very little as a building site.
The land was lying undeveloped and undiverted.
Unless there was a development scheme, the land could not 191 be valued as a building site.
The land could, however, be put to that use if there was such development scheme.
At the time of the notification under section 4(1), there was no recent building activity near about the land, which was either under cultivation or lying desolate.
But as l have already said, the land could be put to a better use provided it was fully developed as a building site.
The claimants were, therefore, entitled to the evaluation of the land as agricultural land with an additional allowance being made for its future potentiality as a building site.
I just cannot imagine what could be the utility of the acquired land on a building site, looking to its proximity to the railway track.
It would, indeed, be very little.
In a reference under 9. 18 of the Act, the burden of proving that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis.
The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him.
When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him, or when the basis was the application of a 'multiple ' which could not be justified on any rational ground, the burden can be discharged by a slight evidence.
But that is not the case here.
The claimants have led no trustworthy evidence.
It is equally well settled that where the claimant leads no evidence to show that the conclusions reached in the award were inadequate, or, that it offered unsatisfactory compensation, the award has to be confirmed.
Upon a compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition, at the time of expropriation, with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired.
In Vyricharla Narayana Gajapatjiraju vs Revenue Divisional Officer Vizagapatnam(1) the Privy Council state: "For the land is not to be valued merely by reference to the use to which it is being put at the time at which the value has to be determined. but also by reference to the uses to which it is reasonably capable of being put in the future.
It is possibilities of the land and not its realized possibilities that must be taken into consideration.
" The value of the acquired property, with all its possibilities has to be ll adjudged on the material on record.
(1) 66.
I.A. 104.
192 The market price must be fixed with reference to the date of the.
notification under section 4 irrespective of any trend, if any, for an increase in the value thereof.
The basis for determination of the market value of tel land within section 23 (1) (i) of the Act is the value of the land to the owner.
Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the property as at the date of the notification.
That test is clearly not fulfilled in the present case.
Clause fifthly in section 24 interdicts the court from considering any prospective increase in value due to acquisition.
Market value of the land acquired has to be fixed with reference to the date of notification under section 4 (1) .
In Vyricharla Narayana Gajapatiraju vs Revenue Divisional Officer, Vizagapatam (supra) the Privy Council observed that where the owner is a person who could turn the potentiality of the land into account, it is immaterial that the utilization of the same potentiality is also the purpose for which the land is acquired.
The Underlying principle is that a speculative rise in price of land due to acquisition should not be an element which should enter into computation.
Sometimes the prices shown in sale deeds executed subsequent in point of time are not the actual prices paid.
The sales may be.
unreal and may not reflect the true value of the land.
There always elapses a certain interval between the time when the intention to acquire Ea certain land first becomes known and the actual notification under section 4(1) is issued.
Here though the notification under section 4(1) was issued on 8th February, 1957, but the claimants had, in fact, delivered the possession to the District Engineer, South Eastern Railway on the 17th January, 1957, and were indeed, as it appears from the evidence, aware of the fact that the land was being acquired by the South Eastern Railway much earlier, i.e., in December, 1956.
In view of this, the prospective rise in value, if any, has to be kept out of consideration.
the principles to determine the quantum of compensation are contained in section 23(1) of the Act.
The court in fixing the amount has to take into consideration the prevailing market value of the land at The date of the notification under section 4(1) and the said market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from a willing purchaser.
The underlying principle of fixing the market value with reference to comparable sales is to reduce the element of speculation.
In a comparable sale, the features are: (i) it must be within a reasonable time of the date of notification under section 4.(1); (ii) it should be a bona fide transaction; (iii) it should be a sale of the land acquired or of the land adjacent to the acquired; and (iv) it should possess 193 similar advantages.
Before such instances of sales can be considered there must be material evidence either by the production of the sale deeds or by examining the parties to the deeds or persons having knowledge of the sales, to prove that the transactions are genuine.
In the light of these principles, the three sale deeds relied upon by the High Court, Ext.
P 14, Ext.
P 15 and Ext.
P 17, pertaining to the small portions of the acquired land executed by the claimants, could not obviously be the basis for the determination of the market value of the land.
These sale deeds had clearly been brought into existence by the claimants in quick succession, in an attempt to inflate the price of the land, after they became aware of the proposed acquisition.
Of these, the land covered by the sale deed Ext.
P 14, dated 14th December, 1956 executed by Tikam Singh Thakur, i.e., just a month before the delivery of the possession, shows a sale of a plot measuring 4,800 sq.ft.
to Dr. Dhirendra Chandra Das, AW 2, for a price of Rs. 2,000/ .
The rate works out to about 42P per sq.
It evidently could not afford a fair criterion of the value of the property on the date of the notification under section 4(1).
Dr. Das admits that he is in Railway service and when he purchased the land he knew that it was being acquired by the South Eastern Railway.
No doubt Dr. Das is a willing friend of Dr. Harisingh Thakur prepared to lend a helping hand but, by no stretch of imagination, could he be treated to be a willing purchaser.
in the true sense of the term.
Though Dr. Das asserts that he had purchased the land for building a house, he admits that he did not construct upon it because he would have been required to invest considerable money for levelling the land making it fit to be utilised as a building site.
This transaction indubitably does not appear to be a real sale and could not furnish any guide for determination of the true market value.
I am afraid, the other two sale deeds, Ext.
P 15 dated 19th December, 1956 and Ext.
P 17 dated 21st February, 1957 executed by Dr. Harisingh Thakur, by which he sold 300 sq.
Of the acquired land to Jhallu Dani, AW 13 for Rs. 150/ and 280 sq.
ft to Baido, AW 15, for Rs. 200/ were, in fact, fictitious sales effected by him after delivery of possession to the South Eastern Railway.
The transactions speak for themselves.
Indeed, Ext.
P 17 was executed by him after issue of the notification under s.4(1).
The first sale was effected by the claimants to show the price of the land to be 50P per sq.
They were evidently not satisfied by this and, therefore, brought the other sale deed into existence, a few days after the notification, showing the rate to be about 72P per sq.
It is needless to stress that such fictitious and unreal transactions which are but 194 speculative in nature could not be taken into account by the High Court at all.
In Raghubans Narain Singh vs The Uttar Pradesh Government (1) this Court quoted with approval the following passage from one of its earlier decision in N. B. Jeajabhoy vs The District Collector, Thana,(2) where it was said: "the question therefore turns upon the facts of each case.
In the context of building potentiality many questions will have to be asked and answered: whether there is pres sure on the land for building activity, whether the acquired land is suitable for building purpose, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has ex tended and within what time, whether buildings have been put up on the lands purchased for building purposes, what is the distance between the built in land and the land acquired and similar other questions will have to be answered.
It is the overall picture drawn on the said relevant circumstances that affords the solution.
" In Raghubans Narain Singh 's case (supra) there was evidence to the effect that there was a school building near the acquired land, that the land abutted on the road and that some houses had been built on the opposite side of the road.
It was nevertheless held by this Court that all this did not constitute evidence of building potentiality.
It was pointed out that there should be evidence, on the record, 'of building activity of a substantial nature, being carried on in the neighbourhood of the acquired land, at about the time when the notification was issued '.
There is complete absence of such evidence in this case.
It is beyond doubt that the acquired land was agricultural land, and had not been diverted for non agricultural purposes.
Indeed, the claimant, Dr. Harisingh Thakur had himself admitted the land to be agricultural land.
The land is on the outskirts of Raigarh town but that itself does not show that the land had a potential value for building purposes.
It was for the claimants to show that at the relevant time there was a tendency of the town to develop in that direction and that prior to the acquisition new buildings had been constructed in the neighbourhood.
Topography of the acquired land which abuts the railway track is given by Jujhar Singh, NAW 1, the then Revenue Inspector, who states that actually paddy used to be grown on the land.
To the north of this land, there was cultivation.
Beyond it, there was a 10 ft.
(1) [1967] I S.C.R. 489.
(2) C.A. Nos. 313 to 315 of 1965 decided on August 30, 1965.
195 broad pucca road.
About three furlongs way from the land was the house of Ambalal.
About one and a quarter miles away there was a skin godown.
In the east, there were small huts.
Beyond them, in the east, at a distance of about half a furlong, there was the house of Jairamvalji.
In the west, about a furlong away, there was an old bungalow.
At about the same distance, there is the burial ground.
In between and all around, there were agricultural fields.
That is the total evidence of the case.
On this evidence it cannot be said that valuation should be made on the basis of the potentiality of the land as building site.
In the absence of comparable sales, the only other alternative to adopt is the capitalised value.
Compensation in respect of the agricultural land should be allowed on the basis of 20 years ' purchase.
The capitalisation basis cannot, however, be accepted in a case where, as in the instant case there is no evidence of the profits yielded from the land.
I would, therefore, for these reasons allow the appeal of the State of Madhya Pradesh.
It is with reluctance that I have written this separate opinion.
There has never been a public undertaking in this country Governmental, Municipal, city or industrial, but that the land holder has generally secured anything from four to forty times as much for the land as its agricultural price, i.e., many times its real value.
This result unfortunately springs from a general tendency of District Judges in hearing a reference under s.18 of the Land Acquisition Act, 1894, to assume that purely agricultural lands, merely by their proximity to a city or town, become endowed with 'special adaptability ' as a building site.
While it is not suggested that unfairly low value should be offered, on the other hand the temptation to over generosity must be equally resisted.
Such generosity at the public expense reacts against the development and against the prosperity of the country and imposes an unnecessary burden on the taxpayer.
Per Curiam In accordance with the opinion of the majority, the appeals are dismissed with casts.
N.V.K. Appeals dismissed. | Agricultural land belonging to the respondents was acquired by the railways for doubling the railway line, compensation payable for the acquired land was fixed at Re. 1/6 per sq.
But the respondent claimed Re. /12/ per sq.
On the ground that the land had a great potential value as a building site.
On reference the Additional District Judge enhanced the rate of compensation to Re. /41 per sq.
and allowed solatium at 15%.
On appeal the High Court enhanced the compensation to Re.
/8/ per sq.
on further appeal to this Court it was contended on behalf of the appellants that the courts below had erred in treating the land, which was primarily agricultural land, as abadi land overlooking that it had not been declared as such.
[Per Jaswant Singh & Pathak, J. Sen, J. dissenting] Dismissing the appeals.
^ HELD: (1) Taking all the facts into consideration it cannot be said that the basis on which the Additional District Judge and the High Court proceeded was wrong or that the quantum of compensation awarded by the High Court was in any way excessive or exorbitant.
[188 F] (2) The question as to whether a land has potential value as a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing or a prospering town with prospects of development schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof.
[ 87F F] (3) In the instant case it was clear from the observations of the Special Land Acquisition officer and the Addl.
District Judge that the land had great potential value as a building site.
Moreover the Spl.
Land Acquisition officer did not lead any evidence worth the name to show the price of comparable sites but remained content with the production only of the sale statement prepared by the Revenue Inspector.
The sale statement consisted mostly of sales relating to the year 1951 which is not relevant to the question on hand.
Without examining the vendors or vendees, the sale statement was not admissible in evidence and could not be relied upon.
From the material on record it was clear that Raigarh was a growing town.
Instead of utilising the land for doubling the railway track 184 the railway had built staff quarters.
On three sides of the land there were pucca buildings and on the fourth side there was a metalled road.
[187G H 188C D. [Per Sen, J.(dissenting)] 1.
Upon compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition at the time of expropriation with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired.
The value of the acquired property with all its possibilities had to be adjudged on the material on record.
[191 F, H] Vyricharla Narayana Gajapatiraju vs Revenue Divisional officer, Vizagapatnam, 66 IA 104, followed.
The market price must be fixed with reference to the date of the notification under section 4 irrespective of any trend, for an increase to the value thereof.
The basis for determination of the market value of the land within section 23(1)(i) of the Act is the value of the land to the owner.
Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the ,, property as at the date of the notification.
That test is clearly not fulfilled in l? the present case[192A B] 3.
In a reference under section 18 of the Act the burden of providing that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis.
The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him.
When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him or when the basis was the application of a "multiple" which could not be justified on any rational ground, the burden can be discharged by a slight evidence.
But that is not the case here.
[191C D] 4.
In the present case the High Court fell into an error in overlooking the fact that the acquired land was agricultural land.
It was recorded as a raiyati land.
The land was not recorded as abadi as wrongly assumed by the High Court.
The claimants admitted that the land was actually under cultivation.
The Revenue Inspector stated that the land was a paddy field and was surrounded by agricultural lands.
That being so the District Judge was clearly wrong in treating the land to be abadi and calculating compensation on the footing of its being a building site.
[189E 190A] 5.
Secondly, the land was lying undeveloped and undiverted.
Unless there was a development scheme the land could not be valued as a building site.
At the time of the notification under section 4(1) there was no recent building activity near about the land.
The land could be put to better use provided it was fully developed as a building site.
The claimants were therefore entitled to the valuation of the land as agricultural land with an additional allowance for its future potentiality as a building site.
[190H 191B] 6.
In fixing the amount of compensation the court has to take into consideration the prevailing market value of the land at the date of the notification unders.
4(1) and such market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from 1 a willing purchaser.
In a comparable sale the features are: (1) it must be 185 within a reasonable time of the date of notification under section 4(1), (2) it should be a bona fide transaction; (3) it should be a sale of the land acquired or of the land adjacent to the land acquired and (4) it should possess similar advantages.
[92G 193A] 7.
In the instant case the sale deeds relied upon by the High Court could not obviously be the basis for the determination of the market value of the land.
These sale deeds had clearly been brought into existence by the claimants in quick succession in an attempt to inflate.
the price of the land after they became aware of the proposed acquisition.
The transactions which were examined by the High Court were apparently fictitious and unreal and are speculative in nature and could not be taken into account at all.
[193B C, 193H 194A] 8.
On the evidence produced it could not be said that valuation should be made on the basis of potentiality of the land as building site.
There is complete absence of evidence of building activity of a substantial nature being carried on in the neighbourhood of the acquired land at about the time when the notification was issued.
The claimants themselves did admit that the land was agricultural land.
[195B, 194F C] Raghubans Narain Singh vs The U.P. Govt.
, ; N. B. Jeejabhoy vs The District Collector, Thana, C.A. Nos. 313 to 315 of 1965 decided on Aug 1965: referred to.
In the absence of comparable sales, the only other alternative to adopt is the capitalised value.
Compensation in respect of the agricultural land should be allowed on the basis of 20 years ' purchases.
The capitalisation basis cannot, however, be accepted in a case where there is no evidence of the profits yielded from the land.
[195C] |
ON: Criminal Appeal No. 193 of 1974.
Appeal by Special Leave from the Judgment and order dated 1 3 1974 of The Delhi High Court in Criminal Appeal No. 119/72.
Frank Anthony, N. section Das Bahl and Shushil Kumar for the appellant.
E. C. Agarwala and R. M. Sachthey for the Respondent.
ii The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The appellant before us was convicted by the learned Special Judge, Delhi of an offence under Section 5(1) (d) read with Section 5(2) of the Prevention of Corruption Act and Section 161 Indian Penal Code, and sentenced to suffer rigorous imprisonment for a period of one year on each count.
He was also sentenced to pay a fine of Rs. 100/ .
The conviction and sentence were confirmed by the High Court and the appellant has come up in appeal by special leave.
The prosecution case briefly was as follows: P.W. 6 Ram Niwas Sharma, an Architect by profession prepared building plans for one M.L. Batla and submitted them to the Delhi Development Authority for sanction.
The plans were submitted on 6th May, 1969.
They were rejected on 26th May, 1969.
Revised plans were thereafter submitted on 16th June, 1969.
Certain objections were raised and in order to comply with those objections P.W.6 went to the office of the Delhi Development Authority on 11 7 1969.
He met the accused who was overseer Section officer and asked him to be permitted to make necessary corrections in the building plans.
Instead of giving the file to P.W.6 the accused demanded a sum of Rs. 30/ as bribe.
P.W.6 told him that he did not have the money with him whereupon the accused asked him to come on 14th July, 1969, in the afternoon with the money.
On 1 4th July, 1969.
P.W.6 went to the AntiCorruption office at about 12 noon and 332 gave a report exhibit P.W.1/A to P.W.9, an Inspector of the Anti Corruption Establishment.
P.W.9 sent for P.Ws. 1 and 2 from the Sales Tax office.
The report made by P.W.6 was read over to them.
Thereafter, P.W.6 produced three ten rupee notes, the numbers of which were noted by P.W.9 in the presence of the Panch witnesses P.Ws. 1 and 2.
Thereafter it was arranged that they should all proceed to the office of the Delhi Development Authority.
There P.W. 5 was to give the bribe to the accused and on his giving the bribe to the accused, P.W. l was to give a signal to P.W. 9.
As arranged P.W.6 went to the office of the Delhi Development Authority alongwith Panch witnesses.
The Inspector stopped at the door of the room.
P.W.6 went to the table of the accused and asked him for the file for the purpose of making necessary corrections in the building plans.
The accused asked him if he has brought the money.
On his saying 'yes ' the file was taken out and given to P.W. 6.
As there were a number of other files on the table the accused, P.W. 6 took the file to another table at a distance of one or two paces from the table of the accused.
After making the corrections P.W. 6 handed over the file to the accused alongwith Its. 30/ .
Instead of taking the money the accused asked P.W. 6 to place the money in the file which he accordingly did.
The accused ' then took the file and placed it under the table, putting his foot on it.
At that stage P.W. 1 gave the agreed signal.
P.W. 9 came to the room, disclosed his identity to the accused and questioned him whether he had accepted Rs. 30/ from P.W. 6.
The accused was stunned and kept mum.
P.W. 9 was then informed by P.W. 6 and the two panch witness that the money was kept in the file under the foot of the accused.
P.W. 9 then took out the file and found the sum of Rs. 30/ in the file.
The numbers of the currency notes were compared with the numbers earlier noted at the Anti Corruption office.
Thereafter, r w. g sent the raid report.
On receipt of it, P.W. 7, Deputy Superintendent of Police took over the investigation.
After completing the investigation, a charge sheet was laid and the accused was duly tried, convicted and sentenced as aforesaid.
The defence of the accused was that P.W. 6 met him on 11th July, 1969 and.
wanted to make some corrections.
He told him that he should file the original sale deed.
P.W. 6 then said that he should come on Monday with the original sale deed.
On 14th July 1969, P.W. 6 came to his office and wanted the file for making the necessary.
corrections.
He took out the file and gave it to P.W 6.
P.W. 6 took the file to another table and brought it back to him after Or 3 minutes.
According to the accused, P.W. 6 must have put the money into the file when he had taken the file to the other table.
When the Police officer came in and questioned him about the receipt of the 333 bribe his straight away told him that he had not taken any money from P.W. 6.
According to the accused, P.W. 6 was annoyed with him on 11th July, 1969, as he thought that he (accused) was delaying his work.
He also stated that Mr. Batla the owner of the plot had threatened him with dire consequences because he had raised objections to the plans submitted by him.
Both the Panch witnesses examined by the prosecution did not fully support the prosecution case.
They resiled from the earlier statement made by them during the course of investigation.
P.W. 1 stated that when P.W. 6 went into the room where the accused was working there was some talk between P.W. 6 and the accused but he did not hear what it was.
He saw the accused taking out the file from the Almirah and giving it to P.W. 6.
P.W. 6 took it to another table and was writing something in the file.
Then he took back the file to the accused.
The accused was busy with his own work.
The complainant placed three ten Rupee notes in the file and handed over the file to the accused who placed it under the table near his feet.
P.W.6 signalled to him and he gave the agreed signal.
The Inspector then entered the room and questioned the accused about the receipt of the bribe.
The accused denied the charge.
He (P.W.1) then informed the Inspector that the money was in the file.
The money was recovered from the file.
The prosecution was permitted to cross examine him.
In cross examination his earlier statements to the Investigating officer were put to him.
He admitted in cross examination that when questioned by the Inspector the accused kept silent for some time as he was perplexed but thereafter told the Inspector that he had not taken any money.
The evidence of the other witness P.W. 2 was on the same lines as P.W. 1 except that he stated that when questioned by the Inspector the accused kept mum and was perplexed.
P.W. 2 was also cross examined by the prosecution and the statements made by him to the Investigating officer were put to him.
Shri Frank Anthony learned Counsel for the appellant submitted that the conviction was based on the uncorroborated testimony of P.W. 6 and that it should, therefore, be quashed.
He urged that Batla, Advocate who had employed P.W.6 as an Architect had been convicted in a Criminal case and that the present complaint was inspired by Batla who had previously threatened the accused with direct consequences.
He pointed out that P.Ws. 1 and 2 stated in their evidence that Batla was actually present in the Anti Corruption office when they were called there by the Inspector.
He invited our attention to the circumstance that some persons were standing near the table of the accused at the time when the bribe was supposed to have been given 334 and argued that it was most unlikely that the accused would have demanded and accepted the bribe when so many people were nearby. 'the learned Counsel further urged that the evidence of P.W.6 that he went to the office of the D.D.A. at 3 or 3.15 p.m.
On 11th July, 1969 could not be true as the noting on the file showed that the file was received at 4.45 p.m.
It was also contended that the lower Courts had erred in law in relying upon the statements made by P.Ws. 1 and 2 to the Police.
It was argued that the evidence of P.Ws. 1 and 2 rendered the evidence of P.W.6 entirely unacceptable.
It was further contended that the lower Courts were wrong in treating the conduct of the accused when questioned by the Police officer as a circumstance against him.
We are unable to agree with the submission of Shri Anthony that no conviction can ever be based on the uncorroborated testimony of a person in the position of P.W.6 who, for the sake of felicity may be described as a "trap witness '.
That a trap witness may perhaps be considered as a person interested in the success of the trap may entitle a Court to view his evidence as that of an interested witness.
Where the circumstances justify it, a Court may refuse to act upon the uncorroborated testimony of a trap witness.
On the other hand a Court may well be justified in acting upon the uncorroborated testimony of a trap witness if the Court is satisfied from the facts and circumstances of the case that the witness is a witness of truth.
Shri Anthony referred us to the decisions of this Court in Ram Prakash Arora vs The State of Punjab,(1) and Darshan Lal vs The Delhi Administration.(3) In the first case Grover, J., observed as follows: "It must be remembered that both Joginder Singh and Dalbir Singh P.Ws. were interested and partisan witnesses.
They were concerned in the success of the trap and their evidence must be tested in the same way as that of any other interested witness and in a proper case the court may look for independent corroboration before convicting the accused person".
All that Grover J., said was that in an appropriate case corroboration may be sought and not that corroboration should invariably be sought In the particular case it was found that the witnesses could not be implicitly relied upon and, therefore, corroboration was necessary.
In the second case a string of circumstances was noticed which made it necessary that evidence of the witnesses who had laid the trap should not be acted upon without independent corroboration.
This (1) A.I.R. 1973 S.C. 498.
(2) A.I.R. 1974 S.C. 218.
335 decision also does not lay down that the uncorroborated testimony of a trap witness can never be acted upon.
That the law did not require any such corroboration was laid down in The State of Bihar.
vs Basawan Singh(1), and Bhanuprasad Hariprasad Dave and Anr vs The State of Gujrat (2).
In Bhanuprasad 's case it was observed by Hegde J., as follows: (at p. 1326): "Now coming back to the contention that the appellants could not have been convicted solely on the basis of the evidence of Ramanlal and the police witnesses, we are of opinion that it is an untenable contention.
The utmost that can be said against Ramanlal, the Dy.
S.P., Erulker and Santramji is that they are partisan witnesses as they were interested in the success of the trap laid by them.
It cannot be said and it was not said that they were accomplices.
Therefore the law does not require that their evidence should be corroborated before being accepted as sufficient to found a conviction".
We have carefully gone through the evidence of P.W. 6.
After perusing the evidence of P.W. 6 we are left with the impression that P.W. 6 is a truthful witness, an impression which we share with the High Court, the final Court of fact.
He has given evidence in a straight forward manner and was unshaken in cross examination.
We are unable to discover any reason to discredit his testimony.
The suggestion which was made to him was that he was aggrieved with the accused as he thought that he was unnecessarily raising objections, That he had a hot altercation with him and that he went to the Anti Corruption office with the help of Shri Batla.
The suggestions are without substance.
P.Ws. 1 and 2 no doubt stated that Shri Batla was present in the Anti Corruption office when they were called there by P.W. 9, the Inspector.
We do not have the slightest doubt that P.Ws. 1 and 2 are not truthful witnesses and that they have given evidence in order to accommodate the accused.
Their evidence on important particulars was contradicted by their earlier statements to the Police.
Here we may refer to the grievance of Shri Anthony that the Trial Judge and the High Court treated the statements made by P.Ws. 1 and 2 to the Police as substantive evidence.
There is no justification for the grievance.
The witnesses, who were treated as hostile by the Prosecution were confronted with their earlier statements to the Police and their evidence was rejected as it was contradicated by their earlier statements.
Such use of the statements (1) ; (2) ; 336 is premissible under section 155 of the Evidence Act and the proviso to section 162(1) of the Code of Criminal Procedure read with section 145, Evidence Act.
Corroboration to the evidence of P.W. 6, if considered necessary, may be found in the following circumstances: First, his evidence is corroborated by the report Exh.
PW. 1/A which he gave to P.W. 9 that day.
Second, his evidence is corroborated by the conduct of the accused when he was questioned by P.W. 9.
P.W. 6 stated that when P.W. 9 entered the room and questioned the accused whether he had accepted Rs. 30/ from him, the accused was stunned and did not reply.
P.W. 9 also stated that the accused kept mum when challenged.
P.W. 2 stated that the accused did not reply and kept mum but added that the accused was perplexed.
Though P.W. 1 first stated in his chief examination that the accused, when questioned denied having received any bribe, later he reluctantly admitted ill cross examination that the accused kept silent for some time as he was perplexed and then denied that he had received any bribe.
The immediate reaction of the accused on being questioned by P.W. 9 is a circumstance which corroborates the testimony of P.W. 6.
another a circumstance which corroborates the testimony of P.W. 6 is that the accused was ready with the file and handed it over to P.W. 6 as soon as he asked for it, indicating thereby that the statement of P.W. 6 that the accused had asked him to come on the afternoon of 14th July, 1969, was true.
Yet another important circumstance which corroborates the evidence of P.W. 6 is that after P.W. 6 handed over the file to the accused he kept it under the table.
It was contended by the learned Counsel for the appellant that the evidence relating to the conduct of the accused when challenged by the Inspector was inadmissible as it was hit by Section 167 Criminal Procedure Code.
He relied on a decision of the Andhra Pradesh High Court in D. V. Narasimhan vs State.(1) We do not agree with the submissions of Shri Anthony.
There is a clear distinction between The conduct of a person against whom an offence is alleged, which is admissible under Section 8 of the Evidence Act, if such conduct is influenced by any fact in issue or relevant fact and the statement made to a Police officer in the course of an investigating which is hit by Section 162 Criminal Procedure Code.
What is excluded by Section 162 Criminal Procedure Code is the statement made to a Police officer in the course of investigation and not the evidence relating to the conduct of an accused person (not amounting to a statement) when confronted or questioned by a Police officer during (1) A.I.R. 1969 A.P. 271.
337 the course of an investigation.
For example, the evidence of the circumstance, simpliciter, that an accused person led a Police officer and pointed out the place where stolen articles or weapons which might have been used in the commission of the offence were found hidden, would be admissible as conduct, under Section 8 of the Evidence Act, irrespective of whether any statement by the accused contemporaneously with or antecedent to such conduct falls within the purview of Section 27 of the Evidence Act [vide Himachal Pradesh Administration vs Om Prakash(1).
The decision of the Andhra Pradesh High Court on which Shri Anthony placed reliance does not support his contention. 'where the learned Judges were not prepared to go into the question whether the evidence relating to the conduct of the accused was admissible as that question did not directly arise for consideration.
On the other hand in Zwinglee Ariel vs State of Madhya Pradesh(2), this Court appeared to be inclined to hold that evidence to the effect that the accused started trembling and showed signs of being frightened on being;, questioned by the Police officer, if proved, was admissible, and, in Rao Shiv Bahadur Singh and Anr.
vs State of Vindhya Pradesh(3), and, State of Madras vs A. Vaidyanatha Iyer(4), this Court actually relied on evidence relating to the conduct on the accused on being confronted by the Police officer with the allegation that he 'had received a bribe.
In Rao Shiv Bahadur Singh case the evidence relating to conduct on which reliance was placed was to the effect that the accused was confused and could furnish no explanation when questioned by the Police officer.
In Vaidyanatha Iyer 's case also evidence to the effect that the accused was seen trembling and that he silently produced the notes from the folds of his dhoti was acted upon.
We, therefore, do not see any reason to rule out the evidence relating to the conduct of the accused, which lends circumstantial assurance to the testimony of P.W. 6.
On a consideration of the entire evidence we arc satisfied that the appellant was rightly convicted.
The other points mentioned by Shri Anthony are of a minor character and do not warrant any interference under Article 136 of the Constitution.
The appeal is accordingly dismissed.
M.R. Appeal dismissed.
(1) ; (2) A.I.R. 1954 S.C. 15. | Prakash Chand an overseer Section officer in the Delhi Development Authority office, was charged under section 5(1)(d) read with 8.
5(2) of the Prevention of Corruptions Act and section 161 IPC, for demanding and accepting Rs. 30/ bribe from the trap witness Ram Niwas Sharma.
an architect, for permitting him to make some necessary corrections in the building plans submitted by him to comply with certain objections raised by the D.D.A. On a report by Shri Sharma, an Inspector of Anti Corruption Establishment, accompanied him to the D.D.A office, with two panch witnesses and on receiving a pre arranged signal, entered the room and challenged the accused who was stunned and kept mum.
Then three pre marked ten rupees notes were found in the file dealing with Sharma 's matter, the file was found under the table and the accused had his foot on it.
The panch witnesses did not fully support the prosecution csse.
They resiled from their earlier statements made in the course of investigation were treated as hostile by the prosecution, and were disbelieved by the Court.
The accused was duly tried, convicted and sentenced, and the conviction was upheld by the High Court.
It was contended that the uncorroborated testimony of a trap witness was not sufficient to found the conviction? and also that the evidence relating to the conduct of the accused when challanged by the police inspector was excluded by.
section and was inadmissible in evidence.
Dismissing the appeal, the Court ^ HELD: (1) We are unable to agree that no conviction can ever be based on the uncorroborated testimony of a "trap witness".
Where the circumtance justify it, a court may refuse to act upon the uncorroborated testimony of a. trap witness.
On the other hand a court may well be justified in acting upon the uncorroborated testimony of a trap witness, if the court is satisfied from the facts and circumstances of the case that the trap witness is a witness of truth.
[334C E] The State of Bihar vs Basawan Singh, ; , and Bhanuprasad Hariprasad Dave & Anr.
vs The State of Gujarat, ; , applied.
Ram Prakash Arora vs The State of Punjab, AIR 1973 SC 498 and Darshan Lal vs The Delhi Administration, AIR 1974 SC, 218; differentiated.
The conduct of a person against whom an offence is alleged, is admissible under s.8 of the Evidence Act.
What is excluded by s.162 Cr.
P.C is the 331 Statement made to a police officer in the course of investigation and not the evidence relating to the conduct of an accused person (not amounting to a statement) when confronted or questioned by a police officer, during she course of an investigation.
[336G H, 337A] D. V. Narasimluan vs State, AIR 1969 A.P. 271, held inapplicable.
Himachal Pradesh Administration vs Om Prakash, ; and Zwinglee Ariel vs State of M.P., AIR 1954 SC 15; reaffirmed.
Rao Shiv Bahadur Singh & Anr.
vs State of Vindhya Pradesh, ; and State of Madras v.A. Vaidyanatha Iyer; , , applied. |
vil Appeal No. 1945 and 1946 of 1989.
From the Judgment and Order dated 11.12.1984 of the Punjab and Haryana High Court in C.R. No. 1794 and 1795 of 1985.
Dr. L.M. Singhvi and Y.P. Rao for the Appellant.
G.L. Sanghi, J.P. Gupta and S.K. Agarwal for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
882 This appeal arises from the decision of the High Court of Punjab & Haryana, dated 11th December, 1984 dismissing the Civil Revision filed by the appellant.
It appears that there was a contract entered into by the parties on or about 15th May, 1979 which provided that the appellant would give to the respondent paddy to convert these into rice after lifting paddy from the godown of the appellant.
There was an agreement between ' the parties for shelling of paddy into rice, after lifting the paddy from the godown of the appel lant, at the rate of 70% of the paddy.
The shelling charge was Rs.2.20 per quintal.
The learned Subordinate Judge, First Class, directed on or about 17th March, 1980 appoint ment of an arbitrator on an application by the respondent.
On 22nd January, 1982, the arbitrator gave his award.
The arbitrator did not allow the claims of the appellant as claimed as per the terms of the agreement.
The arbitrator allowed certain claims.
It is necessary, in view of the contentions that have been raised, to refer to the award of the arbitrator.
After setting out the history the arbitrator dealt with the various contentions.
It is not necessary to refer to all the contentions and points urged before the arbitrator and upon which he has made his award.
It is sufficient if the relevant portions are dealt with.
The arbitrator, inter alia, dealt with a claim of Rs. 55,060.29 which had claimed as penalty at Rs.2 per qtl.
for not lift ing the balance of the paddy weighing 2765 3093 mts.
The arbitrator noted that he had held that there was justifica tion for the millers, millers being respondent herein, not to lift the paddy.
Assuming, however, the arbitrator noted, that if it was decided that the millers were at fault in not lifting this paddy, the arbitrator expressed the opinion that the appellant could not recover the amount claimed by way of penalty.
He expressed the view that in order to enable the appellant to claim the amount, it had to be shown that the actual losses were suffered by the Corporation.
Otherwise, it could not be claimed as pre estimated damages.
Otherwise, it would only be penalty which could not be recovered.
No evidence had been led for how many days the bags of the paddy remained in the godowns of the Corpora tion, the arbitrator noted, and what losses were incurred for getting it shelled from other quarters.
The arbitrator referred to the affidavit of one Mr. M.S. Rawat, Asstt.
Manager, that the Corporation had to get the unlifted paddy shelled by transporting to other centre as well as getting the same shelled at heavy additional expenditure.
The arbi trator noted that there was not an iota of evidence on that point.
So no actual losses stated to have been suffered by the Corporation and no proof thereof was there.
The arbitra tor further noted that an amount by way of penalty could be permitted if some losses were proved.
He, accordingly, dismissed the claim of the appellant for Rs. 55,090.19.
883 The next claim dealt with by the arbitrator was the claim of Rs.3,23,856.08 claimed by the Corporation as the cost of non delivery of 137 39549 tonnes of rice at the rate of Rs. 165 per qtl.
of paddy.
The claim of the appellant was based on the basis that the appellant had converted the undelivered rice into paddy by multiplying it with 100/70 and it came to 123,87.11 tonnes.
The arbitrator dealt with this question as follows: "At the rate of Rs. 165 per qtl.
its price works at Rs.3,23,856.08.
According to provi sions of clause g(i) of the Contract, in the event of failure to supply rice within pre scribed specification, the millers are liable to pay to the Corporation for the quantities of rice short supplied at the penal rate of 11/2 times the economic cost of the concerned variety of the paddy equivalent to the short ages.
In the contract no definition of 'Eco nomic Cost ' is furnished nor is the expression any where defined in any law.
However, Shri Pritam Singh in the statement attached to the affidavit work it out at Rs. 110 per qtl.
The procurement price of paddy is Rs.85 per qtl.
as shown therein.
He has added to it market fee and other charges including cost of gunny Rs.2 and interest charges at Re. 1.
Under the above clause of the contract, the Corporation has added 50% penalty and thus has claimed the price at Rs. 165 per qtl.
I do not think that the Corporation is enti tled to such a fantastic rate particularly when the expression 'economic rate ' has not been defined.
Even if the statement of Shri Pritam Singh is accepted the maximum price of the rice at that time should be Rs. 100 per qtl.
exclusive of gunny bag and interest charges to which in my opinion the Corporation is not entitled.
The market rate did not exceed that amount at that time.
So the calcu lated at this rate the price of the undeliv ered rice will come to Rs.1,96,277.00.
to which the Corporation is entitled.
I may add here that the above amount has been allowed to the Corporation besides from the evidence on the record I believe that the rice was short delivered.
When the paddy had been accepted by the millers unconditionally and without any reservation, they were bound to give to the Corporation 70% of the yield.
As they did not do it, so they are liable to pay the price of the undelivered rice.
884 I have already stated above that the rice after shelling to be , delivered to the Corpo ration under clause g(i)of the contract had to conform to the specification laid down by the Punjab Government under the Punjab Rice Pro curement Price Control Order, 1968 issued on the 22nd October, 1968, as amended from time to time.
The Corporation states that the rice accepted by them was done subject to the quality rice which was permissible under clause g(ii) of the contract.
This has been duly proved from the evidence placed on the record by the Corporation.
Even Shri Anil Kumar, a partner of the millers firm admitted that they received an analysis report in respect of the rice which was accepted by the Corporation to continue that the Corporation was mentioned and that they did not appeal against the cut, though there was a provision in the said order to do so.
It, therefore, means that the quality cut was admitted to have been correctly assessed under the said Punjab Rice Order and to that the millers submitted.
This item is, therefore, allowed.
" The respondent filed an application under section 14 of the Arbitration Act, 1948 (hereinafter referred to as 'the Act ') for filing of the award and prayed for making the award the rule of the court.
The appellant on 25th May, 1982 filed objections under sections 30 and 33 of the Act.
The learned Subordinate Judge, First ClasS, on 2nd December, 1982 found that the award was liable to be set aside and modified the award and passed a decree in favour of the appellant for the amount.
On 2nd March, 1984, the Additional District Judge allowed the appeal by respondent and reversed the Subordinate Judge 's order.
Aggrieved thereby, the appellant went in revision before the High Court.
The High Court on 11th December, 1984 dis missed the revision petition.
Aggrieved thereby, the appel lant has come up before this Court.
It is, therefore, neces sary to decide whether the High Court was right.
As mentioned hereinbefore, the learned Subordinate Judge had modified the award and passed a decree in favour of the appellant for the amount.
The learned Additional District Judge, however, allowed the appeal of the respondent and reversed the decision of the learned Subordinate Judge.
The High Court did not interfere with that decision because the High Court did not find any ground to interfere.
The 885 question therefore is, whether the learned Additional Dis trict Judge in the first appeal was right in holding that the award was not liable to be corrected in the manner done by the learned Subordinate Judge.
The jurisdiction to inter fere by the Court of law of an award made by the arbitrator chosen by the parties is circumscribed.
In India, there is a long history of arbitration.
Arbitration is a mode of set tlement of disputes evolved by the society for adjudication and settlement of the disputes and the differences between the parties apart from the courts of law.
Arbitration has a tradition; it has a purpose.
Arbitration, that is a refer ence of any particular dispute by consent of the parties to one or more persons chosen by the parties with or without an umpire and an award enforceable by the sovereign power were generally unknown to ancient India.
Hindus recognised deci sions of Panchayats or bodies consisting of wealthy, influ ential and elderly men of the Community and entrusted them with the power of management of their religions and social functions.
The sanction against disobedience to their deci sion was excommunication, or ostracism and exclusion from all religions and social functions of the community.
An agreement to abide by the decision of a Panchayat and its decision with regard to the line of boundary was held not to be conclusive, since a reference to arbitration and award properly so called did not exist.
See the observations in Mukkudduns of Kimkunwady vs Inamdar Brahmins of Soorpai, See also Bachawat 's Law of Arbitration at page 1.
When power came to the East India Company, they framed Regulations in exercise of the power vested in them by the British Government Some of these Regulations were touching arbitration.
Bachawat gives description of the evolution of the .
Therefore, arbitration as a mode for settlement of disputes between the parties, has a tradi tion in India.
It has a social purpose to fulfil today.
It has great urgency today when there has been an explosion of litigations in the courts of law established by the sover eign power.
New rights created, or awareness of these rights, the erosion of faith in the intrinsic sense of fairness of men, intolerant and uncompromising attitudes are all the factors which block our courts.
The courts are full of litigations, which are pending for long time.
Therefore, it should be the endeavour of those who are interested in the administration of justice to help settlement by arbitra tion, if possible.
It has also a social efficacy being the decision by the consent of the parties.
It has greater scope of acceptance today when there is a certain erosion of faith in view of the failure to appreciating the functions of the courts of law.
It has also the advantage of not only quick ness of decision but of simplicity of procedure.
But in proceedings of arbitra 886 lion there must be adherence to justice, equity, law and fair play in actions.
However, the proceedings of arbitra tion must adhere to the principles of natural justice and must be in consonance with such practice and procedure which will lead to a proper resolution of the dispute and create confidence of the people for whose benefit these processes are resorted to.
It is, therefore, the function of courts of law to oversee that the arbitrators act within the norms of justice.
Once they do so and the award is clear, just and fair, the courts should, as far as possible, give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator.
It is in this perspective that one should view the scope and limit of correction by the court of an award made by the arbitrator.
We should make the law of arbitration simple, less technical and more responsible to the actual realities of the situation, but must be responsive to the cannons of justice and fair play and make the arbitrator adhere to such process and norms which will create confidence, not only by doing justice between the parties, but by creating a sense that justice appears to have been done.
Sections 30 and 33 of the Act provide for the grounds on which an award of the arbitrator can be set aside.
These were mainly, until recent changes made by statutory laws in England, in consonance with the English principles of Common Law as adopted in India.
So far as the material of the present purpose is concerned, an award of the arbitrator can only be interfered with or set aside or modified within the four corners of the procedure provided by the Act.
It is necessary to find whether the arbitrator has misconducted himself or the proceedings legally in the sense whether the arbitrator has gone contrary to the terms of reference between the parties or whether the arbitrator has committed any error of law apparent on the face of the award.
It is necessary to empha sise that these are grounds for setting aside the award but these are separate and distinct grounds.
Halsbury 's Laws of England, Vol.
2 4th Edn., para 623 reiterates that an arbi trator 's award may be set aside for error of law appearing on the face of it.
Though this jurisdiction is not to be lightly exercised.
The award can also be set aside if, inter alia, the arbitrator has misconducted himself or the pro ceedings.
It is difficult to give an exhaustive definition what may amount to a misconduct on the part of the arbitra tor.
This is discussed in Halsbury 's Laws of England (supra).
It is not misconduct on the part of an arbitrator to come to an erroneous decision, whether his error is one of fact or law, and whether or not his findings of fact are supported by evidence.
See the observations of Russell on Arbitration, 20th Edn., page 422.
In the instant case, the arbitrator has chosen to make a speaking 887 award, that is to say, he has given reasons for his conclu sion.
Whether he is obliged to give such reasons or not is another matter but since the arbitrator has chosen to give the reasons, unless it is demonstrated to this Court that such reasons are erroneous as such as propositions of law or a view which the arbitrator has taken is a view which it could not possibly be sustained on any view of the matter, then the challenge to the award of the arbitrator cannot be sustained.
As has been emphasised in M/s Sudarsan Trading Co. vs The Government of Kerala & Anr., [1989] 1 Jt.
Today SC 339 that an award could be set aside if the arbitrator has misconducted himself or the proceedings or has proceeded beyond jurisdiction.
It could also be set aside where there are errors apparent on the face of the award.
But these are separate and distinct grounds.
In case of errors apparent on the face of the award, it can only be set aside if in the award there is any proposition of law which is apparent on the face of the award, namely, in the award itself or any document incorporated in the award.
See the observations of the Judicial Committee in Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. Ltd., L 1922 IA 324.
Dr. L.M. Singhvi, learned counsel for the appellant, urged before us that the arbitrator was wrong in not award ing 50% of the added penalty as claimed by the appellant, as mentioned hereinabove.
The appellant had claimed the price of Rs. 165 per qtl.
The arbitrator was of the view that the expression 'Economic Rate ' had not been defined.
It is true that the expression 'Economic Rate ' has not been used, but the expression 'Economic Cost ' has been used.
The arbitrator has noted that the market rate did not exceed that amount at the time.
The amount of Rs. 100 per qtl.
is mentioned of such a rate as the arbitrator had noted, could only be pre estimated damages but this was not so according to the arbitrator.
The arbitrator had construed the effect of clause g(i) of the contract as mentioned hereinbefore.
It cannot be said that such a construction is a construction which is not conceivable or possible.
If that is the position assuming even for the argument that there was some mistake in the construction, such a mistake is not amenable to be connected in respect of the award by the court.
This was a fair order after considering all the records.
The conclusion arrived at by the arbitrator is a plausible conclusion.
The court has, in our opinion, no jurisdiction to interfere or modify the award in the manner sought for by the appellant and in the manner done by the learned Subordinate Judge in the first instance in this case.
In that view of the matter, the learned Additional District Judge was justified in correcting the 888 order of the learned Subordinate Judge and the High Court was also justified in not interfering with the order of the Additional District Judge.
The award on the aspects can vassed before us by Dr. L.M. Singhvi is a plausible con struction of clause g(i) of the contract.
It cannot, in our opinion, be interfered with either on the ground that there was error apparent on the face of the award or on the ground that the arbitrator has misconducted himself in not giving the effect to the penal rate as contemplated under clause g(i) of the contract referred to hereinbefore in the award.
Dr. Singhvi sought to urge that as per the terms of the contract the arbitrator was obliged to award penal rate in terms of clause g(i) of the contract.
The arbitrator has apparently not done so.
He has given reason why he has not done so.
It was submitted that he was wrong in not doing so.
We do not agree.
The arbitrator has discussed the effect of clause g(i).
He has noted that unless there was evidence about which incidentally there was none, this amount could not be treated as a pre estimate of damage.
If that be so then it was penalty.
It was not recoverable.
Reasons may not be apparent, latent was there.
Dr. Singhvi 's objection therefore cannot be accepted.
Dr. Singhvi drew our attention to the observations of this Court in M/s Sudersan Trading Co., (supra) at page 352 of the report where it was stated that if it was apparent from the award that a legal proposition which formed its basis was erroneous, the award was liable to be set aside.
Dr. Singhvi sought to urge that when the arbitrator observed that "Corporation is not entitled to recover such a claim particularly when the 'Economic Rate ' has not been defined", this, according to the statement of Dr. Singhvi, the arbi trator was mistaking the law, such a mistake of law is apparent on the face if it.
It has to be borne in mind, however, that wrong statement or conclusion of law, assuming even that it was a wrong statement of law, was not wrong statement of the proposition of law which was the basis for decision in this award.
Error of law as such is not to be presumed, if there is legal proposition which is the basis of the award and which is erroneous as observed in Champsey Bhara & Co, (supra), then only the award can be set aside.
There was no proposition of law; there was a legal deduction of law arrived at to say that the provisions of clause g(i) of the contract would be penal rate and such penal rate cannot be sustainable without evidence of the damages suf fered to that extent.
We are of the opinion that the arbi trator had taken a view which is plausible view.
Beyond this, the court has nothing to examine.
It is not necessary for a court to examine the merits of the award with refer ence to the materials produced before the arbitrator.
The Court cannot sit in appeal over the 889 views of the arbitrator by re examining and re assessing the materials.
See the observations of this Court in Puri Con struction Pvt. Ltd. vs Union of India, In the aforesaid view of the matter, it appears to us that the learned Additional District Judge was right in the view it took and the High Court, therefore, was justified in dismissing the revision.
The appeal, therefore, fails and is accordingly dismissed.
No order as to costs.
Special leave granted.
In view of the fact that the facts of this appeal are more or less identical to the Appeal arising out of S.L.P. (C) No. 3392 of 1985, this appeal is also dismissed.
No order as to costs.
Y.L. Appeals dis missed. | The Respondent entered into a contract with the appel lant Food Corporation of India on or about May 1979 whereun der the appellantCorporation was to give to the Respondent Paddy for being shelled/ converted into rice at the rate of 70% of the Paddy.
The Paddy was to be lifted from the go downs of the appellant.
The shelling charge was fixed at Rs.2/20 p. per quintal.
Some dispute having arisen between the parties, the Respondent moved an application before the Subordinate Judge for appointment of an arbitrator and the Sub Judge appointed the arbitrator who gave his award on 22nd January 1982.
In the award the arbitrator did not allow some of the claims made by the appellant, in particular, a claim of Rs.55,060/29 p which was claimed as a penalty Rs.2 per quintal for not lifting the balance of Paddy.
The arbitrator in disallowing the claim on that count, took the view that the appellant has to prove the actual losses suffered by it which the appellant failed to prove.
Another claim not allowed by the arbitrator related to Rs.3,23,856/08.
p. in respect of the cost of non delivery of 137 39548 tonnes of rice @ Rs. 165 per quintal.
The Respondent made an application section 14 of the Arbi tration Act, 1940 to make the award a rule of the Court.
The appellant filed the objections u/s 30 and 33 of the Act.
The Subordinate Judge, First Class, on 2nd December, 1982, found that the award was liable to be set aside and accordingly modified the award and passed a decree in favour of the appellant for the amount.
On 2nd March, 1984, the Addl.
Distt.
Judge, on appeal by the Respondent, reversed the order passed by the Subordinate Judge.
He held that the award was not liable to be corrected/interfered with in the manner done by the Sub Judge.
Aggrieved by the said order the appellant went in revision to the High Court.
The High Court on 11.12.84 dismissed the revision petition.
Hence this appeal by the appellant Corporation.
881 Dismissing the appeal, this Court, HELD: That the arbitrator has chosen to make a speaking award in the instant case, that is he has given reasons for his conclusions.
Since the arbitrator has chosen to give reasons, unless it is demonstrated to this Court that such reasons are erroneous as such as propositions of law or a view which the arbitrator has taken is a view which it could not possibly be sustained in any view of the matter, then the challenge to the award of the arbitrator cannot be sustained.
[886H; 887A B] Even assuming that there was some mistake, such a mis take is not amenable to be corrected in respect of the award by the Court.
This was a fair order passed after considering all the records.
The conclusion arrived at by the arbitrator is a plausible conclusion.
The Court has no jurisdiction to interfere or modify the award in the manner sought for by the appellant.
[887G H] The Addl.
Distt.
Judge was justified in correcting the order of the Subordinate Judge and the High Court was also justified in not interfering with the order of the Addl.
Distt.
Judge.
[887H; 888A] Mukkudduns of Kimkunwady vs Inamdar Brahmins of Soorpai, ; M/s. Sudarsan Trading Co. vs The Government of Kerala & Anr., [1989] 1 Jt.
Today SC 339; Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. Ltd., L 1922 IA 324, followed.
Puri Construction Pvt. Ltd. vs Union of India, , referred to. |
iminal Appeals Nos. 146 and 147 of 60.
Appeals by special leave from the judgment and order dated February 11, 1960, of the Madhya Pradesh High Court in Criminal Revisions Nos.
270 to 274 of 1959.
G. C. Mathur, for the appellants.
I. N. Shroff, for the respondents.
February 5.
The Judgment of the Court was delivered by KAPUR, J.
There are two appeals directed against the order of the High Court of Madhya 22 Pradesh reiecting a Reference made by the Sessions Judge against the prosecution of.
the appellant for contravening the provisions of the C. P. and Berar Sales Tax Act (C. P. XXI of 1947), hereinafter called the 'Act '.
A firm of which five brothers including the two appellants were partners submitted their sales tax returns for the quarters beginning June 1, 1947, to the quarters ending December 31, 1951.
A .complaint was filed against the partners on July 19, 1957, on the ground that the returns filed by them were false and the accounts produced were incorrect and therefore an offence under section 24(1)(b) and (g) of the Act was committed.
On December 12, 1958, an objection was taken by the accused.
persons that under section 26(2) of the Act, the prosecution could not be instituted as it was barred by time, having been instituted more than three months after the commission of the offence.
The learned, Magistrate did not go into the objection on the ground that it was not the proper forum for raising the objection.
Four revisions were taken to the Sessions Judge who on May 4, 1959, made a reference to the High Court for quashing the proceedings But the High Court rejected the reference on the ground that a person making a false return neither acts nor purports to act under the Act and therefore section 26(2) is not applicable to him.
It is against that order that these peals were brought by Special Leave.
In order to decide this question, it is necessary to refer to the relevant provisions of the Act.
Under section 10 of the Act every dealer is required to furnish a return when called upon to do so and every registered dealer is required to furnish returns by such dates as may be prescribed.
The ap pellants are registered dealers and they have made returns under that section.
Section 15 deals with 23 production and inspection of accounts and section 24 enumerates the offenses under the Act.
The alleged offence of the appellants falls under is.
34(1) (b) and (g).
failing without sufficient use to submit any return or furnishing false returns and knowingly producing incorrect accounts, registers or documents or knowingly furnishing incorrect information.
Section 26 relates to the protection of persons acting in good faith and limitation for suits and prosecutions.
The section when quoted is as follows section 26 (1) "No suit, prosecution or other legal proceedings shall lie against any servant of the Government for anything which is in good faith done or intended to be done under this Act or rules made thereunder.
(2) No suit shall be instituted against the Government and no prosecution or suit shall be instituted against 'any person in respect of anything done or intended to be done under this Act unless the suit or prosecution has been instituted within three months from the date of the act complained of.
" For the appellants, it was contended that the words "no prosecution or suit shall be, instituted against any person in respect of anything done" in sub section
(2) of section 26 cover their cases also and they fall within the words ",any person".
The respondent 's submission on this point was that the two sub sections of section 26 should be read together and the intention of the Legislature was to give protection to Government servants in regard to prosecutions or other legal proceedings.
That, in our opinion, is not *hat the words used in sub section
(2) mean.
, They are words of wider import and would cover cases of all persons including persons other than Government servants.
There are ' no words restricting the meaning of "any person" and no 24 reason has been shown why those words should not include the appellants.
The ground on which the High Court rejected the Reference was that in its opinion the appellants neither acted nor purported to act under any of the provisions of the Act when they filed false returns or produced false accounts and in fact they were rendering.
themselves liable to punishment under the provisions of section 24 of the Act.
It observed as follows : "The test whether an act is done or intended to be done under a certain law might well be whether the person who committed it can, if challenged, reasonably justify his act under any provision contained in that law".
This opinion is, in our view, not sustainable.
When the appellants submitted their returns they did so under section 10 of the Act and when they produced their accounts they did so under section 15 of the Act.
Therefore both the making of the returns and production of the accounts were done under the Act and cannot be said to be outside the provisions of the Act.
In our opinion the High Court was in error in rejecting the Reference.
The appeals are therefore allowed, the order of the High Court is set aside aid the proceedings in the trial court are quashed.
Appeals allowed. | The appellants submitted their returns of sales tax.
More than three months afterwards a complaint was filed against them under section 24(1)(b) and (g) of the C. P. and Berar Sales Tax Act ' alleging that the returns filed Were false and that the accounts produced were incorrect.
They contended that the prosecution was barred by section 26(2) of the Act which provided that no prosecution shall be instituted against any person in respect of anything done or intended to be done under the Act unless it was instituted within three months from the date of the act complained of.
Held, that the prosecution was barred by section 26(2) of the Act.
The words "any person" in section 26(2) were words of wide import and included the appellants.
There was no reason to restrict them to Government servants.
Both the making of the return and the production of the accounts were acts done under the Act; the return being filed under section 10 and the accounts being produced under section 15 of the Act.
Section 26(2) was thus clearly applicable to the case. |
N: Criminal Appeal No. 117 of 1978.
(Appeal from the Judgment and order dt.
5 12 77 of the Punjab & Haryana High Court in Criminal Misc.
Petition No. 3892 M of 1976).
R. section Narula, M. section Marwah and D. section Narula for the appellant.
section K. Mehta, K. R. Nagaraja and P. N. Puri for the respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Jagir Singh, the appellant in this appeal by special leave, was married to Kirpal Kaur in 1951.
Husband and wife became estranged in 1954, since when they have been living separately.
Ranbir Singh, the issue of the marriage, was born in 1954.
Jagir Singh married again and it is said that he has a son and a daughter by the second wife.
On 25th May, 1971, Kirpal Kaur and Ranbir singh filed an application for maintenance under Section 488 of the Criminal Procedure Code, 1898.
One of the defences raised by the appellant to that application was that Ranbir Singh was a major and, therefore, not entitled to claim maintenance under Section 488.
The Magistrate held that Ranbir Singh was a student who was unable to maintain himself and, therefore, the question whether he was a major or a minor was immaterial.
On 19th May, 1973, he made an order awarding maintenance at the rate of Rs. 200/ per month to Kirpal Kaur and Rs. 75/ per month to Ranbir Singh, Jagir Singh filed a revision petition before the Sessions Judge.
By consent of the parties, the Sessions Judge made a reference to the High Court recommending that the award of maintenance in favour of the wife should be reduced to Rs. 150/ per month and that the award of Rs. 75/ per month to the son should be confirmed.
The reference was accepted by the High Court.
The Criminal Procedure Code 1898 was repealed and the Criminal Procedure Code 1974 was enacted in its place.
The new Code came into force on 1st April, 1974.
On 3rd May, 1974, the appellant made an application before the Magistrate, purporting to be under Section 127 of the new Code, for cancellation of the order of maintenance in favour of the son on the ground that the son had attained majority 285 and did not suffer from any infirmity or abnormality which prevented A him from maintaining himself.
It was claimed on behalf of the appellant that under the new Code it was not permissible to award maintenance or enforce an order to maintenance in favour of a child who had attained majority and who was not unable to maintain itself by reason of any physical or mental abnormality or injury.
On 3rd June, 1974, the son filed a counter admitting that he had attained majority but claiming that he was still a student, unable to maintain himself.
The son claimed that the order in his favour had been validly passed under the old Code and continued to remain in force notwithstanding the enactment of the new Code.
On 9th May, 1975, the learned Magistrate allowed the application of the father under Section 127 of the Criminal Procedure Code 1974 and cancelled the order for maintenance made earlier in favour of the son.
Ranbir Singh, the son, filed a Revision Application before the Sessions Judge.
It was dismissed on 12th March, 1976.
The learned Sessions Judge held that the order made under Section 488 of the old Code could survive under Section 484(2) of the new Code if there was a corresponding provision under the new Code which enabled the award of maintenance to a major child.
Since there was no such corresponding provision the order under Section 477 in favour of Ranbir Singh ceased to be in force.
Ranbir Singh then filed a Revision Application before the High Court of Punjab and Haryana which was allowed on 5th December, 1977.
The High Court held that notwithstanding the change in the law which disentitled a major child from claiming maintenance, Section 125 of the new Code did correspond to Section 488 of the old Code.
Therefore, the order for maintenance in favour of Ranbir Singh was saved by Section 484(2) of the Code of 1974.
1974 Jagir Singh has preferred this appeal after obtaining special leave from this Court under Article 136 of the Constitution.
Shri R. section Narula, learned Counsel for the appellant contended that the Revision Application to the High Court was incompetent as it was barred by the provisions of Section 397(3) of the Code of Criminal Procedure 1974.
He argued that the right of the respondent to invoke the revisional jurisdiction of a superior Court became exhausted when he invoked the revisional jurisdiction of the Sessions Judge.
Shri Narula further contended that under Section 125 of the Criminal Procedure Code 1974, a major son who did not suffer from any physical or mental abnormality or injury which prevented him from maintaining himself was not entitled to get an order for maintenance in his favour and that an order made in favour of such a son under Section 488 Criminal Procedure Code of 1898 was not saved either by Section 484(2) of the Code of Criminal Procedure 1974 or Sections 6 and 24 286 of the General Clauses Act.
Shri section K. Mehta, learned Counsel for the respondent submitted that the revision application before the High Court could be treated and maintained as one directed against the order of the Sessions Judge rejecting the Revision Application made to him.
In any case he argued that the Revision Application could be treated as one under Article 227 of the Constitution.
He contended that the order of the Magistrate under Section 488 of the Criminal Procedure Code 1898 continued to be in force and that it could not be cancelled merely because Section 125 did not provide for the award of maintenance to a major son who did not suffer from any abnormality or injury.
The first question for consideration is whether the High Court was precluded from interfering with the order of the Magistrate in the exercise of its revisional jurisdiction by reason of the provisions of Section 397(3) of the Criminal Procedure Code 1974.
Section 397 which corresponds to Section 435 of the Criminal Procedure Code 1898 invests the High Court and the Sessions Judge with concurrent revisional jurisdiction over inferior criminal Courts within their jurisdiction The District Magistrate who also had revisional jurisdiction under Section 435 of the Code of Criminal Procedure 1898 is now divested of such jurisdiction.
In addition, there are, in the 1974 Code two important change Both of which are apparently designed to avoid delay and to secure prompt rather than perfect justice.
The first change is that introduced by Section 397(2) which bars the exercise of revisional power in relation to any interlocutory order passed in any appeal, enquiry, trial or other proceeding.
The second is that introduced by Section 397(3) which provides that if an application under the Section has been made by any person either to the High Court or to the Sessions Judge, and further application by the same person shall be entertained by the other of them.
We are concerned with this provision in this appeal.
The object of Section 397(3) is clear.
It is to prevent a multiple exercise of revisional powers and to secure early finality to orders.
Any person aggrieved by an order of an inferior Criminal Court is given the option to approach either the Session Judge or the High Court and once he exercises the option he is precluded from invoking the revisional jurisdiction of the other authority.
The language of Section 397(3) is clear and peremptory and it does not admit of any other interpretation.
We may also mention here that even under Section 435 of the previous Code of Criminal Procedure, while the Sessions Judge and the District Magistrate had concurrent jurisdiction, like present Section 397(3) previous Section 435(4) provides that if an application under the Section had been made either to the Sessions 287 Judge or District Magistrate no further application shall be entertained by the other of them.
In order to cross the hurdle imposed by Section 397(3) it was suggested that the revision application before the High Court could be treated as an application directed against the order of the Sessions Judge instead or an one directed against the order of the Magistrate We do not think that it is permissible to do so.
What may not be done directly cannot be allowed to be done indirectly, that would be an evasion of the statute.
It is a "well known principle of law that the provisions of an Act of Parliament shall not be evaded by shift or contrivance" (per Abbott C.J. in Fox vs Bishop of Chester(1) "To carry out effectually the object of a Statute, it must be construed as to defeat all attempts to do, or avoid doing, in an indirect or circuitous manner that which it has prohibited or enjoined" (Maxwell, 11th edition, page 109).
When the Sessions Judge refused to interfere with the order of the Magistrate, the High Court 's jurisdiction was invoked to avoid the order of the Magistrate and not that of the Sessions Judge.
The bar of Section 397(3) was, therefore, effectively attracted and the bar could not be circumvented by the subterfuge of treating the revision application as directed against the Session Judge 's order.
If the` revision application to the High Court could not be maintained under the provisions of the Criminal Procedure Code, could the order of the High Court be sustained under Article 227 of the Constitution, as now suggested by the respondent ? In the first place the High Court did not purport to exercise its power of superintendence under Article 227.
The power under Article 227 is a discretionary power and it is difficult to attribute to the order of the High Court such source of power when the High Court itself did not, in terms, purport to exercise any such discretionary power.
In the second place the power of judicial superintendence under Article 227 could only be exercised, sparingly, to keep subordinate Courts and Tribunals within the bounds of their authority and not to correct mere errors.
Where the statute banned the exercise of revisional powers by the High Court, it would indeed require very exceptional circumstances to warrant interference under Article 227 of the Constitution, since the power of Superintendence was not meant to circumvent statutory law.
In the third place it was doubtful if the High Court could exercise any power of judicial superintendence on the date of its order as the Constitution 42nd Amendment Act had by then been passed.
By the 42nd Amendment Act clause (5) was added in Article 227 of the Constitution and it says "Nothing in this article shall (1) (1824) 2 B & 635.
288 be construed as giving to a High Court any jurisdiction to question any judgment of any inferior Court which is not otherwise subject to appeal or revision".
Clause (5) of Article 227 introduced by the 42nd Amendment Act is a verbatim reproduction of Sub Section (2) of Section 224 of the Government of India Act, 1935 which it was held conferred powers of administrative superintendence only and not the power of Judicial Superintendence.
In the present case the revision application was, however, filed before the passing of the 42nd Amendment Act and it was therefore, argued by the learned Counsel for the respondent that the High Court could exercise the power of superintendence possessed by it before the 42nd Amendment.
We have serious doubts.
Article 227, before the 42nd Amendment, gave no right to any party.
An application invoking the High Court 's power of Superintendence did not create any vested right in the suitor.
There could, therefore, be no question of any vested right being taken away or not being taken away by the amendment.
It was just a question whether the High Court possessed the power of Superintendence on the date of the High Court 's order.
There is no dispute that it did not.
We do not wish to pursue the matter further as in our view there was no case to warrant interference under Article 227 of the Constitution.
In view of the foregoing discussion, the revision application to the High Court must be held to be incompetent.
In that view it is unnecessary to go into the question whether the original order under Section 488, Criminal Procedure Code, 1898 in favour of the respondent could be cancelled under Section 127 of the Criminal Procedure Code 1974, But the lower Courts went into the question at some length and detailed submissions were made before us.
We will express our opinion briefly.
Section 484(1) of the 1974 Code repeals the Code of Criminal Procedure 1898.
Section 484(2) (a) provides for the continuance and disposal of pending cases in accordance with the provisions of the old Code.
Section 484(2)(b) provides that 'all notifications published,, proclamations issued, powers conferred, forms prescribed, local jurisdictions defined, sentences passed and orders, rules and appointments made under the old Code and which are in force immediately before the commencement ' of the new Code, shall be deemed, respectively, to have been published, issued, conferred, prescribed, defined, passed or made under the corresponding provisions of the new Code.
In the present case the order of the Magistrate under Section 488 of the old Code awarding maintenance to the respondent was made on 19th May, 1973.
The new Code came into force on 1st April, 1974.
Therefore, the order was in force immediately before the commencement of the new Code.
289 It must, therefore, be deemed to have been made under the corresponding provision of the new Code.
The question,, therefore, is whether there is any provision of the new Code corresponding to the provision of the old Code under which maintenance was awarded to the respondent.
As we said, the respondent was awarded maintenance under Section 488 of the Criminal Procedure Code 1898.
Under Section 488 Criminal Procedure Code 1898 a person having sufficient means and neglecting or refusing to maintain his wife or his legitimate or illegitimate child unable to maintain itself could be ordered to make a monthly allowance for the maintenance of his wife or such child.
The word child used in Section 488 led to some controversy whether a person could be ordered to pay maintenance to a child who had attained majority but who was unable to maintain itself.
In Nanak Chand vs Chandra Kishore Agarwal & Ors.
(1) the Supreme Court held that the word 'child ' in Section 488 did not mean a minor son or daughter and that the real limitation was contained in the expression 'unable to maintain itself.
Irrespective of whether a son or daughter was a major or minor, a father was bound to maintain the son or daughter if such son or daughter was unable to maintain himself or herself.
Section 125 of the 1974 Code makes a slight departure.
Under this provision child who has attained majority is not entitled to be awarded maintenance unless such child is unable to maintain itself by reason of any physical or mental abnormality or injury.
According to Shri R. section Narula in view of the change it cannot be said that the new Code contains ally provision corresponding to the provision in the old Code which authorised the award of maintenance to a child who had attained majority and who was unable to maintain itself even if such child did not suffer from any physical or mental abnormality or injury.
Therefore, according to Shri Narula, Section 484(2) (b) does not save all order awarding maintenance in favour of a child who has attained majority and who does not suffer from any physical or mental abnormality or injury.
It is difficult to agree with the submission of Shri Narula.
To accept the submission would be to give the expression "corresponding provision" the meaning "identical provision".
Whenever an Act is repealed and re enacted there are bound to be changes and modifications.
To say that a modified provision dealing with the same subject matter in substantially the same manner as the original provision is not a corresponding provision would be to practically mullify the effect of a "Repeal and Savings" provision like Section 484(2) (b) of the new Code.
In the Shorter oxford English Dictionary Third Edition Vol.
I, the word 'correspond ' is said to mean ' (1) to answer to something else in the way H (1) A.l.
R 290 of fitness; to agree with; be conformable to; be congruous or in harmony with.
(2) To answer to in character or function; to be similar to '.
In Butterworths 'Words and Phrases Legally defined ' Second Edition Vol. 1, it is said " 'to correspond ', does not usually, or properly, mean 'to be identical with ', but 'to harmonise with ', or 'to be suitable to ' " and reference is made to Sackville West vs Holmesdale (Viscount) (1).
We are, therefore, of the view that Section 125 of the new Code corresponds to Section 488 of the old Code notwithstanding the fact that under the new Code a child who has attained majority and who does not suffer from any infirmity is not entitled to be maintained by the father.
We also note that there are no words in Section 484(2) (b) limiting its application to orders made and sentences passed which are not inconsistent with the provisions of the new Code.
There are no such limiting words as may be found as for example in Section 24 of the General Clauses Act which limits its application to an order, rule, etc. "so far as it is not inconsistent with the provisions re enacted".
This does not mean that statutory instruments made under the old Code and which are inconsistent with the provisions of the new Code continue to be effective.
All that Section 484(2) (b) says is that such statutory instruments shall be deemed to be made under the corresponding provisions of the new Code.
Their validity will have to be tested like any other statutory instruments made under the provisions of the new Code and they will have to answer the test whether they are consistent with the provisions of the new Code.
But, in the case of Judicial orders made and sentences passed such orders and sentences which have attained finality and which have created rights in parties do not have to answer the test of being consistent with the provisions of the new Code.
We, therefore, hold that the order for maintenance made in favour of the respondent must be deemed to be an order made under Section 125 of the new Code and that it does not automatically cease to be effective on the coming into force of the new Code.
The High Court arrived at this conclusion and thought that it was sufficient to hold in favour of the respondent and to allow the Revision Application.
We do not think that the High Court was right in stopping there.
The High Court should have further considered the question whether the order for maintenance which was deemed to be an order under Section 125 of the new Code could not be cancelled under the provisions of Section 127 of the new Code.
Once the, order under Section 488 is deemed to be an order under Section 125 of the new Code, it must be so deemed for all purposes including the application of Section 127 of the new Code.
Section 127 provides for consequential orders upon proof of a change in the circumstance of any person (1) (1878) L.R. 4 l. 543.
291 receiving, under Section 125, a monthly allowance, or ordered under the A same Section to pay a monthly allowance to his wife, child, father or mother, as the case may be.
The admitted attainment of majority of the respondent and the change of the law were surely circumstances which entitled the appellant to have the order in favour of the respondent cancelled.
We accordingly allow the appeal and set aside the judgment of the High Court.
B M.R. Appeal allowed. | Ranbir Singh is Jagir Singh 's son from his separated first wife.
Ill 1971 he and his mother applied for maintenance under section 488 of Cr.P.C., 1898.
Although Ranbir Singh was a major, maintenance was awarded to him on the ground that he was a student unable to maintain himself.
In April 1974, the new Cr.
P.C. came into force, and under section 127 jagir Singh applied for cancellation of the maintenance order, on the ground that the major son WAS not prevented from maintaining himself through any infirmity or abnormality, and is not entitled to maintenance under the new code.
The respondent contended that the maintenance order had been validly passed under the old Code, and continued to remain in force notwithstanding the enactment of the new Code but the Magistrate cancelled the maintenance order, Ranbir Singh 's Revision Application was dismissed by the Sessions Court, on the ground that the order made under section 488 of the Cr.P.C., 1898 would not survive under section 484(2) of the Cr.
P.C. 1974 due to the absence of a corresponding provision under the new Code, enabling his maintenance.
He then applied to the High Court for a Revision.
The High Court allowed the Revision holding that 9. 125 of the Cr.
P.C., 1974 did correspond with section 488 of the Cr.
P.C. 1898.
The appellant contended that Ranbir Singh 's Revision application to the High Court was barred by section 397(3), Cr.P.C., 1974, and was incompetent, and that his right to invoke revisional jurisdiction of a superior court became exhausted when he moved the Sessions Court in Revision.
He further contended that the maintenance order was not saved either by section 484(2), Cr.
P.G 1974 or section 6 and 24 of the General Clauses Act.
The respondent submitted that his Revision application before the High Court could be treated and maintained, as, one directed against the Sessions Judge 's order rejecting his Revision application, or It could be treated as one under article 227 of the Constitution.
Allowing the appeal, the Court.
^ HELD: (1) The power under Act.
227 is discretionary.
The power of judicial superintendence under it could only be exercised sparingly to keep subordinate courts and Tribunals within the bounds of their authority, and not to collect mere errors.
Where the statute banned the exercise of revisional 283 powers by the High Court, it would require very exceptional circumstances to A warrant interference under article 227, since the power of superintendence was not meant to circumvent statutory law.
By the 42nd.
Amendment Act, clause (5) was added in article 227, which is a verbatim reproduction of section 224(2) of the Government of India Act, 1935, conferring powers of administrative superintendence only, and not the power of judicial superintendence.
[287F H, 288A] (2) In the Cr.
Of 1974 the District Magistrate is divested of his revisional jurisdiction over inferior criminal courts.
In addition, there are two important changes apparently designed to avoid delay and to secure prompt justice.
The first change is introduced by section 397(2) which bars the exercise of revisional power in relation to any interlocutory order passed in any appeal, enquiry, trial or other proceeding.
The second change is introduced by section 397 (3) under which any person aggrieved by an order of an inferior criminal court, is given the option to approach either the Sessions Judge or the High Court, and once he exercises the option, he is precluded from invoking the revisional jurisdiction of the other authority.
The object is, to prevent a multiple exercise of revisional powers and to secure early finality to orders.
[286C F] For vs Bishop of Chestor, ; ; Maxwell (11th Edn. page 109); applied.
(3) Whenever an Act is repealed and re enacted, there are bound to be changes and modifications.
To say that a modified provision dealing with the same subject matter in substantially the same manner as the original provision is not a "corresponding provision", would be to practically nullify the effect of a "Repeal and Savings" provision like section 484 (2) (b) of the new Code.
"To correspond" does not usually, or properly, mean to be identical with but to harmonise with, or to be suitable to.
There are no words in section 484 (2) (b) limiting its application to orders made, and sentences passed, which are not inconsistent with the provisions of the new Code.
All that section 484(2)(b) says is that such statutory instruments shall be deemed to be made under the corresponding provisions of the new Code.
Their validity will have to be tested like any other statutory instrument made under the provisions of the new Code.
There validity will have to be tested like any other statutory made under the provisions of the with the provisions of the new Code.
and they will have to answer the test whether they are inconsistent with the provisions of the new Code.
But in ease of judicial orders made, and sentences passed, such orders and sentences which have attained finality and which have created rights in parties, do not have to answer the test of being consistent with the provisions of the new Code.
[289F H, 290B E] Butterworth 's (Words and Phrases legally defined)(2nd Edn Vol.
I), Shorter oxford English Dictionary (3rd Edn.
I); Sackville West vs Holmsdale (Viscount), [1870] LR. ; applied.
(4) Section 125 of the new Code corresponds to section 488 of the Cr.P.C., 1898 notwithstanding the fact that under the Cr.P.C. Of 1974, a child who has attained majority, and who does not suffer from any infirmity, is not entitled to be maintained b`y the father.
Once an order under section , is deemed to be an order under section 125 of the Cr.
P.C. 1974, it must be to deemed for all purposes, including the application of section 127 of the new Code.
[290B, G] 20 817 SCI/78 284 Nanak Chand vs Chandra Kishore Aggarwal & Ors., ; ; referred to. |
Civil Appeal No. 1271 of 1969.
Appeal from the Judgment and Order dated 17 8 1966 of the Andhra Pradesh High Court in Appeal Nos. 252 and 283 of 1960.
427 V. Gopala Krishnaiah,, A. K. Ganguli and D. P. Mukherjee for the Appellant.
Upendralal Waray and A. Subba Rao for the Respondent.
The Judgment of the Court was delivered by DESAI J.
This appeal by certificate granted under Article 133(1)(a) of the Constitution arises from Civil Suit No. 23/1 of 1952 filed by the appellant against 56 respondents for recovering possession of lands more particularly set out in the Schedule annexed to the plaint, mesne profits, accounts and injunction, which suit was largely dismissed and partly decreed by the trial Court but in appeals bearing A. section Nos. 252 and 283 of 1960 by the unsuccessful defendants and the plaintiff, respectively, as dismissed as a whole.
A brief narration of facts necessary for appreciating the contentions raised herein may be set out.
Plaintiff appellant is the son of late Kazim Yar Jung who was a Minister of H.E.H. the Nizam of Hyderabad.
The father of the plaintiff obtained grant of certain lands in Ryalamadugu village from the Government of Nizam, the patta having been granted in the name of the plaintiff.
At about the time of police action in 1948 when the local conditions in Hyderabad City and State were disturbed, the plaintiff, his father Kazim Yar Jung and his step brother Mustafa found it difficult to even approach their lands and the plaintiff was then contemplating to shift to Pakistan with others.
Defendant No. 1 Rami Reddy who was a police Patel approached the plaintiff and represented that he would manage the affairs of the plaintiff, his brother and father, out that is he was not keeping well a nominal Power of Attorney would have to be granted to defendant No. 34 Uppara Sattayya whereupon the plaintiff, his father and brother jointly executed a Power of Attorney, Ext.P 1 dated 10th April 1949 in favour of defendant No. 34 which was further supplemented by the deed Ext.P 2 dated 20th April 1949.
The plaintiff alleged that in October 1949 he came to know that defendants nos.1 and 34 were perpetrating fraud when on 25th October 1949 the plaintiff and his brother Mustafa published a notice in the newspapers and the Gazette cancelling the Power of Attorney granted in favour of defendant No. 34.
Plaintiff then came to know that defendant nos, 1 and 34 and other defendants in collusion with each other got Transferred the lands of the plaintiff for inadequate or 110 consideration and that a fraud was perpetrated.
The plaintiff further alleged that the Power of Attorney is vague and void and inoperative and would not clothe defendant No. 34 with legal authority to deal with the properties in the manner in which they have been dealt 428 with.
At any rate, the Power of Attorney did not clothe defendant no, 34 with the authority to sell the land and, therefore, the purchasers have not acquired any title to the lands purporting to have been sold by defendant No. 34.
The plaintiff accordingly sued for possession, mense profits and accounts from the defendants.
Different groups of defendants filed three separate written statements but more or less the contentions raised in the various written statements are identical.
The first contention is that the plaintiff was not the lull and absolute owner of the suit lands but was a benamidar inasmuch as the lands were granted to the father of the plaintiff who was a Minister in the Nizam 's Government but the patta was formally taken in the name of the plaintiff who was then a minor.
It was also contended that the Power of Attorney, Ext, P l with P 2 was legal and valid and binding and it clothed del`defendant 34 with an authority to sell the lands and different parcels of lands have been sold to different defendants for full consideration and the plaintiff was aware of it and is now trying to take an advantage on the basis of a technical plea.
There were some other contentions which at this stage are hardly relevant.
The trial Court held that the plaintiff was the full and absolute owner of the suit properties.
The Power of Attorney Ext.P 1 was not vitiated by fraud and has clothed defendant No. 34 with the necessary authority to sell the lands and the sale of different parcels of lands in favour of different defendants were not vitiated by fraud and each sale was for consideration and binding on the plaintiff.
The Trial Court further held that the properties bearing Items 27 to 40, 42 44, 46, 47, 55 67 and 69 set out in the ' Schedule annexed to the plaint were not proved to have been sold, the conclusion having been based on the only ground that no sale deeds were forthcoming and accordingly it was held that the plaintiff was entitled to recover possession of the aforementioned pieces of land.
The trial Court accordingly dismissed the suit except for the aforementioned pieces of land in respect of which a decree for possession and mesne profits was granted in favour of the plaintiff.
Two appeals came to be filed to the High Court.
Appeal bearing A. section 252/60 was preferred by original defendants 8, 9 and 11 to the extent decree was made against them by the trial Court.
Appeal bearing A.S. 283/60 was preferred by the plaintiff to the extent the suit was dismissed.
Both the appeals came to be disposed of by a Division Bench of the Andhra Pradesh High Court by a common judgment rendered on 17th August 1966 by which A.S. 252/60 preferred by original defendants 8. 9 and 11 was allowed and the decree made against them 429 in favour of the plaintiff was set aside, and A.S. 283/6 preferred by the plaintiff was dismissed.
As a consequence the entire suit of the plaintiff came to be dismissed with costs in one set.
The plaintiff thereupon approached the High Court for a certificate and on a certificate under Article 133(1) (a) being granted, the plaintiff lodged the present appeal.
When the appeal reached the stage of hearing on an earlier occasion, CMP. 17845/78 was filed requesting the Court to record a memorandum of compromise between the appellant and the legal representatives of respondents 1, 2, 3, and respondent 34 inviting the Court to dismiss the appeal of the plaintiff appellant against them.
By an order made by this Court, this compromise was recorded and the appeal was so down for further hearing against the remaining respondents.
We take note of this compromise because on the basis of this compromise a submission has been made on behalf of the remaining respondents that the appeal against them would no more survive.
Mr. V. Gopalakrishnayya, learned counsel for the appellant urged that it is impermissible in law to give a joint Power by three persons in favour of one agent.
Alternatively it was contended that if such a power of Attorney is legal and valid it would clothe the agent with the only authority to Act in respect of the joint affairs or property of the principals and not for any individual affair or property of any one of them.
It was further urged that upon a true construction of the authority conferred by the Power of Attorney, Ext P 1 the scope of authority only encompassed the management of the joint properties of the three co principals or at best the management of property of each one of the principal but it did not clothe him with an authority to sell the property of any one of them and the situation is not improved by the supplementary deed, Ext.
Alternatively it was contended that if exhibit P 1 conferred an authority to sell the land it was hedged in with a prerequisite that the property can be sold to finance the litigation or to repay the loan, if any, borrowed for the aforesaid purpose.
In this context it was submitted that the Court should bear in mind that the garden is on the party who seeks to rely on the authority of the constituted attorney to establish that the impugned transaction falls within the ambit of authority of the attorney, and in this connection it may be borne in mind that ordinarily the courts construe Power of Attorney strictly.
It was then urged that even if it is held that by the combined operation of Exts.P 1 and P 2 the Attorney had the authority to sell the land he had not acted on his own but merely completed the sale negotiated by an outsider and thereby he acted as a rubber stamp and such an act of the attorney would not bind the principal, and in that 430 event the purchaser did not acquire any title to the land.
It was also contended that the High Court was in error in admitting the three sale deeds by granting CMP. 2762/61 purporting to act under Order 41, rule 27, Civil Procedure Code, and if they are excluded from consideration, in the absence of sale deeds the decree of the trial Court against original defendants 8, 9 and 11 will have to be restored.
On behalf of the contesting respondents it was urged that the plaintiff being benamidar, cannot maintain the suit on the allegation that he is the full and absolute owner of the properties.
The first contention of the appellant is that it was impermissible in law for three persons to jointly grant a Power of Attorney in favour of defendant 34.
Barring the ipse dixit of the learned counsel nothing was shown to us to make such a joint power impermissible in law.
The relation between the donor of the power and the donor of the power is one of principal and agent and the expression 'agency ' is used to connote the relation which exists where one person has an authority or capacity to create legal relations between a person occupying the position of principal and third parties.
The relation of agency arises whenever one person called the agent has authority to act on behalf of another called the principal and ' consents so to act.
The relationship has its genesis in a contract.
If agency is the outcome of a contract between the principal and the agent, in order to show that three principals jointly constituting an agent by a deed called 'Power of Attorney ' was impermissible, provisions of Contract Act or the general law of contract should have been shown as having been violated by such a contract.
Nothing of the kind was pointed out to us.
On the contrary, in Halsbury 's Laws of England, Vol.I, 4th Edn.para 726, the following proposition has been stated: "Co principals may jointly appoint an agent to act for them and in such case become jointly liable to him and may jointly sue him.
" We are in agreement with this view and, therefore, three principals could jointly appoint an agent.
The next limb of the submission was that if three co principals jointly constituted an agent then unless contrary is indicated by the deed of the Power of Attorney, the necessary inference would be that the agent can act in respect of those affairs in which all the co principles are jointly interested.
In other words, it was said that such a Power of Attorney would clothe the agent with an authority to act in respect of joint affairs of the co principals.
We are unable to find any force in this 431 argument, for what the Power of Attorney authorises depends on its terms and the purpose for which it is executed.
It would, therefore, be necessary to refer to the Power of Attorney, Ext.P l and the supplementary deed, Ext.P l is dated 10th April 1949 and is styled as general Power of Attorney.
The co principals are: (1) plaintiff Syed Abdul Khader (2) Kazim Yar Jung, and (3) Syed Mustafa Hussain.
The purpose for which the power was executed is set out in Ext.P l in the following words: "that in view of our private needs and as we are unable to conduct cases and answer them in time, we therefore appoint Copper Sattayya son of Coper Durgayya resident of Ghanpur, Medak Taluq as our general power of Attorney to act on our behalf and we empower the said person through this power of Attorney that the said Muktar can conduct the cases (Parvi) of all sorts, question and answer, admit or deny, either orally or writing on our behalf in all departments, civil and criminal courts, in the High Court, in the judicial committee, in the Revenue Departments of the Districts, namely, in the offices of the IInd, IIIrd, and Ist Taluqdars, the Tahsil Offices etc and purchased or sell (sic) of lands and that he is authorised to appoint any pleader or special Muktar when occasioned (sic) and to stop or to take or file any copies in any suit or to file any suit or file any written statements with his own signature to fetch any loan for our business or lands or to pay the debts from out of the income of the estate or to purchase or sell the lands and to execute the sale deeds and get registered under his signature etc . " The last sentence is that "all the acts of the said Muktar shall be deemed to be acts done and effected by us which we hereby accept and approve".
Subsequently on 20th April 1949 a supplementary Power of Attorney in addition to Ext.P l was executed by the aforementioned three donors of Power in favour of defendant No. 34 in which it is specifically stated that they affirm earlier Power of Attorney dated 10th April 1949 and thereafter the relevant recital is as under: "But by the said document, the powers of sale and registration were not confirmed (sic) on him and that therefore through this deed the same is hereby confirmed (sic) on him '.
It was urged that the Court should bear in mind the first principle that a Power of Attorney has to be strictly construed.
Undoubtedly, where someone other than the person who has a right to act in respect 432 of certain things has, under a contract of agency, the right to ac.
On be half of principal, the authority conferred by the written instrument has to be strictly construed.
Ordinarily a Power of Attorney is construed strictly by Courts (vide Bryant, Powis and Bryant Ltd. vs La Banque du Peuple) (1).
Adopting the principle of strict construction of a Power of Attorney, the first question that is required to be answered is whether the Power of Attorney, Ext.P l was meant to confer the authority on the agent to act only in respect of the joint affairs or joint property of the co principals or it was in respect of the individual affairs and effects of each principal.
In Ext.P 1 at three places the expression used is: "our Power of Attorney to act on our behalf and we empower the said person"; then again "on our behalf in all departments", and then lastly, "acts done and effected by the agent shall be deemed to be the acts done and effected by the principals." Mr. Gopalakrishnayya said that it would be extraordinary to hold that the expression "on our behalf" as disclosing a conjoint action on behalf of more than one person could ever be interpreted by any canon of construction as one on behalf of each individual.
He said that apart from the strict construction the Court must put on a Power of Attorney, where the terms of the written contract are clear and unambiguous it is impermissible for the Court to take into consideration the other circumstances to determine the intention of the parties.
When a contract is reduced to writing, undoubtedly the Court must look at the terms of the contract and proceed on the assumption that the parties intended what they have said and if the terms are unambiguous the Court must give effect to the terms of the contract.
However, it is well establish ed that in considering a contract it is legitimate to take into account the surrounding circumstances for ascertaining the intention of the parties (vide Modi & Co. vs Union of India).(2) Exhibit P l being a Power of Attorney granted by three co principals in favour of one agent, the expression "on our behalf" would hardly be decisive of the scope of authority conferred by the deed.
The circumstances in which such Power of Attorney came to the executed and the fact that three different persons though near relations but having no joint property or venture joined in executing a Power of Attorney and the purpose and object for which it was executed when taken into consideration would throw light on the true, nature of the authority conferred by the deed.
In this connection it is an admitted position that the Power of Attorney was executed in April 1949 and that too, in the (1) at 177(2) ; 433 State of Hyderabad, the erstwhile Nizam 's State.
In the wake of police action in the fall of 1943 and thereafter there were unusually disturbed conditions in Hyderabad State.
Plaintiff himself has stated in plaint para 1 that the conditions in Hyderabad were disturbed that like himself, his father and brother found it difficult to make contact with their properties and it was being contemplated by the plaintiff that he might shift to Pakistan with others.
All the three persons, i.e. his father, brother and the plaintiff found it difficult even to approach the properties of each of them and that all of them were contemplating;, to migrate to Pakistan.
In his belated evidence in Court after defendants ' evidence was closed the plaintiff re affirmed that after police action he lost possession of his lands and it was difficult to approach the lands or manage the same.
Even his clerk was not willing to undertake the responsibility.
Further there is no evidence to show that all the three co principals had any joint property or any joint business or any joint venture in which they were jointly interested.
Plaintiff says in his evidence that all the three joined in executing Power of Attorney Ext.P 1 because each of them had his land in that area and each was unable to manage his land.
In this background it would be futile to say that the three co principals executed the power of Attorney in favour of the agent to lookafter their joint affairs and joint property alone.
In fact, plaint para I leaves no room for doubt that each of the three co principals neither could manage nor could have access to each one 's own property and that each one was contemplating to migrate to Pakistan and that therefore they all gathered together and executed one Power of Attorney in favour of defendant No. 34 as a matter of convenience for dealing with the property of each one of the co principals.
It thus clearly transpires that each one of the co principals had his land, that each one of them was unable to manage his land, and that all the three of them were contemplating to migrate to Pakistan and that they wanted possibly to dispose on their lands, collect cash and skip over to Pakistan.
If Power of Attorney Ext.P 1 was executed in this background it would illumine the scope and ambit of authority conferred by Ext.
It would clearly appear that each one wanted to constitute defendant 34 to be his agent in respect of his property.
Therefore, the contention that the power of attorney Ext.P 1 read with Ext.P 2 was a joint power only in respect of joint properties of the three co principals must be rejected.
An incidental submission may be disposed of at this stage.
It was urged that the Power of Attorney Ext.P 1 is legally invalid and defective in form and that the supplementary document Ext.P 2 does not render in valid.
The defect pointed out is that when Ext P 1 was offered for registration the Sub Registrar has nowhere noted in his endorsement 434 that the donors of the power who executed the Power of Attorney Ext.P 1 were identified to him by someone known to him or they were personally known to him.
Undoubtedly the Sub Registrar in order to be satisfied that there is no impersonation may require some person known to him to identify those who admit execution before him but in case the persons who have executed the deed before him are known to him the failure to endorse that fact on the deed does not render the deed invalid.
In any event if those who executed the deed admit having executed the deed, the fact that the Sub Registrar failed to endorse the fact of the persons being known to him would not render the deed invalid.
A General Power of Attorney is not a compulsorily registrable document.
No rule or regulation was pointed out to us in support of the submission that it was obligatory for the Sub Registrar to make the endorsement that those who have executed the deed were either personally known to him or were identified by someone known to him.
Therefore, there is no merit in the contention and it must be rejected.
The next contention is that upon a true construction of Ext.P 1, the authority conferred thereby was to manage the property of the donors of the power and it did not confer any authority to purchase or sell the property.
Simultaneously it was stated that Ext.P 2 does not improve the position in this behalf.
Both the Courts have rejected this submission and for very good and convincing reasons.
A bare perusal of Ext.P 1 clearly shows that apart from the power to manage the property, a further power to purchase and sell lands was conferred on the agent.
Power to purchase and sell lands has been expressly mentioned at two places in Ext.P 1., But even apart from this, the plaintiff in his cross examination has admitted that after executing Ext.P 1 the Registrar pointed out that the Power of Attorney Ext.P 1 does not confer the authority to sell land and offer for registration sale deed and requested them to execute a supplemental document expressly confer ring such authority and he identified Ext.P 2 to be the supplemental document.
P 2 has been reproduced in extenso by the High Court in its judgment and in no uncertain and most unambiguous terms it is stated therein that the power to sell and registration of sale deed was conferred by Ext.
But even if Ext.P 2 were to be excluded from consideration, the Power of Attorney Ext.P 1 clearly confers an authority on the agent to sell the property.
If we recall at this stage the circumstances in which Ext.P 1 came to be executed in favour of defendant No. 34, it clearly appears that plaintiff, his father and brother were keen to get the lands sold as they were contemplating to migrate to Pakistan.
In the face of this express and explicit power it could not be said that the authority was conferred only to manage the property.
435 In Ext.P 1 the expression 'to manage the property ' is nowhere to be found.
On the contrary the general Power of Attorney is couched in a language which confers wide authority to file suits, defend actions, engage advocates, appear in various offices, purchase and sell land and execute sale deeds and get them registered, to borrow money, to employ persons needed for carrying out affairs and to dismiss them.
It is difficult to appreciate the submission that the authority was only to manage the property.
The submission is not borne out by the contents of Exts.P l and P 2.
Incidentally in this connection it was urged that the power to purchase and sell land and to execute documents and to offer them for registration does not include the power to sell agricultural land.
This has only to be mentioned to be rejected because the expression 'lands ' would include both agricultural and non agricultural land.
The next contention is that even if the Court were to accept that the authority conferred by the Power of Attorney encompasses the authority to sell land, the power to sell land was hedged in with a pre condition 1 or with a pre requisite that the land could be sold either for Financing litigation or if for that purpose a loan was borrowed, to repay the loan.
Sustenance is sought to be drawn for this submission from the following few lines in Ext.P 1: "and purchase or sell (sic) of lands and that he is authorised to appoint any pleader or special Muktar when occasioned (sic) and to stop or to take or file any copies in any suit or to the any suit or file any written statements with his own signature to fetch any loan for our business or lands or to pay the debts from out of the income of the estate or to purchase or sell the lands and to execute the sale deeds and get registered under his signature and to obtain money or to enter into a compromise in any suit or get it settled through arbitration or to withdraw any suit. etc.
" In Ext.P 2 the supplemental Power of Attorney, it is stated that the power for sale and registration of documents was conferred on the agent The, construction suggested is not warranted by the language used in Ext.
The power to purchase or sell land was not hedged in by any pre requisite or pre condition.
Each recital constitutes a separate power, namely, (i) power to purchase or sell land, (ii) power to appoint a pleader or Mukhtar, (iii) power to file suit or appear and file written statement (iv) power to borrow money or to enter into any comprise in any suit or get it settled through arbitration and withdraw any suit each was an independent power.
There is nothing in Ext.P 1 which 436 would even remotely indicate that the land could be sold only for financing the litigation or if for that purpose a loan was borrowed, to repay the loan Such power of wide amplitude conferring such wide authority cannot by construction be narrowed down to deny an authority which the donors expressly granted.
The ordinary authority given in one part of the instrument will not be cut down because there are ambiguous and uncertain expressions elsewhere but the document will be considered as ? whole for interpretation of particular words or directions (see Halsbury 's Laws of England, 4th Edn., Volume I, Para 733).
The contention, therefore, must be negatived.
The next contention is that even if Ext.P 1 confers authority on dependant 34 to sell land, the authority so conferred on defendant 34 was to act on his own and not at the behest of an outsider or as a rubber stamp of someone and that in this case evidence clearly shows that it was Kazim Yar Jung, the father of the plaintiff who entered into an agreement, Ext.D 18 dated 14th February 1949, with defendant No. 1 for sale of land and the agent defendant 34 merely rubber stamped the sale and executed the sale deed and that such a sale is not binding on the plaintiff.
At first blush the argument is really attractive but it does not stand scrutiny.
Land involved in the dispute was granted by the Nizam when the father of the plaintiff was a Minister in the Nizam 's Government.
Patta evidencing the grant was taken in favour of the plaintiff who was then a minor.
The father of the plaintiff really believed that he was the owner of the land and in fact on 20th October 1949 he wrote to Tahsildar, Medak; that his son was a benamidar and that the lands may, therefore, be transferred in his name.
Thus, the father of the plaintiff acted as if he was the owner of the land but when a contention on; behalf of the respondents that the plaintiff was a benamidar would be presently examined, it would be painted out that the plain tiff we the real owner and was not a benamdar.
That is the true legal position.
the fact, however, remains hat the father of the plaintiff who must be a man of considerable influence being a Minister in the Government of Nizam, must have acted as if he was the owner of the land.
Undoubtedly, the agreement Ext.D 18 for sale of land was entered into between the father of the plaintiff and defendant No. l and pursuant to this agreement defendant No. 34 executed a sale deed in favour of defendant No. 31, but it may be noticed that the agreement Ext.D 18 was entered into two months prior to the grant of Power of Attorney, Ext.
There is, however, evidence to show that the agreement for sale of land and the sale deed were taken in the presence of and to the know ledge and with the full acquiescence of the plaintiff witness Kishta Reddy, D.W. 2 has stated in his evidence that defendant 1 Rami Reddy 437 paid the consideration for purchase of land pursuant to agreement Ext.D 18 to plaintiff in his own presence.
He has further stated that Kazim Yar Jung, Plaintiff 's father and daughter of Kazim Yar Jung and both of his sons including the plaintiff were present when the amount of consideration was paid.
This witness 's presence at the time of payment of consideration cannot be disputed because receipt Ext.
D 16 which evidences payment of consideration for the sale of land to defendant No. 1 though signed and passed by Kazim Yar Jung, the father of the plaintiff, was attested by him.
This evidence which has remained uncontroverted would show that the consideration for sale of land in favour of defendant 1 pursuant to agreement of sale Ext.D 18 was paid to the plaintiff in the presence of this witness and plaintiff accepted the same though the receipt Ext.D 18 was passed by the father of the plaintiff.
A feeble attempt was made to explain this inconvenient evidence by saying that in agreement Ext.D 18 lands are not especially described by setting out the Survey Numbers or the Khata Numbers and as in that very village plaintiff 's father had also his lands, the plaintiff may have as well remained under the impression that the father had sold his own lands and, therefore, could not raise any objection about the sale.
This explanation cannot be swallowed for the obvious reason that there was no reason for the plaintiff to accept the consideration or the consideration being put in his hands if his land was not being sold.
Even if the father of the plaintiff could be said to be an ostensible owner of the land and he purported to sell the land, the plaintiff the real owner as he claimed to be had acquiesced in the same and accepted the consideration and in this background he would be estopped from challenging the title which was transferred pursuant to the sale.
In the back drop of these circumstances the principle enunciated in section 41 of the Transfer of Property Act would come to the rescue of the transferee.
Section 41 of the Transfer of Property Act provides that where, with the consent, express or implied, of the person interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorized to make it.
Section 41 codifies what was once treated as a principle in equity which the Judicial Committee had recognised in Ram coomar vs Macqueen,.(1) wherein the Judicial Committee observed as under: "It is a principle of natural equity which must be universally applicable that, where one man allows another to hold himself out as the owner of an estate and a third person purchases it, for value, from the apparent owner in the belief that (1) (1872) I.A. 11 Bengal L.R. 46.438 he is the real owner, the man who so allows the other to hold himself out shall not be permitted to recover upon his secret title, unless he can overthrow that of the purchaser by showing either that he had direct notice, or something which amounts to constructive notice, of the real title; or that there existed circumstances which ought to have put him upon an inquiry that, if prosecuted would have led to a discovery of it ' In this case the father of the plaintiff throughout acted in relation to others as the owner of the property though the plaintiff was the real owner of the property.
The father of the plaintiff executed agreement D 18 to sell the land to defendant 1.
The transaction was completed in the presence of the plaintiff and the consideration was put in the hands of the plaintiff.
Plaintiff would certainly be estopped from contesting the validity of the sale on the ground that the father had no authority to sell the land or on the ground that though his father entered into the agreement Ext.D 18, his constituted attorney defendant 34 acted as a mere rubber stamp.
In this connection it would be very profitable to refer to a notice served by the plaintiff on defendant 1, Ext.D 21 dated 19th December 1949.
Now, before the true impact of this notice can be gauged, a few dates may be recalled.
The Power of Attorney Ext.P 1 was executed in favour of defendant 34 on 10th April 1949.
Agreement Ext.D 18 was entered into between the father of the plaintiff and defendant No. 1 on 14th February 1949.
This would show that agreement D 18 was entered into between the father of the plaintiff and defendant 1 prior to the execution of the Power of Attorney, Ext.
The public notice cancelling the Power of Attorney was issued on 25th October 1949.
Now, notice Ext.D 21 is dated 19th December 1449.
Therefore, it clearly transpires that notice Ext.D 21 was issued by the plaintiff after he had developed a suspicion about the fraud alleged to have been perpetrated by defendants 1 and 34 and after cancelling the Power of Attorney in favour of defendant No. 34.
Yet by this notice Ext.D 21 plaintiff called upon defendant 1 to meet him to purchase the lands set out in the notice if he was so desirous, otherwise plaintiff would sell the same to others.
The lands described in the notice clearly exclude those pieces of lands sold under the authority of Power Of Attorney Ext.
Does it stand to reason to believe that plaintiff who suspected that he was the victim of a fraud at the hands of defendant 1 and that he had to take steps to cancel the Power of Attorney granted by him in favour of defendant 34 specifically at the instance of 439 defendant 1 would ever invite him to purchase some other land ?
If there was any substance in the case put forth by the plaintiff that the sale already completed by defendant 34 in favour of defendant 1 pursuant to the agreement, Ext.D 18 executed by the father of the plaintiff in favour of defendant 1 was not acceptable to him or was not binding on him he would not invite him to purchase other lands.
The conduct of the plaintiff belies his suspicion, and the allegation of fraud and want of authority is clearly an after thought.
Viewed from any angle, the contention of the plaintiff is without merits and must be rejected.
It was next contended that the High Court was in error in granting MP.2762/61 permitting the heirs of defendants 8, 9 and 11 to produce the sale deeds which they did not produce in the trial Court and after relying on the same, reversing the decree of the trial Court.
The High Court has given cogent reasons for granting CMP. 2762/61.
Order 41, Rule 27, C.P.C. enables the appellate Court to admit additional evidence in the circumstances or situation therein mentioned one such being where the appellate court requires any document to be produced or any witness to be examined to enable it to pronounce judgment or for any other substantial cause.
By a catena of decisions of this Court, it is well established that Order 41, Rule 27, C.P.C 'does not confer a right on the party to produce additional evidence.
But if the Court hearing the action requires any document so as to enable it to pronounce judgment, it has the jurisdiction to permit additional evidence to be produced.
The High Court has given cogent reasons why it felt impelled to permit production of registered sale deeds so as to enable it to pronounce judgment in the matter.
If the High Court considered the production of registered sale deeds essential so as to enable it to pronounce judgment, there is no reason why we should interfere with the discretionary power properly exercised by the High Court in the interest of justice.
Even otherwise, the High Court was justified in permitting additional evidence to be produced when it consisted of registered sale deeds.
Such additional evidence has to be read as part of the record.
Once these registered sale deeds are taken into consideration, a part of the decree of the trial Court granted in favour of the plaintiff awarding him possession of the land on the only ground that the sale deeds in respect of those pieces of lands were not produced, could not be maintained and the High Court rightly allowed the appeal of original defendant nos.8, 9 and 11 and no exception can be taken to it.
We may now turn to two contentions raised on behalf of the respondents.
440 The first contention on behalf of respondents is that the plaintiff being a benamidar, he is not entitled to seek possession of the land on the basis of his title as full and absolute owner of the suit lands.
The High Court in this connection has not specifically dealt with this contention though the trial Court raised a specific issue in respect of it and answered it in favour of the plaintiff '.
The High Court has, however, ob served that the plaintiff 's father was the real owner of the suit lands and he was managing the property although the patta was issued in the name of his son, the plaintiff.
The High Court then observed that Kazinm Yar Jung for the reason that he was an employee of the Nizam in order to avoid embarassment to himself nominally made the plaintiff, his minor son, the pattadar.
In the opinion of the High Court this is borne out by the fact that after executing the Power of Attorney, Ext.P 1 in favour of defendant 1, he wrote to the Tahsildar, Medak on 20th October 1949 that his son was a benamidar and that the lands may therefore be transferred in his name.
However, after making these observations the High Court has not chosen to non suit the plaintiff on the ground that he n was a benamidar Undoubtedly, Kazim Yar Jung was holding a high office in Nizam 's Government It is rational to believe that he may have influenced the decision of the Nizam to grant the land and that he may not have taken the patta in his own name.
The patta may, therefore, have been grant ed in favour of his minor son, the plaintiff.
Does that make the plain tiff a benemidar Section 82 of the , provides that where property is transferred to one person for a consideration paid or provided by another person, and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration.
Now, there is no evidence to show that the patta was for consideration.
It is said that there was a grant of land and it is not clear that it was meant to be a gift of land.
Even if the Nizam in appreciation of the services rendered by the plaintiff 's father granted the land to the plaintiff, it could not be said that any consideration flowed from the father of the plaintiff so as to make the plaintiff a benamidar.
The genesis of the concept of benami is the consideration for a transfer must flow from one person and the transfer is taken in the name of the other person and the consideration so flowing for the transfer was not intended to be a gift in favour of the person in whose name the transfer is taken All these ingredients of benami are absent in this case and, therefore, the contention that the plaintiff was a benamidar cannot be accepted.
441 lt was also contended that the plaintiff came to the Court with an allegation that defendant 1 induced the plaintiff, his father and brother to execute a nominal Power of Attorney in favour of defendant No. 34, and defendants 1 and 34 in collusion with each other defrauded the plaintiff his property.
It was said that if defendants 1 and 34 were the perpetrators of the fraud, the plaintiff having compromised with them and withdrawn the appeal against them, the appeal would not survive against the rest.
There is absolutely no merit in this contention.
The plaintiff may have valid reasons for entering into a compromise with defendants 1 and 34 who might have made good a part of the loss suffered by the plaintiff.
But apart from the allegation of fraud, the suit was substantially based on the scope of authority conferred by Exts.P l and P 2 to sell lands and the acquisition of the title by the purchasers From the attorney defendant 34 in exercise of the authority conferred by Exts.
P l and P 2 and, therefore, a compromise with defendants 1 and 34 would not render the appeal against the rest of the defendants infructuous or untenable.
The third contention was that the plaintiff left India and his evidence having remained incomplete, the same could not be read in evidence.
After we explained the relevant documents, we are satisfied that there is no substance in this contention.
As all the contentions raised by the appellant fail, the appeal fails and is dismissed with costs.
N.V.K. Appeal dismissed . | The plaintiff (appellant), his father and step brother were owners of lands in a village in the former State of Hyderabad.
Coming to know that the two brothers and father were contemplating to migrate to Pakistan, defendant No. 1 suggested to the plaintiff that he would manage their properties but that since he was not in good health, a nominal power of attorney might be granted in favour of defendant No. 34.
The power of attorney (Ext.
Pl) was granted tc defendant 34 by all of them.
It was later supplemented by another deed (Ext. P2).
The plaintiff alleged that sometime thereafter he realised that the two defendants in collusion with each other transferred his lands to others for no consideration or inadequate consideration and that thereby a fraud was perpetrated upon him by the defendants.
Thereupon, it was further alleged, the plaintiff and his brother published in the newspapers and the official gazette a notice cancelling the power of attorney granted to defendant No. 34.
The plaintiff sued the defendants for recovery of possession of lands and certain other benefits.
The defendants on the other hand claimed that the two documents being valid the plaintiff could not resile from them.
They also alleged that the plaintiff was not the full and absolute owner of the lands but was a benamidar.
The trial court dismissed the plaintiff 's suit holding that the documents were valid The High Court upheld the trial court 's order.
It however held that the plaintiff was the absolute owner of the suit properties Dismissing the appeals. ^ HELD 1(a) There is no force in the contention that it is impermissible for three persons to jointly grant a power of attorney in favour of defendant No. 34.
Co principals may jointly appoint an agent to act for them and in such a case they become jointly liable to him and may jointly sue him.
[430C,F] (b) The relation of agency arises when one person, called the agent, has authority to act on behalf of another called the principal and consents so to act.
The relationship has its genesis in contract.
In order to show that it is imper 425 missible for three principals to jointly constitute an agent by a common power of attorney it should be shown that the provisions of Contract Act or the general law of contract have been violated by such a contract.
[430E] In the instant case there is no such violation.
Halsbury 's Laws of England Vol.
1 4th Edn.
para 726 referred to. 2.
There is no force in the contention that since the two documents confer a joint power of attorney in respect of properties of the three co principals, the agent could look after the joint properties of the donors alone and not their individual affairs.
What a power of attorney authorises depends on its terms and the purposes for which it was executed.
Where someone other than the person Who has the right to act in respect of certain things, has under a contract of agency, the right to act on behalf of the principal, the authority conferred by the written instrument has to be strictly construed.
Ordinarily the power of attorney is construed strictly by courts.
It is equally well established that in considering a contract it is legitimate to take into account the surrounding circumstances for ascertaining the intention of the parties.
[430H, 431A, 431H 432A, F] Bryant, Powis and Bryant Ltd vs La Banque du Peuple, at 177, Modi & Co. vs Union of India, referred to.
In the instant case in Ext.
P1 at three places the expressions used are" our power of attorney to act on our behalf and we empower the said person` '. 'on our behalf in all departments", and lastly, "acts done and effected by the agent shall be deemed to be acts done and effected by the principals.
" The power of attorney having keen granted by three co principals in favour of one agent the expression "on our behalf" would hardly be decisive of the scope of authority conferred by the deed.
The surrounding circumstances clearly established that each of the co principals had his land, each of them could not have access to this land and therefore could not manage them, and with a view to migrating to Pakistan each of them apparently wanted to dispose of his lands and collect cash and therefore for this purpose each of them wanted to constitute defendant No. 34 to be his agent in respect of his individual property.
1432C. G, 433F] 3.
A general power of attorney is not a compulsorily registrable document.
When those who executed a deed admit having executed it, the tact that the Sub Registrar failed to endorse that the executants were known to him would not render the deed invalid.
Nor is there a legal obligation on the part of the Sub Registrar to make an endorsement that the persons executing a deed were either personally known to him or were identified by someone known to him.
[434C, B] 4.
There is no force in the submission that the authority given under exhibit P1 was only to manage the property and not to sell it.
P1 clearly shows that apart from the power to manage the property a further power to purchase and sell lands was conferred on the agent.
The general power of attorney conferred wide authority on defendant No. 34 to file suits, defend actions.
engage lawyers.
purchase and sell land and execute sale deeds and so on.
[434D E, 435A] 5.
A document will be considered as a whole for interpretation of particular words or directions.
An ordinary authority given in one part of the instrument will not be cut down because there are ambiguous and uncertain expressions elsewhere.
A power of wide amplitude conferring wide authority cannot by 9 978 SCI/78 426 construction be narrowed down to deny an authority which the donor expressly wanted to confer.
[436B] Halsbury 's Laws of England 4th Edn.
1 para 733; referred to.
(a) By a catena of decisions of this Court it is well established that Order 41 Rule 27 C.P.C. does not confer a right on a party to produce additional evidence before an appellate court.
But if the court hearing the action requires any document to enable it to pronounce judgment, it has the jurisdiction to permit additional evidence to be produced.
If the High Court considered production of registered sale deeds essential to enable it to pronounce judgment, there is no reason why this Court should interfere with the discretionary power properly exercised by the High Court in the interest of justice.
[439E F] 7.
(a) The contention that defendant No. 34 who was the constitute attorney acted as a mere rubber stamp in certain transactions has no force.
Section 41 of the Transfer of Property Act provides that where, with the consent, express or implied of the person interested in immovable` property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it.
[436D, 437F] (b) Even if the father of the plaintiff could be said to be the ostensible owner of the land and he purported to sell the land, the plaintiff had acquiesced in the sale and accepted the consideration.
He would therefore be estopped from challenging the tile which was transferred pursuant to the sale.
[437E] Ramcoomar vs Macqueen, 1872 I.A. 11 Bengal LR 46; referred to.
(a) The contention that the plaintiff was a benamidar cannot be accepted.
The genesis of the concept of benami is that consideration for a transfer must flow from one person and the transfer is taken in the name of the other person and the consideration so flowing for the transfer was not intended to be a "gift in favour of the person in whose name the transfer is taken.
All these ingredients of benami ale absent in the instant case.
[440H] (b) Section 82 of the provides that where property is transferred to one person for a consideration paid or provided by another person, and it appears that such person did not intend to pay or provide such consider for the benefit of the transferee, the transferee must hold the property for the benefit OF the person paying or providing, the consideration.
[440F] (c) The plaintiff 's father held a high office in the Nizam 's Government.
He might have influenced the Nizam to grant the land to his son.
There is no evidence to show that the patta was for consideration.
Even if the Nizam in appreciation of the service rendered by the plaintiff 's father granted the land to the plaintiff it could not be said that any consideration flowed from the father of the plaintiff so as to make him a benamidar.
[440E, G] |
N: Criminal Appeal Nos.
274 275 of 1974.
Appeals by Special Leave from the Judgment and Order dated 27 11 73 and 11 1 1974 of the Delhi High Court in Criminal Appeal No. 78/67 and Crl.No. 80/73 respectively.
R. K. Garg, V. J. Francis and D. K. Garg for the Appellant.
Soli J. Sorabji, Addl.
, R. N. Sachthey for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
These appeals are by special leave against the judgment of the High Court of Delhi in Criminal Appeal No. 78 of 1967 and Order dated 11th January, 1974 in Cr.
(S.C.A.) No. 80 of 1973.
The appellant was chargesheeted on 26th December, 1963 for an offence under section 120 B, Indian Penal Code, for entering into a criminal conspiracy with one Sirajuddin and one Rehman to accept from them illegal gratification in the discharge of his official duties.
He was also charged with specific offences of accepting Rs. 6000 and Rs. 4000 from Sirajuddin and Rehman being offences punishable under section 161, Indian Penal Code, read with section 5(2) and Section 5(1) (d) of the Prevention of Corruption Act, 1947.
He was also charged for the offence punishable under section 5(2) read with section 5(1) (a) of the Prevention of Corruption Act that in pursuance of the aforesaid conspiracy, he, during the period from 1955 to 1961 habitually accepted illegal gratification from the said two co accused persons.
The Special Judge who tried the case acquitted the appellant by his order dated 19th January, 1967 holding that neither the charge of conspiracy nor any other charge against the accused was proved.
But the Special Judge held that the assets of the appellant from 1st July, 1955 to 30th April, 1961 had exceeded his income by Rs. 33,588.34 and they were disproportionate to the known sources of income of the petitioner.
The learned Judge, however, found that as section 5(3) of the Act had been repealed on 18th December, 1964 and as specific instances of payment of bribe to the petitioner could not be proved the accused could not be held guilty of the charges.
Aggrieved by the decision, the State preferred an appeal to the Delhi High Court on 11th April, 1967.
Pending 819 the appeal before the High Court, Act No. 16 of 1967, received the assent of the President on 20th June 1967 and came into effect on 5 5 1967 reintroducing section 5(3) in the Act w.e.f. 18 12 1964.
In the High Court the appellant challenged the vires of Act No. 16 of 1967 on the ground that survival of section 5(3) of the Act and making it applicable retrospectively was void and unconstitutional as it was in violation of article 14 and 20(1) of the Constitution.
A Division Bench of the High Court of Delhi by its judgment dated 27th November, 1973 allowed the appeal upholding the validity of Act No. 16 of 1967 and remanded the case to be tried from the stage at which it was pending on 18th December, 1964.
Criminal Appeal No. 274 of 1974 is against the order of the High Court remanding the case for fresh trial and Criminal Appeal No. 275 of 1974 is against the order of the High Court refusing to grant a certificate of fitness for appeal to this Court.
Mr. R. K. Garg, the learned counsel for the appellant, submitted that since section 5(3) of the Prevention of Corruption Act, 1947 was repealed on 18th December, 1964, the Courts below cannot take into account the provisions of section 5(3) of the Act after the date of its repeal on 18th December, 1964.
It was further submitted that Act No. 16 of 1967 which gave retrospective operation to section 5(3) of the Act is violative of articles 14 and 20(1) of the Constitution.
In order to appreciate the contention of the learned counsel for the appellant it is necessary to set out the relevant provisions of the Act.
Section 5(1) of the Prevention Act, of 1947, states when a public servant is said to commit the offence of criminal misconduct.
The section before the amendment Act No. 16 of 1967 consisted of four clauses (a), (b), (c) and (d).
The appellant was charged for an offence under section 5(1)(a) and section 5(1) (d) punishable under section 5(2) of the Act.
Section 5(1)(a), and section 5(1)(d) and section 5(2) read as follows: "5.(1) A public servant is said to commit the offence of criminal misconduct in the discharge of his duty (a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person, any gratification (other than legal remuneration) as a motive or reward such as is mentioned in section 161 of the Indian Penal Code.
(b) * * * * (c) * * * * 820 (d) If he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.
5 (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 5(2) provides for the punishment of any public servant who commits criminal misconduct as specified in clauses (a) and (d) of section 5(1).
Section 5(3) prescribed a rule of evidence which runs as follows: "5.(3) In any trial of an offence punishable under sub section (2), the fact that the accused person or any other person on his behalf is in possession, for which the accused person cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income may be proved, and as such proof of the Court shall presume, unless the contrary is proved, that the accused person is guilty of criminal misconduct in the discharge of his official duty and his conviction therefor shall not be invalid by reason only that it is based solely on such presumption."
Section 5(3) was repealed on 18th December, 1964 by Act 40 of 1964.
The Act also introduced a new section, section 5 (1) (e) which reads as follows: "(e) if he or any person on his behalf is in possession or has at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income." Thus on the date when the Special Judge pronounced his order on 19th January, 1967 section 5(3) was not in existence and the Special Judge acquitted the appellant on the ground that the presumption under section 5(3) was not available for the prosecution on that date.
Subsequently on 5th May 1967 Act No. 16 of 1967 came into force.
Section 2 of the Act provided as follows: "2.Amendment of Anti Corruption Law in relation to certain pending trials.
(1) Notwithstanding (a) the substitution of new provision for sub section (3) of section 5 of the Prevention of Corruption Act, 1947 (hereinafter referred to as the 1947 Act), by section 6(2)(c) of the Anti Corruption Laws (Amendment) Act, 1964 (hereinafter referred to as the 1964 Act); and (b) any judgment or order of any court, the said sub section (3) as it stood immediately before the commencement of the 1964 Act shall apply and shall be deemed always to have applied to and in relation to trial of offences punishable under sub section (2) of section 5 of the 1947 Act pending before any court immediately before such commencement as if no such new provisions had been substituted for the said sub section (3); (2) The accused person in any trial to and in relation to which sub section (1) applies may, at the earliest opportunity available to him after the commencement of this Act, demand that the trial of the offence should proceed from the stage at which it was immediately before the commencement of the 1964 Act and on any such demand being made the court shall proceed with the trial from that stage.
(3) For the removal of doubt it is hereby provided that any court (i) before which an appeal or application for revision against any judgment or order or sentence passed or made in any trial to which sub section (1) applies is pending immediately before the commencement of this Act, or (ii) before which an appeal or application for revision against any judgment, order or sentence passed or made before the commencement of this Act in any such trial, is filed after such commencement 'shall remand the case for trial in conformity with the provisions of this section.
" The contention of the learned counsel for the appellant is that Act No. 16 of 1967 is an ex post facto legislation creating a new offence retrospectively.
We will first consider the effect of repeal of section 5(3) of the Prevention of Corruption Act, Act 2 of 1947.
The nature of section 5(3) has been considered by this Court in several decisions.
In Sajjan Singh vs The State of Punjab this court referring to the sub 822 section held that the sub section provided an additional mode of proving an offence punishable under sub section 5(2) for which an accused person is being tried.
This Court negatived the contention that section 5(3) created a new kind of offence of criminal misconduct by a public servant in the discharge of his official duty.
It held that the section merely prescribed a rule of evidence for the purpose of proving the offence of criminal misconduct as defined in section 5(1) for which an accused person is already on trial.
The court followed the view held by this Court in C.D.S. Swamy vs The State and in Surajpal Singh vs State of U.P.
The question that arises is what is the effect of repeal of the provision under section 5(3).
By Act 40 of 1964 section 5(3) was repealed prospectively.
The statute does not say that the section shall be deemed not to have been in force at all.
Mr. R. K. Garg the learned counsel for the appellant relying on the dissenting judgment of Fazal Ali J. in Keshavan Madhava Menon vs The State of Bombay, (3) submitted that the effect of a repeal will be that it should be construed as the Act not having been in existence at all.
The view of Tindal C. J. that a repeal of the statute obliterated it completely from the records of Parliament as if it had never been passed was followed by Fazal Ali J. Mahajan J. speaking for the majority disagreed with the view holding that "it would be more consonant with reason and justice to say that the law existed and was good at the time when it was passed but that since the date of its repeal it has no longer any effect whatsoever.
" The view taken by the Chief Justice Jindal was abrogated by the enactment of the Interpretation Act, 1889.
Section 32 of the Interpretation Act deals with the effect of repealing an Act after August 30, 1889.
"Such repealing Acts are, unless contrary intention appears, not to effect the previous operation of any enactment so repealed or anything duly done or suffered under any enactment so repealed or effect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or affect any penalty, forfeiture, or punishment incurred in respect of any offence committed against any enactment so repealed; or affect any investigation, legal proceeding, or remedy in respect of any such right, privilege," obligation, liability, penalty, forfeiture or punishment as aforesaid." (Maxwell on The Interpretation of Statutes, 12th Ed., p.17).
In India the , contain similar provisions as in the Interpretation Act, 1889.
Section 6 of the runs as follows: 823 "6.Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.
" Section 6 provides that the repeal shall not affect the previous operation of any enactment so repealed unless a different intention appears.
The operation of all the provisions of the Prevention of Corruption Act would continue in so far as the offences that were committed when section 5(3) was in force.
The offences that were committed after the date of the repeal will not come under the provisions of section 6(b) of the Section 6(c) also preserves all legal proceedings and consequences of such proceedings as if the repealing Act had not been passed.
In this view it is clear that whether Act 16 of 1967 had been brought into force on 20th June, 1967 or not the rule of evidence as incorporated in section 5(3) would be available regarding offences that were committed during the period before the repeal of section 5(3).
Mr. R. K. Garg the learned counsel submitted that the provisions of Act 16 of 1967 by virtue of which the rule of evidence enacted in section 5(3) is deemed to have always been in existence is violative of article 20(1) of the Constitution.
Article 20(1) of the Constitution is as follows: 824 "No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence."
Article 20(1) deals with ex post facto laws though that expression has not been used in the Article.
Usually, a law prescribes a rule of conduct by which persons ought to be governed in respect of their civil rights.
Certain penalties are also imposed under the criminal law for breach of any law.
Though a sovereign legislature has power to legislate retrospectively creation of an offence for an act which at the time of its commission was not an offence or imposition of a penalty greater than that which was under the law provided violates article 20(1).
In the well known case of Phillips vs Eyre and also in the American case of Calder vs Bull the principle underlying the provision has been fully discussed.
All that article 20(1) prohibits is ex post facto laws and is designed to prevent a person being punished for an act or omission which was considered innocent when done.
It only prohibits the conviction of a person or his being subjected to a penalty under ex post facto laws.
In Rao Shiv Bahadur Singh & Anr.vs The State of Vindhya Pradesh, the Court pointed out that "what is prohibited under article 20(1) is only conviction or sentence under an ex post facto law and not the trial thereof.
Such trial under a procedure different from what obtained at the time of the commission of the offence or by a Court different from that which had competence at the time cannot ipso facto be held to be unconstitutional.
A person accused of the commission of an offence has no fundamental right to trial by a particular Court or by a particular procedure, except in so far as any constitutional objection by way of discrimination or the violation of any other fundamental right may be involved.
" Thus the appellant cannot object to a procedure different from what obtained at the time of the commission of the offence.
The offence that was committed was when section 5(3) was in force and by Act 16 of 1967 the procedure is revived.
It is not as if the procedure is brought into force for the first time.
"Where an Act is repealed and the repealing enactment is then repealed by another, which manifests no intention that the original Act shall continue repealed, the common law rule was that the repeal of the second Act revived the first ab initio.
" Maxwell on the Interpretation of Statutes, 825 12th Ed., p.19).
There can be no objection in law to the revival of the procedure which was in force at the time when the offence was committed.
The effect of the amendment is that sub section (3) of section 5 as it stood before the commencement of 1964 Act shall apply and shall be deemed to have always applied in relation to trial of offences.
It may be if by this deeming provision a new offence was created then the prohibition under Article 20(1) may come into operation.
But in this case, as already pointed out, what is done is no more than reiterating the effect of section 6(1) of the .
Mr. Garg, the learned counsel, submitted that by amending procedure drastically and giving it retrospective effect a new offence may be created retrospectively.
It was contended that by shifting the burden of proof as provided for in section 5(3) of the Prevention of Corruption Act, 1947, a new offence is created.
It is unnecessary for us to consider the larger question as to whether in certain circumstances giving retrospective effect to the procedure may amount to creation of an offence retrospectively.
In the present case the old procedure is revived and no new procedure is given retrospective effect.
The procedure given effect to is not of such a nature as to result in creation of a new offence.
In the result all the contentions raised by the learned counsel for the appellant fail and these appeals are dismissed.
S.R. Appeal dismissed. | The appellant who was charged for the offences (a) under section 120B I.P.C. (b) under section 161 I.P.C. read with section 5(2) and 5(1) (d) of the Prevention of Corruption Act 1947 and (c) under section 5(2) read with section 5(1) (a) of the Prevention of Corruption Act 1947 was acquitted by the special judge holding that neither the charge of conspiracy nor any other charge against the accused was proved.
But the special Judge held that the assets of the appellant from 1st of July '55 to 30th April 1961 had exceeded his income by Rs. 33,588.34 and they were disproportionate to the known sources of income of the petitioner.
The trial Judge, however, found that as section 5(3) of the Act had been repealed on 18 12 1964 and as specific instances of payment of bribe to the petitioner could not be proved the accused could not be held guilty of the charges.
Aggrieved by the decision, the State preferred an appeal to the Delhi High Court on 11th April, 1967.
Pending the appeal before the High Court, Act No. 16 of 1967, came into force on 5th May 1967 re introducing section 5(1)(e) in the Act.
In the High Court the appellant challenged the vires of Act No. 16 of 1967 on the ground that revival of section 5(3) of the Act and making it applicable retrospectively was void and unconstitutional as it was in violation of article 14 and 20(1) of the Constitution.
A Division Bench of the High Court of Delhi by its judgment dated 27th November, 1973 allowed the appeal upholding the validity of Act No. 16 of 1967 and remanded the case to be tried from the stage at which it was pending on 18th December, 1964.
In appeals by special leave it was contended that (a) Since section 5(3) of the P. O. F. A., 1947 was repealed on 18 12 64 the Court below cannot take into account the provisions of section 5(3) of the Act after the date of its repeal on 18 12 64 and (b) Act No. 16 of 1964 which gave retrospective operation to section 5(3) of the Act is violative of Articles 14 and 20(1) of the Constitution.
^ HELD: 1.
Whether Act 16 of 1967 had been brought into force on 20th June 1967 or not the rule of evidence as incorporated in section 5(3) of the P.O.F.A., 1947 would be available regarding offences that were committed during the period before the repeal of section 5(3).
[823 G] 2.
Section 5(3) of the Prevention of Corruption Act, 1947 provided an additional mode of proving an offence punishable under sub sections 5(2) for which an accused person is being tried and, therefore, prescribes a rule of evidence.
Section 5(3) does not create a new kind of offence of criminal misconduct by a public servant in the discharge of his official duty.
[821 H, 822 A].
817 G.D.S. Swamy vs State, ; , Surajpal Singh vs State of U.P., ; and Sajjan Singh vs State of Punjab ; ; applied.
While repealing section 5(3) by Act 40 of 1964 the statute did not say that the section shall be deemed not to have been in force at all.
Section 6 of the provides that the repeal shall not affect the previous operation of any enactment so repealed unless a different intention appears.
The operation of all the provisions of the Prevention of Corruption Act would continue in so far as the offences that were committed when section 5(3) was in force.
The offences that were committed after the date of the repeal will not come under the provisions of section 6(b) of the .
Section 6(c) also preserves all legal proceedings and consequences of such proceedings as if the repealing Act had not been passed.
[822 C, 823 E F].
Keshavan Madhava Menon vs State of Bombay, [1951] 2 SCR followed.
Article 20(1) of the Constitution deals with ex post facto laws though that expression has not been used in the Article.
Usually, a law prescribes a rule of conduct by which persons ought to be governed in respect of their civil rights.
Certain penalties are also imposed under the criminal law for breach of any law.
Though a sovereign legislature has power to legislate retrospectively creation of an offence for an act which at the time of its commission was not an offence or imposition of a penalty greater than that which was under the law provided violates article 20(1).
All that article 20(1) prohibits is ex post facto laws and is designed to prevent a person being punished for an act or omission which was considered innocent when done.
It only prohibits the conviction of a person or his being subjected to a penalty under expost facto laws.
[824 B D].
In the instant case, the appellant cannot object to a procedure different from what obtained at the time of the commission of the offence.
The offence that was committed was when section 5(3) was in force and by Act 16 of 1967 the procedure is revived.
It is not as if the procedure is brought into force for the first time.
[824 F G].
Rao Shiv Bahadur Singh & Anr.
vs The State of Vindhya Pradesh, ; applied; Phillips vs Eyre, , at pp.
23 and 25 and Calder vs Bull, ; ; at 649; quoted with approval.
There can be no objection in law to the revival of the procedure which was in force at the time when the offence was committed.
The effect of the amendment is that sub section (3) of section 5 as it stood before the commencement of 1964 Act shall apply and shall be deemed to have always applied in relation to trial of offences.
It may be, if by this deeming provision a new offence was created then the prohibition under Article 20(1) may come into operation.
In this case what is done is no more than reiterating the effect of section 6(1) of the .
[825 A B].
818 6.
In the present case the old procedure is revived and no new procedure is given retrospective effect.
The procedure given effect to is not of such a natural as to result in creation of a new offence.
[825 D]. |
N: Criminal Appeal No. 255 of 1973.
Appeal by Special Leave from the Judgment and Order dated 16 7 73 of the Rajasthan High Court in S.B. Crl.
No. 309/73.
A. N. Mulla and B. P. Singh for the Appellant.
Sobhag Mal Jain and section K. Jain for the Respsondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against a judgment of the Rajasthan High Court by which the conviction of the appellant under Section 494 I.P.C. and sentence of two years rigorous imprisonment and fine of Rs. 2,000/ have been upheld.
The facts of this case have been detailed in the judgments of the courts below and it is not necessary to repeat them.
Suffice it to say that the accused Gopal Lal married the complainant Kanchan sometime in the year, 1963 and a child was born out of this wedlock.
Soon thereafter the parties appeared to have fallen out and parted company.
While the first marriage was subsisting Gopal Lal contracted a second marriage which according to the custom prevalent amongst Tellis is a valid marriage commonly known as nata marriage.
This marriage was contracted on 20th of March, 1969.
The complainant Kanchan, the first wife having come to know about this marriage filed a complaint on the 22nd March, 1969, on the basis of 1173 which appellant was prosecuted and ultimately convicted as mentioned above.
Mr. A. N. Mulla, learned counsel for the appellant, had submitted two points before us.
In the first place it was contended that in view of the provisions of Section 17 of the , the second marriage being a void marriage, the provisions of Section 494 I.P.C. are not attracted at all.
We have given our anxious consideration to this argument but we are of the opinion that the argument is wholly untenable.
Section 494 runs thus: "Whoever, having a husband or wife living, marries in any case in which such marriage is void by reason of its taking place during the life of such husband or wife, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
Exception This section does not extend to any person whose marriage with such husband or wife has been declared void by a court of competent jurisdiction, nor to any person who contracts a marriage during the life of a former husband or wife, if such husband or wife, at the time of the subsequent marriage, shall have been continually absent from such person for the space of seven years, and shall not have been heard of by such person as being alive within that time provided the person contracting such subsequent marriage shall before such marriage takes place, inform the person with whom such marriage is contracted of the real state of facts so far as the same are within his or her knowledge".
The essential ingredients of this offence are: (1) that the accused spouse must have contracted the first marriage.
(2) that while the first marriage was subsisting the spouse concerned must have contracted a second marriage and (3) that both the marriages must be valid in the sense that the necessary ceremonies required by the personal law governing the parties had been duly performed.
It may also be noticed that Section 494 I.P.C. would come into play only if the second marriage becomes void by virtue of the fact 1174 that it had taken place in the life time of one of the spouses.
Thus, it is not possible to accede to the contention of Mr. Mulla that merely because the second marriage was void under Section 17 of the hence Section 494 I.P.C. would not be attracted.
Section 17 of the runs thus: "Any marriage between two Hindus solemnized after the commencement of this Act is void if at the date of such marriage either party had a husband or wife living; and the provisions of sections 494 and 495 of the Indian Penal Code shall apply accordingly".
What Section 17 contemplates is that the second marriage must be according to the ceremonies required by law.
If the marriage is void its voidness would only lead to civil consequences arising from such marriage.
Section 17 makes it absolutely clear that the provision has to be read in harmony and conjunction with the provisions of Section 494 of the Penal Code which has been extracted above.
Section 17 clearly provides that provisions of Sections 494 and 495 of the Penal Code shall apply accordingly.
In other words though the marriage may be void under Section 17, by reason of the fact that it was contracted while the first marriage was subsisting the case squarely falls within the four corners of Section 494 and by contracting the second marriage the accused incurs the penalty imposed by the said statute.
Thus the combined effect of Section 17 of and Section 494 I.P.C. is that when a person contracts a second marriage after the coming into force of the said Act, while the first marriage is subsisting he commits the offence of bigamy.
(Emphasis ours).
This matter no longer res integra as it concluded by a decision of this Court in Bhaurao Shankar Lokhande and Anr.
vs State of Maharashtra & Anr.(1) This Court while considering the question of bigamy qua the provisions of Section 17 observed as follows: "Section 17 provides that any marriage between two Hindus solemnized after the commencement of the Act is void if at the date of such marriage either party had a husband or wife living, and that the provisions of sections 494 and 495 I.P.C. shall apply accordingly.
The marriage between two Hindus is void in view of section 17 if two conditions are satisfied: (i) the marriage is solemnized after the commencement of the Act; 1175 (ii) at the date of such marriage, either party had a spouse living.
If the marriage which took place between the appellant and Kamlabai in February 1962 cannot be said to be 'solemnized ', that marriage will not be void by virtue of section 17 of the Act and section 494 I.P.C. will not apply to such parties to the marriage as had a spouse living".
The word 'solemnize ' means, in connection with a marriage, 'to celebrate the marriage with proper ceremonies and in due form ', according to the Shorter Oxford Dictionary.
It follows, therefore, that unless the marriage is 'celebrated or performed with proper ceremonies and in due form ' it cannot be said to be 'solemnized '.
It is therefore essential, for the purpose of section 17 of the Act that the marriage to which section 494 I.P.C. applies on account of the provisions of the Act should have been celebrated with proper ceremonies and in due form".
It was thus pointed out by this Court that Section 17 of the requires that the marriage must be properly solemnized in the sense that the necessary ceremonies required by law or by custom must be duly performed.
Once these ceremonies are proved to have been performed the marriage become properly solemnized and if contracted while the first marriage is still subsisting the provisions of Section 494 will apply automatically.
In a decision of this Court in Kanwal Ram & Ors.
vs The Himachal Pradesh Administration the earlier case was noticed by the Court and relied upon.
The matter has also been fully discussed in Priya Bala Ghosh vs Suresh Chandra Ghosh.
In view of the authorities of this Court, therefore, the following position emerges: where a spouse contracts a second marriage while the first marriage is still subsisting the spouse would be guilty of bigamy under Section 494 if it is proved that the second marriage was a valid one in the sense that the necessary ceremonies required by law or by custom have been actually performed.
The voidness of the marriage under Section 17 of the is in fact one of the essential ingredients of Section 494 because the second marriage will become void only because of the provisions of Section 17 of the .
In these circumstances, therefore, we are unable to accept the contention of Mr. Mulla that the second marriage being void Section 494 will have no application.
It was next contended by Mr. Mulla that there is no legal evidence to show that the second marriage which is said to 1176 be a nata marriage was actually performed.
We are afraid, we are unable to go into this question because three courts have concurrently found as a fact that the parties were governed by custom of nata marriage and the two essential ceremonies of this marriage are: (1) that the husband should take a pitcher full of water from the head of the prospective wife; (2) that the wife should wear chura by the husband.
There is evidence of P.Ws. 2, 3, 4 and 5 who have proved fact that these ceremonies had been duly performed in their presence.
That there was such a custom which requires these ceremonies was admitted by D.Ws. 3 and 5 who were examined by the appellant.
The evidence led by the prosecution has been accepted by the High Court and the courts below and after perusing the evidence we are not in a position to hold that the finding of facts arrived by the courts below are wrong in law or perverse.
From the evidence led by the prosecution, therefore, it has been clearly established that the second marriage which was performed by the appellant Gopal Lal with Gopi was a valid marriage according to the custom of the nata marriage prevalent in the Telli community to which the appellant belonged.
This being so and the validity of the first marriage not having been disputed, Section 494 I.P.C. applies in terms and the appellant must be held to have committed the offence of bigamy as contemplated by Section 494 I.P.C. Lastly, Mr. Mulla pressed this appeal on the question of sentence.
Bigamy is a serious offence and the maximum punishment under Section 494 is seven years.
Therefore, where the offence of bigamy is proved the Court cannot take a very lenient view.
In the instant case the appellant was sentenced to two years and a fine of Rs. 2,000/ .
It appears that the appellant has already paid a fine of Rs. 2,000/ .
In these circumstances, therefore, we feel that the ends of justice will be met by reducing the sentence of imprisonment from two years to one year but maintaining the sentence of fine.
With this modification the appeal is dismissed.
The appellant will now surrender and serve out the remaining portion of the sentence.
S.R. Appeal dismissed. | After having fallen out and parted company with his wife Kanchan in the year 1963, the appellant, belonging to Telli community contracted a second marriage prevalent amongst his community with Gopi on 20th March 1969.
A complaint filed by his first wife ended in his conviction under section 494 I.P.C. and sentence of two years R.I. and a fine of Rs. 2,000/ , the conviction and sentence having been upheld by the Rajasthan High Court.
Dismissing the appeal by special leave, the Court, ^ HELD: 1.
The second marriage was a valid marriage according to the custom of the nata marriage prevalent in the Telli community which requires the following two essential ceremonies: (a) that the husband should take a pitcher full of water from the head of the prospective wife, and (b) that the wife should wear chura by the husband.
The prosecution through PWs.
2, 3, 4 and 5 having proved that these ceremonies have been duly performed, that there was such a custom which requires the said ceremonies having been admitted by the defence witnesses 3 and 5 and the validity of the first marriage not having been disputed, Section 494 I.P.C. applies in terms and the appellant must be held to have committed the offence of Bigamy as contemplated by section 494 I.P.C. [1176A E] 2.
The combined effect of section 17 of the Hindu Marriage Act and section 494 I.P.C. is that when a person contracts a second marriage after the coming into force of the said Act while the first marriage is subsisting, such a person commits the offence of bigamy.
[1174 E] Section 17 of the makes it absolutely clear that the provision has to be read in harmony and conjunction with the provisions of section 494 I.P.C., the essential ingredients of which are: (i) that the accused spouse must have contracted the first marriage (ii) that while the first marriage was subsisting the spouse concerned must have contracted a second marriage, and (iii) that both the marriages must be valid in the sense that the necessary 1172 ceremonies required by the personal law governing the parties had been duly performed and (iv) the second marriage must have become void by virtue of the fact that it had taken place in the life time of one of the spouses.
[1173F H] 3.
Where a spouse contracts a second marriage while the first marriage is still subsisting the spouse would be guilty of bigamy under section 494, I.P.C. if it is proved that the second marriage was a valid one in the sense that the necessary ceremonies required by law or by custom have been actually performed.
The voidness of the marriage under section 17 of the is in fact one of the essential ingredients of section 494 because the second marriage will became void only because of the provisions of section 17 of the .
Therefore, the contention that the second marriage being void section 494 I.P.C. will have no application is not correct.
[1175F G] Bhaurao Shankar Lokhande and Anr.
vs State of Maharashtra and Ors., [1965]2 S.C.R. 837; Kanwal Ram and Ors.
vs The Himachal Pradesh Administration, [1966]1 S.C.R. 539 and Priya Bala Ghosh vs Suresh Chandra Ghosh; [1973]3 S.C.R. 961 applied.
[Bigamy being a serious offence for which the maximum punishment is seven years, the Court while maintaining the conviction reduced the sentence to one year.] |
minal Appeal No. 24 of 1956.
On appeal by special leave from the judgment and order dated the, 26th September 1955 of the Allahabad High Court (Lucknow Bench) in Criminal Appeal No. 195 of 1955 and Capital Sentence No. 17 of 1955 arising out of the judgment and order dated the 11th April 1955 of the Court of the Sessions Judge at Bahraich in Criminal S.T. No. 9 of 1955.
D. R. Prem, for the appellant.
K. B. Asthana and C. P. Lal, for the respondent.
March 12.
The Judgment of the Court was delivered by IMAM J.
The appellant 'was sentenced to death for the murder of one Ram Dularey.
He was also sentenced to seven years ' rigorous imprisonment for having robbed the murdered man of his goods.
He was tried along with two other persons, who were ' acquitted, by the Sessions Judge of Bahraich.
All the four assessors,, who attended the trial, were of the opinion that the appellant was guilty.
The High Court of Allahabad affirmed the conviction and the sentence and this appeal is by special leave, 193 Certain facts have been proved beyond all doubt.
Indeed, the most important of them are admitted by the appellant in his statement under section 342 of the Code of Criminal Procedure when examined in the Court of Sessions.
It has been established by the evidence in the case that the deceased Ram Dularey, a shop keeper of Jarwal, had gone to Lucknow to purchase goods for his shop.
On his return journey, he got down from the train at Jarwal Road Station on the 2nd of July, 1954, at about 9 30 p.m.
He had with him articles consisting of a box, a balti, a gunny bag, jholas and other things.
Shortly thereafter, he engaged the appellant 's cart to take him and his goods to his village.
Two other persons also got on to the cart.
The appellant was driving the cart.
Neither the deceased nor the articles, which were with him, nor the cart ever reached Jarwal.
In the morning, Ram Dularey 's body was found near a bridge in close vicinity of Jarwal. 'Information was sent to the police who commenced investigation and their enquiriesed them to the appellant, who was arrested on the 6th of July, 1954.
The appellant gave the key of his kothri to the police with which it was opened.
From the kothri numerous articles were recovered, including a big knife exhibit 20 with blood stains, a dhoti exhibit 3, a box exhibit 9, a balti exhibit I,, a chadar exhibit 2, a gunny bag exhibit 13 and a jhola exhibit 24.
It is not necessary to give the details of the other articles recovered.
The knife was sent to the Chemical Examiner along with the dhoti.
Although minute blood stains were detected on the knife, they were not sufficient to enable a comparison in a blood group test.
No blood was discovered on the dhoti.
The dhoti exhibit 3, the box exhibit 9, the balti exhibit 1, the chadar exhibit 2, the gunny bag exhibit 13 and the jhola exhibit 24 have been identified as belonging to the deceased Ram Dularey.
When examined under section 342 of the Code of Criminal Procedure by the Sessions Judge, the appellant stated that the deceased Ram Dularey bad asked him to take his goods in his cart and it was agreed that Rs. 2 would be paid as the fare.
The appellant 194 took the deceased on his cart with his goods including the box exhibit 9.
Two other men were also in the cart who got down at the Sugar Mill gate at the Railway Station.
At the Raduayan Bridge three men enquired if Ram Dularey was in the cart.
Ram Dularey responded and got down from the cart asking the appellant to halt his cart at Jarwal Bazar Bridge, where he waited for the deceased until 4 a.m., but the deceased did not turn up.
As the appellant did not know the house of the deceased in Jarwal Bazar, he took the dead man 's goods in his cart to his own house as his buffaloes were very hungry.
To the question as to whether any article of the deceased was recovered from his house by the police, the appellant stated that he handed over to the police all the property of the deceased which be had looked in the kothri.
He asserted that he had told the people in his village as well as the Mukhia that he would hand over the property to its owner when he came to take it.
Concerning the knife, he disowned its ownership and could not say how it came to be found in his house.
So far as the dhoti exhibit 3 is concerned, the appellant claimed it as his.
On behalf of the appellant, it was urged that the evidence in the case was insufficient to establish any of the charges framed against him.
In the alternative, it was suggested, that as the co accused of the appellant had been acquitted the latter could not be convicted of the offence of murder by the application of the provisions of section 34 of the Indian Penal Code in the absence of proof that any act of his caused the death of Ram Dularey.
It was also submitted that no question was put by the Sessions Judge to the appellant when he was examined under section 342 of the Code of Criminal Procedure concerning the act of murder or robbery.
We have examined the statement of the appellant recorded under section 342 of the Code of Criminal Procedure by the Sessions Judge.
At the very commencemeilt of the record of that statement, the Sessions Judge readout the appellant 's statement under section 342 of the Code of Criminal Procedure before 195 the Committing Magistrate and enquired 'Whether it was correct.
, to which the 'appellant replied in the affirmative.
The statement of the appellant before the Magistrate is admissible under section 287 of the Code of Criminal Procedure.
The Magistrate pointedly asked the appellant as to whether he along with the other accused murdered Ram Dularey and had taken his property to which the appellant replied in the negative.
It was not necessary for the Sessions Judge to specifically repeat the same when the appellant admitted his statement before the Committing Magistrate as correct when read out to him.
Apart from this, when the statement of the appellant to the Sessions Judge is read as a whole, it clearly shows that the appellant knew what the accusation against him was and he offered an explanation for the disappearance of Ram Dularey from his cart and for his possession of the deceased 's goods.
There is no justification for supposing that there had been any prejudice caused to the appellant on account of improper or insufficient recording of his statement by the Sessions Judge under section 342 of the Code of Criminal Procedure.
On the facts proved beyond question it is clear that the last time the deceased was seen alive was in the company of the appellant and two other persons when the cart started for Jarwal and his goods were ' on that cart.
There is, however, no evidence as to what happened in the course of the journey.
Concerning that we have only the statement of the accused.
The evidence next establishes that after the cart started, next morning, the 3rd of July, the dead body of Ram Dularey was found not far from Jarwal.
His goods had disappeared and some of them at any rate were found in the possession of the appellant on the 6th of July.
The real question is whether the evidence in the case establishes that the appellant murdered and robbed Ram Dularey.
The evidence is circumstantial.
Before we deal with that evidence, it is necessary to consider how far recent possession of property of a deceased, in circumstances clearly indicating that he 196 had been murdered and robbed, would suggest that not only the possessor of the property was a thief or a receiver of stolen property, but that it also indicated that he was guilty of a more aggravated crime which had connection with the theft.
In the case of The Emperor vs Sheikh Neamatulla(1) Sir Lawrence Jenkins had the occasion to examine this question.
After referring to section 114 of the Evidence Act, be quoted the following passage from Wills on Circumstantial Evidence: "the possession of stolen goods recently after the loss of them, may be indicative not merely of the offence of larceny, or of receiving with guilty knowledge, but of any other more aggravated crime which has been connected with theft.
This particular fact of presumption commonly forms also a material element of evidence in cases of murder; which special application of it has often been emphatically recognized".
In the case of Queen Empress vs Sami and Another(2) at page 432, the learned Judges of the High Court observed, "Under these circumstances, and in the absence of any explanation, the presumption arises that any one who took part in the robbery also took part in the murder.
In cases in which murder and robbery have been shown to form parts of one transaction, it has been held that recent and unexplained possession of the stolen property while it would be presumptive evidence against a prisoner on the charge of robbery would similarly be evidence against him on the charge of murder.
All the facts which tell against the appellant, especially his conduct indicating a consciousness of guilt, point equally to the conclusion that he was guilty as well of the murder as of the robbery. . . . .
In the case of Emperor vs Chintamoni Shahu(3), the opinion was expressed that "the possession of stolen goods recently after the loss of them may be indicative not merely of the offence of larceny or of receiving with guilty knowledge but of any other more aggravated Crime which has been (1) [1913]17 C.W.N. 1077.
(2) Mad.
(a) A.I.R. 1930 Cal.
379. 197 connected with the theft; this particular fact of pre sumption forms also a material element of evidence in the case of murder".
A similar view seems to have been taken in the case of In re Guli Venkataswamy(1) as well as in the case of Ramprashad Makundram Rajput vs The Crown(2).
In the present case it is established beyond doubt that the deceased travelled with his goods with the appellant on his bullock cart.
He should have reached his destination Jarwal in the course of the night.
He never got there.
Obviously, he was murdered on his way home.
On the appellant 's own statement, he and the deceased were alone in the cart after the other two persons had got off the cart at the Sugar Mill gate.
Thereafter the deceased was never seen alive by any one.
He was found murdered.
The appellant was found in possession of the deceased 's goods three days afterwards.
The appellant made no effort to trace the whereabouts of the deceased or lodge information of his disappearance from the bullock cart.
The appellant has told the court that some people called the deceased while the cart was on its journey and the deceased told him to wait for him at a certain place.
He waited until 4 a.m. but the deceased never turned up.
This should have aroused his suspicions and he should have informed the police or someone in authority about it.
He says he informed the Mukhia and all the people about it.
Neither the Mukhia nor anyone has been examined by the appellant to support his story.
Reliance was placed on the statement of Iftikhar Ahmad P.W. 7) who spoke of a rumour in the village that the appellant had brought the property of a man on his cart who had gone away and that this rumour had been spread by the appellant.
It is clear, however, that the witness was not speaking of this from his personal knowledge and his statement is not legal evidence.
On the other hand, if really the appellant had spread such a rumour there is no adequate explanation for his failure to inform the authorities.
He (1) A.I.R. 1950 Mad. 309.
(2) A.I.R. 1949 Nag.
26 198 knew he was in possession of a large number of articles belonging to the man who had hired his cart but had disappeared in very strange circumstances.
In addition, there is no explanation for his possession of a big blood stained knife, a weapon which if used against the deceased, could have caused the injuries found on him.
It is true that the blood stains were minute and have not been established to be of human blood.
The appellant, however, denied that the knife belonged to him, and has not explained as to how it came to be in his possession.
It is impossible to believe his story that he waited until 4 a.m. for the deceased to return.
The cart had started from Jarwal Road Station at about 10 p.m.
It could not have been more than a couple of hours later that the deceased left the cart.
To wait from that time until 4 a.m. at a place not far from Jarwal itself appears to be a fantastic story.
It is true that none of the clothes of the appellant were found to be bloodstained, as they should have been, if he bad parti cipated in the murder, having regard to the nature of the injuries on the deceased.
These clothes were not seized until the 6th July, some three days later, and the appellant could have removed all traces of blood stains from his clothing in that time.
The appellant was convicted of the offences of murder and robbery by the Sessions Judge by the application of section 34 of the Indian Penal Code.
The charge framed, however, was one of murder and robbery and there was no mention of these offences having been committed in the furtherance of a common intention.
The High Court, however, found that the appellant along with two others committed these offences and they shared in the goods robbed.
On this finding, even if the co accused of the appellant were acquitted, the appellant could be convicted by the application of the provisions of section 34 of the Indian Penal Code.
The charge framed against the appellant was for murder and robbery and the only question to be decided was whether the evidence was sufficient to support such a charge or did it merely establish offences less grave in nature.
We think it 199 was and are satisfied that it establishes the offences of murder and robbery against the appellant and not merely the minor offence of robbery or theft.
It is impossible to accept the submission that the evidence does not establish any offence having been committed by the appellant.
Having regard to what is established in the case and the principles deducible from the cases cited, we are satisfied that the appellant has been rightly convicted of the offences of murder and robbery.
The appeal is accordingly dismissed. | The appellant was sentenced to death for the murder of one and also sentenced to seven years rigorous imprisonment for having robbed the murdered man of his goods, It was established by the evidence on the record that the deceased, a shop keeper of village Jarwal had gone to Lucknow to purchase goods for his shop.
On his return journey he got down from the train at about 10 p.m.
He had with him a box, a balti, a gunni bag and a jhola and other things.
He engaged the appellant 's cart to take him and his goods to his village.
Two other persons also got on to the cart.
Neither the deceased, nor the articles which were with him nor the cart reached Jarwal.
In the morning the body of the deceased was found near a bridge in the vicinity of Jarwal.
During investigation on the fourth day after the occurrence the appellant gave the key of his kothri to the police and from the kothri, a dhoti, a box, a balti, a chadar, a gunny bag and a jhola were recovered which were identified as belonging to the deceased.
A big knife was also recovered from the kothri which the appellant disowned but could not explain how it was found in his home.
The appellant on examination before the Sessions Judge under section 342 of the Code of Criminal Procedure stated that the deceased asked him to take his goods 'in the cart at about 10 p.m. when he got down at the Railway Station.
Two other men were also in the cart who got down at the Sugar Mill gate near the Railway Station.
At Raduayan Bridge three men enquired if the deceased was in the cart.
The deceased responded and got down from the cart asking the appellant to halt his cart near Jarwal Bazar Bridge where he waited for the deceased up to 192 4 a.m. but he did not turn up.
Not knowing the house of the deceased he took the dead man 's goods to his own house as his buffaloes were very hungry.
He stated further that he had handed over all the articles of the deceased person to the police which he had locked in the kothri.
Held, that recent and unexplained possession of the stolen property while it would be presumptive evidence against a prisoner on the charge of robbery would similarly be evidence against him on the charge of murder.
All the facts which tell against the appellants especially his conduct indicating consciousness of guilt, point equally to the conclusion that he was guilty as well of the murder as of the robbery.
The Emperor vs Sheikh Neamatulla ([1913] , Queen Empress vs Sami and Another ([1890] I.L.R. 13 Mad. 426), Emperor vs Chintamoni Shahu (A.I.R. , In re Guli Venkataswami (A.I.R. 1950 Mad. 309), and Bamprashad Mukundram Rajput vs The Crown (A.I.R. , referred to. |
Civil Appeal No. 2008 of 1969.
From the Judgment and Order dated 7 4 1965 of the Rajasthan High Court in D. B. Civil Regular Appeal No. 67/53.
section M. Jain for the Appellant.
B. D. Sharma, Ramesh Chandra and B. P. Maheshwari for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The State of Rajasthan, defendant in Civil Suit No. 9 of 1963 in the Court of the Senior Civil Judge, Udaipur, is the appellant in this appeal filed pursuant to a certificate granted under Article 133(1) (a) of the Constitution of India (as it stood prior to the 30th amendment).
The plaintiff respondent took a building work on contract from the erstwhile Government of the State of Udaipur.
He completed the work on 6th June, 1950.
Despite demands and notices issued by the plaintiff a considerable amount due to him remained unpaid.
He, therefore, filed the suit out of which the appeal arises to recover a sum of Rs. 3,19,458/11/ together with interest at the rate of 12%.
The suit was contested by the State of Rajasthan.
An interim decree for a sum of Rs. 66,517/ was passed on 7th November, 1955.
After full trial a decree for Rs. 1,67,619/ (including the sum of Rs. 66,517/ for which a preliminary decree had already been passed) was passed on 11 6 1958/30 6 1958.
The decree also awarded interest at the rate of 4 1/2% on the amount decreed from the date of suit till the date of realisation.
The plaintiff and the defendant preferred appeals to the High Court of Rajasthan.
The High Court reduced the decreetal amount by a sum of Rs. 9,991/ .
The High Court, however, held that the plaintiff was entitled to interest from 1st January, 1951, and not merely from the date of suit.
The High Court also enhanced the rate of interest pendente lite from 4 1/2 to 6%.
The High Court having varied the decree of the Trial Court, the State of Rajasthan 8 sought and obtained a certificate under Article 133(1)(a) of the Constitution and has filed this appeal.
The controversy in the High Court related primarily to (i) conveyance and lift charges; (ii) alleged double benefit in regard to bond stones, lintels and sills; (iii) use of Jodhpur slabs and their high cost; (iv) charge for C. P. Teak wood at the same rates as for Burma Teak.
In regard to conveyance and lift charges the High Court pointed out that no question was raised in the Memorandum of grounds of appeal and there was, therefore, no justification for permitting the learned Counsel for the State to assail the finding of the Trial Court relating to those charges.
We do not see any reason either why the learned Counsel should be permitted to agitate this question in this appeal.
Regarding double charge for bond stone, lintels and sills, the complaint of the appellant was that while separate payment was being made for them, they had also been included in the measurements of the walls in which they happened to be fixed.
From the office circular issued by the Chief Engineer of the Public Works Department of the United State of Rajasthan on 12th July, 1948, it appears that it was the practice uptill then to allow payment for bond stones, lintels and sills separately without deducting their cubic contents from the general wall masonry.
This had always been the practice and this was never objected to by the Accountant General.
In view of the practice obtaining till then it could not be said that the contractor had wrongfully claimed double payment for bond stones, lintels and sills.
The use of Jodhpur slabs was not questioned in the written statement.
All that was said was that the rate was high but at the trial there was no evidence worth the name, as observed by the High Court to show that the charge was excessive.
Again there was no objection to the use of C.P.Teak wood instead of Burma teak wood as the latter was not available.
According to the letter of the Superintending Engineer dated 6th February, 1950, where Burma teak wood was not available and C. P. Teak wood was used, the rates specified for Burma teak wood should be taken for C.P. Teak wood.
It could not, therefore, be said that the contractor had charged more than what he should for C.P. Teak wood.
The last question which was argued before us by Shri Jain, learned Counsel for the State of Rajasthan was that no interest should have been awarded for the period before the filing of the suit and that the rate of interest should not have been enhanced by the High Court for the period subsequent to the filing of the suit.
It was 9 submitted that the Interest Act, 1839, was not applicable as no sum A certain was payable and there was no demand for payment of interest.
It was argued that what was demanded by the plaintiff was damages and not interest.
It was also contended that the Trial Court having, in exercise of its discretion, awarded interest at the rate of 4 1/2 % pendente lite, the High Court ought not to have interfered with the discretion of the Trial Court.
Reliance was placed upon the decision in Mahabir Prasad Rungta vs Durga Datt(1) and Union of India vs A. L. Rallia Ram(2).
We are unable to agree with the submission of the learned Counsel for the appellant.
Under the Interest Act, 1839, "upon all debts or sums certain payable at a certain time or otherwise, the Court before which such debts or sums may be recovered may, if it shall think fit, allow interest to the creditor at a rate not exceeding the current rate of interest from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written instrument at a certain time; or if payable otherwise, then D from the time when demand of payment shall have been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the term of payment: provided that interest shall be payable in all cases in which it is now payable by law".
The claim of the present plaintiff was not for the payment of any unliquidated damages or for the payment of any amount arising out of an inchoate or contingent obligation.
It was for the payment of a sum which was ascertainable on a calculation made in accordance with the terms of the agreement.
It was clearly a "sum certain" within the meaning of the Interest Act.
In any case it would be a debt, i.e., "a sum of money which is now payable or will become payable in the future by reason of a present obligation".
The further question for consideration is whether the plaintiff had made a demand of payment, "so as such demand shall give notice that interest will be claimed from the date of such demand until the term of payment".
The plaintiff issued two notices to the defendant demanding payment.
The first was on 21st December, 1950, and the second was on 5th April, 1953.
There is no dispute that in the second notice of demand of payment of definite claim for interest had been made.
In the first notice it was said "by with holding payment of his bills absolutely, the Government has put my client to enormous loss by way of interest also .
I intimate to you (1)[1961] 3 S.C.R. 639.
(2)[1964] 3 S.C.R. 164.
2 196SCI/79 10 through this notice that the said Shri Ramsingh claims a sum of Rs. 2,50,519/ from the Rajasthan State as under: 1.
Unpaid bills for work done: Rs. 1,37,177/ 2.
lnterest on the above.
11,511/ 3. . . . 4. . . 5. . . . 6. . .
Total: Rs. 2,50,519/ The learned counsel submitted that what was claimed by the plaintiff in this notice was damages and not interest and that too for the past, without any indication that future interest was also being claimed.
It is true that the plaintiff mentioned "loss by way of interest", suggesting that what he was claiming was compensation for the damage suffered by him.
We are, however, not prepared to construe the notice so literally or technically.
The mention of loss was only explanatory.
The plaintiff was, without any manner of doubt claiming interest as such.
Nor are we impressed with the argument that there was no claim for future interest.
In our opinion a claim for past interest would necessarily imply a claim for future interest, vide Kuppuswami Pillai vs Madras Electric Tramway Co. Ltd.(1) and Sita Ram & Ors.
vs Mrs. section Sullivan(2).
In Mahabir Prasad Rungta vs Durga Datt(3) interest was disallow ed on the ground that the notice which was given did not specify the sum which was demanded and therefore, the Interest Act did not apply.
On the question whether interest could be awarded on grounds of equity it was held that what was claimed by Durga Datt was interest as damages and that it could not, therefore, be awarded.
The suit itself was one for damages for breach of contract.
We do not think that this case is of any assistance to the appellant.
In Union of India vs A. L. Rallia Ram, (supra) the Arbitrator had awarded interest by way of compensation since the party had to borrow a large amount of money from its banker to meet its obligation under the contract.
The Supreme Court pointed out that interest could not be awarded by way of damages.
The Supreme Court also noticed that an Arbitrator was not a Court within the meaning of the Interest Act.
No question arose before the Supreme Court whether interest could not be awarded under the Interest Act merely because the notice demanding payment (1) I.L.R. (2) (3) ; 11 mentioned that the plaintiff had suffered loss of interest also.
In our view the condition prescribed by the Interest Act that such demand shall give notice to the debtor that interest shall be claimed is fulfilled if interest is claimed, notwithstanding the fact that the notice of demand explains that loss by way of loss of interest has been suffered.
Ta take any other view would be to be over technical in the construction of pleadings, including notices preceeding the action.
We must notice here an argument advanced by the learned counsel for the appellant that the contract prohibited the award of interest.
He relied upon the following sentence occurring in paragraph 16 of the Contract dated 11th May, 1947: "Neither the earnest money deposit nor the with held amount shall bear any interest".
This sentence far from supporting the case of the appellant appears to support the case of the plaintiff.
The reference to "the with held amounts" is to the amounts represening five per cent of the running bills which are required to be with held at the time of payment of the running bills.
The provision that the contractor is not entitled to interest on these with held amounts appears to imply that interest is claimable on other amounts due to the contractor.
While awarding interest pendente lite the Trial Court adopted the rate of 4 ' % but the Trial Court gave no reasons for so doing.
The High Court considered the matter in some detail and having regard to the various continuous defaults committed by the defendant and its Officers, the High Court enhanced the rate of interest to 6%.
The High Court was justified in doing sol and we see no reason to interfere with the discretion exercised by the High Court.
In the result the appeal is dismissed with costs.
N.V.K. Appeal dismissed. | The Interest Act, 1839 (32 of 1839) empowers the Court to allow interest to the plaintiff if the amount claimed is a sum certain which is payable at a certain time by virtue of a written instrument at la rate not exceeding the current rate of interest from the time when such amounts were payable and if the amount is payable otherwise, then from the time when the demand of payment shall have been made in writing.
As the amounts due in respect of a building works contract remained unpaid despite demands and notices, the respondent (plaintiff) filed a suit for its recovery together with interest.
Decreeing the suit, the trial court award ed interest at 4 1/2 per cent.
But in appeal, the High Court enhanced the rate of interest pendente life from 4 1/2 per cent to 6 per cent.
In the further appeal to this Court it was contended that the Interest Act 1839, was not applicable as no sum certain was payable and there was no demand for payment of interest.
Dismissing the appeal, ^ HELD: 1.
The claim was for a "sum certain" within the meaning of the Act.
[9F] The claim was ascertainable on a calculation made in terms of the agreement and was therefore a sum certain within the meaning of the Act.
It is "a sum of money which is now playable or will become payable in the future by reason of a present obligation" and in any case it was not for the payment of any unliquidated damages or for the payment of any amount arising out of an inchoate obligation.
[9E F] 2.
The respondent issued two notices.
In the second notice a definite claim of interest had been made by them.
The term "loss by way of interest" mentioned in the first notice suggested that what was being claimed was compensation for the damages suffered by them.
The notice should not be construed literally or technically.
The mention of loss was only explanatory.
Without any manner of doubt the respondents were claiming interest as such.
[9G 10D] 3.
Nor again can it be said that there was no claim for future interest.
A claim for past interest would necessarily imply a claim for future interest.
[10E] 7 Kuppusami Pillai vs Madras Electric Tramway Co. Ltd., ILR ; Sita Ram & Ors.
vs Mrs. section Sullivan, [1901] 2 Punjab Law Reporter 464; referred to.
Mahabir Prashad Rungta vs Durga Datt, ; and Union of India vs A. L. Rallia Ram, ; ; distinguished.
Having regard to the various continuous defaults committed by the appellant and its officers the High court was justified in enhancing the rate of interest to 6 per cent. |
Civil Appeal No. 1626 of 1973.
Appeal by Special Leave from the Judgment and Order dated 16 9 1971 of the Calcutta High Court in Appeal from Original Decree No. 209/66.
section N. Andley, K. C. Sharma, Prem Malhotra and Uma Datta for the appellant.
342 L. N. Sinha, G. section Chatterjee, D. N. Mukherjee and D. P. Mukherjee for the Respondent.
The Judgment and Order of the Court was delivered by KAILASAM, J.
This appeal is by plaintiff 1, legal representatives of plaintiff 2 and plaintiff 3 by certificate granted by the High Court Calcutta against its judgment dismissing the suit.
The suit was filed by the plaintiffs for the declaration of each of the plaintiffs ' title to the extent of 1/4th share each and in all 3/4th for all the plaintiffs of the suit property and the premises with the findings that the suit property and the premises were purchased in co ownership awarding the plaintiffs and the defendants equal 1/4th share each in terms of the agreement dated 2.4.1960 and for partition of the suit property and premises in equal 1/4th share each and for a decree of Rs. 45,000 with further accruals by way of receipt of further rent till full realisation of the claim.
In the alternative a decree for accounts of the dissolved partnership on declaration of dissolution of the same and partition of the suit property and premises in equal 1/4th share to each of the plaintiffs and the defendant by metes and bounds.
The defendant in his written statement denied the claim of the plaintiff and contended that the suit property was never purchased in co ownership or that the plaintiffs were entitled to 3/4th share.
He contended that plaintiffs 2 and 3 advanced Rs. 10,000 each as loan and that they had no claim to the property he having purchased the property in court auction as the absolute owner.
The trial court decreed the suit.
The defendant preferred an appeal to the High Court which accepted the appeal and dismissed the suit.
The facts of the case may be shortly stated.
The suit property in Darjeeling belonged to one Harbhajan Singh Wesal.
He executed a mortgage in favour of the Calcutta National Bank Ltd. The bank instituted a suit against Harbhajan Singh Wesal for recovery of Rs. 1,82,403 11 3 and for enforcement of the mortgage.
Pending suit the Calcutta National Bank was wound up and the High Court of Calcutta passed a decree against Harbhajan Singh and appointed the Official Liquidator of the Calcutta National Bank as Receiver of the mortgaged property including the suit properties.
On 5 9 1959 a final decree was passed directing the sale of the mortgaged property including the suit properties at Darjeeling by public auction subject to confirmation by the Court.
The defendant Prafulla Kumar Chatterjee was interested in buying the property in Darjeeling.
He was negotiating with the Receiver for 343 the purchase of Darjeeling properties.
On 10.6.1959 he received a letter from D. N. Mukherjee advocate advising him to give an offer to the Receiver and on 22.6.59 the defendant obtained an engineering estimate and made an offer to the Receiver to purchase the property for Rs. 32,000.
On 20.11.59 an advertisement appeared in the newspaper by P.W. 1, K. K. Kshetry, Solicitor of the bank, for auction of the suit property.
The property was auctioned on 15th December, 1959 and the defendant offered the highest bid for Rs. 30,000.
On the same day the defendant deposited Rs. 7,500/ .
While the sale was awaiting confirmation by the High Court a higher offer was made by one Baidyanath Garsi and thereupon the defendant offered Rs. 40,000 which was accepted by the court and the sale in favour of the defendant was confirmed by the the High Court for a sum of Rs.40,000 on 19.1.60.
The defendant deposited a sum of Rs. 2,500 in addition to Rs. 7,500 that had already been deposited.
The defendent was granted three months ' time for depositing the balance sum of Rs. 30,000.
The defendant did not have funds to pay the balance of Rs. 30,000 and had to raise the amount.
On 2.4.1960 an agreement was entered into between the three plaintiffs and the defendant.
The suit by the plaintiffs is mainly based on this agreement P 45 dated 2.4.60.
The agreement is signed by the three plaintiffs as well as by the defendant.
According to the recital in the agreement the parties after learning from the notification in the newspaper of the sale of the suit property agreed between themselves to call the bid jointly in co ownership in the name of the defendant and that in pursuance of the agreement the defendant was deputed to call the bid.
The agreement further states that accordingly the defendant was sent to Calcutta and the bid at the auction which was finally knocked down on 19.1.60 for a sum of Rs. 40,000 in the name of the defendant.
The agreement also provided that the plaintiffs and the defendants would be entitled to equal shares in the property.
Another term of the agreement provided that the conveyance shall be drawn in the joint names of the parties by obtaining leave from the High Court.
On 7.4.60 the defendant executed two receipts Exs. 22 and 22A in favour of the second and the third plaintiffs respectively.
It is recited in the receipt that the defendant received a sum of Rs. 10,000 as the share of the purchase price of the property sold in public auction by the Official Liquidator in pursuance of the agreement amongst themselves.
Though the receipt was typed in Darjeeling on 7.4.60 the defendant signed the receipt at Calcutta on 11 4 60.
In the meantime on 8.4.60 the defendant filed an application in the High Court of Calcutta praying that the time for completion of the sale be extended by three months from 19 4 60 and the conveyance be executed in 344 favour of the three plaintiffs and himself.
On 11 4 60 a sum of Rs. 30,000 was paid to M.R. Kshetry.
The request for the conveyance to be made in favour of the three plaintiffs and the defendant was given up and the court directed the execution of the conveyance in favour of the defendant alone.
On 17 6 60 a conveyance was executed by the Registrar of the High Court and the Receiver in favour of the defendant alone in pursuance of the order of the court dated 11 4 60.
On 2 1 61 the plaintiffs served a notice on the defendant calling upon him to partition the property and deliver their shares and render accounts.
On 3 6 61 the plaint in the suit was filed.
The plaintiffs apart from oral evidence very strongly rely on three documents to prove that they are joint owners and are entitled to 3/4th share in the suit property.
The first document is the agreement between the parties dated 2.4.60.
The second are two receipts dated 7.4.60 issued by the defendant in favour of plaintiffs 2 and 3.
The third document is the application filed by the defendant on 8 4 60 in the High Court praying that the conveyance may be effected in favour of the three plaintiffs and himself.
The case for the plaintiffs is that between 20th and 23rd November, 1959 there was an advertisement in the newspapers by the Official Receiver announcing the sale of the suit property.
According to the plaintiffs the three plaintiffs and the defendant mutually agreed to call the bid jointly in co ownership in the name of the defendant and to purchase the property in equal shares contributing equally the bid money and the other costs as might be incurred for the conveyance of the property.
It was further agreed that the plaintiffs and defendant would have equal share in the property.
According to the plaintiffs in pursuance of the agreement the defendant was sent to Calcutta where he bid on 15.12.59 for Rs. 30,000 and the bid was confirmed by the High Court on 19.1.60 for a sum of Rs. 40,000.
Out of the bid money a sum of Rs. 7,500 was paid to the Receiver on 15.12.59 and a sum of Rs. 2,500 on 19 1 60 and the balance of Rs. 30,000 on 11 4 60.
In the meantime it is stated that the plaintiffs and the defendants considered it advisable to have the verbal agreement between them reduced to writing and thus the agreement dated 2.4.60 came into existence.
After the full bid money was paid, the plaintiffs contributing equally, a deed of conveyance was executed on 17 6 60 and registered at Darjeeling.
According to the mutual agreement the parties were entitled as co sharers to enjoy and occupy the suit property in co ownership and were also entitled to income from them.
It was further agreed that the defendant would manage the joint property for the co owners of the property and the defendant would realise the rents for and on behalf of the parties with liability to pay the respective shares 345 to each of the plaintiffs.
The defendant, on the other hand, submitted that he was trying to purchase the suit property from the previous owner Harbhajan Singh by private negotiations before the proceeding was started for auction sale.
The defendants efforts to purchase the property from the owner proved abortive and he decided to purchase the suit property in the auction sale when the property was advertised for sale.
As the defendant was not acquainted with the procedure of court 's sale he approached the first plaintiff for legal service and the first plaintiff gave directions as to how the defendant should proceed.
The defendant denied that he was sent by the plaintiffs to Calcutta for calling the bid.
According to him he went of his own accord, attended the public auction on 15.12.59 and offered Rs. 30,000 for purchasing the property and when the bid was accepted he paid Rs. 7,500 and that money belonged to him alone.
Eventually, the sale was confirmed in favour of the defendant for Rs. 40,000 and he paid a sum of Rs. 2,500 in court to make up Rs. 10,000 i.e. One fourth of the bid amount all by himself As the defendant had to pay the balance of Rs. 30,000 and as he was in short of funds he approached the first plaintiff who was his lawyer and asked for his advice.
As the time for payment of balance amount was fast approaching the defendant frantically tried to find a person who could advance him temporary loan of Rs. 20,000 which amount he needed for completing the purchase.
As he was not successful he requested the first plaintiff to find from amongst his clients persons who could make temporary advance of the amount.
According to the defendant in the first week of April, 1960 the first plaintiff informed the defendant that two of his clients, namely plaintiff Nos. 2 and 3, were agreeable to advance the requisite amount but in view of the provisions of Bengal Money Lenders ' Act they were not willing to advance the amount unless some sort of safeguards were provided for and the transaction was not described as loan.
The first plaintiff drafted a document in the form of an agreement and the defendant signed it under the advice and suggestion of the first plaintiff on the understanding that the document was not intended to be acted upon and was only to remain as a security for the loan and that the recitals in the said document do not represent the real nature of the transaction.
The defendant admitted that plaintiffs 2 and 3 advanced to the defendant a sum of Rs. 10,000 each by way of loan and the defendant had to sign in their favour the documents acknowledging the receipt of the loan.
The defendant denied that the plaintiffs and the defendant contributed equally for payment of the bid money or in defraying the incidental costs in equal shares.
The defendant asserted that he alone paid the entire bid money and bore all the incidental expenses and that there was never any co ownership or co 346 partnership.
He submitted that as the conveyance was executed exclusively in his favour the plaintiffs had no right to the property.
The plaintiffs have sought to prove that the parties after learning from the notification in the newspaper of the sale of the property agreed between themselves to call the bid jointly in co ownership in the name of the defendant and in pursuance of that agreement the defendant paid the deposit.
Further it is the plaintiffs ' case that in pursuance of the agreement the defendant was sent to Calcutta where he bid at the auction which was finally knocked down for the benefit of all.
The plaintiffs ' claim that they contributed 1/4th of the price of the property and the expenses i.e. Rs. 13,500 each.
Further, it was contended by the plaintiffs that the bid by the defendant was for the benefit of the three plaintiffs and the defendant and that it was agreed that the conveyance should also be in favour of all of them.
It is seen from the evidence that the defendant was interested in buying the property alone before the advertisement appeared in the newspapers on 20 11 59 and 23 11 59.
The defendant received exhibit V a letter dated 10 6 59 from D. N. Mukherjee advocate, advising him to give an offer to the Receiver so that he can place the matter to the court for an order for sale by private negotiation.
Soon after, the defendant obtained an engineering estimate of the value of the property under exhibit M and in accordance with the valuation wrote exhibit L on 22.6.59 to K. K. Kshetry offering Rs. 32,000 for the property.
On 15 12 79 the defendant went to Calcutta by himself and made a bid for Rs. 30,000 and deposited Rs. 7,500 of his money.
The plaintiffs admit that the entire deposit was made by the defendant but pleaded that it was agreed that on accounts being taken the expenses will be shared by the plaintiffs.
Due to a third party making a higher offer the defendant had to raise the bid for Rs. 40,000.
It is also not in dispute that the defendant by himself paid Rs. 2,500 over Rs. 7,500 already paid to make 1/4th of the bid amount.
The bid for Rs. 40,000 was made by the defendant alone.
On behalf of the plaintiffs it is stated that 2 or 3 days after the advertisement appeared the defendant went to the first plaintiff and told him that he did not have sufficient funds and requested the first plaintiff to join him to purchase the property and that 2 or 3 days later plaintiff 3 and son of plaintiff 2 came to first plaintiff and expressed their desire to purchase the property and the plaintiff advised them to purchase the property jointly with the defendant in shares.
Plaintiff 3, Daluram Agarwala, deposing as P.W. 5 does not support this case.
In cross examination P.W. 5 stated that on November 24 or 25, 1959 he and one N. K. Aggarwala, who is the son of plaintiff No. 2, went to see the first 347 plaintiff.
It was decided among them that the property would be purchased in the names of all the four of them, the plaintiffs and the defendant.
He would further say that the defendant on return from Calcutta towards the end of December, 1959 stated that the property had been purchased in the names of three plaintiffs and the defendant.
It is thus the case of P.W. 5 that the defendant was sent by all the three plaintiffs to bid on their behalf and that the defendant bid on behalf of all of them.
P.W. 7, the son of the second plaintiff, would state that it was agreed that the property would be bought in the name of the defendant and that there was no talk that it would be purchased in the names of all the four of them.
It is rather inexplicable as to how plaintiffs 2 and 3 who wanted to buy the property separately for themselves agreed to purchase jointly for the benefit of all of them.
It is also difficult to accept the plea that palintiffs 2 and 3 went to the first plaintiff who is an advocate and there agreed to purchase the property in equal shares between the defendant, first plaintiff and themselves.
The second plaintiff had an office in Calcutta and the Calcutta office had a Munim and three other partners in whom they had complete confidence.
In the circumstances it is strange that they wanted the first plaintiff to be a co sharer so that he could attend to all the legal questions.
There is no explanation as to why plaintiffs 2 and 3 who were independant businessmen would join to purchase the property.
The explanation that the agreement was arrived at to keep the bid low is purile.
The evidence discloses that the plaintiffs were taking active part in the transaction after 2.4.1960 while between November, 1959 when the advertisement appeared and the date of agreement, there was comparative quiet, which fact probablises that the plaintiffs were not taking any part in the activities of the defendant regarding the bid in the court auction of the property.
The dealings of plaintiffs 2 and 3 show that they were dealing with the defendant at arms ' length insisting on passing of a receipt for their payment of Rs. 20,000 and accompanying the defendant and paying the money to the Receiver themselves.
It is highly improbable that they would have deputed the first defendant to go and bid on their behalf.
There is no explanation as to why their share of the bid of Rs. 30,000 or the subsequent bid for Rs. 40,000 was not paid by them.
The story that before the defendant bid for the property for Rs. 30,000 there was an agreement between the plaintiffs and the defendant that the bid should be on behalf of all of them cannot be accepted.
The next question that arises is whether the plaintiffs have proved their case that plaintiffs 1, 2 and 3 each of them paid Rs. 13,500, Rs. 10,000 being their share of the bid money and Rs. 3,500 towards expenses.
The two receipts Exs.
22 and 22A are acknowledgements by 348 the defendant of receipt of Rs. 10,000 from each of the plaintiffs 2 and 3.
The defendant admits that he did receive Rs. 10,000 from each of the plaintiffs 2 and 3 but his case is that it is a loan.
There can be no doubt that the defendant was paid Rs. 10,000 by each of the plaintiffs 2 and 3.
The case of the plaintiffs is that they paid in addition Rs. 3,500 each towards expenses.
There is no receipt for this extra payment.
But the plea on behalf of plaintiffs 2 and 3 is that the son of the second plaintiff paid Rs. 27,000 to the Receiver Kshetry personally representing the share of plaintiffs 2 and 3 of Rs. 13,500 each.
We find it difficult to accept the story for plaintiffs 2 and 3 were reluctant to part with Rs. 10,000 each without receipt even though the first plaintiff assured that there was no need for a receipt.
In fact the money was not parted with by them till the second plaintiff 's son accompanied the defendant to Calcutta and paid it in person to the Receiver.
In such circumstances, it is not possible to accept the plea of plaintiffs 2 and 3 that they did not insist on a receipt for payment of Rs. 3,500 each.
In this connection, the evidence of P.W. 1 Kshetry that out of the sum of Rs. 30,000 paid in cash Rs. 27,000 was handed over to him by Narendra Kumar Aggarwal and only the balance was paid by the defendant was relied on by the plaintiffs to show that the share of plaintiffs 2 and 3 of Rs. 13,500 each was paid.
According to the defendant second plaintiff 's son Narendra gave him Rs. 20,000 and he had Rs. 10,000 and he and Narendra counted Rs. 30,000 and handed over the sum of Rs. 30,000 to Kshetry, in the presence of the Judge.
On the evidence the High Court came to the conclusion that the money was counted by Narendra and the defendant before it was paid to Kshetry and if Narendra handed to the Solicitor a sum of Rs. 27,000 after counting, the inference that Rs. 27,000 belonged to plaintiffs is not justified.
We agree with the view taken by the High Court.
We therefore find that plaintiffs 2 and 3 have not proved that they paid Rs. 3,500 each towards the expenses.
The evidence relating to payment by the first plaintiff is even worse.
According to the first plaintiff, who examined himself as P.W. 2, on 2nd April, 1960 when the agreement was signed he paid Rs. 10,000 as his share of purchase price and Rs. 2,500 towards cost, Rs. 12,500 in all in cash to the defendant.
He did not consider it necessary to take a receipt in view of the signed agreement which he thought was sufficient acknowledgment of the liability by the defendant.
The first plaintiff was cross examined about the availability of the sum with him.
He admitted that he had no accounts and that the payment of Rs. 12,500 is not recorded any where.
The first plaintiff would add that he paid another Rs. 1,000 by issuing a cheque in favour of the third plaintiff with a direction that the third plaintiff should pay the 349 sum of Rs. 1,000 to the defendant towards expenses.
A cheque was no doubt drawn by the first plaintiff in favour of the third plaintiff but there is nothing to indicate that this amount was to be paid to the defendant.
The third plaintiff did not obtain any receipt from the defendant.
The High Court rightly rejected the plea on behalf of the first plaintiff that the proceeds of the cheque were paid to the defendant.
On the record there is hardly any acceptable evidence for establishing the payment of Rs. 13,500 by the first plaintiff to the defendant or the payment of Rs. 3,500 each by the plaintiffs 2 and 3 to the defendant.
There is no explanation by the plaintiffs as to how the conveyance came to be registered in the name of the defendant only when the agreement was that it should be taken in the name of the three plaintiffs and the defendant jointly.
The agreement contemplated taking of the conveyance in the names of the three plaintiffs and the defendant and in fact the application made by the defendant to the court prayed that the sale be confirmed in favour of the three plaintiffs and the defendant and the conveyance issued in their joint names.
But the application for confirmation in the joint names was not pressed and the conveyance was ultimately made in favour of the first defendant alone.
There is no explanation as to why the plaintiffs did not insist on the bid being confirmed in the names of all of them and the conveyance issued in their joint names.
Equally on the side of the defendant there is no explanation as to why the signed the agreement which povided that the sale should be for the benefit of all of them and as to why he applied to the court praying for the confirmation of the sale in favour of all of them.
Neither has the defendant denied receipt of Rs. 10,000 from each of the plaintiffs 2 and 3.
There is no provision for payment of interest by the defendant to plaintiffs 2 and 3 for the sums advanced.
If it had been loan simpliciter there could be no explanation for absence of provision for payment of interest.
On a close analysis of the evidence led on behalf of the plaintiffs and the defendant we agree with the High Court that neither the version of the plaintiffs nor that of the defendant discloses the entire truth.
The conclusion we arrive at on the evidence is that the plaintiffs have failed to prove any prior agreement before the defendant made his bids for Rs. 30,000 and later for Rs. 40,000 and paid the deposits amounting to Rs. 10,000 by himself.
Plaintiffs 2 and 3 have failed to prove that they have paid Rs. 3,500 each towards expenses in addition to payment of Rs. 10,000 by each of them which is admitted.
The first plaintiff has totally failed in proving that he had paid any part of the consideration.
On the side of the defendant there is no explanation as to why he subscribed to the 350 agreement agreeing to share the property along with the three plaintiffs and for his applying to the court for confirmation of the sale in favour of all of them.
Neither is there any explanation by him as to why plaintiffs 2 and 3 advanced Rs. 20,000 without interest.
Taking all the circumstances into account we feel the irresistible inference is that the defendant having made the bid by himself later on found himself badly in need of money to pay the balance of the bid amount.
In trying to find the money he sought the help of the plaintiffs and received payment of Rs. 20,000 from plaintiffs 2 and 3.
The crucial question is whether this amount was received merely as a loan as contended by the defendant or given on the agreement that plaintiffs 2 and 3 should be entitled to a share each.
The conduct of the defendant shows that while he badly needed the money he was not willing to share the property with them for the amount.
Equally plaintiffs 2 and 3 wanted the share in the property for the money advanced by them.
It is clear that the money was not advanced as a loan.
It may be that the plaintiffs 2 and 3 were insisting on a hard bargain but it cannot be denied in the circumstances in which the defendant was placed that he had accepted it.
The condition insisted upon by plaintiffs 2 and 3 might not have been fair but the agreement arrived at in the circumstances cannot be said to be due to undue influence.
The relief to which the plaintiffs are entitled to under the agreement cannot be denied.
The High Court after observing that plaintiffs 2 and 3 who are businessmen would not have lent a large sum of money without charging interest and that it is not likely that the plaintiffs would have been so charitable towards the defendant who was a stranger was of the view that it was not necessary to examine the defendant 's financial position and record a finding on the point for the purpose of appeal.
While holding that the defendant 's version also does not disclose the entire truth the High Court held that would not help the plaintiffs who have to prove the case they set up in the plaint.
On the short ground that the agreement dated 2nd April, 1960 does not reflect the true nature of the transaction the High Court held that the suit must fail.
We are of the view that if the amount was not advanced as a loan but paid towards acquiring of a share in the property the relief cannot be denied.
In the circumstances, the plaintiffs 2 and 3 are entitled to 1/4th share each in the property on their payment of their share of the expenses i.e. Rs. 3,500 each.
The defendant has been in possession of the property ever since the purchase and the plaintiffs are entitled to their share of the rents collected by the defendant.
We estimate the share of the rents collected for each of the plaintiffs at Rs. 25,000.
The result is the appeal is allowed to the extent that there will be a decree for partition and separate possession of 1/4th share 351 each of plaintiffs 2 and 3.
Plaintiffs 2 and 3 will pay to the defendant Rs. 3,500 each and interest at 10 per cent per annum from the date of the conveyance and receive Rs. 25,000 each from the defendant towards their share of the rent collected upto date.
The first plaintiff will not be entitled to any relief and the suit so far as he is concerned is dismissed.
There will be no order as to costs.
Before we conclude we will shortly refer to the question of law raised by Mr. L. N. Sinha on behalf of the defendant.
He submitted that as the title in the property vested in the defendant by confirmation of the court sale and later by a registered conveyance, the plaintiffs cannot seek relief on the unregistered agreement exhibit 4 as conveying any title to them.
This point was not taken in any of the courts below but learned counsel submitted that because it is a pure question of law not involving any investigation of facts and as it goes to the root of the matter the court may permit the point to be taken.
In support of his contention that a pure question of law in the circumstances can be taken for the first time in this Court he relied on the decisions of this Court in Yaswant Deorao Deshmukh vs Walchand Ramchand Kothari(1), Raja Sri Sailendra Narayan Bhanja Deo vs The State of Orissa (2), Seth Badri Prasad and others vs Seth Nagarmal and others(3), State of Uttar Pradesh & Anr.
vs Anand Swarup(4) and T. G. Appanda Mudaliar vs State of Madras(5).
As the point raised is a pure question of law not involving any investigation of the facts, we permitted the learned counsel to raise the question.
The plea of the learned counsel is that as the title has vested in him by virtue of the confirmation of the sale and the registered conveyance the plaintiff cannot rely on the unregistered agreement.
In support of his contention the learned counsel relied on the decision of the Privy Council in G. H. C. Ariff vs Jadunath Majumdar Bahadur(6) and Maritime Electric Co. Ltd. vs General Dairies Ltd.(7).
In G. H. C. Ariff vs Jadunath Majumdar Bahadur it was doubted whether the English equitable doctrine can be applied so as to modify the effect of an Indian statute.
The court expressed itself thus:". .but that an English equitable doctrine affecting the provisions of an English statute relating to the right to sue upon a contract, should be applied by analogy to such a statute as the Transfer of Property Act and with such a result as to create without any writing an interest which the statute says can only 352 be created by means of a registered instrument, appears to their Lordships, in the absence of some binding authority to that effect, to be impossible".
The Court further observed: "Their Lordships do not understand the dicta to mean that equity will hold people bound as if a contract existed, where no contract was in fact made: nor do they understand them to mean that equity can override the provisions of a statute and (where no registered document exists and no registrable document can be procured) confer upon a person a right which the statute enacts shall be conferred only by a registered instrument." In Meritime Electric Co. Ltd. vs General Dairies Ltd. (supra) the court observed: ". where as here the statute imposes a duty of a positive kind, not avoidable by the performance of any formality, for the doing of the very act which the plaintiff seeks to do, it is not open to the defendant to set up an estoppel to prevent it".
The decisions are clear that the plaintiffs cannot succeed in displacing the title of the defendant on the basis of the unregistered agreement.
But this will not help the defendant as the suit is based on the plea that the suit property and the premises were purchased in co ownership i.e. on a claim that the plaintiffs were the real owners of the property.
The claims of the plaintiffs as a real owner is not based on the unregistered agreement alone.
On the pleadings in the case the question of law raised cannot result in the suit being dismissed as not maintainable.
The second question the learned counsel raised was that the suit is barred under section 66 of the Civil Procedure Code.
The trial court overruled the plea on the ground that although the sale in question is a court sale it is not according to the rules prescribed by the Civil Procedure Code but only according to the Rules of the Calcutta High Court on the original Side.
The learned counsel submitted that the purpose of section 66, Civil Procedure Code, applies equally to court sales conducted under Rules of Civil Procedure Code as well as those conducted under the High Court Rules.
Reliance was placed on a decision of the Privy Council in Bishun Dayal vs Kesho Prasad and Anr.(1) where the only case pleaded by the plaintiff was that the person through whom he claimed derived his right to half of the village from the auction purchase having been made in part on his behalf by the auction purchaser, it was held that the claim was barred by section 66, Civil Procedure Code, inasmuch as no case independent of auction purchase and basing title upon subsequent possession was put forward in the plaint.
Section 66 of the Civil Procedure Code runs as follows: "66(1).
No suit shall be maintained against any person claiming title under a purchase certified by the Court in such 353 manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims." (2).
x x x x x section 66 prohibits any person claiming that a purchase certified by the court in such manner as may be prescribed in favour of a person was made on behalf of the plaintiff.
In order to invoke the prohibition it is necessary to establish that the person against whom the suit cannot be maintained is a person claiming title under a purchase certified by the court in such manner as may be prescribed.
A certificate by the court for the purchase in the manner prescribed is therefore essential.
The word "prescribed" is defined under section 2(16) of the Civil Procedure Code as meaning prescribed by Rules.
The provisions as to grant of a certificate by a court under a purchase is prescribed in Order 21.
Order 21, Rules 64 to 73 prescribe the procedure relating to sale generally while Rules 82 to 108 prescribe the procedure relating to sale of immovable property.
When the court makes an order confirming the sale under order 21, Rule 92, the sale becomes absolute.
After the sale becomes absolute under Rule 94 the court shall grant a certificate specifying the properties sold and the name of the person who at the time of the sale is declared to be the purchaser.
Such certificate is required to bear the day and the date on which the sale became absolute.
The certificate by the court referred to in sec.
66 is a certificate under order 21, Rule 94.
The procedure envisaged for sale generally and sale of immovable property under Order 21 is sale by a public auction.
Sale by a court through the Receiver appointed by court is not contemplated under these provisions.
In a sale by a Receiver a certificate to the purchaser under Order 21, Rule 94, is not given by the Court.
Therefore, the prohibition under sec.
66 cannot be invoked in the case of a sale by the Receiver.
A Receiver is appointed under Order 40, Rule 1, and a property can be sold by the Receiver on the directions of the court even by private negotiations.
The requirement of section 66 of the C.P.C. is a certificate by the court as prescribed.
In this case the conveyance exhibit 5 was in accordance with the original side Rules of the High Court.
In the view we have taken that section 66 is not applicable to sale by Receiver it is not necessary to go into the question whether a sale by the Receiver under the Rules of the Calcutta High Court would come within the purview of section 66.
Section 66 refers to execution of sales only and has no application to a sale held by a Receiver.
In this view the objection raised by the learned counsel for the defendant has to be rejected.
354 ORDER When the Judgment was delivered in Court on 16th January, 1979, allowing the appeal to the extent that there will be a decree for partition and separate possession of one fourth share each of plaintiffs 2 and 3, the parties expressed their desire to agree amongst themselves and divide the properties finally and report a settlement to that effect and prayed that the Court may be pleased to pass a decree in terms of the compromise.
Leave was granted to the parties to enter into a compromise and report the matter to the Court for the passing of the decree in terms of the compromise.
Accordingly the parties have entered into a compromise and have filed the compromise memo along with plans for passing of the final decree.
Accordingly we direct that a decree be passed in terms of the compromise.
S.R. Appeal allowed. | The plaintiffs appellants filed a suit against the defendants respondents claiming their title on an unregistered document to the suit property and premises purchased by the latter through a sale by the Receiver under the orders of the Court, on the ground that they were co owners thereof by virtue of the said document.
The trial court decreed the suit but the High Court, on appeal, accepted the appeal and dismissed the suit.
Allowing the appeal by certificate, the Court ^ HELD: 1.
A pure question of law on the facts and circumstances of a case can be taken for the first time in the Supreme Court.
[351 B C] (a) In the instant case, the plea that "as the title has vested in the respondent by virtue of the confirmation of sale and the registered conveyance, the plaintiffs appellants cannot rely on an unregistered document" is a pure question of law not involving any investigation of the facts.
[351C E] Yaswant Deorao Deshmukh vs
Walchand Ramchand Kothari; , @ 861; Raja Sri Sailendra Narayan Bhanja Rao vs State of orissa ; ; Seth Badri Prasad and ors v Seth Nagarmal and ors.
, [1959] Suppl.
1 S.C.R. 769 @ 773; State of U.P and Anr v Anand Swarup ; ; T. A A Appanda Mudaliar vs State of Madras ; ; applied.
In a suit against the purchaser on the ground that the purchase was made on behalf of plaintiff or on behalf of some one through whom the plaintiff claims, the plaintiff cannot succeed in displacing the title of the defendant on the basis of the unregistered agreement,[352 C] on the pleadings, in the instant case, the question of law raised cannot result in the suit being dismissed as not maintainable.
The claim of the appellant as a real owner was not based on the unregistered agreement alone.
341 The suit was based on the plea that the suit property and the premises were purchased in ownership (i.e.) on the claim that the appellants plaintiffs were the real owners of the property.[352 C D] G. H. C. Ariff vs Jadunath Mazumdar Bahadur, A.I.R. , Meritime Electric Co. Ltd. vs Genral Dairies Ltd., A.I.R. 1937 PC 114; referred to.
Section 66 of the Civil Procedure Code prohibits any person claiming that a purchase certified by the Court in such manner as may be prescribed in favour of a person was made on behalf of the plaintiff.
In order to invoke the prohibition it is necessary to establish that the person against whom the suit cannot be maintained is a person claiming title under a purchase certified by the Court in such manner as may be prescribed.
A certificate by the Court for the purchase in the manner prescribed is, therefor, essential.
[353 B C] The word "prescribed" is defined under section 2(16) of the Civil Procedure Code, as meaning prescribed by Rules.
The provision as to grant of a certificate by a court under a purchase is prescribed in Order 21.
Order 21, Rules 64 to 73 prescribe the procedure relating to sale generally while Rules 82 to 103 prescribe the procedure relating to sale of immovable property.
When the Court makes an order confirming the sale under Order 21, Rule 92, the sale becomes absolute.
After the sale becomes absolute under Rule 94 the Court shall grant a certificate specifying the properties sold and the name of the person who at the time of the sale is declared to be the purchaser.
Such certificate is required to bear the day and the date on which the sale became absolute.
[353 C E] The certificate by the Court referred to in Section 66 C.P.C. is a certificate under Order 21, Rule 94.
The procedure envisaged for sale generally and sale of immovable property under Order 21 is sale by a public auction.
Sale by a Court through the Receiver appointed by Court is not contemplated under these provisions.
In a sale by a Receiver a certificate to the purchaser under Order 21, Rule 94, is not given by the Court.
Therefore, the prohibition under Sec. 66 cannot be invoked in the case of a sale by the Receiver.
A Receiver is appointed under Order 40 Rule 1, and a property can be sold by the Receiver on the directions of the Court even by private negotiations.
The requirement of Sec. 66 of the C.P.C., is a certificate by the Court as prescribed.
Since Section 66 is not applicable to sales by Receiver it is not necessary to go into the question whether a sale by the Receiver under the Rules of the Calcutta High Court would come within the purview of section 66.
Section 66 refers to execution of sales only and has no application to a sale held by a Receiver.
In this case, the conveyance exhibit 5 was in accordance with the original side Rule of the High Court.
[353 E G] |
N: Criminal Appeal No. 154 of 1972.
From the Judgment and Order dated 12 11 1971 of the Allahabad High Court in Criminal Revision No. 865 of 1970.
Shiv Pujan Singh for the Appellant.
D.P. Uniyal and M. V. Goswai for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY J.
Jorma who was convicted by the learned Sessions Judge, Dehradun under Section 302 Indian Penal Code and 449 sentenced to suffer imprisonment for life, was directed by the High Court of Allahabad to be released on bail on furnishing bail to the satisfaction of the District Magistrate, Dehradun.
The District Magistrate (Judicial) Dehradun ordered Jorma to execute a personal bond in a sum of Rs. 5,000/ and to furnish two sureties in a sum of Rs. 10,000/ each.
Ram Lal the present appellant was one of the persons who executed a surety bond.
Another, Abdul Jabbar, also executed a surety bond.
By some oversight no personal bond was taken from Jorma nor was his signature taken on the reverse of the bonds executed by the two sureties as appeared to have been usually done.
Jorma jumped bail and the sureties were unable to produce him when required to do so.
The District Magistrate, Dehradun, therefore, forfeited the surety bonds and issued a warrant of attachment against the sureties under Section 514 of the Code of Criminal Procedure, 1898.
The appellant preferred an appeal to the High Court of Allahabad against the order of forfeiture.
Before the High Court it was submitted that the surety bond executed by the appellant could not be forfeite when no personal bond had been taken from the accused who had been released on bail.
The High Court over ruled the submission of the appellant and confirmed the order of forfeiture.
The appellant has filed this appeal on a certificate granted by the High Court under Article 134(1)(c) of the Constitution.
Shri Shiv Pujan Singh, learned Counsel for the appellant submitted that the question of forfeiting the surety bond for the failure of the accused to appear would arise only if the accused himself had executed a personal bond for his appearance.
He submitted that someone must be primarily bound before the surety could be bound and his bond forfeited.
He invited our attention to Section 499 of the Code of Criminal Procedure, 1898, and form No. 42 of the forms in Schedule V.
He relied on the decisions in Brahma Nand Misra vs Emperor, (1), and Sailash Chandra Chakraborty vs The State(2).
A reference was also to Bakaru Singh vs State of U.P. (3) On the other hand the learned Counsel for the State urged that the bond to be executed by the surety was independent of the bond to be executed by the accused and there was no impediment in the way of the forfeiture of the surety bond even in the absence of a personal bond executed by the accused.
He relied upon the decisions in Abdul Aziz & Anr.
vs Emperor(4), and Mewa Ram & Anr.
vs State (5).
450 Section 499(1) of the Code of Criminal Procedure Code 1898 was in the following terms: "Before any person is released on bail or released on his own bond, a bond for such sum of money as the police officer or Court, as the case may be, thinks sufficient shall be executed by such person, and, when he is released on bail, by one or more sufficient sureties conditioned that such persons shall attend at the time and place mentioned in the bond, and shall continue so to attend until otherwise directed by the police officer or Court, as the case may be".
Now, this provision contemplated the execution of a bond by the accused, and by the sureties.
The provision did not imply that a single bond was to be executed by the accused and the sureties, as it were, to be signed by the accused and counter signed by the sureties.
Form No. 42 of Schedule V, Code of Criminal Procedure, 1898, was as follows: "XLII bond and bail bond on a preliminary Inquiry before a Magistrate.
(See Sections 496 and 499) I, (name), of (place), being brought before the Magistrate of (as the case may be charged with the offence of, and required to give security for my attendance, in his Court and at the Court of Session, if required, do bind myself to attend at the Court of the said Magistrate on every day of the preliminary inquiry into the said charge, and, should the case be sent for trial by the Court of Session, to be, and appear, before the said Court when called upon to answer the charge against me; and, in case of my making default, herein, I bind myself to forfeit to Government the sum of rupees Dated this day of 19 (Signature) I hereby declare myself (or we jointly and severally declare ourselves and each of us) surety (or sureties) for the said (name) that he shall attend at the Court of on every day of the preliminary inquiry into the offence charged against him, and, should the case be sent for trial by the Court of Session, that he shall be, and appear, before the said Court to answer the charge against him, and, in case of his 451 making default therein, I bind myself (or we bind ourselves) to forfeit to Government the sum of rupees Dated this day of 19 (Signature)" The undertaking to be given by the accused as may be seen from form No. 42 of Schedule V was to attend the Court on every day of hearing and to appear before the Court whenever called upon.
The undertaking to be given by the surety was to secure the attendance of the accused on every day of hearing and his appearance before the Court whenever called upon.
The undertaking to be given by the surety was not that he would secure the attendance and appearance of the accused in accordance with the terms of the bond executed by the accused.
The undertaking of the surety to secure the attendance and presence of the accused was quite independent of the undertaking given by the accused to appear before the Court whenever called upon, even if both the undertakings happened to be executed in the same document for the sake of convenience.
Each undertaking being distinct could be separately enforced.
It is true that before a person is released on bail he must execute a personal bond and, where necessary, sureties must also execute bonds.
There can be no question of an accused being released on bail without his executing a personal bond.
But it does not follow therefrom that if a person is released by mistake without his executing a personal bond the sureties are absolved from securing his attendance and appearance before the Court.
The responsibility of the surety arises from the execution of the surety bond by him and is not contingent upon execution of a personal bond by the accused.
Nor is the liability to forfeiture of the bond executed by the surety contingent upon the execution and the liability to forfeiture of the personal bond executed by the accused.
The forfeiture of the personal bond of the accused is not a condition precedent to the forfeiture of the bonds executed by the sureties.
The Calcutta High Court in Sailash Chandra Chakraborty vs The State (supra) and single Judge of the Allahabad High Court in Brahma Nand Misra vs Emperor, (supra) proceeded on the assumption that the bond executed by the accused and the sureties was single and indivisible and if the accused did not join in the execution of the bond, the bonds executed by the sureties alone were invalid.
We do not find any warrant for this assumption in Section 499 of the Criminal Procedure Code of 1898.
We are afraid that there has been some confusion of thought by the importation of the ideas of 'debt ' and 'surety ' from the civil law.
As pointed out in Abdul Aziz & Anr.
vs Emperor(supra) under Section 499 Criminal Procedure Code, the surety did not guarantee the payment of any sum of money by the person accused 452 who was released on bail but guaranteed the attendance of that person and so the fact that the person released on bail himself did not sign the bond for his attendance did not make the bond executed by the surety an invalid one.
In Mewa Ram & Anr.
vs State (supra) the difference between a surety under the Code of Criminal Procedure and a surety under the Civil Law was pointed out and the view taken in Abdul Aziz & Anr.
vs Emperor (supra) was reiterated.
We agree with the view expressed in Abdul Aziz & Anr.
vs Emperor, and Mewa Ram & Anr.
vs State (supra).
In Bakaru Singh vs State of U.P., (supra) the question presently under consideration did not arise.
The question which was considered in that case was whether it was necessary that the personal bond of the accused should be executed on the other side of the bond executed by the surety on the same paper.
It was held that it was not necessary.
And, it was pointed out that the mere fact that form No. 42, Schedule V Criminal Procedure Code, printed the contents of the two bonds, one to be executed by the accused and the other by the surety together, did not mean that both the bonds should be on the same sheet of paper.
To the extent that it goes the decision helps the State and not the appellant.
For the reasons stated above, the appeal is dismissed.
N.V.K. Appeal dismissed. | Dismissing the appeal, ^ HELD: Section 499(1) of the Cr.
P.C., which contemplated the execution of a bond by the accused and by the sureties, did not imply that a single bond was to be executed by both the accused and the sureties, signed by the accused and counter signed by the sureties.
An undertaking of the surety in Form 42, Schedule V to secure the attendance of the accused was quite independent of the undertaking given by the accused to appear before the court whenever called upon, even if both the undertakings of the surety and the accused happened to be executed in the same document for the sake of convenience.
Each under taking being distinct can be separately enforced.
[450 C, 451 B D] The fact that an accused would not be released on bail without his executing a personal bond does not mean that if a person is released by mistake without his executing a personal bond, the sureties are absolved from securing the attendance of the accused and his appearance before the court.
The sureties ' responsibility arises from the exeeution of the surety bond and is not contingent upon execution of a personal bond by the accused.
Nor is the liability to forfeiture of the bond executed by the surety contingent upon the execution and the liability to forfeiture of the personal bond executed by the accused.
The forfeiture of the personal bond of the accused is not a condition precedent to the forfeiture of the bonds executed by the sureties.
[451 E F] Abdul Aziz & Anr.
vs Emperor, AIR 1946 All. 116; Mewa Ram & Anr.
vs State, AIR 1953 All. 481; approved.
Bakaru Singh vs State of U.P., ; ; distinguished.
Brahma Nand Misra vs Emperor, AIR 1939 All. 682; Sailesh Chandra Chakraborty vs The State, AIR 1963 Cal.
309; over ruled. |
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