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Appeals Nos. 344 346 of 1960.
Appeals by special leave from the judgment and order dated September 8. 1958, of the Madhya Pradesh High Court (Indore Bench), Indore, in Civil Second Appeals Nos.
11.0 1,12 of, 1952.
section T.Desai and J. B. Dadachanjifor the appellant.
B. Sen,J. Bhave and 1.
N. Shroff,for the respondent.
July 17.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These three consolidated appeals by special leave are against a common judgment and order of the High Court of Madhya Pradesh, dated September 8, 1958, in three second appeals filed under R. 13 of the Indore Industrial Tax Rules, 1927 of the former Holkar State, which were in force before the State became part of Madhya Bharat State.
They concern three assessments relating to the assessment years, 1941,1942 and 1943 respectively.
These second appeals were originally filed in the Madhya Bharat High Court as early as 1952 ; but the records of the appeals 'were destroyed by fire and had to be reconstructed.
By the time the appeals were ready, Madhya Bharat had merged in the new state of Madhya Pradesh, and the appeals were accordingly heard by a Divisional Bench of that High Court.
The appellant is a Textile Mill and a public Joint Stock Company called the Nandlal Bhandari Mills, Ltd. The appellant had appointed a" firm, Messrs Nandlal Bhandari and Sons as agents, secretaries and treasurers of the Mills, and under cl.
(6) of the agreement of agency, it agreed to pay to the agents an office allowance, commission on the Company 's net profits and commission on the sale proceeds.
of sales of yam, cloth, etc.
The 861 remuneration of the agents for the three accounting years was as follows : ___________________________________________________________ Remuneration As per Accounting Years, agree ment.
1941 1912 1943 Rs. Rs. Rs. __________________________________________________________ Clause 6 1500 18,000 18,00018,000 (a) Fixed P.M. for the for the monthly allow year.
ance as office allowance.
(b) Commission @ 16% 2,68,335 6,15,946 10,52,939 on the Com net on painy 's Net profits Profits.
(c) Commission @ 1 9 0 1,10,156 1,10156 1,64,751 2,71,672 on the sale Per Cent, proceeds of on sales sales of yarn, cloth etc.
___________________________________________________________ In computing the tax, the Mills claimed to deduct under R. 3(2)(ix) of the Rules the above amounts paid as remuneration.
The Rule reads : "(ix) any expenditure (not being in the nature of capital) incurred solely for the purposes of earning such profits or gains." The Assessing Officer accepted the appellant 's claim for deduction but only as.
to a part.
We are not required in these appeals to consider the correctness of the quantum of the deduction in view of what transpired later.
The Assessing Officer also disallowed certain other claims made by the appellant, which again need 'not be mentioned.
The appellant then.
appealed to the Appellate Authority, and on December 31, 1951 the Appellate Authority, while accepting some of 862 the appellant 's other contentions upheld the order refusing to deduct the agent,s commission on profits under R. 3(2)(ix).
Three second appeals were preferred in the Madhya Bharat High Court under R. 13 of the amended Rules.
They were dismissed by the High Court of Madhya Pradesh, and hence the present appeals.
The Indore Industrial Tax Rules were first promulgated in 1926 by a Cabinet Resolution (No. 373 dated March 22, 1926).
In 1927, by, Cabinet Resolution No. 1991 dated November 23 1927, the Rules were modified, and the new Rules, were made applicable retrospectively from May 1, 1926.
These Rules were framed for the levy of the tax and for ascertainment and determination of the income of cotton mills.
The taxcalled the "Industrial Tax" was leviable under R. 3, which imposed the charge.
It says that the Industrial Tax shall be payable by an assessee in respect of the profits or gains of any Cotton Mill industry carried on by him in the Holkar State.
Sub r.
(2) of R. 3 provides that such profits or gains are to be computed after making allowances, inter alia, for any expenditure incurred solely for the purpose of earning such profits or gains, R. 6, which is a part of the Rule imposing a charge, lays down the rates which are : (a) on all incomes up to Rs. 50,000, at 1 1/2 annas per rupee, and (b) above, at 2 1/2 annas per rupee.
The short question thus was whether in computing the profits and gains of the appellant, the remuneration paid to the agents was deductible under R. 3 (2) (ix).
It is necessary At this stage to see the legislative machinery existing in the Holkar State in 1927 and onwards.
On February 27, 1926, His Highness Maharaja Tukoji Rao III abdicated, and, his son, H.H. Maharaja Yeshwant Rao Holkar, became the Ruler, whose installation ceremony ' was performed on March 11, 1926.
A Regency Council was appointed under the orders of the 863 Government of India for the administration ' of the State during the minority of the Maharaja.
This Regency Council, which was called the Cabinet, was entrusted with the administration of the State according to existing rules and practice, under the supervision and with the advice of the Agent to the Governor General in Central India.
Prime Minister of the State was the Chairman.
H. H. Maharaja Yeshwant Rao Holkar attained majority on September 6, 1929 and resumed sovereign powers on May 9, 1930.
It was during the minority of the Ruler that the Cabinet had promulgated the amended Rules of 1927.
In 1931, the decision of the Privy Council in the well known case of Pondicherry Railway Co., Ltd. vs Commissioner oF Income tax (1) was rendered.
In that case, a Railway Company had agreed to make over to the French Colonial Government half of the Company 's net profits in consideration of a 99 year concession.
This was sought to be deducted by the Company from its assessable profits as an expenditure incurred solely for the purpose of earning such profits.
The Privy Council disallowed the deduction.
Lord Macmillan observed as follows : "A payment out of profits and conditional on profits being earned cannot accurately be described as a payment made to earn profits.
It assumes that profits have first come into existence.
But profits on their coming into existence attract tax at that point and the revenue is not concerned with the subsequent application of the profits.
" It seems that, as a result of this decision, a notification was issued in August, 1931, and another on February 2/3, 1932 by the Commerce.
and Industry Department of the Holkar State.
The latter notification reads as follows (1) (1931) L.R. 38 I.A. 239. 864 "Commerce and Industry Department Notification.
Notification No. 1 dated the 2nd/3rd Feb. 19 32.
In continuation of this office Notification No. 4733 dated the 6th December, 1927 (Vide Issue No. 11 dated the 12th December, 1927, of the Holkar Sirkar Gazette) embodying modified rules for the levy of the Industrial Tax the Cabinet,in their Resolution No. 1072 dated the 25th August, 1931, have ordered that the Agents ' Commission on 'Profits ' should not be allowed to be deducted from the assessable profits.
" It is, to be noticed that this notification refers to the earlier notification No. 4733 of December 6, 1927, under which were published the amended Industrial Tax Rules, 1927, and to the notification of August 1931.
The latter has not been produced before us.
This notification led to representations by the persons affected by it.
The Maharaja of Holkar thereupon referred the matter for the opinion of the, Full Bench of the High Court of the State.
It appears that the opinion of the High Court was in favour of disallowing such deductions.
On July 14, 1933, another notification (No. 13) was issued which reads as follows : "In continuation of this office Notification No. 1 dated 3rd February,, 1932, it is hereby published for the information of the mills and factories concerned that on submission of the Prime Minister 's (Legal Department) report No. 25 dated 11th May, 1933, His Highness the Maharaja is please to order (vide Huzur Shri Shankar, Order No. 173 dated 29th June,1933) that the opinion of the Full Bench of the High Court being that the Managing Agent 's Commission an profit 's is 865 not an item of expenditure incurred solely for the purpose of earning the said profit within the meaning of Rule 3(2)(ix) of the said Industrial Tax Rules and this being.
also the view of the Cabinet as expressed in their resolution No. 1072 dated 28th August, 1931, the aforesaid Cabinet Resolution be given effect to and the industrial tax due on the amount of the managing agent 's commission on profits be recovered with effect from the date of the said Cabinet Resolution.
" This notification, it is contended before this Court had not the force of law and was not enforceable against the appellants, who claim that they are entitled to show that the remuneration paid to the agents was deductible from the profits of the Mills before.
computing the Industrial Tax.
In this connection, the appellants wish to use the later decisions of the House of Lords in The Union Cold &wage Co., Ltd. vs Adamson(1) and of the Privy Council in The Indian Radio and Cable Communication Co., Ltd. vs Commissioner of I Income tax (2), in which the decision in the Pondicherry Railway Company case (3) was explained.
In the case before the Privy Council, Lord Maugham observed: "It is not universally true to say that a, payment the making of which is conditional on profits being earned cannot properly be described as an expenditure incurred for the purpose of earning such profits.
The typical exception is that of a payment to a, director or a manager of a commission on the profits of a company '.
If a company having made; an apparent net profit, of pound 10,000 has then to pay pound 1,000 to directors, or managers as the contractual recompense for their service during the year, it: is plain that the real net profit is only pound 9,000.
" (1) (2) (3) (1931) L.R. 58 (1) A. 239.
866 Lord Macmillan in the former case observed that the Pondicherry Railway Company case (1) must be read in the context of the facts of that case, and the obligation was first to find out the net profits of the company and then to divide them.
These two sets of cases proceed upon different principles.
If the agreement is to share the profits the expenditure cannot properly be treated as one incurred solely for the purpose of earning such profits; but if a slice of the profits is;to be paid to persons as remuneration to help in the earning of the profits, the deduction can be claimed.
All this would of course be pertinent to consider, if there was no legislative enactment on the subject.
If the matter was not one concluded by law, then there would be room for judicial interpretation of the Rule.
The rival claims in these appeals are thus confined to the legislative force of the notifications issued in 1931, 1932 and 1933 respectively,.
The appellant 's contention is that the notifications were not an act of legislation but an interpretation by the Sovereign.
Mr. Desai concedes that if they be regarded as legislation, then the later decisions of the Privy Council and some of this Court cannot be called in aid, because where the law itself speaks with clarity, judicial interpretation is out of place.
He contends, how ever that the two notifications were not framed as rules and were not expressly stated to be amendments of the rules then existing.
He points out that after the first notification which was nothing more than an administrative direction to the assessing officers to include in the profits the remuneration of the agents, the opinion of the High Court was obtained, and the second notification merely pointed out that the earlier notification was to be given effect to, and did no more than add a second administrative direction.
On the other side, it is contended that the Cabinet could make laws as often as it pleased and that (1) (1931) L. R. 58 I. A. 239.
867 the notifications must be read either as independent rules or as a legislative explanation of R. 3 (2) (ix).
In so far as the legislative supremacy of the Cabinet was concerned, no question was raised before us.
When the Indore Industrial Tax Rules, 1926 were framed, they came into existence by virtue of a Cabinet Resolution of that year.
When they were modified, they were superseded by yet another Cabinet Resolution of the year 1927, which promulgated the new Rules with retrospective effect from May 1926.
The source of the Rules 'was thus a Resolution of the Cabinet on both the occasions, and it is not denied that the Rules thus framed had legislative sanction and were unquestionable.
When the Cabinet promulgated its notifications in 1931, 1932 and 1933, it followed the same procedure, and it stated that the notification of 1932 was " 'in continuation of this office Notification No. 4733 dated December 6, 1927.
" This has reference to that notification under which the Indore Industrial Tax Rules, 1927 were orginally published.
From this, it follows that new Rules were framed by a resolution of the Cabinet and were promulgated by a notification in the Gazette as part of the Rules.
The mode followed in 1926 and 1927 was repeated in 1932 and 1933 and also presumably in 1931, though the notification of that year has not been printed in the record of this case.
This view was taken by the Full Bench of the ' Madhya Bharat High Court in Raj Kumar Mills Ltd. vs Madhya Bharat State (1).
The question which is involved in these appeals also arose in that case.
It was observed by the Full Bench : "This Notification makes it abundantly clear that His Highness the Maharaja ordered that the industrial tax due on the amount of the managing agent 's commission on profits be recovered.
This being.
an order of the (1) A.I.R. 1953 Madbya Bharat 135. 868 ruler, who enjoyed sovereign Powers, that order is not open to challenge.
This is a mandate emanating from a sovereign and as such has the force of law.
This Court has, therefore, no power to go behind the order and enquire as to whether the managing agent 's commission on profits is an item of expenditure solely incurred for the 'purpose of earning profits or not: In this view of the matter the point at issue is concluded by Huzur Shri Shanker order No. 173 dated 29th June, 1933.
" Thus view was affirmed by the High Court of Madhya Pradesh in the judgment under appeal.
In our judgment, the two notifications cannot be described as "judicial ,interpretation".
If any this, they must be interpreted as legislative exposition of R. 3(2)(ix) and in the nature of an explanation.
This Court in Ameer un nissa Begum vs Mahboob Begum in dealing with the 'Firmans" of His Exalted Highness the Nizam of Hyderabad, observed as follows : "It cannot be disputed that prior to the integration of Hyderabad State with the Indian Union and the coming into force of the Indian Constitution, the Nizam of Hyderabad enjoyed uncontrolled sovereign powers.
He was the supreme legislature, the supreme judiciary and the, supreme head of the executive, and there were no ;constitutional limitations upon his authority to act in any of these capacities.
The 'Firmans ' were expressions of the sovereign will of the Nizam and they were binding in the same way as any other law; nay they would override all other laws which were in conflict with them.
so long as a particular 'Firman ' held the field, that alone would govern or regulate (1)A.I.R. 869 the rights of the parties concerned, though it could be annulled or modified by a latter 'Firman ' at any time that the Nizam willed.
" The same can be said of the Ruler of the Holkar State.
When to the order of the Ruler was added the usual mode of making and promulgating rules, the position which emerges is really unassailable.
Mr. Desai in attempting to show that the ruling does not apply to the case, raised two contentions.
The first was based upon a more recent decision of this Court in Madhaorao vs State of Madhya Bharat (1), where certain Kalambandis of the Maharaja of Gwalior were considered.
This Court in deciding whether the Kalambandis were existing law under article 372 of the Constitution, observed : "In dealing with the question as to whether the orders issued by such an absolute monarch amount to a law or regulation having the force of law, or whether they constitute merely administrative orders, it is important to bear in mind that the distinction between executive orders and legislative commands is likely to be merely academic where the Ruler is the source of all power.
There was no constitutional limitation upon the authority of the Ruler to act in any capacity he liked ; he would be the supreme legislature, the supreme judiciary and the supreme head of the executive, and all his orders, however issued, would have the force of law and would govern and regulate the affairs of the State including the rights of its citizens.", It was, however, pointed out in the case that even where an order is issued by the sovereign ruler, one must look to the character of the order and its content to find out whether it enacted a binding rules (1) ; 870 Mr. Desai has constructed his entire argument on the basis of these observations, and has contended that the orders only expressed an opinion and did not bind.
He pointed out as the second limb of his argument that these notifications were not expressed as a rule but as an order, and that they did not seek to amend the rules, nor to add to them.
He referred to other notifications in which a legislative act was clearly discernible, as for example, Notification No. 22/Com.
dated May 17, 1946, by which for the existing Rule 4, a new Rule was substituted.
An examination of the Rules, however, shows that there was no set pattern of language.
Some of the Rules do not read like rules at all.
Notes have been appended to the rules, which are not rules proper, and R. 29 says : "All matters not dealt with in these rules may be submitted to the member incharge., Commerce and Industry Department for decision.
" The existence of such a rule seems to obliterate the frontiers between legislative, judicial and executive exercise of the power of a State, such as we understand it.
There being no invariable use of a clear cut legislative language, each general order emanating from the sovereign ruler and promulgated in the same manner as any other rule and having its roots in a resolution of the Cabinet must be regarded as one binding upon the subject.
This is the purport of the decisions of this Court, and the present case falls in line with those which have been previously decided.
There is nothing in the content, the character or the nature of these notifications, which would put them on a level lower than the Rules, which had been earlier promulgated.
In our opinion., the judgment of the High Court under appeal is correct, and the appeals are accordingly dismissed with costs, one set.
Appeals dismissed.
|
By a Cabinet Resolution of the Holkar State certain Rules known as The Indore Industrial Tax Rules were framed for the purpose of levying industrial tax.
After the decision of the Privy Council in cherry Railway Go.
, Ltd. vs Commissioner Income, tax, (1931) L. R. 58 1.
A. 239, disallowing deduction , of Commission paid out of profits to agents from the assessable profits; the Government of Holkar State of which the Maharaja was the Supreme Ruler; issued certain Notifications ordering that the Agents ' Commission on profits should not be allowed to be deducted from the assessable profits.
The appellants who under an agreement paid commission to their agents out of the company 's net profits contended, inter alia, that the Notifications in question did not have the force of law and was not enforceable against the appellants.
Held, that every general order emanating from the sovereign ruler having its roots in a resolution of the cabinet must be regarded as a law binding on the subject and the Notifications disallowing commission paid to, agents to be deducted from the assessable profits were therefore binding on the appellants, because that was the normal mode by which laws were made in the Holkar State.
Rajkumar Mills Ltd. vs Madhya Bharat State, A. I. R. 1953 Madhya Bharat 135, approved.
Ameer un nissa Begum vs Mahboob Begum, A. I. R. , followed.
The Union Cold Storage Co., Ltd. vs Anderson, (1931) 16 T. C. 293 and The Indian Radio and Cable Communications Co., Ltd. vs Commissioner of Income tax, , discussed.
Madharao vs State of Madhya Bharat, ; , referred to. 860
|
view Petition Nos.
557 564 & 571,594/1987.
IN 827 CIVIL MISC.
PETITION NOS.
25279, 13195, 19336, 18600, 1563, 15031 33, 19552, 20695/1986.
IN CIVIL APPEAL NOS.
3005, 1599, 2194, 2067, 158 2148 50, 2902/86, 2533/86,223/88.
G. Ramaswamy Additional Solicitor General, A.K. Ganguli, P.P. Singh, R.P. Srivastava and P. Parmeswaran for the Petitioner.
J. Ramamurthy, B. Parthasarthi, V.J. Francis, C.S Vai dyanathan, S.R. Setia, Harish N. Salve, Ravinder Narain, D .N. Misra, section Padmanabha Mahale, Mrs. Leelawati, K.K. Gupta V. Balachandran and Uma Dutta for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKIIARJI, J.
In these matters, the question that arises for consideration is, whether a learned Single Judge sitting in Chambers is competent to dismiss applica tion for condonation of delay in statutory appeals under Order XX A of the Supreme Court Rules, 1966, regarding appeal under section 55 of the as well as under Order XX B re garding appeals under Section 130 E of the and Section 35 L of the Central Excises & Salt Act, 1944.
It appears that an application for condonation of delay came before a learned Single Judge and in the circumstances mentioned in the Review Petition No. 557 of 1987, the appli cation was dismissed by the learned Single Judge.
That application was dismissed by one of us on 11.1 I. 86.
That order was passed by learned Single Judge under Order VI rule 2(14) of the Supreme Court Rules, 1966.
The application had been filed for the condonation of delay along with the Statutory Appeal against the Judgment/Order of the Customs, Excises and Gold Control Appellate Tribunal.
The revenue being the Collector of Central Excise, Madras in this case filed a review petition on the ground that the application for condonation of delay made in Statutory Appeals arising out of final orders of the Tribunal under several Acts should be heard by a bench of at least two Judges.
The matter was posted before this bench for consideration wheth er the learned Single Judge had jurisdiction to dismiss such application for condonation of delay or not.
In order to decide this question, it is necessary to have a cons 828 pectus of the relevant rules.
In the Supreme Court Rules, 1966 (hereinafter referred to as 'the Rules '), as amended in 1983, under Order XX B, of the said rules, provision has been made for appeals under clause (b) of Section 130 E of the and under Section 35 L of the .
According to Rule 1 thereof, the petition of appeal shall, .subject to the provisions of Sections 4, 5 & 12 of the be presented within 60 days from the date of the order sought to be appealed against or within 60 days from the date on which the order sought to be appealed against is communicated to the Appellate, whichever is later.
The time required for obtaining a copy of the order should be excluded.
There is, however, no provision providing for limitation in the con cerned Statutes.
According to Rule 2 of Order XX B, Rules 1 to 7 of Order XX A of the Rules relating to appeals under Section 51 of the shall with necessary modifications and adaptations, apply to appeals under that Order.
Rule 3 of Order XX A provides as under: "After the appeal is registered, it shall be put up for hearing ex parte before the Court which may either dismiss it summarily or direct issue of notice to all necessary par ties, or may make such orders as the circum stances of the case may require".
According to this provision, it appears that all such statutory appeals have to be placed before a Court for ex parte admission.
According to Section 5 of the : "Any appeal or any application . may be admitted after a prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not prefer ring the appeal or making an application within such a period.
" Some grounds, according to the appellant, had been made for condonation of delay.
Apparently, in the facts of the case, the learned Single Judge did not find any merit in those grounds and refused to condone the delay.
Consequently, it was contended that the effect of the refusal of condonation of delay was dismissal of the appeal following as a result thereof.
The question is, can the learned Single Judge do it9 The 829 learned Single Judge has done it by virtue of Rule 2(14) of Order VI of the said Rules.
Order VI deals with the 'Busi ness in Chambers '.
Order VI, Rule 1 provides that the powers of the Court in relation to the matters enumerated thereun der would be exercised by the Registrar.
Order VI, Rule 2 provides that the powers of the Court in relation to certain matters may be exercised by a single Judge sitting in Cham bers.
Thereafter 28 such matters are enumerated.
Rule 2(14) of Order VI provides as follows: "Applications for enlargement or abridgement of time except where the time is fixed by the Court and except applications for condonation of delay in filing special leave petitions".
Reading the rule simply, it appears to us that it means all applications for the enlargement or abridgement of time would be cognizable by the learned Single Judge in Chambers except, those applications time for which has been fixed by the Court in terms of Order VII and also applications for condonation of delay in filing special leave petitions.
This appears to us to be logical and literal meaning of the said rule.
The question, however, has been posed is this an application for condonation of delay or an application for enlargement or abridgement of time.
This question, it ap pears to us, is concluded by the decision of this Court in Commissioner of Income Tax, Bombay City vs R.H. Pandi Manag ing Trustees of Trust, Bombay; , There a bench of three learned Judges of this Court had occasion to con sider this question.
A question arose there as to whether the application for condonation of delay in filing petition of appeal could be heard by the Judge in his Chambers.
Ray, C.J. observed in the said judgment an argument was advanced before the Hon 'ble Judge in Chambers that if an application for condonation of delay was refused by the Judge in Cham bers it would amount to dismissal of the appeal by the Judge in Chambers.
Therefore, it was said that these applications should be heard by 'the Court ' which alone was competent to dismiss the appeal.
By Court, it was urged, meant a bench of two learned Judges.
After giving notices to the learned Attorney General and the Bar Association, the matter was discussed by this Court and it was held that in view of Order VI, Rule 2(14) of the Rules set out hereinbefore, all applications for enlargement or abridgement of time except the three cases mentioned in Order VI, Rule 2(14) were to be heard by the Judge in Chambers.
At the relevant time, the three matters included, inter alia, deposit of security.
This Court observed in the said decision that an important exception was the application for condonation of delay in 830 filing special leave petitions.
It was observed that Order XLVII Rule 3 of the Rules stated that the Court might en large or abridge any time appointed by these rules or fixed by any order enlarging time, for doing any act or taking proceedings, upon such terms, if any, as the justice of the case might require, and any enlargement might be ordered, although the application therefore was not made until after the expiration of the time appointed or allowed.
A petition of appeal was required under Order XV of the Rules to be presented within 60 days from the grant of certificate of fitness.
The time to present the petition of appeal was fixed by the Rules of this Court.
It was observed, there fore, that Order XLVII Rule 3 should apply with regard to enlargement or abridgement of any time appointed by the Rules for doing any act.
This Court was of the view that Order VI Rule 2(14) spoke of the applications for enlarge ment or abridgement of time.
Here the words "enlargement or abridgement of time" took in applications for enlargement of time appointed by the Rules, that is to say, according to this Court, fixed by the Rules.
The significant feature of the Rules was that applications for condonation of delay in filing special leave petitions were excepted from the busi ness of a Chamber Judge.
The natural presumption was that but for the exception the Rule would have to be included also applications for condonation of delay in filing special leave petitions.
Any application for condonation of delay in filing petition of appeal was therefore included in applica tions for enlargement or abridgement of time.
This Court noted that the practice of the Chamber Judge hearing appli cations for condonation of delay in filing petitions of appeal within the time appointed by the Rules of this Court had been followed ever since 1966.
Cursus curiae est lex curiae.
The practice of this Court is the law of the Court.
See Broom 's Legal Maxims at p. 82.
Where a practice had existed it was convenient to adhere to it because it was the practice.
It was noted that the power of each Court over its own process is unlimited; it is a power incident to all Courts.
Reliance was placed on the observations in Cooker vs Tempest, Therefore, this Court held that applications for condonation of delay in filing petitions of appeal were within the Chamber business under Order VI Rule 2(14).
Learned Additional Solicitor General contended that the aforesaid decision requires reconsideration.
He submit ted that a prior decision of this Court and a decision of Calcutta High Court were not adverted to.
He further submit ted that this Court spoke of "enlargement or abridgement of time" fixed by the Rules.
Therefore, it could not be con tended that the application for condonation of delay would come within this purview.
Furthermore, it was argued that if the exceptions in favour of special leave petitions are maintained, there would be hostile discrimi 831 nation without any basis, namely, special leave petitions being amenable to be dealt with by the two Judges, while the learned Single Judge will dispose of the application for condonation of delay under Statutory Appeals.
This, it was submitted, is irrational and violative of Article 14 of the Constitution and the Rules should not be so construed.
The Learned Additional Solicitor General, therefore, submitted before us that we should hold that as dismissal of applica tion for condonation of delay amounts to dismissal of the appeal, it should be heard in terms of Order VII Rule 1 subject to other provisions, namely, it should be heard by not less than two Judges.
He submitted that if we were not inclined to accept this submissions in view of the decision of this Court in C. 1.
T., Bombay City vs R.H. Pandi Manag ing Trustees of Trust, Bombay, (supra), we should refer the matter to a larger bench for reconsideration of the matter.
We have considered the matter.
We are unable to accept the submission of the learned Additional Solicitor General.
We accept the reasoning to the decision of this Court in Commissioner of Income tax vs R.H. Pandi, (supra).
We find that was the practice of the Court.
That has been sanctified by the judicial decision.
We also see reason in the decision and the practice.
We do not find any reason for holding that the practice of this Court followed since 1966 requires to be altered.
Arranging the business of the Court is within the domain of the Court.
These Rules have been framed by this Court with the approval of the President of India.
Under Order I Rule 2(1)(g) of the Rules, 'Court ' means the Supreme Court of India.
Sub rule (14) of Rule 2 of Order VI empowers a Single Judge to decide certain matters which speaks of applications for enlargement or abridgement of time except where the time is fixed by the Court and except, inter alia, applications for condonation of delay in filing special leave petitions.
On a proper reading, it appears to us that the exception made only in favour of the time fixed by the Court means Court functioning judicially in terms of Order VII Rule 1 as well as time fixed by the Rules of the Court.
All other applications for enlargement or abridgement of time could be heard by the learned Single Judge.
As is clear, Order VI demarcates the power of the Registrar, and the learned Single Judge and Order VII demarcates the con stitution of the Division Courts, powers of a Single Judge and the Vacation Judge.
This is arranging the business of the Court.
This is within the power of the Court.
Two deci sions were referred to us by the learned Additional Solici tor General.
Our attention was drawn to the observations in the Division Bench Judgment of the Calcutta High Court in Promotho Nath Roy vs W.A. Lee, AIR 1921 Calcutta 415.
There the Court was concerned 832 with the provisions of Civil Procedure Code, Section 109.
The Court observed that an order dismissing an appeal as barred by limitation prescribed therefore after further refusing an application under section 5 of the to admit the appeal after the prescribed time, was 'passed on appeal ' under Section 109.
Sanderson, C.J. doubt ed the said conclusion but observed that this involved a substantial question of law.
That was an application by the defendant for a certificate that the decree of this Court, from which the appeal was sought to the Privy Council in volved a claim of Rs. 10,000 and that the appeal involved some substantial question of law.
The question was whether such application should be allowed.
A point was taken on behalf of the plaintiff that the decree of the High Court was not one 'passed on appeal ' within the meaning of clause (a) of Section 109 of the Civil Procedure Code.
There it appears that the order of Mr. Justice Greaves against which the appeal was directed, was made on 26th July, 1918.
On the 30th August, 1918, being the last date of sitting of the Court, at about 5.00 P.M. after the Court of Appeal had risen an application was made to Mr. Justice Chaudhuri sitting on the Original Side for leave to file the memoran dum of appeal without a copy of the order against which the defendant desired to appeal.
The learned Judge granted leave to the defendant to file the memorandum of appeal subject to any objection which might be taken on behalf of the plain tiff.
When the matter came before the appeal Court, the plaintiff took the point that the appeal was out of time.
The appeal Court decided that the appeal was out of time, being barred by the , and the Court further refused an application under Section 5 of the to admit the appeal after the prescribed time and the appeal was dismissed.
Having regard to the above mentioned facts, Sanderson, C.J. observed that it cannot be held that the order was not one 'passed on appeal '.
Sanderson, C.J. had some doubts on that proposition but agreed with Woodroffe, J. that the appeal involved substantial question of law.
In that appeals, a certificate was granted.
In our opinion, this decision is not relevant for the issue before us.
Whether an order dismissing an application for condonation of delay in case of Statutory Appeal is an order or appeal is not quite in issue here and is not decisive of the mat ter.
It does not solve the question whether a learned Single Judge can dismiss an application for condonation of delay in a statutory appeal.
After all, the Court functions by its arrangement under the Rules.
Order VI mentions the Chamber Business and the Business to be transacted by the Registrar and Single Judge sitting in Chambers.
The powers of the Court, that is to say, the whole Court and the powers of Division Bench normally, except those mentioned in Order VI, will be as enjoined by Rule.
1 of Order VII, 833 that is to say, a bench consisting of not less than two Judges.
In that view of the clear provisions of the Rule, we are of the opinion that the said decision of the Calcutta High Court upon which reliance has been placed does not in any manner detract the decision of this Court in C. 1.
T., Bombay City vs R.H. Pandi.
Our attention was also drawn to a decision of this Court in M/s. Mela Ram & Sons vs The Com missioner of Income Tax, Punjab; , There the appellant firm had filed appeals against orders assessing it to income tax and super tax for two years 1945 46 and 1946 47 beyond the time prescribed by Section 30(2) of the Income Tax Act.
The appeals were numbered and notices were issued for their hearing under Section 31 of the Income Tax Act, 1922.
At the hearing of the appeals before the Appellate Assistant Commissioner, the Department took the objection that the appeals were barred by time.
The appellant prayed for condonation of delay, but that was refused, and the appeals were dismissed as time barred.
The appellant then preferred appeals against the orders of dismissal to the Tribunal under Section 33 of the Act, and the Tribunal dismissed them on the ground that the orders of the Assist ant Commissioner were in substance passed under Section 30(2) and not under Section 31 of the Act and that no appeal lay against them under Section 33 of the Act.
This Court observed that an appeal presented out of time is an appeal and an order dismissing it as time barred is one 'passed in appeal '.
Section 31 of the Act was the only provision relat ing to the hearing and disposal of appeals and if an order dismissing an appeal as barred by limitation as in the present case is one passed in appeal it must fall within Section 31 and as Section 33 confers a right of appeal against all orders passed under Section 31, it must also be appealable.
These observations, in our opinion, were made entirely in different statutory context and cannot be used in the context in which the question has arisen before us in the present case.
Learned Additional Solicitor General submitted before us that in view of the fact that these two decisions were not considered by this Court in C. 1.
T., Bombay City vs R.H. Pandi, (supra) and in view of the fact that this argument in favour of statutory appeals to be heard by the learned Single Judge while the applications for condonation of delay in respect of the special leave peti tions to be heard by the bench of two learned Judges will be violative of Article 14 of the Constitution and as such this contention should be heard by a larger bench.
We are unable to accept this submission.
This Court had occasion to consider the situation in which question settled by this Court can be reviewed.
Refer ence may be made to the observations of Gajendragadkar, CJ in the Keshav Mills Co. Ltd. 834 vs C.I.T., Bombay North; , at page 921 the learned Chief Justice observed: "In dealing with the question as to whether the earlier decisions of this Court in the New Jehangir Mills, [(1960)] 1 SCR 249] case, and the Petlad Ltd. case [(1963)] Supp. 1 SCR 871] should be reconsidered and revised by us, we ought to be clear as to the approach which should be adopted in such cases.
Mr. Palkhivala has not disputed the fact that in a proper case, this Court has inherent jurisdiction to reconsider and revise its earlier decisions, and so, the abstract question as to whether such a power vests in this Court or not need not detain us.
In exercising this inherent power, however, this Court would naturally like to impose certain reasonable limitations and would be reluctant to entertain pleas for the reconsideration and revision of its earlier decisions, unless it is satisfied that there are compelling and substantial reasons to do so.
It is general judicial experience that in matters of law involving ques tions of construing statutory or constitutional provisions, two views are often reasonably possible and when judicial approach has to make a choice between the two reasonably possible views, the process of decision making is often very difficult and delicate.
When this Court hears appeals against decisions of the High Courts and is required to consider the propriety or correctness of the view taken by the High Courts on any point of law, it would be open to this Court to hold that though the view taken by the High Court is reasonably possible, the alternative view which is also reasonably possible is better and should be preferred.
In such a case, the choice is between the view taken by the High Court whose judgment is under appeal, and the alterna tive view which appears to this Court to be more reasonable; and in accepting its own view in preference to that of the High Court, this Court would be discharging.
its duty as a Court of Appeal.
But different considerations must inevita bly arise where a previous decision of this Court has taken a particular view as to the construction of a statutory provision as, for instance, Section 66(4) of the Act.
When it is urged that the view already taken by this Court should be reviewed and revised, it may not necessarily be an ade quate reason for such review and revision to hold that though the earlier view is a reasonably 835 possible view, the alternative view which is pressed on the subsequent occasion is more reasonable.
In reviewing and revising its earlier decision, this Court should ask itself whether in the interests of the public good or for any other valid and compulsive reasons, it is necessary that the earlier decision should be revised.
When this Court decides questions of law, its decisions are, under Article 141, binding on all courts within the territory of India, and so, it must be the constant endeavour and concern of this Court to introduce and maintain an element of certainty and conti nuity in the interpretation of law in the country.
Frequent exercise by this Court of its power to review its earlier decisions on the ground that the view pressed before it later appears to the Court to be more reasonable, may inci dentally tend to make law uncertain and introduce confusion which must be consistently avoided.
That is not to say that if on a subsequent occasion, the Court is satisfied that its earlier decision was clearly erroneous, it should hesitate to correct the error; but before a previous decision is pronounced to be plainly erroneous, the Court must be satis fied with a fair amount of unanimity amongst its members that a revision of the said view is fully justified.
It is not possible or desirable, and in any case it would be inexpedient to lay down any principles which should govern the approach of the Court in dealing with the question of reviewing and revising its earlier decisions.
It would always depend upon several relevant considerations: What is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based? On the earlier occasion, did some patent aspects of the question remain unnoticed, or was the attention of the Court not drawn to any previous decision of this Court bearing on the point not noticed?.
Is the Court hearing such plea fairly unanimous that there is such an error in the earlier view? What would be impact of the error on the general administra tion of law or on public good?.
Has the earlier decision been followed on subsequent occasions either by this Court or by the High Courts?.
And, would the reversal of the earlier decision lead to public inconvenience, hardship or mischief?.
These and other relevant considerations must be carefully borne in mind whenever this Court is called upon to exercise its jurisdiction to review and revise its earli er decisions.
" 836 This view was again reiterated by this Court in the Pillani Investment Corporation Ltd. vs Income Tax Officer, "A" Ward, Calcutta, and Another[1972] In the facts and circumstances of the case, in the light of the provisions of the said Rules as noticed before, we cannot say that we are satisfied that the earlier decision of this Court in C.I.T. Bombay City vs R.H. Pandi, (supra) was clearly erroneous.
In that view of the matter, it is not necessary to refer this question to a larger bench or to disturb the settled practice of this Court.
There is no substance in the contention of any discrimi nation under Article 14 of the Constitution or in Order VII rule 2(14).
Applications under Article 136 is a special class and are sui juris.
These are and should legitimately be treated separately other than all other applications including applications under Statutory Appeals.
If a sepa rate and distinct provision is made for application of condonation of delay under Article 136 of the Constitution, we do not see any conceivable ground which can be taken for contending that it is violative of Article 14 of the Consti tution.
After all Article 136 is the residuary power of this Court to do justice where the Court is satisfied that there is injustice.
These are class apart.
The practice of the learned Single Judge disposing of in Chambers applications for condonation of delay in statutory appeals is just, fair and reasonable.
Every court has the right to arrange its own affairs.
We find no reason either to upset that practice or to cast doubt on the propriety of such practice.
In this connection, reference may be made to the decision of this Court in P.N. Eswara lyer etc., etc.
vs The Registrar, Supreme Court of India, where this Court upheld the circulation system for the disposal of the Review Petitions and held that early hearing was the essential requirement if a review petition is found devoid of substance.
Such different treatment in respect of different applications has always been within the domain of Court 's arrangement of business.
These do not involve any violation of the fundamental right.
In the premises, we do not find any reason to interfere with the order passed.
We hold that a Single Learned Judge in Chambers is and was always competent to dismiss all applications for condonation of delay in statutory appeals.
We find nothing repugnant in the same and no substance in the contention that otherwise the same would be violative of Article 14 of the Constitu tion.
The Review Petitions therefore, fail and are dis missed.
N.P.V. Petitions dismissed.
|
An application for condonation of delay was filed by the petitioner Revenue alongwith statutory appeals against the judgment/order of the Customs, Excise and Gold Control Appellate Tribunal.
The application was rejected by a Single Judge of this Court under Order VI, Rule 2(14) of the Su preme Court Rules, 1966.
The Revenue filed review petitions on the ground that the application for condonation of delay made in statutory appeals under several Acts should be heard by a bench of at least two Judges.
It was contended that the effect of the refusal of condonation of delay was dismissal of the appeal itself, that the exception in favour of Special Leave Peti tions amounted to hostile discrimination without any basis in that the Special Leave Petitions will be amenable to be dealt with by two Judges, while a Single Judge will dispose of applications for condonation of delay under statutory appeals, which was irrational and violative of article 14 of the Constitution and, therefore, the Court should either hold that as dismissal of application for condonation of delay amounted to dismissal of the appeal itself, it should be heard by not less than two Judges in terms of Order VII Rule 1 subject to other provisions or refer the matter to a larger bench for re consideration, in view of the decision 825 of this Court in Commissioner of Income Tax Bombay City versus R.H. Pandi, Managing Trustees of Trust.
Bombay, holding that the applications for condonation of filing petitions of appeal were within the Chamber business under Order VI Rule 2(14).
On the question whether a Single Judge has jurisdiction to dismiss applications for condonation of delay in statuto ry appeals.
Dismissing the review petitions, HELD: 1.1 A Single Judge in Chambers is and was always competent to dismiss all applications for condonation of delay in statutory appeals.
There is nothing repugnant in the same that it is not violative of article 14 of the Consti tution.
[836G] 1.2 Order VI, Rule 2 of the Supreme Court Rules provides that the powers of the court in relation to a certain mat ters may be exercised by a Single Judge sitting in Chambers.
Rule 2(14) deals with applications for enlargement or abridgement of time with some exceptions.
Reading the rule simply, it means all applications for enlargement or abridgement of time would be cognizable by the Single Judge in Chambers except those applications, time for which is fixed by the court in terms of Order VII and also applica tions for condonation of delay in filing Special Leave Petitions.
[831E F] 1.3 On a proper reading, the exception made only in favour of the time fixed by the court means court function ing judicially in terms of Order VII Rule 1 as well as time fixed by the rules of the court.
All other applications for enlargement or abridgement for time could be heard by the Single Judge.
[831F G] 1.4 If a separate and distinct provision is made for application for condonation of delay under article 136 of the Constitution, it is not violative of article 14 of the Consti tution.
Applications under article 136 are a special class and are sui juris.
These are and should legitimately be treated separately other than all other applications including applications under statutory appeals.
article 136 is the resid uary power of this Court to do justice, where the court is satisfied that there is injustice.
These are class part.
There is, therefore, no discrimination under article 14 of the Constitution or in Order VI Rule 2(14).
[836C D] 2.1 Order VI demarcates the power of the Registrar and the Single Judge and Order VII demarcates the constitution of the divi 826 sion courts, powers of a Single Judge and a Vacation Judge.
This is arranging the business of the court, this is within the power of the court.
[831G] 2.2 Different treatment in respect of different applica tions has always been within the domain of Court 's arrange ment of business.
These do not involve any violation of the fundamental rules.
[836F) P.N. Eswara Iyer etc., etc.
vs The Registrar, Supreme Court of India, relied on.
3.1 The practice of one Single Judge disposing of in Chambers applications for delay in statutory appeals is just, fair and reasonable.
There is no reason either to upset that practice or to cast doubt on the proprietory of such practice, which has been valid since 1966, and which has been sanctified by the judicial decision.
There is reason in the decision and the practice.
[836E; 831D E] Commissioner of Income Tax, Bombay City vs R.H. Pandi Managing Trustees of Trust, Bombay, ; affirmed.
3.2 In the facts and circumstances of the case and in the light of the provisions of the Rules, it cannot be said that the earlier decision of this Court in Commissioner of Income Tax, Bombay City versus R.H. Pandi was clearly erro neous and, therefore, it is not necessary to refer this question to a larger bench or to disturb the settled prac tice of this Court.
[836B] Keshav Mills Co. Ltd. vs C.I.T. Bombay North, ; and Pillani Investment Corporation Ltd. vs Income Tax Officer, "A" Ward, Calcutta, and Another, , relied on.
Promotho Nath Roy vs W.A. Lee, AIR 1921 Calcutta 415 and M/s. Mela Ram & Sons vs The Commissioner of Income Tax, Punjab, ; , distinguished.
Cooker vs Tempest, , referred to.
|
Civil Appeal No. 2281 of 1969 Appeal by Special Leave from the Judgment and Order dated 6th December, 1965 of the Allahabad High Court in Special Appeal No. 978/62.
Shiv Pujan Singh and M. V. Goswami for the Appellant.
B. P. Maheshwari and Suresh Sethi for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by the State of U.P. by special leave granted by this Court against the judgment and order of the High Court at Allahabad in Special Appeal No. 978 of 1962.
Two companies, the Raza Sugar Co. Ltd. and the Buland Sugar Co. Ltd., were incorporated under the Rampur State Companies Act, 1932.
Messrs. Govan Brothers (Rampur) Ltd. were the common managing agents of the two companies.
On 10th May, 1933 the Raza Ltd. and on 11th December, 1934, the Buland Ltd. entered into agreements with the erstwhile State of Rampur.
The agreements provided that the Rampur State should grant to the companies leases of the agricultural land with adequate irrigation facilities suitable for cultivation of sugar cane.
The companies were required to pay fair and equitable land revenue which was to be agreed upon by the com 421 panies and the Rampur State.
On 5th May, 1935, a partnership deed was a executed by the Raza Ltd. and the Buland Ltd. constituting a partnership firm of the two companies in equal shares known as the Agricultural Company, Rampur.
In the year 1939 the Rampur State leased 2,000 acres of land and in the year 1946 another 2,000 acres of land to the Agricultural Company, Rampur.
In 1949 the State of Rampur acceded to the Union of India and was merged with the State of Uttar Pradesh with effect from Ist December, 1949.
The Rampur State had agreed to exempt the Raza Ltd. and the Buland Ltd. from all taxes for a period of 15 years from the date of commencement of their business.
The U.P. Agricultural Income Tax Act was applied to the areas which formed part of the erstwhile State of Rampur on Ist July, 1950.
The Assessing Authority issued notices under section 16(4) of the U.P. Agricultural Income Tax Act to the Raza Ltd. and the Buland Ltd. for furnishing returns of their agricultural incomes for the years 1357 F to 1361 F. It may be noted that the notice was not issued to the Agricultural Company, Rampur.
The Raza Ltd. and the Buland Ltd. submitted their returns.
The Assessing Authority assessed the two companies to agricultural income tax for the years concerned.
The companies preferred an appeal against the assessment to the Commissioner, Rohikhand Division, and also filed writ petition No. 2385 of 1959 in the High Court of Allahabad challenging the assessment orders.
On 17th April, 1961 the writ petition was allowed and the order of assessment was quashed with a direction that fresh assessments may be made.
The Commissioner also directed the Assessing Authority to make fresh assessments in the light of the observations made by the High Court in its judgment dated 17th April, 1961, allowing the writ petition No. 2385 of 1959.
When the Assessing Authority started fresh hearing in pursuance of the order of the High Court an objection was raised with regard to the assessability of the two companies on the ground that no notice had been sent to the Agricultural Company, Rampur.
The Assessing Authority negatived the plea and assessed the Raza Ltd. and the Buland Ltd. for the years 1357 F to 1361 F and also for the years 1362 F to 1363 F. Against the order of the Assessing Authority the two companies which in the meantime became amalgamated as the Raza Buland Sugar Co. Ltd., Rampur, filed a writ petition No. 1982 of 1962 in the High Court of Judicature at Allahabad and prayed for the quashing of the assessment order dated 29th June, 1962, made by the Assessing Authority against the Raza Ltd. and the Buland Ltd. for the assessment years 1357 F to 1363 F. 422 The writ petition was heard by a single Judge of the High Court who by his order dated 4th October, 1962 allowed the writ petition on the ground that the Assessing Authority committed an error of law in assessing the two partners of the Agricultural Company, Rampur, and not assessing the firm as such.
Aggrieved by the order the State filed Special Appeal No. 978 of 1962 before the Division Bench of the High Court at Allahabad.
The Division Bench of the High Court by its order dated 6th December, 1965, dismissed the Special Appeal.
An application for leave to appeal to the Supreme Court was dismissed by the High Court.
The appellants then preferred Special Leave Petition No. 1724 of 1969 to this Court and on the leave being granted this appeal is now before us.
The main contention that has been raised before us by the appellants is that there being no express prohibition under the U.P. Agricultural Income Tax Act an assessment can be validly and legally made on the individual partners, in the present case the two companies, without proceeding against the firm.
It was pleaded that the tax could be assessed either on the partnership firm or on the partners invididually and that the view of the High Court that the tax can only be recovered from the firm is erroneous.
The facts of the case disclose that on receipt of a notice by the Assessing Authority under section 16(4) of the U.P. Agricultural Income Tax Act, the two companies Raza Ltd. and the Buland Ltd. submitted their returns relating to the income of the two companies.
In the return it was stated that the income was half of the income received from the partnership firm, the Agricultural Company, Rampur.
The assessment was made on the basis of the returns.
The assessment was questioned before the Commissioner and in the writ petition before the High Court of Allahabad on the ground that the lands were neither assessed to land revenue in the United Provinces nor were they subject to local rate or cess assessed and collected by an officer of the Provincial Government.
This contention was accepted by the High Court which directed the Assessing Authority to determine the question whether the lands were assessed to land revenue, in the United Provinces or they were subject to local rate or cess assessed and collected by an officer as required under section 2(a) of the U.P. Agricultural Income Tax Act, 1948.
After remand the Assessing Authority found that the lands from which the income accrued satisfied the requirements of the section.
For the first time before the Assessing Authority the point was raised that as no notice was issued to the partnership firm, the partners i.e. two companies cannot be proceeded with for assessment of the tax.
When this plea was rejected by the 423 Assessing Authority the matter was taken up before the High Court, first before a single Judge and then before the Division Bench, which accepted the contention of the two companies and held that in the absence of notice to the partnership firm proceedings cannot be taken against the two companies for assessment of the tax.
The relevant provisions under the United Provinces Agricultural Income Tax Act, 1948, may be noticed.
Section 2(5) defines "Assessee" as meaning a person by whom agricultural income tax is payable.
"Company" is defined under section 2(8) as meaning a company as defined in the Indian Income tax Act, 1922.
The Indian Income tax Act, 1922, section 2(5A) defines a company as follows: "(5A) "company" means (i) any Indian company, or (ii) any association, whether incorporated or not and whether Indian or non Indian, which is or was assessable or was assessed as a company for the assessment for the year ending on the 31st day of March, 1948, or which is declared by general or special order of the Central Board of Revenue to be a company for the purposes of this Act;" "Firm" is defined in section 2(9) as having the same meaning assigned to it in the .
Section 4 of the , states that "Persons who have entered into partnership with one another are called individually 'partners ' and collectively a firm and the name under which their business is carried on is called the 'firm name '".
"Person" is defied in section 2(11) as meaning an individual or association of individuals, owning or holding property for himself or for any other, or partly for his own benefit and partly for that of another, either as owner, trustee, receiver, manager, administrator or executor or in any capacity recognized by law, and includes an undivided Hindu family, firm or company but does not include a local authority.
It may be noted that by the definition the word "person" means an individual and includes a firm or a company.
The liability of the person whether he be an individual, partner or the company for the agricultural income tax is therefore beyond question.
The only point that is raised in this case is as to when there is a registered firm of which the two companies were partners the assessment proceedings cannot be taken against the two partners, namely the two companies, without proceeding against the 424 firm.
In support of this contention section 18 of the U.P. Agricultural Income Tax Act was strongly relied on.
Section 18 confers the power to assess individual members of certain firms, associations and companies.
Sub section (1) of section 18 enables the Assistant Collector with the previous approval of the Collector of the disrict concerned to pass order under the circumstances stated in the sub Sec.
that the sum payable as agricultural income tax by the firm or association shall not be determined, and thereupon the share of each member in the agricultural income of the firm or association shall be included in his total agricultural income for the purpose of his assessment thereon.
Section 18(2) states that under certain circumstances the Collector may, with the previous approval of the Commissioner of the area concerned, pass an order that the sum payable as agricultural income tax by the company shall not be determined and thereupon the proportionate share of each member in the agricultural income of the company, whether such agricultural income has been distributed to the members or not, shall be included in the total agricultural income of such member for the purpose of his assessment thereon.
The submission of the learned counsel for the respondent which was accepted by the High Court was that if the Agricultural Income tax authorities wanted to proceed against the individual members of the firm they ought to have taken proceedings under section 18(1) and in the absence of such proceedings the partners, in this case the two companies, could not have been proceeded with.
The argument thus presented though looks attractive does not stand scrutiny.
There is nothing in the provisions of the Act prohibiting the Assessing Authority from proceeding against the individuals forming the partnership.
Section 18 enables the authorities while proceeding with the assessment of a firm or a company not to determine the tax payable by the firm or the company but proceed to determine the agricultural income of each member of the fir.
The provisions do not apply to a case where the returns are submitted by the partners, as in this case, and the assessment made on that basis.
The section would undoubtedly be applicable if assessment proceeding against the firm is stopped and the share of the individual is to be determined under the provisions of section 18.
Our attention was not drawn to any provision in the Act which would bar the income tax authorities from proceeding against the individual partners on the returns submitted by the partners as such.
Under the Indian Income tax Act it has been held that where a firm has not made a return and has not offered its income for assessment, the Department may assess a partner directly in respect of his share of the firm 's income without resorting to the machinery provided under the Act and without making an assessment on the firm, (CIT vs Murlidhar Jhawar & Purna Ginning 425 & Pressing Factory(1).
It has been further held that once the Department has exercised its option and assessed the partners individually it cannot thereafter assess the same income in the hands of the firm as an unregistered firm.
It is not necessary for us to refer to the distinction that is maintained under the Income tax Act between a registered and unregistered firm for no such distinction is maintained under the U.P. Agricultural Income Tax Act.
The only prohibition is against double taxation.
In this case no assessment proceedings have been taken against the firm much less any tax imposed on it.
The principle that is applicable in tax statutes is that the income is subject to tax in the hands of the same person only once.
Thus, if an association or a firm is taxed in respect of its income the same income cannot be charged again in the hands of the members individually and vice versa.
The trust income cannot be taxed in the hands of the settlor and also in the hands of the trustee or beneficiary or in the hands of both the trustee as well as the beneficiary.
These principles are, of course, subject to any special provision enabling double taxation in the statute.
In the circumstances, we are unable to share the view of the High Court that without proceeding against the firm the Assessing Authority was in error in proceeding against the two partners of the firm on the basis of the returns submitted by them.
There is yet another objection to the upholding of the plea of the respondents.
Apart from submitting the returns their only plea in the earlier writ petition before the High Court was that the lands did not satisfy the requirements of the provisions of the U.P. Agricultural Income Tax Act in that they were not assessed to land revenue in the United Provinces nor were they subject to local rate or cess.
This plea was accepted but the High Court remanded it for the determination of the question whether the land was assessed to land revenue or was subject to local rate or cess.
The plea that the assessment proceedings ought to have been taken against the firm was not taken.
This plea cannot be allowed to be taken in proceedings after remand.
The objection was taken only before the Assessing Authority after remand.
It is true that in the proceedings before the Assessing Authority the assessment relating to two Fasli years 1362 and 1363 which did not form part of the proceedings before the High Court was also taken up.
But here again the returns were submitted by the two companies on the basis of their respective income.
In the circumstances, it cannot be said that the tax authorities were in error in assessing a tax on the returns submitted by the two companies.
The plea, therefore, that the 426 assessment on the two companies, in the absence of proceedings against the firm of which the companies were partners, is not legal cannot be upheld.
The second contention that was raised before us was that it has not been established that the lands were either assessed to land revenue in the United Provinces or were subject to local rate or cess assessed and collected by an officer of the Provincial Government.
As the Single Judge of the High Court and the Division Bench of the High Court accepted the plea of the assessees that the assessment proceedings against them could not be sustained because of the failure of the authorities to take proceedings against the firm, they considered it unnecessary to go into this question.
It is unfortunate that this aspect of the matter was not considered either by the Single Judge or by the Division Bench of the High Court.
We do not think it desirable to remit the case to the High Court for the determination of this question as the matter has been long pending.
This plea has been elaborately considered by the Assessing Authority which has pointed out that agreements with the Raza Sugar Co. Ltd. and the Buland Sugar Co. Ltd. show that it was stipulated that the Rampur State shall from time to time grant to the Company lease of agricultural land.
It was further provided that such fair equitable land revenue as may be agreed between the Rampur State and the Company shall be payable in respect of such land and shall be subject to revision by agreement every 15 years.
The lease also provided that fair and equitable water rates and cesses shall be payable in respect of the land.
In section 4(7) of the U.P. Land Revenue Act it is mentioned that the word "Mal Guzari" will be applicable where it has been duly assessed or has been determined by means of an auction or by any other means.
On a consideration of all the relevant facts the Assessing Authority came to the conclusion that the agreement in favour of the companies provided for payment of land revenue and the word "rent" used in the leases has to be considered in relation to the original agreements and as such it is seen that the agreement provided for payment of land revenue.
The learned counsel appearing for the respondents was unable to challenge the correctness of the finding of the Assessing Authority.
On a consideration of all the facts that were placed before the Assessing Authority, we do not see any reason for not accepting the conclusion arrived at by the Authority.
This issue also we find against the assessee.
In the result we hold that the High Court was in error in coming to the conclusion that the assessment proceedings against the respon 427 dent were unsustainable.
We set aside the judgment and order of the High Court and restore the order of the Assessing Authority.
N.V.K. Appeal allowed.
|
Two joint stock companies entered into agreements with a former Princely State for the grant of agricultural land on payment of fair and equitable land revenue.
Later the two companies formed into a partnership firm.
On the merger of the State with the Union of India, the Assessing Authority under the U.P. Agricultural Income tax Act issued notices to the two companies to submit their returns of agricultural income, which the companies did.
In writ petitions filed by the companies challenging the assessment orders, the High Court accepted the contention that since the lands were neither assessed to land revenue nor were they assessed to any local rate or cess as required by section 2(a) of the Act, they were not assessable to agricultural income tax and remanded the cases to the Assessing Authority for determination of this question.
Before the Assessing Authority, on remand the companies raised for the first time the contention that since no notice had been issued to the firm of which they were partners, the assessment was invalid.
The Assessing Authority rejected this contention.
He also held that the lands satisfied the requirements of s.2(a).
In writ petitions filed by the two companies a single Judge of the High Court upheld the contention that the Assessing Authority committed an error of law in assessing the two partners without assessing the firm.
This view was affirmed by a Division Bench on appeal.
On further appeal to this Court it was contended that in the absence of a prohibition in the Act, the two companies could be validly assessed to tax without assessing the firm.
Allowing the appeal, ^ HELD: 1.
The Assessing Authority was not in error in assessing tax on the returns submitted by the two companies and therefore the argument that assessment of the companies, without assessing the firm, was not legal, is without substance.
[425 H 426 A] 2. "Person" defined in the section means an individual and includes a firm or a company.
[423 G] 3.
There is nothing in the Act prohibiting the Assessing Authority from proceeding against individuals forming a partnership.
Section 18 enables the authorities, while proceeding with assessment of a firm or a company, not to 420 determine the tax payable by the firm or the company but to proceed to determine the agricultural income of each member of the firm.
The provisions do not apply to a case where the returns were submitted by the partners and the assessment made on that basis.
The section would be applicable if assessment proceedings against a firm are stopped and the share of the individual is to be determined under the provisions of section 18.
[424 F] 4.
The well established position under the Income Tax Act (Central Act) with regard to assessment of firms is that where a firm has not made a return it is open to the department to assess a partner directly in respect of his share of the firm 's income without resorting to the machinery provided under the Act and without making an assessment on the firm, the only prohibition being against double taxation.
[424 H] C.I.T. vs Murlidhar Jhawar & Purna Ginning & Pressing Factory, SC; referred to.
Secondly, the plea that assessment proceedings ought to have been taken against the firm, was not taken by them in the first instance either before the Assessing Authority or before the High Court.
This plea cannot be allowed to be taken at a later stage.
The assessees submitted their returns on the basis of their respective incomes.
[425 F 426 A] 6.
The Assessing Authority has correctly come to the conclusion that the agreement between the parties provided for payment of land revenue.
[426 F G]
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N: Criminal Appeal No. 105 of 1975.
Appeal by Special Leave from the Judgment and Order dated 6 8 1974 of the Delhi High Court in Criminal Revision No. 58 of 1973.
Frank Anthony, K. C. Dua and O. P. Soni for the Appellants.
J. Sorabjee, Additional Soli.
General, B. P. Maheshwari and Suresh Sethi for the Respondents.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against the Judgment of the Delhi High Court convicting the appellant under section 7/16 of the , read with Section 2(ix) clause (a) & (g) of the Act and sentenced to rigorous imprisonment of six months and a fine of Rs. 1,000/ .
This order was passed by the High Court in a revision filed by the Municipal Corporation of Delhi against the Order of the Trial Court which convicted the appellant under section 7/15 of the read with Section 2(ix) (k) of the Act and sentenced him to imprisonment till the rising of the Court and a fine of Rs. 500/ , a revision against this order to the Sessions Judge was unsuccessful and hence a further revision was taken by the Delhi Administration before the High Court.
The facts of the case are detailed in the Judgment of the High Court and the Magistrate and we need not repeat the same all over again.
The food Inspectors, namely, one Mr. James and Mr. Sinha took samples of a preparation called Para Excellant and Para Asli from the shop of the appellant who according to the Food Inspectors sold these preparations as saccharin, a fact which is not admitted by the appellant.
The Trial Court after considering the evidence and the report of the Chemical Examiner found that the case of mis branding under section 2(ix) (a) & (g) was not made out by the Prosecution, but it was certainly mis branding as contemplated by section 2(ix) (k) of the Act.
He, accordingly convicted the appellant as indicated above.
Mr. Frank Anthony, Learned Counsel for the appellant has submitted that the High Court was wrong in law in interfering with the Order of the Magistrate, firstly, because the findings of fact by the 553 Magistrate was binding on the High Court in revision and secondly, because the High Court took a legally erroneous view of the law on the interpretation of Section 2(ix) (a) & (g) of the .
We have heard learned counsel for the parties and have perused the judgment of the High Court and we are of the opinion that the contentions raised by the learned counsel for the appellant is well founded and must prevail.
We have perused the original label which described the preparation sold to the food inspectors.
There is nothing to show that the appellant in any way tried to give an impression to the purchaser that either saccharin or some preparation of the type of saccharin was being sold so as to amount to misbranding as contemplated by Section 2(ix) (a) & (g) of the Act.
All that the appellant purported to convey under the label was that the preparation sold was as sweet as saccharin but not as bitter as saccharin.
This was intended merely to lay emphasis on the sweetness of the preparation when it was compared to the sweetness of saccharin.
When the label clearly described the fact that the preparation was not as bitter as saccharin it clearly intended to convey that it was neither something like saccharin nor saccharin itself, in any form or of any type.
Mr. Sorabjee appearing for the respondent submitted that the use of the word saccharin itself amounts to mis branding and gives the impression that the preparation sold was saccharin or something akin to saccharin.
We are unable to agree with this contention.
In the facts and circumstances of the present case and the contents of the label and the description of the preparation, we are satisfied that there was no misbranding, nor was there any attempt on the part of the appellant to sell his preparation as saccharin or some sort of saccharin.
Section 2.(ix) (a) runs as follows: "Misbranded" an article of food shall be deemed to be misbranded (a) "If it is an imitation of, or is a substitute for, or resembles in a manner likely to deceive, another article of food under the name of which it is sold, and is not plainly and conspicuously labelled so as to indicate its true character.
" According to the Additional Solicitor General of India, the sale, by the appellant, of the preparation clearly falls within (iii) clause of sub section (a), that is to say the preparation resembles saccharin so as to deceive a person who wanted to purchase the article of food 554 known as saccharin.
After having examined the label, its description and the contents of the tin and packets, sold to the food inspectors, we are unable to find any evidence of any intention on the part of the appellant to sell a preparation which resembles saccharin in any respect.
The words, as sweet as saccharin were merely meant to convey one of the qualities of the preparation itself and not the quality of saccharin at all.
That, by itself, would not attract the provision of Section 2(ix) (a) of the Act.
It was, then submitted that in one of the labels under the directions it was mentioned that the preparation was para saccharin which also shows that the appellant intended to pass on the preparation as some sort of saccharin.
In the first place, the use of the word para saccharin appears to be a mistake in the facts of the present case because this word is completely absent from the Hindi portion of the directions contained in the same label.
Secondly, the word para saccharin would not indicate that the preparation sold was saccharin in any form or of any kind.
It was just a way of describing it because according to the manufacturers the preparation was as sweet as saccharin.
This was mentioned because saccharin being 500 times sweeter than sugar, the manufacturer wanted to convey that the preparation was also much sweeter than sugar and could be used for preparing soda water bottles.
It is obvious that if any person who purchased the preparation was not conversent with the English language, he would not be misled at all.
Having regard to these circumstances we are of the opinion that the case of the appellant does not fall within the clauses (a) & (g) of Section 2(ix) of the Act and the High Court erred in law in convicting the appellant for misbranding under these provisions.
For the reasons given above, the appeal is allowed.
The order of the High Court is set aside and the sentence of imprisonment of six months is also set aside and the fine is reduced to Rs. 500/ .
In other words, the order of the Trial Court Magistrate is hereby restored.
The appeal is accordingly allowed.
N.V.K. Appeal allowed.
|
The appellant was a manufacturer of a preparation called Para Excellent and Para Asli The outer label of the package describe the contents as "as sweet as saccharin".
Under the directions for use it was mentioned on the label that the preparation was para saccharin.
The appellant was prosecuted under s.2(ix)(a) and (g) of the for misbranding the goods and for selling it as saccharin.
While the trial court convicted and sentenced the appellant to imprisonment and a fine on the ground that though a case of misbranding under section 2(ix) (a) and (g) had not been made out, it was a case of misbranding contemplated by section 2(ix) (k), the High Court, in revision, enhanced the sentence and fine under sections 7 and 16 read with section 2(ix)(a) and (g) of the Act.
On behalf of the prosecution it was contended in the appellant 's appeal to this Court that the use of the word saccharin gave the impression that the preparation was saccharin or something akin to it and it was, therefore, a case of misbranding punishable under the Act.
Allowing the appeal.
^ HELD :1.
There is nothing on the facts of the case to show that the appellant in any way tried to give an impression to the purchasers that either saccharin or some preparation of the type of saccharin was being sold so as to amount to misbranding as contemplated by section 2(iv)(a) and (g) of the Act.
Nor was there an attempt to sell the preparation as saccharin or some kind of saccharin.
When the label described that the preparation was as sweet as saccharin it merely laid emphasis on the sweetness of the preparation when compared to the sweetness of the saccharin.
Similarly when the label described the preparation was not as bitter as saccharin it was intended to convey that it was neither something like saccharin nor saccharin itself in any form or of any type.
[553 C D] 2.
Nor again was there any evidence of intention on the part of the appellant to sell a preparation which resembles saccharin in any respect.
The words "as sweet as saccarin" were merely meant to convey one of the qualities of the preparation itself and not the quality of saccharin.
That by itself would not attract the provisions of section 2(ix)(a) of the Act.
[554 B] 3.
The use of the word para saccharin appears to be a mistake.
In the Hindi portion of the directions contained in the label the words "para Saccharin" were not used.
Secondly the word "para saccharin" would not indicate that 552 the preparation sold was saccharin in any form or of any kind.
It was just a way of describing the contents because the preparation was "as sweet as saccharin. ' The manufacturer wanted to convey that the preparation wasa also much sweeter than sugar and could be used for preparing soda water.
[554 C D]
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Civil Appeal Nos.
2170 2172 of 1972 Appeals by Special Leave from the Judgment and Order dated 22 7 1971 of the Mysore High Court in T.R.C. Nos. 3, 4 and 5 of 1967.
B. B. Ahuja and Miss A. Subhashini for the Appellant.
section T. Desai, I. N. Shroff and H. section Parihar for the Respondents.
The Judgment of the Court was delivered by UNTWALIA J.
These are three appeals by special leave filed by the Commissioner of Wealth Tax, Mysore from the Judgment of the Mysore (now Karnataka) High Court.
The assessee is the Dowger Maharani of Gondal.
Her husband, His Highness Bhojjrajji Maharaja Saheb of Gondal, died intestate on 31.7.1952 leaving considerable moveable and immoveable properties.
Certain disputes and differences arose after his death between his two sons namely Maharaja Vikramsinghji and his younger brother Shivaraj Singhji in respect of the assets left by the late Maharaja Saheb.
The younger brother was contemplating legal proceedings against his elder brother.
Their mother intervened.
The idea of litigation, thereupon, was dropped because the assessee gave a letter dated 14.5.1953 to Shivaraj Singhji stating therein: "Your father had expressed in the presence of many people that he will give you rupees fifty lakhs.
To keep up his words and promise and also that I should get peace of mind I am writing to you that if your brother Vikramsinghji Maharaja of Gondal does not give you the full amount, then you 547 must get the balance of amount from me.
That is my sincere desire.
I will also press Vikram that the should give you the amount of Rs. fifty lakhs.
Vikram Singhji paid only Rs. 20,00,000/ to Shivaraj Singhji.
The latter, therefore, claimed the balance amount of Rs. 30,00,000/ from the assessee on the basis of her letter dated 14.5.1953.
On or about 12.9.1959, pursuant to her commitment made in the letter aforesaid, the assessee transferred War Stock valued at Rs. 11,00,000/ to Shivaraj Singhji and also agreed to hand over certain ornaments in full settlement of his claim.
The ornaments were however not given.
That led to disputes between the mother and the son but eventually they were also settled on 22.2.1962 which settlement was evidenced by a document setting out all the relevant facts of the history of the dispute.
By virtue of this settlement a sum of Rs. 10,00,000/ was paid by the assessee to Shivaraj Singhji.
The assessee 's wealth was assessed to wealth tax under the Wealth Tax Act, 1957 for the three assessment years in question viz. 1960 61, 1961 62 and 1962 63.
The corresponding valuation dates of the said assessment years are 31.12.1959, 31.12.1960 and 31.12.1961.
It would be noticed that the assessee, under the arrangement arrived at between the parties, became liable to pay the balance of the amount of Rs. 30,00,000/ to Shivaraj Singhji as vikramsinghji, out of the sum of Rs. 50,00,000/ mentioned in the letter dated 14.5.1953, paid only Rs. 20,00,000/ The assessee succeeded in wiping off her liability to the extent of Rs. 11,00,000/ on 12.9.1959 by transfer of War Stock.
The balance of the liability, i.e., Rs. 19,00,000/ remained due and continued to be due on all the three valuation dates aforesaid.
It could be wiped off by a further settlement only in February, 1962.
In respect of the three assessment years in question, however, a question arose as to whether while assessing the net wealth of the assessee within the meaning of clause (m) of section 2 of the Wealth Tax Act the said sum of Rs. 19,00,000/ was to be deducted.
The Wealth tax Tribunal held in favour of the assessee.
At the instance of the Revenue for all the three years a common question of law was referred to the High Court for its opinion.
The questions being in identical terms it would suffice to quote the question with respect to the assessment year 1960 61.
It reads as follows: "Whether on the facts and circumstances of the case, the sum of Rs. 19 lakhs could constitute a debt owed by the assessee and deductible under the Wealth Tax Act from the value of the total assets as on 31.12.1959?" 548 The High Court has answered the question in the affirmative, in favour of the assessee and against the department.
Hence this appeal.
Mr. Ahuja appearing in support of the appeal contended that by the letter dated 14.5.1953 no debt was created as the undertaking given by the assessee to her son agreeing to pay the deficit in respect of Rs. 50,00,000/ on his elder brother 's failure to pay any portion of the sum was an agreement without consideration and hence under section 25 of the Contract Act it was void and was not saved by any of the exceptions mentioned therein.
He, therefore, contended that it was not an enforceable liability on any of the valuation dates and could not be deducted from the valuation of the assessee 's wealth.
In our opinion the argument is not sound.
Taking the totality of the facts as found by the Tribunal and mentioned in the impugned judgment of the High Court it was a case of family settlement or family arrangement which is binding on the parties concerned.
The assessee agreed to purchase peace for the family, and to pay to her son the amount which fell short of Rs. 50,00,000/ if her elder son did not pay any portion thereof.
It is well established that such a consideration is a good consideration which brings, about an enforceable agreement between the parties.
Section 25 of the Contract Act does not hit this.
It may be further pointed out that even if it be held that the letter dated 14.5.1953 had not the effect of bringing about the family arrangement and any binding agreement between the parties, their subsequent conduct upto 12.9.1959 brought about a concluded family arrangement.
Vikramsinghji paid Rs. 20,00,000/ .
Out of the balance of Rs. 30,00,000/ the assessee discharged her liabilities to the extent of Rs. 11,00,000/ and reiterated her obligation to pay the balance of Rs. 19,00,000/ in the shape of ornaments.
That was not honoured.
Shivaraj Singhji had a right to enforce the family arrangement against his mother, as arrived at partly in writing and partly orally as evidenced by the conduct of the parties.
The assessee would have been bound to pay Rs. 19,00,000/ if a suit had been filed against her by Sivaraj Singhji as he had refrained going to the law court from against his brother on her bringing about the family arrangement.
Mr. Ahuja then submitted that at best the undertaking given by the assessee in her letter dated 14.5.1953 was a contingent contract within the meaning of section 31 of the Contract Act.
Even so, under section 32 such a contract becomes enforceable by law when future even contemplated in the contingent contract has happened.
In this case the cotingency was the liability of the mother to pay a certain sum of money 549 on the failure by her elder son to pay Rs. 50,00,000/ or any part there of.
This did happen sometime between 14.5.1953 and 12.9.1959.
In that view of the matter, if not earlier the liability of the mother became enforceable by law on the latter date.
Learned counsel for the appellant cited three decisions of this Court to support his argument viz. Kesoram Industries and Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central) Calcutta;(1) Standard Mills Co. Ltd. vs Commissioner of Wealth Tax, Bombay(2) and Bombay Dyeing and Manufacturing Co. Ltd. vs Commissioner of Wealth Tax, Bombay City I(3).
None of them is quite apposite on the point at issue before us.
In the case of Kesoram Industries it was held that "debt owed" within the meaning of section 2(m) of the could be defined as the liability to pay in praesenti or in futuro an ascertainable sum of money.
It was held that a liability to pay income tax was a present liability though the tax became payable after it was quantified in accordance with ascertainable data.
Subba Rao J., as he then was, delivering the majority opinion said at page 780 : "The said decisions also accept the legal position that a liability depending upon a contingency is not a debt in praesenti or in futuro till the contingency happened.
But if there is a debt the fact that the amount is to be a scertained does not make it any the less a debt if the liability is certain and what remains is only the quantification of the amount.
In short, a debt owed within the meaning of section 2(m) of the can be defined as a liability to pay in praesenti or in futuro an ascertainable sum of money.
The other two decisions of this Court were concerned with the question as to whether the liability of the assessee to pay gratuity to its employees on determination of employment was a mere contingent liability which arose only when the employment of the employee was determined by death, incapacity, retirement or resignation and whether it could be deducted as a debt in computing the net wealth of the assessee.
The answer given was against the assessee.
In the present case we have held that the liability of the assessee was created by the family arrangement arrived at between the parties and even if it was a contingent liability the contingency did happen and the assessee became liable 550 to pay the amount as a debt before 12.9.1959, which is anterior to the relevant valuation dates.
The sum of Rs. 19,00,000/ was a subsisting debt on the said valuation dates.
For the reasons stated above, we hold that there is no merit in this appeal.
It is accordingly dismissed with costs.
N.K.A Appeal dismissed.
|
The respondent 's wealth was assessed to Wealth Tax under the Wealth Tax Act, 1957 for three assessment years 1960 61, 1961 62 and 1962 63 the corresponding valuation dates being 31 12 1959, 31 12 1960 and 31 12 1961.
On 14th May, 1953 the assessee wrote a letter to her younger son stating that his late father expressed the wish that he (the second son) should be paid Rs. 50 lakhs out of the family properties and that to keep his promise and also to get peace of mind, if his elder brother did not pay the sum of Rs. 50 lakhs, she would pay such balance that remains unpaid.
The elder brother paid Rs. 20 lakhs.
The balance liability of Rs. 19 lakhs remained due and continued to be due on all the three aforesaid valuation dates.
It was finally wiped off in February, 1962.
On the question "whether, while assessing the net wealth of the respondent within section 2(m) of the Wealth Tax Act, the sum of Rs. 19 lakhs was to be deducted" as debt owed by her, the Wealth Tax Tribunal held in favour of the respondent.
The High Court held that the sum of Rs. 19 lakhs constituted a debt owed by the assessee and was deductible under the Wealth Tax Act from the value of the total assets as on 31 12 1959.
On appeal to this Court, the appellant argued (i) that the letter dated 14 5 1953 created no debt as the undertaking given by the respondent to her son on his elder brother 's failure to pay any portion of the sum was an agreement without consideration and hence it was void and therefore it was not enforceable at law on any of the valuation dates and could not be deducted; (ii) that the undertaking given by the respondent in her letter dated 14 5 1953 was a contingent contract within the meaning of section 31 of the Contract Act.
Dismissing the appeal, ^ HELD: (1) Taking the totality of facts it was a case of family settlement or family arrangement which was binding on the parties.
The respondent agreed to purchase peace for the family and to pay to her younger son the amount which fell short of Rs. 50 lakhs if her elder son did not pay any portion thereof.
It is well established that such a consideration is good consideration which brings an enforceable agreement between the parties and is not hit by section 25.
Even if it be held that the letter dated 14 5 1953 had not the effect of bringing about the family arrangement or any binding arrangemen bewteen the parties, their subsequent conduct upto 12th September 1959 brought a concluded family arrangement.
The respondent paid Rs. 11 lakhs and reiterated her obligation to pay the balance in the shape of ornaments.
546 That was not honoured by reason of which the younger son had a right to enforce the family arrangement against his mother.
The respondent would have been bound to pay the balance if a suit had been filed against her as he had refrained from going to the law court against his brother on her bringing about the family arrangement.
[548 C G] (2) Assuming that it was a contingent contract within the meaning of section 31 of the Contract act, such a contract under section 32 of the Contract Act, becomes enforceably by law when the future event contemplated in the contingent contract had happened.
The contingency in this case was the liability of the mother to pay a certain sum of money on the failure by the elder son to pay Rs. 50 lakhs or any part thereof.
In that view, the liability of the mother became enforceable by law on the latter date, if not earlier.[548 G H, 549] Kesoram Industries and Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central), Calcutta, 59 I.T.R. 767; Standard Mills Co. Ltd. vs Commissioner of Wealth Tax, Bombay, ; and Bombay Dyeing and Manufacturing Co. Lt. vs Commissioner of Wealth Tax, Bombay City I, , distinguished and held inapplicable.
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Civil Appeal No. 1936 of 1978.
From the Judgment and Order dated 19 8 78/3 10 78 of the Bombay High Court (Nagpur Bench) in E.P. No. 1/78.
AND Civil Appeal No. 2387 of 1978 From the Judgment and Order dated 3 8 78/22 9 78/3 10 78 of the Bombay High Court (Nagpur Bench) in Election Petition No. 1/78.
M. C. Bhandare, B. P. Salve, A. N. Karkhanis and Mrs. section Bhandare for the Appellant in C.A. 1936/78.
N. M. Ghatate and section V. Deshpande for the Appellant in C.A. 2387/78.
M. N. Phadke, Mrs. V. D. Khanna and P. G. Palsikar for R. 2 in C.A. 1936 of 1978.
U. R. Lalit and V. N. Ganpule for R. 5 in C.A. 1936/78.
The Judgment of the Court was delivered by PATHAK, J.
These two appeals under section 116A of the Representation of the People Act, 1951 are directed against an order of the High Court of Bombay declaring void the election of Janardan Dattuappa Bondre to the 104 Chikhli Legislative Assembly Constituency, Maharashtra and declaring Bharat Rajabhau Bondre to be duly elected.
Civil Appeal No. 1936 (NCE) of 1978 has been filed by Janardan Dattuappa Bondre and Civil Appeal No. 2387 (NCE) of 1978 by Keshavrao Jaiwantrao Bahekar.
The parties will be referred to hereinafter according to their array in the former appeal.
General elections to the Legislative Assembly of Maharashtra were held in February, 1978.
The appellant Janardan Dattuappa Bondre, was declared elected to the 104 Chikhli Assembly Constituency.
He secured 27,785 votes.
The fifth respondent, Bharat Rajabhau Bondre was given 27,604 votes and the third respondent, Keshavrao Jaiwantrao Bahekar 27,447 votes.
The election of the 900 appellant was questioned by an election petition filed in the High Court of Bombay by a voter, the first respondent, Govindprasad Shivprasad Choudhary.
The High Court did not find substance in most of the grounds raised in the election petition, but having regard to the allegations made in respect of a number of ballot papers it allowed fresh scrutiny and recount of the votes.
The task was entrusted to a Special Officer of the High Court.
After considering his report and the material before it, the High Court made an order dated September 22, 1978 allowing the election petition, declaring the election of the appellant to be void and further declaring the fifth respondent to be duly elected.
The decision was rendered on the finding that after taking into account the votes now counted in favour of the different candidates, the fifth respondent was found to have received 191 votes more than the appellant.
This result was reached after denying to the appellant the benefit of 250 ballot papers cast in his favour but found included in the packet of Bahekar 's ballot papers.
If these 250 ballot papers are counted in favour of the appellant, it is not disputed that the result of the election must swing in favour of the appellant.
The submissions of learned counsel for the parties have, therefore, centred mainly on this aspect of the case.
The relevant portion of the report of the Special Officer reads: 'While the counting was in progress, it was found that in one envelope from Box No. 2 of candidate No. 4 Shri Bahekar, there were 278 ballot papers noted by the Returning Officer on the envelope but at the time of actual counting it was found that from them 28 ballot papers were of Shri Bahekar, while the remaining were of votes cast, in favour of candidate No. 3 Shri Janardhan Bondre.
Similarly, in the envelope of Shri Janardhan Bondre there were 408 ballot papers noted by the Returning Officer but at the time of actual counting of that envelope it was noticed that from out of 408 ballot papers, 158 only were of Shri Janardhan Bondre and the remaining were of Shri Bahekar.
It would be therefore clear that there was some mistake committed by the Returning Officer while packing the ballot papers in the two envelopes of Shri Bahekar and Janardhan Bondre.
" On the report of the Special Officer, it was contended before the High Court on behalf of the fifth respondent that it was not permis 901 sible to take into account the 250 votes cast in favour of the appellant and found in the packet of Bahekar because the order of the High Court directing a recount was limited to finding out whether any improper votes had been accepted in favour of the appellant and whether any proper votes of the fifth respondent had been rejected.
Relying on P. Malaichami vs M. Ambalam,(1), the High Court took the view that as the appellant had not filed a notice of recrimination under section 97 of the Representation of the People Act, 1951, it was not open to him to allege that any of his votes had been improperly counted in favour of some other candidate.
In the appeal filed by Janardan Dattuappa Bondre, the principal contention on behalf of the appellant is that the High Court has erred in holding that Section 97 comes into play.
It is vehemently contended that no notice of recrimination was necessary for the purpose of having the 250 votes, whose validity was never in dispute and which had been cast in favour of the appellant, counted in the total number of votes secured by the appellant.
It seems to us that the appellant is right.
The order for a recount was made by the High Court on an application made by the election petitioner.
The directions in the order required the Special Officer, among other things, to physically count the votes recorded in favour of the appellant, Bahekar and other candidates in order to ascertain whether those votes were less than the number of votes declared as having been respectively secured by them.
During the recount, the appellant applied to the Special Officer that if any votes cast in his favour were found to have been erroneously counted in the total of other candidates the mistake should be rectified by including them in his total.
A similar application was made by Bahekar.
The High Court rejected the appellant 's application on the ground that he had not filed a notice of recrimination.
It seems to us that when the High Court directed the "physical" count of the votes cast in favour of the appellant, Bahekar and others what was intended was a mechanical recount of those votes and nothing more.
It did not envisage any enquiry into their validity, and whether any of them had been improperly received.
When the appellant requested that the 250 votes cast in his favour but included in the packet pertaining to Bahekar shoud be counted in his total, he was asking for nothing more than the application of a mechanical process.
Those votes had never been regarded as cast in favour of Bahekar.
There was never any dispute that they were votes for the appellant.
Their validity was never doubted.
Plainly 902 what had happened was that by an error 250 ballot papers cast in favour of the appellant had been erroneously placed in the packet of Bahekar.
It is quite probable that as equal numbers of ballot papers of the two candidates were exchanged, the error occurred after the ballot papers of each candidate had been separately tied in bundles of 50, as is required by the "Handbook for Returning Officers".
After withdrawing the 250 votes of Bahekar from the appellant 's packet and the appellant 's 250 votes from Bahekar 's packet, the Special Officer could not stop there.
The 250 votes of each candidate had then to be counted in his total.
They were not valid votes.
The inclusion of the 250 votes cast in favour of the appellant was material for the purpose of determining the total number of votes received by him.
The accident that they were not placed in his packet but in Bahekar 's packet did not render them any the less votes belonging to the appellant.
Their inclusion in calculating the appellant 's total was a necessary part of the process involved in deciding whether he had been duly elected or whether on the election petition, his election should be declared void.
It was a process relevant to the first of the reliefs claimed by the election petitioner, that is to say, that the election of the appellant be declared void.
The other relief claimed by the election petitioner was that the fifth respondent be declared duly elected.
as was observed in Jabar Singh vs Genda Lal,(1) where both reliefs are claimed in an election petition the Court must first "decide the question whether the election of the returned candidate is valid or not, and if it is found that the said election is void, it makes a declaration to that effect and then deals with the further question whether the petitioner himself or some other person can be said to have been duly elected".
A notice of recrimination under section 97 of the Act is necessary only where the returned candidate or other candidate disputes the grant of the further declaration sought by the election petitioner that he or some other candidate should be declared duly elected.
When the recount was taken, the High Court had not yet concluded that the election of the appellant was invalid.
It was in the process of determining that question, and the question could properly be determined only after giving to the appellant the benefit of all the votes cast for him.
These would include the 250 votes cast in his favour, even though they were found placed in Bahekar 's packet.
Once the benefit of his 250 votes is given to the appellant, he becomes the candidate with the highest number of votes.
His election cannot be declared void.
903 That being so, no question arises of the appellant wanting to give evidence to prove that the election of any other canddiate would have been void if he had been the returned candidate.
Therefore, no notice for recrimination under section 97 was necessary.
In the circumstances, the High Court erred in declining to count the appellant 's 250 votes in his total on the ground that no notice of recrimination under section 97 of the Act had been given.
In P. Malaichami vs M. Ambalam (supra), on which the High Court relied, the facts were different.
In that case, the recount ordered did not inolve the mere mechanical process of counting the valid votes cast in favour of the parties.
It involved the kind of counting contemplated under Rule 56 of the Conduct of Election Rules, 1961, "with all its implications".
The validity of the votes was to be under re examination.
And if the returned candidate intended to take the benefit of such a recount against the election petitioner or other candidate, in whose favour the further declaration of being duly elected had been claimed, it was necessary for him to file a notice of recrimination.
In the present case, the appellant was concerned with his claim to his 250 votes.
The claim did not involve any reconsideration of the validity of any votes, whether cast in his favour or any other candidate; what was called for was a mere mechanical process of counting.
That every order of recount does not bring section 97 into play was laid down by this Court in Anirudh Prassad vs Rajeshwari Saroj Das & Ors.(1) We are of opinion that the High Court should not have declined to include in the appellant 's total votes the 250 votes cast in favour of the appellant but included in the packet of Bahekar.
If those votes are included in the appellant 's total, the appellant secures the highest number of votes and is entitled to be declared elected.
In the circumstances, it is not necessary to consider the other contention of learned counsel for the appellant that the High Court was in error in directing a recount of the ballot papers.
A submission was made by learned counsel for the fifth respondent that the postal ballot papers were printed in Hindi and therefore, Rule 22 of the Conduct of Election Rules, 1961 was contravened.
The point was raised before the High Court and, has, in our opinion, been rightly repelled.
On the material before us it is not possible to say that the result of the election has been materially effected by that irregularity.
904 In the appeal filed by Bahekar, the contention raised for him is that on a proper and complete recount of the votes cast for the respective candidates it is he who should be declared duly elected.
We are not satisfied that the grounds raised have any substance, and we see no force in his appeal.
In the result, Civil Appeal No. 1936 (NCE) of 1978 is allowed and Civil Appeal No. 2387 (NCE) of 1978 is dismissed.
The order of the High Court declaring the election of the appellant void and declaring the fifth respondent duly elected is set aside.
The election petition is dismissed.
The appellant is entitled to his costs throughout against the second and the fifth respondents in the election petition as well as in the appeal filed by him.
The remaining respondents will bear their own costs in that appeal.
All the parties will bear their own costs in the other appeal.
N.V.K. C.A.1936/78 allowed.
C.A.2387/78 dismissed.
|
The appellant was declared elected to the State Assembly in the General Election in 1978.
He secured 27785 votes.
The fifth respondent was given 27,604 votes and the third respondent 27,447 votes.
The election of the appellant was questioned by an election petition filed in the High Court by a voter, the first respondent.
Having regard to the allegations made in respect of a number of ballot papers, the High Court allowed fresh scrutiny and recount of the votes, and entrusted the task to a Special Officer of the High Court.
The Special Officer pointed out that in one envelope from the box of the 3rd respondent out of 278 ballot papers 28 were of the 3rd respondent while the balance of 250 were the votes cast in favour of the appellant.
Similarly in the envelope of the appellant out of 408 ballot papers found in this box only 158 were votes cast in his favour and 250 were in favour of the 3rd respondent and that by reason of this some mistake was committed by the Returning Officer while packing the ballot papers in the two envelopes of the appellant and the 3rd respondent.
On the report of the Special Officer, it was contended before the High Court on behalf of the fifth respondent that it was not permissible to take into account the 250 votes cast in favour of the appellant which were found in the packet of the third respondent because the order of the High Court directing a recount was limited to finding out whether any improper votes had been accepted in favour of the appellant and whether any proper votes of the fifth respondent had been rejected.
The High Court relying on P. Malaichami vs M. Ambalam, ; took the view that as the appellant had not filed a notice of recrimination under section 97 of the Representation of the People Act, 1951, it was not open to him to allege that any of his votes had been improperly counted in favour of some other candidate.
On the basis of the report of the Special Officer the High Court held that the fifth respondent had received 191 votes more than the appellant and declared the appellant 's election to be void.
It declared the fifth respondent to be duly elected.
In the appellant 's appeal to this Court it was contended that the High Court had erred in holding that section 97 comes into play and that no notice of recrimination was necessary for the purpose of having the 250 votes, whose validity was 898 never in dispute and which had been cast in favour of the appellant, counted in the total number of votes secured by the appellant.
^ HELD: 1.
When the High Court directed the "physical" count of the votes cast in favour of the appellant, third respondent and others, what was intended was a mechanical recount of these votes and nothing more.
It did not envisage any inquiry into their validity, and whether any of them had been improperly received.
When the appellant requested that the 250 votes cast in his favour but included in the packet pertaining to the third respondent should be counted in his total, he was asking for nothing more than the application of a mechanical process.
These votes had never been regarded as cast in favour of the third respondent.
There was never any dispute that they were votes for the appellant.
Their validity was never doubted.
Plainly what had happened was that by an error, 250 ballot papers cast in favour of the appellant had been erroneously placed in the packet of the third respondent.
[901G 902A] 2.
The accident that they were not placed in his packet but in the third respondent 's packet did not render them any the less votes belonging to the appellant.
Their inclusion in calculating the appellant 's total was a necessary part of the process involved in deciding whether he had been duly elected or whether on the election petition his election should be declared void.
It was a process relevant to the first of the reliefs claimed by the election petition, that is to say, the election of the appellant be declared void.
The other relief claimed by the election petitioner was that the fifth respondent be declared duly elected.
[902C E] 3.
A notice of recrimination under section 97 of the Act is necessary only when the returned candidate or any other candidate disputes the grant of the further declaration that he or some other candidate should be declared duly elected.
[902F] In the instant case when the recount was taken, the High Court had not yet concluded that the election of the appellant was invalid.
It was in the process of determining that question, and the question could properly be determined only after giving to the appellant the benefit of all the votes cast for him.
These would include the 250 votes cast in his favour, even though they were found placed in the third respondent 's packet.
Once the benefit of his 250 votes is given to the appellant, he becomes the candidate with the highest number of votes.
His election cannot be declared void.
That being so, no question arises of the appellant wanting to give evidence to prove that the election of any other candidate would have been void if he had been the returned candidate.
Therefore, no notice for recrimination under section 97 was necessary.
[902G 903A] 4.
The appellant was concerned with his claim to his 250 votes.
The claim did not involve any reconsideration of the validity of any votes, whether cast in his favour or any other candidate.
What was called for was a mere mechanical process of counting.
Every order of recount does not bring section 97 into play.
[903D E] Jabar Singh vs Genda Lal ; , 60; Anirudh Prasad vs Rajeshwari Saroj Das & Ors., ; referred to.
P. Malaichami vs M. Ambalam ; ; distinguished.
The High Court should not have declined to include in the appellant 's total votes the 250 votes cast in favour of the appellant but included in the packet 899 of the third respondent.
If those votes are included in the appellant 's total the appellant secures the highest number of votes and is entitled to be declared elected.
[903F]
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Civil Appeal Nos.
2472 2473 of 1969.
From the Judgment and Decree dated 26 4 1966 of the Allahabad High Court in F.A.F.O. No. 447/61 and 476/60.
R. N. Sachthey, R. B. Datar, Girish Chandra and Miss A. Subhashini for the Appellant.
R. K. Garg for the Respondent.
The Order of the Court was delivered by UNTWALIA, J. These two appeals by certificate arise out of the same proceedings between the parties.
The respondent company applied to the Trial Court for the filing of the Arbitration agreement under Section 20 of the hereinafter called the Act and for appointment of an Arbitrator under Section 8.
The applications were allowed.
An Arbitrator was appointed.
The Union of India took the matter in appeals to the Allahabad High Court.
The High Court has dismissed the appeal arising out of the order of the Trial Court under Section 20 of the Act and has treated the appeal arising out of Section 8 order as a revision and dismissed the same also.
The Union of India has come to this Court.
129 The decisions of the courts below in regard to Section 20 matter is at an end now.
It was denied on behalf of the appellant that there was any Arbitration agreement.
The findings of the court below in this regard could not be assailed at all.
The Arbitration clause in the contract between the parties ran as follows: "All disputes or differences arising between the parties or their representatives and the Controller of Rationing Delhi at any time hereafter and of whatever nature arising out of or in respect of the contract shall be referred for arbitration to the Chief Commissioner/Director of Storage, Ministry of Food, Government of India, and his decision shall be final and binding.
" The post of Director of Storage, Ministry of Food, Government of India was abolished and no person holding that post was available for arbitration for the purpose of the arbitration clause aforesaid.
The Chief Commissioner, however, was available but he refused to act.
That led the respondent company to apply to the court under Section 8 of the Act for appointment of another Arbitrator.
The argument put forward on behalf of the appellant is that when there was a named Arbitrator even though he was named by office, it was not open to the court to supply the vacancy in his place under Section 8(1) (b) of the Act.
We did not find any substance in this argument.
The court had no power to supply the vacancy under Section 8(1) (b) only if the arbitration agreement did show that the parties did not intend to supply the vacancy.
If no such intention could be culled out from the arbitration clause, the court could supply the vacancy.
There is a direct decision of this Court ' in M/s. Prabhat General Agencies etc.
vs Union of India & Another.(1) Mr. R. B. Datar, counsel for the appellant placed the reliance upon the Full Bench Decision of Madras High Court in Badam Satayanarayanamurthi vs Badam Venkataramanamurthi & Ors.(2), in support of his submission that no other Arbitrator could be appointed by the court under Section 8 of the Act when the Arbitrator named in the agreement refused to act.
In our opinion while considering the provisions of Section 8(1) (b) of the Act, that decision is of no help to the appellant.
The full Bench decision was given with reference to the corresponding provisions of 130 law contained in Schedule II of Code of Civil Procedure, 1908 in paragraph 5 whereof the crucial words occurring in Section 8(1)(b) of the Act were not there.
The words in Section 8(1)(b) are these: "and arbitration agreement does not show that it was intended that the vacancy should not be supplied.
" For the reasons stated above, we hold that there is no merit in either of the two appeals.
They are accordingly dismissed with costs which we quantify at Rs. 1500/ .
S.R. Appeals dismissed.
|
HELD: 1.
The Court had no power to supply the vacancy under section 8(1) (b) of the only if the arbitration agreement did show that the parties did not intend to supply the vacancy.
The words in section 8(1) (b) are these: "and arbitration agreement does not show that it was intended that the vacancy should not be supplied".
If no such intention could be culled out from the arbitration clause, the Court could supply the vacancy.
[129 D E].
M/s. Prabhat General Agencies etc.
vs Union of India and Anr.
,[1971] 2 S.C.R. 564; affirmed.
Badam Satyanarayanamurthi vs Badam Venkataramanamurthi, A.I.R. 1948 Madras 312; distinguished.
|
Civil Appeal No. 2494 of 1969.
From the Judgment and Decree dated 24 1 1969 of the Calcutta High Court in Appeal from Original Order No. 111/66.
D. N. Mukherjee and N. R. Chaudhary for the Appellants.
P. K. Chatterjee and Sukumar Ghosh for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by certificate filed by the judgment debtors from the decision of the Calcutta High Court given in appeal from that of a learned single Judge of that Court.
The facts of the case clearly demonstrate the fighting attitude of the judgment debtors to gain time for the satisfaction of the decree.
On August 15, 1925 one Indera Chand Kejriwal instituted on the original side of the Calcutta High Court a suit on the basis of a mortgage against Ram Chander Saragogi, Sewbux Saraogi and Tejpal Saraogi for recovery of Rs. 38,000/ as principal and Rs. 6,082.8 annas as interest.
By an equitable mortgage the property mortgaged consisted of two houses (1) No. 126, Harrison Road and (2) No. 13/2, Syed Salley Lane in the town of Calcutta.
On November 26, 1926 a consent decree was passed for a sum of Rs. 41,000/ together with interest thereon @ 6.3/4% per annum.
On failure of the judgment debtors to pay the amount the mortgaged properties were to be sold.
On 3rd of January, 1929 it was ordered and 158 decreed that the mortgaged property be sold.
On 16th April, 1934 Indera Chand Kejriwal by a deed of assignment assigned his interest in the decree to Mahadeo Prasad Tibrewalla, the respondent in this appeal.
On the application of the assignee decree holder an order was made on the 8th May, 1934 substituting his name in place of the original decree holder and recording some terms of settlement between him and the judgment debtors.
The amount with interest quantified on that date was Rs. 60,023.12 annas which was to carry an interest of 6.3/4% per annum.
Subsequently on an application of the decree holder one Anandilal Poddar was appointed on the 14th June, 1938 a receiver of rents and profits of the mortgaged properties.
A sum of Rs. 10,000/ was paid to the decree holder on the 7th September, 1939 towards part satisfaction of the decree.
On the death of Ram Chander Saraogi, one of the judgment debtors, by order dated the 7th August, 1945 Smt.Parbati Devi, Ananta Kumar Saraogi and Suraj Kumar Saraogi, his heirs and legal representatives, were substituted.
They are appellant Nos. 1 to 3 in this appeal.
No further payment was made to the decree holder and eventually a consent order was passed by the Court on the 17th June, 1953 on the basis of the terms of settlement arrived at between the parties which were incorporated in the letter written by the Solicitor of the judgment debtors to the Solicitor of the decree holder.
The terms of settlement are quoted in full in the appellate judgment of the High Court.
The salient terms of the settlement may be stated as follows: (1) That the total dues on the date came to Rs. 1,10,000/ .
(2) That Shri Anandilal Poddar, the receiver was to pay Rs. 35,000/ .
(3) That a sum of Rs. 40,000/ was to be paid by conveying premises No. 13/2 Syed Salley Lane to the decree holder, and, (4) That a sum of Rs. 35,000/ was to be paid in cash by raising money by execution of an another mortgage of premises No. 126, Harrison Road.
Anandilal Poddar paid the sum of Rs. 35,000/ .
But nothing further was done by the judgment debtors pursuant to the settlement arrived at on the 17th June, 1953.
Sewbux Saraogi, one of the judgment debtors, died leaving a Will in which the universal legatee was his daughter Smt.Kapurbai and the sole executor appointed therein was Motilal Jhunjhunwalla, husband of Kapurbai.
On the 7th 159 June, 1965 the respondent affirmed a tabular statement for execution of the decree.
A learned single judge of the Calcutta High Court dismissed that application mainly on the grounds (1) that the terms of bargain between the parties recorded on the 17th June, 1953 were entirely different from the original decree and had the effect of superseding it; the former decree, therefore, was not executable; (2) that the factum of the death of Sewbux Saraogi was not recorded and his heirs were not substituted in the tabular statement.
In passing, the learned single Judge also expressed the view that the execution was barred under section 48 of the Code of Civil Procedure.
On appeal by the decree holder the Appellate Bench has reversed the decision of the learned single Judge on all the points.
Hence this appeal by the judgment debtors.
We shall first dispose of the point of limitation.
From the facts stated above it is abundantly clear that there was no bar of limitation in the present execution instituted in the year 1965.
At no point of time the mortgage decree had been fully satisfied.
All through steps were being taken and it was not a case where the execution was barred either under section 48 of the Code of Civil Procedure or Article 183 of the Limitation Act 1908.
It was conceded and rightly so by learned counsel for the appellants that the execution was not barred under Article 136 of the .
But the submission was that it was already barred when that Act came into force on the 1st of January, 1964 under Article 183 of the old Act.
We have no difficulty in rejecting the argument of limitation.
All through steps had been taken by the decree holder.
The case was not lying dormant at any point of time for a period of more than 12 years.
When in the year 1929 there was an order for sale of the mortgaged properties it appears some payments were made and finally accounts were settled in the year 1934.
Thereafter the mode of execution proceeded by appointment of a receiver.
A sum of Rs. 10,000/ was paid in the year 1939.
In the year 1945 steps were taken for substitution of the heirs and legal representatives of Ram Chander Saraogi, one of the deceased judgment debtors.
Parbati Devi, appellant No. 1, was allowed to take some steps for the satisfaction of the decree.
But nothing was done.
Eventually a settlement was again arrived at on the 17th June, 1953 for satisfaction of the decree but on the judgment debtors ' failure to fulfil the settlement the present proceedings were started by filing the tabular statement on the 7th of June, 1965 well within 12 years of the 17th June, 1953.
The point of limitation raised on behalf of the appellants, therefore, must be rejected.
160 A statement had been made in the tabular statement that Sewbux Saraogi, one of the judgment debtors, was dead.
Kapurbai, his daughter along with others were sought to be substituted in his place.
Later on it transpired that she was a universal legatee under a will executed by Sewbux Saraogi.
She was, therefore, undoubtedly a legal representative competent to represent the estate of Sewbux Saraogi.
Even in absence of the substitution of Motilal Jhunjhunwalla, the sole executor of the will, the execution was not defective.
Reference in this connection may be made to the decision of this Court in the case of The Andhra Bank Ltd. vs R. Srinivasan and Others, (1) decision relied upon by the Appellate Bench.
Coming to the third and the last point it may be mentioned that the settlement arrived at on the 17th June, 1953 was not an altogether renovation of the old decree.
The amount due was quantified and the mode of satisfaction was prescribed giving liberty to the judgment debtors to satisfy the decree by conveying one of the two mortgaged houses and by paying a sum of Rs. 35,000/ in cash by raising the money by mortgage of the other house.
The judgment debtors did neither.
The terms of settlement were silent as to what was to happen on the failure of the judgment debtors to satisfy the decree in the manner agreed upon.
In such a situation it was quite legitimate to assume that the parties intended that the decree holders would be entitled to realise the dues by execution of the original mortgage decree.
Reading the terms of settlement in the context of the letter of the Solicitor of the Judgment debtors it is plain to us that the order dated 17th June, 1953 had not the effect of passing a new decree in substitution of the old one.
It had merely the effect of giving facility to the judgment debtors for the satisfaction of the decretal dues.
On their failure to do so they were liable to be proceeded with in execution of the original mortgage decree.
For the reasons stated above, we hold that there is no substance in any of the points arising in this appeal.
We accordingly dismiss this appeal with costs.
N.V.K. Appeal dismissed.
|
In a suit for recovery of money on the basis of a mortgage, a consent decree was passed.
When the judgment debtors failed to pay the amount the mortgaged properties were ordered to be sold.
The decree holder assigned his interest under the decree in favour of the respondent and this was approved by the Court.
A part payment was made to the decree holder.
On the death of one of the judgment debtors, his heirs and legal representatives (appellants in this appeal) were substituted.
On June 17, 1953 a consent order was passed by the Court on the basis of the terms of settlement arrived at between the parties.
According to the will left by one of the judgment debtors his daughter was the universal legatee and his son in law was the sole executor.
When the decree holder sought execution of the decree a Single Judge of the High Court dismissed the application on the grounds (1) that the terms of settlement between the parties recorded on 17th June, 1953 were entirely different from the original decree and had the effect of superseding it; (2) that the fact of the death of one of the judgment debtors was not recorded and his heirs were not substituted and (3) execution was barred under section 48 of the Code of Civil Procedure.
On appal, a Division Bench of the High Court reversed the order of the Single Judge.
Dismissing the appeal, ^ HELD: 1.
There was no bar of limitation in the execution instituted in 1965.
At no point of time the mortgage decree had been fully satisfied.
It is not a case in which the execution was barred either under section 48 CPC or article 183 of the Limitation Act, 1908.
Execution was not barred under article 136 of the .
[159D] 2.
There is no force in the contention that it was already barred when the 1963 Act came into force.
All through steps had been taken by the decree holder to enforce the decree.
When the order of sale of the mortgaged properties was passed in 1929 some payments were made and finally accounts were settled in 1934.
Thereafter the mode of execution proceeded by appointment of a receiver.
Some money was paid in 1939.
In 1945 the heirs and legal representatives of one of the deceased judgment debtors were substituted.
Appellant no 1 was allowed to take steps for the satisfaction of the decree; but nothing was done.
A settlement was again arrived at in 1953 for satisfaction of the decree but on the judgment debtor 's failure to comply with the terms of the settlement the present proceedings were started well within 12 years.
[159E H] 157 3.
The daughter of the second judgment debtor was competent to represent the estate of her father.
Even if her husband who was the sole executor of the will was not substituted, execution was not defective.
[160B] The Andhra Bank Ltd. vs R. Srinivasan and Others [1962] 3 S.C.R. referred to. 4.
The settlement of 17th June, 1953 was not an altogether renovation of the old decree.
All that was done was that the amount due was quantified and the mode of satisfaction was prescribed giving opportunity to the judgement debtors to satisfy the decree by conveying one of the two mortgaged houses.
The judgment debtors did nothing.
Though the terms of settlement were silent with regard to what was to happen on failure to satisfy the decree, it is legitimate to assume that the parties intended that the decree holders would be entitled to realise the dues by execution of the original mortgage decree.
The order of 17th June, 1953 passed by the Court had not the effect of passing a new decree in substitution of the old one.
It had merely the effect of giving facility to the judgment debtors for the satisfaction of the decretal dues.
On their failure to do so they were liable to be proceeded with in execution of the original mortgage decree.
[160C F]
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Civil Appeal No. 467 of 1970.
From the Judgment and order dated 25 4 1969 of the Madhya Pradesh High Court in Misc.
Petition No. 4/67.
D. N. Mukherjee and G. section Chatterjee for the Appellant.
section K. Gambhir, R. Nath and Miss Ram Rakhiani for the Respondent.
197 The order of the Court was delivered by UNTWALIA, J.
The appellant was an office Superintendent in the office of Agriculture Department.
Certain charges were levelled against him.
An enquiry was purported to be held.
After finding him guilty of some charges, he was reverted to a lower rank.
He challenged that order by filing a Writ Petition in the Madhya Pradesh High Court .
That Writ Petition was allowed and the order of reversion was quashed on the ground that the enquiry held was not proper and legal.
In view of the order of the High Court, the appellant was reinstated in his original post of office Superintendent.
But shortly after, he was put under suspension and fresh proceedings were started on the basis of the same old charges.
In the second proceedings, he has been found guilty of certain charges, the details of which are not necessary to be mentioned in our judgment.
He was again reverted and it was also directed in the order that the allowance paid to him during the period of suspension could remain intact.
The appellant filed a second Writ Petition in the High Court to challenge the fresh order of reversion.
The High Court has dismissed his Writ Petition.
Hence this appeal in this Court on grant of a certificate by the High Court.
Mr. D. N. Mukherjee, learned counsel for the appellant urged only two points before us; (1) that after the earlier order of reversion was quashed by the High Court and after the appellant was reinstated, no second enquiry on the very same charges could be held and no second order of reversion could be legally and validly ', made; and (2) that appellant was entitled to the full salary for the period of suspension.
We find no substance in either of the points urged on behalf of the appellant.
The earlier order was quashed on the technical ground.
On merits, a second enquiry could be held.
It was rightly held.
The order of reinstatement does not bring about any distinction in that regard.
The Government had to pass that order because the earlier order of reversion had been quashed by the High Court.
Without reinstating the appellant, it would have been difficult perhaps unlawful, to start a fresh enquiry against the appellant.
The observations of this Court in the last paragraph of the judgment in State of Assam & Anr.
vs J. N. Roy Biswas are not applicable to the facts of the present case and do not help the appellant at all.
The reduced amount paid to the appellant for the period of suspension was affirmed by making it a part of the order of reversion 198 itself.
That being so, the second point urged by the counsel is also, of no substance.
For the reasons, stated above, we dismiss this appeal but since the, appellant has already retired from service, we make no order as to costs.
V.D.K. Appeal dismissed.
|
The appellant, an office Superintendent was reverted to a lower rank after finding him guilty of some charges held in a departmental enquiry.
The said orders were quashed by the High Court on the ground that the enquiry held was not proper and legal.
The appellant was reinstated as office superintendent.
Later, fresh enquiry was started after placing him under suspension on the basis of the same old charges.
He was found guilty and again reverted to lower rank with a direction in the order of reversion that the allowance paid to him during the period of suspension could remain intact.
The writ petition filed by the appellant against the said orders was dismissed.
Dismissing the appeal by certificate, the Court ^ HELD: 1.
The observations of this Court in State of Assam & Anr.
vs J. N. Ray Biswas [1976] 2 SCR p. 128 @ 130 to the effect that "once a disciplinary case has closed and the official reinstated, presumably on full exoneration, a chagrinned Government cannot restart the exercise in the absence of a specific power to review or revise, vested by rules in some authority" are not applicable to the fact of the Present case.
[197 G H] The earlier order was quashed on a technical ground.
The order of reinstatement does not bring about any distinction in that regard.
The Government had to pass that order because the earlier order of reversion had been quashed by the High Court.
Without reinstating the appellant it would have been difficult, perhaps unlawful, to start a fresh enquiry against the appellant.
[197F G] (b) The reduced amount paid to the appellant for the period of suspension was affirmed by making in a part of the order of reversion itself, and is in order.
[197H, 198H]
|
minal Appeal No. 187 of 1959.
129 Appeal by special leave from the judgment and order dated August 18, 1958, of the Punjab, High Court in Criminal Original No. 20 of 1958.
Gopal Singh and P. D. Menon, for the appellants.
R. section Gheba, for respondent No. 1. 1962.
February 8.
The Judgment of Das and Subba Rao, JJ, was delivered by Das, J., Dayal, J. delivered a separate judgment.
S.K. DAS, J. This is an appeal by special leave from the judgment and order of the Punjab High Court dated August 18, 1958 by which the said Court found the two appellants guilty of contempt of court and.
instead of committing them for such contempt, administered a warning to them and directed them to pay Rs. 50/ each as costs of the respondent Gurbachan Singh.
The two appellants before us bear the same name.
One of them was the Sub Divisional Officer, Sirsa, District Hisear and the other Naib Tehsildarcum Managing Officer, Sirsa, same district at the relevant time.
In this judgment we shall call the Sub Divisional Officer as the first appellant and the Naib Tehsildar as the second appellant.
The facts alleged against the appellants were these.
One Budh Singh, a displaced person, was allotted some land in village Jagmalera, Tehsil Sirsa, District Hissar.
The land allotted to Budh Singh was, it was stated by the appellants, forcibly occupied by the respondent Gurbachan Singh.
The respondent was not a legitimate allottee and the appellants, who were concerned in their official capacity with the allotment and management of land for displaced persons, were naturally anxious to oust the respondent and deliver possession to Budh Singh of the land allotted to him.
On May 9. 1958 appellant No. 1 made an order that Budh Singh and other allottees like him would be given possession ' of the land, allotted to them.
The date fixed for such 130 delivery of possession was May 20, 1958.
On May 16, 1958 Gurbachan Singh and a number of other persons who were similarly threatened with dispossession filed petitions to the High Court under article 226 of the Constitution challenging the legality of the action threatened against them.
These petitions were put up before the learned Chief Justice on that very day, namely, May 16, 1958, when he issued an order staying delivery of possession till May 19, 1958, when the petitions were to come up for admission before a Division Bench, On May 19, 1958, the Division Bench extended the operation of the stay order until May 23, 1958.
In the High Court the appellants did not dispute that the first order staying delivery of possession up to May 19, 1958 was communicated to them on May 19, 1958 on which date the notice from the High Court reached Sirsa.
It appears that a notice of the second order extending the stay of delivery possession till May 23, 1958, was not officially communicated to the appellants till May 21, 1958.
The allegation on behalf of the respondent was that on May 20, 1958, which was the relevant date, the two appellants were informed by certain interested persons, to whom we shall presently refer, that in extension of the stay order up to May 23, 1958, had been granted by the High Court ' In spite of this information, however, the second appellant, in consultation with and under instruction, of the first appellants formally dispossessed the respondent and handed over possession of the land to Budh Singh.
In these circumstances the allegation on behalf of the respondent was that the two appellants bad committed contempt of court by disobeying the order of the, High Court staving delivery of possession till May 23. 1958.
The respondent made an application, to the High (court, for taking suitable action against the two appellants.
This application was made, oil May 27, 1958.
On this application the High Court 131 issued notice and after hearing the parties, Falshaw, J. (as he then was) who dealt with the application came to the conclusion that the two appellants were aware of the order of the High Court extending the operation of the stay order and yet they disobeyed the said order by dispossessing the respondent and handing over possession to Budh Singh.
He held them guilty of contempt of court, but at the same time expressed the opinion that the appellants honestly believed that they were not bound to hold their hands in the absence of an official communication of the 'High Court 's order extending the operation of the stay order.
In this view of the matter, the learned Judge instead of committing the two appellants for contempt of court merely administered a warning to them and directed them to pay the costs of the respondent.
On behalf of the, appellants several points have been urged in support of their contention that they were not guilty of contempt of court.
Firstly, it has been contended that on the materials on the record, the High Court was wrong in proceeding on the footing that the two appellants were informed by the interested parties that an extension of the stay order up to May 23, 1958, had been granted in the case of the respondent.
It has been argued before us that on May 20, 1958, the appellants did not know that the stay order had been extended till May 23, 1958, in the writ petition filed on behalf of the respondent Gurbachan Singh, though in another case of Didar Singh relating to allotted land in the same village, the appellants were informed by an advocate that the stay order had been extended till May 23, 1958.
It has been contended before us that in the absence of positive evidence fixing the two appellants with knowledge of the extension of the stay order in the particular case of the respondent, the High Court was wrong in finding that the two appellants had willfully disobeyed the order of the High Court.
132 In order to appreciate this argument urged on behalf of the appellants it is necessary to state some more facts.
In para.
17 of the application which the respondent made to the High Court for taking necessary action against the appellants for alleged contempt of court, it was stated that at 6 30 a.m. on May 20, 1958, two persons named Bir Singh and Avtar Singh went personally to the house of appellant No. 2 and told him that the stay order had been extended by the High Court and that they had been informed by the advocate on telephone.
This allegation was supported by an affidavit made on behalf of the respondent.
Appellant No. 2, however, denied this allegation in his counter affidavit.
In paras.
18, 19 and 20 of his petition the respondent stated that at about 7 40 a.m. on May 20, 1958 a written application was filed before appellant No. 2 in which it was stated that the High Court had stayed delivery of possession till May 23, 1958; this application was drafted by an advo cate named Ganga Bishan, who acted on behalf of Didar Singh.
The application was presented to appellant No. 2 in presence of two other persons named Mastan Singh and Teja Singh.
Thereafter, an affidavit was also made on behalf of Didar Singh.
This affidavit was presented to appellant No. 2 'at about 8.15 a.m.
Thereafter, appellant No. 2 went in a 'jeep ' to appellant No. 1 in order to consult the latter.
Appellant No. 2 saw appellant No. 1 in the latter 's court room.
He came out within a few minutes, and told Ganga Bishan that the affidavit should be presented to appellant No. 1.
Thereupon, another application was written on behalf of Didar Singh and this was presented to appellant No. 1 supported by the affidavit already made on behalf of Didar Singh.
Appellant No. 1 did not, however, pass necessary orders on the application till about 10 a.m., when he made an endorsement to the effect that the Tehsildar, Sirsa, should take 133 necessary action, When the application was taken to the Tehsildar, he noted on it that the Naib Tehsildar, namely, appellant No. 2 had already left for the village to deliver possession.
Thereupon Avtar Singh, Bir Singh, Didar Singh and Mastan Singh went to village Jagmalera where the lands lay and again met appellant No. 2.
The application made to appellant No. 1 with his orders thereon was shown to appellant No. 2.
It was alleged that appellant No.2 was also shown the wording of the stay order as received by_ the party through a special messenger.
Appellant No. 2, however, replied that he had been ordered to dispossess the respondent and insisted on his proceeding with the dispossession.
In his counter affidavit appellant No. 2 admitted that on May 20, 1958 an application was presented to him by Didar Singh at about 7 40 a.m.
He further admitted that an affidavit in support of the application was also presented to him.
Appellant No. 2 then made the following significant statements.
"On receipt of these documents I told Shri Didar Singh that I could not act on the application and suspend the proceedings for dispossession unless I was shown the order of stay alleged to have been made by the High Court.
" Appellant No. 2 explained his conduct by referring to the background of quarrel and enmity between the parties which had led to several criminal cases between them.
Appellant No. 2 said in his counter affidavit that with this background of enmity he felt that though Didar Singh was an interested party, it would not be safe to accept the statements of facts contained in the application or affidavit made on behalf of Didar Singh at their face value.
Appellant No. 2 also admitted that he consulted appellant No. 1, who also advised that it would not 134 be safe, to act on the statements made in the application or affidavit.
Appellant No. 2 also admitted that Ganga Bishan Advocate, presented the applications to him.
He also admitted that the application which was filed by Ganga Bishan to appellant No. 1 was received back with the orders of appellant No. 1 thereon at about 6 p.m. on May 20, 1958, while appellant No. 2 was returning from the village.
Appellant No. 2 denied that he was shown the wording of the stay order of the High Court.
He admitted, however, that he was asked not to proceed with delivery of possession on account of the High Court.
Appellant No. 1. also made similar statements in his counter affidavit.
He admitted that at about 9 a. m. on May 20, 1958 an application supported by affidavit was made to him on behalf of Didar Singh and be then endorsed the application to the Tehsildar for necessary action.
Unfortunately, the applications which were made to appellants 1 and 2 have not been filed and we do not know the precise contents of the two applications.
We have, however, affidavits made on behalf of Didar Singh, Teja Singh, Ganga Bisban and Avtar Singh.
The learned Advocate for the parties have taken us through those affidavits.
The argument presented on behalf of the appellants is that though they knew of the extension of the stay order in Didar Singh 's case by reason of the application and affidavit filed on his behalf before them, they did not know that a similar extension of the stay order had been granted by the High Court in the other cases as well.
This argument has been pressed before us with some vehemence and we proceed now to consider it.
It is worthy of note that such an argument which goes to the very root of the matter was not presented to the High Court.
It is not disputed that ",disobedience of a judgment or order requiring a person to do any act other than the payment of money, or to 135 abstain from doing anything is a contempt of court punishable by attachment or committal" ; but disobedience, it is argued, if it is to be punishable as a contempt, must be willful ; in other words, the party against whom a proceeding by way of contempt is taken must know that order before, it can be said that he has disobeyed it.
It is somewhat surprising that if the stand of the appellants was that they did not know of the order made by the High Court on May 19, 1958, in the respondent 's case, such a point was not urged in the High Court.
Falshaw, J., (as he then was) said in his judgement that it was not in dispute before him that on the morning of May 20, 1958, both the appellants were informed that an extension of the stay order upto May, 23, 1958, had been granted by the High Court.
This state ment of the learned Judge must have reference to the case of the respondent which he was considering.
Apart, however, from the point that, such an argument on behalf of the two appellants was not presented in the High Court, it appears to us that on the affidavits made available to the Court, the only reasonable inference is that though the application and the affidavit were made on behalf of Didar Singh, both the appellants were informed that the High Court had granted an extension of the stay order in all 4 he cases.
It is admitted on both sides that there were three cases in which delivery of possession had to be given of lands in village Jagmalera.
It is also not seriously in dispute that on May 9, 1958, appellant No. 1 made an order directing that delivery of possession should be given to the allottees of their respective areas and persons in unauthorised occupation would be dispossessed.
On May 16, 1958 three writ petitions were made which were placed before the Chief Justice who made an interim order of stay lasting for three days.
On May 19, 1958 the writ petitions were placed before a Division Bench for admission and that Bench 136 extended the stay order till May 23, 1958.
These are the admitted facts.
It is also, admitted that the respondent Gurbachan Singh did not appear before the appellants on May 20, 1958, a fact which has been emphasised by the learned Advocate for the appellants.
Lot us, however, see what the affidavits filed in the case show.
Teja Singh said in his affidavit that Harbans Singh Gujral, who was the advocate acting on behalf of the petitioners in all the, cases, told him on the telephone on May 19, 1958 that the High Court had extended the stay order in all the cases upto May 23, 1958.
Teja Singh accompanied Didar Singh, Ganga Bishan, Mastan Singh and others to the village on May 20, 1958, and he said that an application was made to appellant No. 2 in which it was stated that the stay order had been extended by the High Court.
The affidavit of Ganga Bishan is very significant in this connection.
He said that on May 20, 1958, he drafted the application which was later made to appellant No. 2.
Ganga Bishan said that it was stated to appellant No. 2 that the stay order made by the High Court related to all the cases of village Jagmalera.
He further said that appellant No. 2 was informed that stay of delivery of possession had been extended by the High Court upto May 23, 1958 ; appellant No. 2, however, wanted to be ,shown the order of the High Court ; thereupon an affidavit of Didar Singh to the effect that the stay order had been extended by the High Court upto May 23, 1958, was filed.
Ganga Bishan also said that appellant No. 1 was also informed that the High Court had extended the stay order upto May 23, 1958.
The affidavits made on behalf of Didar Singh and Avtar Singh were also to the same effect.
In view of these affidavits we find it very difficult to hold that the.
appellants knew of the stay 'order only in Didar Singh 's case but did not know of the stay order in the other oases.
It is worthy of note here that 137 in the counter affidavits filed on behalf of the appellants the point was made on their behalf was that they considered it unsafe to rely on the applications and affidavits made, in view of the background of enmity between the parties.
The two appellants did not say in their counter affidavits that they came to know of the stay order only in one case and not in the others such a point does not appear to have been specifically made on behalf of the appellants at any stage of the proceedings in the High Court.
Therefore, we have come to the conclusion that the appellants knew of the order of the High Court in all the cases and it is not correct to say that the appellants knew of the order of the High Court only in one case and not in the others.
We find it difficult to believe that Ganga Bishan would not tell the appellants that the High Court had extended the stay order in all the three cases of the village Ganga Bishan says in his affidavit that he did tell the appellants of the extension of the stay order in all the three cases and there was no counter affidavits on behalf of the appellants traversing the statements made by Ganga Bishan.
We must, therefore, overrule the first point urged on behalf of the appellants.
The second point which has been urged on behalf of the appellants is that in the absence of an official communication of the order, they were justified in not acting on what they came to know from interested parties and their advocate.
The learned Advocate for the appellants has submitted that in a case of this nature, before willful disobedience of the order of the High Court could be imputed against the appellants, it was legally essential that the order should be officially communicated or served on the appellants and in the absence of such communication or service, the proceeding for contempt must fail.
We are unable to accept this contention as correct.
138 The legal position has been very succinctly put by Oswald: "The judgment or order should be served on the party personally, except in the following cases: (1) prohibitive orders, the drawing up of which is not completed; (2) orders em bodying an undertaking to do an act by a named day; (3) orders to answer interrogatories or for discovery or inspection of documents: (4) where an order for substituted service has been made; (5) where the respondent has evaded service of the order.
In order to justify committal for breach of a prohibitive order it is not necessary that the order should have been served upon the party against whom it has been 'granted, if it be proved that he had notice of the order aliunde, as by telegram.
or newspaper report, or otherwise, and knew that it was intended to be enforced, or if he consented to the order, or if he was present in Court when the order was pronounced.
, or when the motion was made, although he left before the order was pronounced.
" (Oswald 's Contempt of Court, 3rd Edn.
199 and 203).
The order in the present case was a prohibitory order and if the appellants knew that the High Court had prohibited delivery of possession till May 23, 1958, it was undoubtedly the duty of the appellants to carry out that order.
We do not think that the appellants can take up the plea that as the order had not been officially communicated to them, they were at liberty to ignore it.
The appellants were officers whose duty it was to uphold the law and if they knew that a valid order had been made by the High Court staying delivery of possession, they disobeyed that order at their peril.
There may be circumstances where officials 139 entrusted with the duty of carrying out a legal order may have valid reasons to doubt the authenticity of the order conveyed to them by interested parties and in those circumstances it may be said that there was no willful disobedience of the order made.
We do not, however, think that the appellants in the present case had any real justification for doubting the authenticity of the order made by the High Court, even though the order had not been officially communicated to them.
The appellants knew that an interim order of stay had been made by the High Court on May 16, 1958; that order was in force till May 19, 1958.
Thereafter the appellants were informed not merely by interested parties but by an Advocate, who was an officer of the Court, that the High Court had extended the stay order upto May 23, 1958.
A formal application supported by an affidavit was made to that effect.
Despite the reason alleged by the appellants that there was a background of enmity between the parties, we do not think that the appellants have given any good reasons on which they were entitled to doubt the authenticity of the order communicated to them by Ganga Bishan, an Advocate acting on behalf of Didar Singh.
It is worthy of note that the appellants did not deliver possession in Didar Singh 's case.
They were content with delivering possession in the case of the respondent only.
Taking into considerations all these, circumstances we are satisfied that there was in this case in the eye of the law, a willful disobedience of the order of the High Court staying delivery of possession, even though the appellants might have wrongly but honestly believed that it was not safe to act on the information given to them by Ganga Bishan.
The learned Advocate for the appellants has referred us to a number of decisions, English and Indian, relating to mandatory orders, or 140 orders for the payment of money, or orders which require under the rules of the Court to be served in particular manner.
In re: Holt (an Infant)(1); Ex parte Lingley (2); In re: Tuck March vs Loosemore (3); Dwijendra Krishan Datta vs Surendra, Nath Nag Choudhury (4): and Gordon vs Gordon (5).
In those decisions it was held that it was necessary to have the order properly served before charging a person with disobedience of it.
We do not think that those decisions are in point, because we are dealing with a prohibitory order and in the matter of a prohibitory order it is well settled that it is not necessary that the order should have been served upon the party against whom it has been granted in order to justify committal for breach of such an order, provided it is proved that the person complained against had notice of the order aliunde.
The distinction between prohibitory orders and orders of an affirmative nature was adverted to in N. Baksi vs O. K. Ghosh (6) and a large number of decisions were referred to in support of the rule that in respect of a prohibitory order, service of the order was not essential for founding an action in contempt.
We do not think that any useful purpose will be served by examining those decisions over again.
We are content to adopt for the purposes of this case the rule as succinctly put by Oswald and quoted earlier in this judgment.
Lastly our attention has been, drawn to the statements made by the respondent in para.
22 of his petition to the effect that though appellant No. 2 made a report about delivery of possession in respect of the land of the respondent, no actual dispossession could be made because cotton crop was standing on the land and a large number of persons had gathered there.
The argument before us is that if, according to the respondent (1) (3) (5), (1946) 1 AU E.R. 246.
(2) (4) A.I.R. 1927 Calcutta 548.
(6) A.I.R. 1957 Patna 528, 141 himself, no actual dispossession took place then this is not a fit case in which action for contempt should be taken against the appellants.
It has been submitted on behalf of the appellants that contempt proceedings are of an extraordinary nature and the Court should be reluctant to exercise its extraordinary power if the action complained of is of a slight or trifling nature and does not cause any substantial loss or prejudice to the complainant.
It has been argued that if the respondent himself said that he had not been actually dispossessed, then there was no reason for proceeding against the appellants for contempt of court.
Secondly, it is pointed out that the appellants offered an apology in case the High Court held that they should have taken action on the information given to them by Ganga Bishan.
As to the second submission, it is enough to point out that in a matter relating to contempt of court, there cannotbe both justification and apology, (See M. Y.Shareef vs The Hon 'ble Judges of the High Courtof Nagpur (1).
As to the first submission wemay draw attention to the statements of appellant No. 2 in para.
21 of his affidavit in which he said that so far as the respondent 's land was concerned, possession was delivered to Budh Singh.
This statement of appellant No. 2 clearly shows that the two appellants took the very action which was prohibited by the High Court by its order dated May 19, 1958.
We are, there fore, unable to accept the submission that there was no foundation for taking action against the appellants for contempt of court.
This disposes of all the points urged on behalf of the appellants.
As to the punishment imposed, the learned Judge took into consideration that the appellants wrongly but honestly might have believed that they were not bound to hold their hands in the absence of an official communication of the order (1) ; 142 of the High Court.
That belief afforded no defence to the charge of contempt of court, but was a consideration relevant to the sentence.
In our opinion, there are no grounds for interference with the order of the High Court.
The appeal accordingly fails and is dismissed.
RAGHUBAR DAYAL, J.
I have bad the privilege of perusing the, Judgment of my learned brother section K. Das, J., but regret My inability to hold that the appellants committed contempt of Court.
I need not repeat the facts set out in the majority judgment.
No conviction for committing contempt of Court can be based on the finding of the High Court that the appellants delivered possession believing that they were not bound to hold their hands in the absence of the official communication of the High Court 's order.
The finding means that they delivered possession not in defiance of the High Court 's order, but because they honestly thought that in the absence of the official communication of the order, they could not act on the supposition that the original stay order, which was to be effective up to May 19, 1958, continued to be effective.
If in their honest opinion no stay order existed at the time, their conduct cannot be said to amount to willful disobedience of the High Court 's order extending the stay order up to May 23, 1958.
No question of willful disobedience can arise when the very existence of the order is not believed.
The question of obedience or disobedience arises only after the party knows of the order and if the party does not know the order, no such question can arise.
The allegations in the petition by the first respondents filed in the High Court, did not make out that the appellants delivered possession, the 143 delivery of which had been stayed upto May 23, 1958, by the High Court by its order dated May 19, 1958.
This is clear from the statements in paragraphs 21 and 22 of the petition.
They are : " 21.
However when actually he attempted to start the work of dispossession, he found that a large number of people were collected at the spot and apprehending that the police force already taken to the spot might not be sufficient to cope up with the situation if some trouble arose, he withdrew from the spot.
22.That although in the land possessed by the petitioner in Jag Malera, cotton crop was standing in some of the fields and no proceedings for dispossession of the petitioner could be taken by respondent No. 2 on account of the presence of a large number of persons at the spot, respondent No. 2, however, madesome report later on that the petitioner hadbeen actuary dispossessed of his lands and the same was given over to Budh Singh at the spot.
In the other cases, however, he made a report that be could not deliver possession on account of the presence of a mob at the spot and that the police force with him being too small, was not sure to cope up with the situation.
" These paragraphs can only mean that appellant No. 2 attempted to start the work of dispossession, but did not proceed further, and withdrew from the spot in view of an apprehension of breach of peace and that be made some report of a fictitious kind to the effect that the petitioner had been actually dispossessed of his land and possession had been given over to Budh Singh at the spot.
It Was emphasized that actual possession could not have be on delivered on account of the standing cotton crop.
It follows that even on the statements 144 of the first respondent in his petition for action against the appellants for contempt of Court, there was no assertion that they had disobeyed the stay order by delivering possession to Budh Singh.
In the absence of such an assertion, no action could have been taken or ought to have been taken against the appellants.
Contempt proceedings are criminal or quasi criminal proceedings.
It is essential that the accusation made against the opposite party by the petitioner for taking action against him should be precise and should ,clearly make out that the opposite party had, by some specific act, committed contempt of Court.
the conviction of the opposite party must rest on the facts alleged and proved by the petitioner.
A conviction may also rest on the sole admission of the alleged condemner if that establishes his committing contempt of Court, but, in that case, his admission should be taken as a whole and not that its incriminating part be taken out of the context and made the basis for conviction.
It is immaterial that appellant No. 2 stated in his reply that actual possession of the land in the unauthorised possession of the first respondent was delivered to Budh Singh and that at the time no cotton crop was standing and that the respondent was adopting a contradictory position.
The High Court did not give any finding on this question.
It simply said in its judgment, due to the misreading of the allegations in the petition. "In spite of this fact it is alleged that in the village the Naib Tehsildar formally dis possessed ' the present petitioner and handed over his land to one Budh Singh. " The respondent made no statement about the Naib Tehsildar formally dispossessing him and banding over the land to Budh Singh.
145 A clear cut finding on the disputed fact whether actual possession had been delivered or not is not to be given in summery proceedings for contempt of Court.
If actual possession had been delivered to Budh Singh, there must have been some good reason for the respondent not to admit it in his petition and that can only be that in any future dispute where the question of possession of the respondent or of the Budh Singh be in question, the respondent be not confronted with his own admission in his petition and affidavit accompanying it.
It may be mentioned that identical statements where made in paragaraphs 21 and 22 of the affidavit.
There might be some other reason for the respondent not to admit the delivery of possession, but it is clear that the respondent did not come to Court with clean hands and, in the circumstances, proceedings for contempt of Court on his application was wrong exercise of discretion.
However, the main fact remains that no allegation was made in the petition that the respondents had delivered possession.
The appellants were not served, by the time the delivery of possession may be supposed to have taken place, with the order of the High Court extending the stay, order up to May 23, 1958.
The telegram sent by the counsel of Gurbachan Singh from Chandigarh, reached the first appellant, the Sub Divisional Officer, at 1 30 p.m., on May 10, 1958, and any order of his on it did not reach appellant No. 2 till 6 p.m., by which time, according to him, possession had been delivered.
The formal stay order from the High Court reached much later.
It may not be necessary to serve prohibitive order on the party against whom it is granted, but that party must have notice of the order before it can be expected to obey it can be committed for contempt of Court for disobeying it.
This is what 146 Oswald states at page 203 of his book on 'Contempt of Court ', III Edition.
He says: "In order to justify committal for breach of a prohibitive order it is not necessary that the order should have been server upon the party against whom it has been granted, if it be proved that he had notice of the order aliunde, as by telegram, or newspaper report, or otherwise,. " It would appear from the later part of the observation that it was sufficient that the party concerned gets notice of the prohibitive order by any means, specially by telegram or newspaper report.
is however not what was held in the cases referred to by Oswald in support of his statement.
Notice to the party concerned, of the prohibitive order, in those cases was communicated by the Court through its regular procedure or by a Solicitor of the Court.
In In re Bryant (1) the parties concerned wet,(, informed by the solicitor of the judgment debtor that the debtor had filed a liquidation petition in the London Bankruptcy Court and that application would be made at the next sitting of the Court to restrain further proceedings under the execution.
The auctioneer concerned received a telegram from Bryant 's solicitors referring to the parties to the case and stating that injunction staying sale and further proceedings Lad been granted that morning and that the order would be served as soon as possible.
The auctioneer, how ever, proceeded with the sale.
It was in these circumstances that the parties concerned were held to have disobeyed the order of the Court and to have committed its contempt.
The solicitor was an officer of the Court.
This case is no authority for the proposition that information conveyed to the party concerned (1) I.R. 147 by telegram from a person who is not an officer of the Court would amount to the requisite notice of the prohibitive order by the party concerned.
In Ex parte Langley, Ex parte Smith, In re Bishop (1) the facts were as follows.
Bishop filed a liquidation petition in the London Bankruptcy Court on August 6, 1879.
The same day the Court passed an order restraining until the 8th of September, further proceedings in several actions which had been commenced against the debtor and, inter alia restraining the sheriff of Kent, his officers and servants, from taking any further proceedings in an action which had been brought against the debtor by Messrs. Wade and Thurston.
The sheriff had fixed the sale of the attached furniture of the debtor on the 6th of August, having adjourned it from the 5th in order to afford an opportunity to the debtor to pay the debt.
Smith was he sheriff 's officer who was in charge of the sale.
His assistant, Emmerson and Langley, an auctioneer, were to carry out the sale.
Emmerson had directions to start the sale at 11 'clock and not a moment later.
Langley, however, postponed the same to 12 o 'clock, on his own responsibility, due to paucity of persons present.
Langley received a telegram from one Matthews, the manager of the hotel in which the debtor was carrying on business as a licensed victualer, saying: "Smith gone to Canterbury.
You had better stop Bale on your own account, as I know it is all right.
" The auctioneer was also informed by the debtor 's son and another person between 11 and 12 o 'clock that the debtor would come down by the mid day train from London with the money to pay the execution debt.
The sale was again put off to 1 o 'clock when it did start.
After a few lots had been sold, Emmerson received a telegram purporting to be (1) L.R. (1979) 13.Ch.
D. 110 148 from Learyod & Co., Solicitors, London, to the sheriff 's officer in possession stating: "Take notice, the London Court of Bankruptoy has made an order restraining you from selling or taking any further proceedings in the action against Bishop".
The telegram was shown to Lanoley who thought it to be a ruse on the part of the debtor but was prepared to stop the sale temporarily till instructions from Smith.
Emmerson sent a telegram to Smith saying: "Langley just received telegram to stop sale.
Shall we proceed? People are waiting your reply.
" Smith 's reply was: "If telegram to Langley does not state Defendant filed petition or money paid, sell at once" ' The sale thereafter proceeded.
Langley and Smith were committed for contempt by Bacon C J.
But on appeal they were acquitted.
James, L. J., said at page 116: "With regard to the sheriff 's officer, he does not seem to have been a party to the alleged contempt at all, because I do not think the mere fact of the telegram is sufficient to bring home to him any Participation in the supposed contempt." He further said at page 117, in considering the case of the auctioneer.
"It appears.
to me that he might have taken some steps (though I do not know what steps I should have taken if I bad been in his position) to ascertain whether an order had really been made by the Court.
Perhaps some auctioneers would have done so.
But he has taken upon himself to swear positively (and he 149 has not been cross examined) that which Lord Eldon, in Kimpton vs Eve ; , field to be sufficient.
He swears that he did not believe that there had been any proceedings whatever in the Bankruptcy Court it, or that any such order had been made.
A person in I such a position, and a sheriff 's officer is placed in great difficulty upon receiving a telegram of this kind, knowing nothing at all of the person who may have gone to the post office and sent it, a telegram which might just as well have been sent by the debtor or by Matthews, or any one else on behalf of the debtor, in the name of Messrs. Learoyd.
I am very far from saying that notice of an order cannot be given by telegram.
But it is very difficult to commit for contempt where a man says that which the auctioneer does here, under circumstances which certainly give color to his assertion, and there is some amount of probability that he may, having regard to what had already taken place that ay, not have believed that any order had been made by the Court, and have had no suspicion whatever that he was disobeying any order of the Court when he continued the sale.
" Thesinger, L. J., said at p. 119: I in no way dissent from the proposition laid down by him(Bacon, C.J.) in this case and also in In re Bryant (supra), that, under certain circumstances, a telegram may constitute such a notice of an order of a Court as to make a person who disregards the notice and acts in contravention of the order, liable for the consequences of a contempt of Court. .But the question ineach case, and depending upon the particular circumstances of the case must be or was there or was there not such a notice given to the person who is charged with 150 contempt of Court that you can infer from the facts that he had notice in fact of the order which had been made? And, in a matter of this kind, bearing in mind that the liberty of the subject is to be affected, I think that those who assert that there was such a notice ought to prove it beyond reasonable doubt." He further stated at page 121: "But, on the other hand, he has positively sworn that, coupling what had happened before with the telegram, he bona fide believed that he was not bound to act upon the telegram which he had received, and that there had been no proceedings which would justify him in stopping the sale.
He has not been cross examined, and nothing has been proved to show that his affidavit is not true.
Under such circumstances the observations of Lord Eldon, in Kimpton vs Eve (supra) seem to me pertinent and material, and I may add that in a case like the present the benefit of any doubt ought to be given to the person charged with contempt.
" The further remarks of James L. J., at page 122 point out the proper way of communicating a notice about injunction orders to the parties concerned by the solicitor of the party obtaining the order from the Court.
He says: "I wish to add this, that when parties who .obtain an injunction wish to communicate it by telegram, there is a very obvious mode by which they can prevent difficulties like this.
If the solicitor, instead of telegraphing to the sheriff 's officer, were to telegraph to some solicitor as his agent at the place, and tell him to go and give notice of the order, then the person affected would have the responsibility 151 of an officer of the Court for what he was doing.
" This case well illustrates the difficulties of the parties against whom a prohibitive order is made when they are informed by a telegram about these orders having been made by the Court oven when the telegram was from a solicitor of the Court.
The difficulties would be still greater if the telegram was one from a; person who is not a solicitor and therefore an officer of the Court.
In The Seraglio(1) notice of the issue of warrant which was subsequently disobeyed was sent by telegram by the marshal to the customhouse officer at Plymouth who went on board the seraglio to inform those in charge of the ship.
The master of the Seraglio, however by the owner 's order, left Plymouth with the custom house officer on board.
The warrant was served on him subsequently.
Sir James Hannon said at page 121.
"It must be understood that a litigant cannot be disregard a notice sent to him by telegraph by an officer of the Court.
" In none of the cases referred to, a party 1s said to have received information of the Court 's injunction order through any source having no connection with the court Passing the order.
I would not like an extension if this, practice of holding a person guilty of contempt even though he is not served with the order, to cases in which his alleged knowledge of the order is dependent on the veracity of the witnesses examined by a party praying for action against the other.
Conviction for contempt of Court must depend on unimpeachable evidence of the knowledge of the alleged contemner about the order said to have been disobeyed.
In support of the note that it could be proved that the party proceeded against had notice of the (1) 152 order by newspaper report or otherwise, Oswald has referred to Daniell 's Chancery Practice, Vol '.
1, Edition 7, page 1368.
That edition is not available, but in the 8th edition of that book, Vol.
II, at page 1413, is noted the practice in urgent cases thus : "In such (urgent) cases, the practice is to serve the party enjoined personally with notice in writing that the injunction has been granted, and that the order will be drawn up and served as soon as it can be passed through the offices ; or else to procure a transcript of the minutes of the order signed by the Registrar, and to serve the same personally by delivering a copy of it, showing at the same time the original transcript so signed ; and either the notice or the copy of the minutes will be sufficient to render the defendant or other person enjoined guilty of a contempt, if he acts in opposition to the injunction.
" I do not find any reference that knowledge of the party proceeded against through a newspaper report or otherwise, and not through Court, has been considered sufficient for contempt proceedings.
Again, at page 1419, have been mentioned certain other means through which the party proceeded against could have been informed of the injunction order.
They are practically those summarized in Oswald 's note.
In the appeal before us, I am not satisfied that the appellants had been informed that the High Court had passed an order staying the delivery of possession in proceedings on the writ petition filed by respondent Gurbachan Singh.
The communication made to the appellants about the stay order of the High Court is said to be through the applications and affidavit presented by Didar Singh to the appellants on May 20, 1958, and through a 153 chit said to have come from the advocate of the High Court regarding the injunction order.
Didar Singh had put in another writ petition against his threatened dispossession by appellant No. 1 through appellant No. 2.
There is said to have been ' a third writ petition by another person praying for similar relief.
All these petitions were separately dealt with by the High Court.
Separate stay orders were passed on them.
These five affidavits, in view of their contents, are not sufficient to prove that the appellants had been informed through these documents that the High Court had extended the stay orders in all the three cases.
viz., the cases on the writ applications of Gurbachan Singh, Didar Singh and another third person.
No statement is made in any of the affidavits that the applications and affidavits presented to the appellants mentioned that the High Court had stayed the delivery of possession in all the three cases.
It is not stated by Didar Singh and Mastan Singh what was written on the chit sent by the advocate of the High Court and whether that chit related to the order in the case of Didar Singh alone or referred to the orders in all the cases.
As Didar Singh claimed a receipt for the presentation of the application and affidavit to appellant No. 2, the latter, after consulting the prosecuting inspector, went to appellant No. 1 for consultation and was advised to, return the application to Didar Singh if he insisted on getting a receipt.
The application and the affidavit were therefore then returned to one Ganga Bishan.
The chit alleged to have been sent by the High Court advocate has not been produced.
The application presented to appellant No. 2 in the village and returned by him in the Sub Divisional Officer 's Court, though presumably in possession of Didar Singh, has not been filed.
They would have indicated what their contents were.
That 154 would have been the best evidence of what was conveyed to appellants Nos. 1 and 2.
Ganga Bishan 's statement.
that he had drafted the application addressed to appellant No. 2 to the effect that the stay order issued by the High Court in Jag Malera Namdhari cases had been extended, is not the best 'evidence of what the application (a fair copy presumably), actually contained, an application which is in the possession of Didar Singh.
Of course, the application and affidavit presented to the Sub Divisional Officer, are in the possession of the State.
No attempt was made by the respondent to summon them or to file certified copies of those documents in these proceedings in the absence of the best evidence, the documents, I am not prepared to hold that the application and affidavit filed by Didar Singh must have referred to all the cases.
Normally, he had no business to refer to the stay orders in the other cases and to make prayer for the stay of delivery of possession in all the cases.
He had to restrict his application and affidavit to his own case.
Further, whatever was stated in the application and the affidavit,, in the nature of things, was not on the basis of personal knowledge of Didar Singh Didar Singh himself did not even have the telephonic communication with his counsel at Chandigarh.
The telephonic communication was between Teja Singh and that counsel.
Appellant No. 2 states and I see no reason to doubt that statement that in the background of the facts about the possession over the land he did not consider it advisable and safe to accept the statement of facts contained in the application or affidavit on its face value.
Lastly, the presence of Ganga Bishan, Advocate, on the occasions of the presenting of the application and affidavit to appellants Nos. 1 and 2, is 155 stated in all the affidavits.
But it is only in paragraph 5 of Didar Singh 's affidavit that it is stated that Babu Ganga Bishan, Advocate, presented the application and the affidavit to the Sub Divisional Officer.
Ganga Bishan himself does not state so.
It is not stated anywhere that Ganga Bishan had been engaged as counsel by Didar Singh.
It would appear a bit unusual that 'in the presence of a duly appointed advocate, applications and affidavits be presented by Didar Singh personally and not through his counsel.
On the basis of the statements and the affidavits, I am not prepared to hold that Galiga Bishan was the duly appointed counsel for Didar Singh.
He may be accompanying Didar .Singh like other persons on account of his interest in the matter.
Further, any request by him to the Sub Divisional Officer for passing the necessary orders on the application of Didar Singh, as stated by him in paragraph 3 of his affidavit, cannot lead to the conclusion that be professionally represented Didar Singh, as similar requests were made, according to his own affidavit, by the other persons also, who had accompanied Didar Singh to the Sub Divisional Officer 's Court.
The Sub Divisional Officer, therefore, could not have treated his request to be a statement of fact about the High Court 's extending the stay order up to May 23, 1958.
Ganga Bishan does not state that he told the Court that the High Court had extended the duration of the stay order or that he requested the Sub Divisional Officer, who is also the Sub Divisional Magistrate, to stay the delivery of possession in view of the application filed by Didar Singh.
He simply states: "Several requests were made to the Sub Divisional Magistrate by us that necessary orders on the application presented to 156 him be made and the Managing Officer be called back." Even if Ganga Bishan bad stated that the High Court bad extended the order, his statement too, had no better value when he could not speak about that order on the basis of personal knowledge or on the basis of any communication to him by the Advocate of the High Court.
He has not stated in his affidavit that he was present when the order was passed or that he had received any communication from the High Court Advocate.
I am therefore of opinion that his merely accompanying Didar Singh and others did not invest any greater weight to the correctness of the statements made in the application and the affidavit.
The public officers are not to blame if they do not take at face value what is contained in deliberately prepared applications and affidavits.
I have already mentioned of the way in which the crucial basic fact to be mentioned in the petition for contempt proceedings against the appellants had not been mentioned and statements were made in a way which at first sight could lead to the impression that the delivery of possession had been made in defiance of the order of the High Court.
I am therefore of opinion that it is not established the respondents did not rely on the statements in the application and the affidavit mala fide because they were bent upon delivering possession in defiance of the orders of the High Court.
I find in this case that on May 16, orders of the High Court were obtained for serving the stay order upon the appellants through the petitioner respondent, but no such order was obtained for serving the order dated May 19.
In view of the urgency of the matter, the respondent and others who bad obtained extension of the stay orders on 157 the 19th could have and should have obtained similar orders of the High Court for serving them.
If that precaution had been taken %gain on May 19, 1958, probably what happened subsequently on the spot and thereafter, would not have taken place.
I am therefore of opinion that the appellants committed no contempt of Court, and would allow their appeal.
By COURT : In accordance with the opinion of the majority, the appeal fails and is dismissed.
Appeal dismissed.
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The appellants, one a Sub Divisional Officer and the other a Naib Tehsildar, were entrusted with the duty of allotting land to displaced persons.
The first respondent forcibly occupied the land allotted to B.
On May 9, 1958, the first appellant ordered that B and other allottees similarly situated would be given possession of lands allotted to them on May 20, 1958.
On May 16, 1958.
the first respondent and others threatened with dispossession filed petitions in the High Court under article 226 of the constitution and obtained interim stay of delivery of possession till May 19, 1958, when the petitions would come up before the Division Bench for admission.
On May 19, 1958, the Division Bench extended the operation of the stay order until May 23, 1958.
The notice of the first stay order reached the appellants on May 19, 1958, but no notice of the second order was officially communicated to them till May 21, 1958.
It was alleged that on May 20, 1938, the appellants, although informed of the second stay order by certain interested persons and the Advocate for one of the parties, formally dispossessed the respondent in disobedience of the Court 's order and handed over possession of the land to B. On the complaint of the respondent the High Court field that the .appellants were guilty of contempt of Court and, instead of committing them for contempt, administrated a warning as the appellants honestly believed that they were not bound to stay delivery of possession in absence of an official communication.
The appellants appealed by special leave.
Held, (per Das and Subba Rao, JJ.)that in a case of contempt for disobedience of a prohibitive order, as distinguished from an order of affirmative nature, it was not necessary to show that notice of the prohibitory order was served upon the party against whom it was granted.
It would be sufficient if it was proved that the party had notice of it aliunde.
N.Baksi vs O. K. (Thosh, A. T. R. (19.)7) Patn.
528, referred to.
128 There may be circumstances where officials entrusted with the carrying out of a legal order might have valid reasons to doubt The authenticity of the order conveyed to them by interested parties.
But in the present case there could hardly be any such reasons.
The appellants had really no justification for doubting the authenticity of an order communicated to them by an Advocate.
Held, further.
that in a matter relating to contempt of court, there cannot be both justification and apology.
shareef vs The Hon 'ble Judges of the High Court of Nagpur; , , referred to.
Although the appellants might have honestly believed that they were not bound to bold their band in absence of an official communication, that would be no defence to the charge of contempt of court, but only a relevant consideration in awarding the sentence.
Per Daval, J. Contempt proceedings are criminal or quasi criminal in nature and it is essential that before any action can be taken the accusation must be specified in character.
In the instant case, the respondent did not state that he was formally dispossessed.
This would 'be for some reason if actual posssssion had been delivered.
He could not be said to have come to court with clean hands.
Further, the finding of the High Court that the appellants delivered possession honestly believing that they were not bound not to do so in the absence or the official communication meant that there was no defiance of the High Court 's order.
There could be no willful disobedience since there was no belief in the existence of the order.
It may not be necessary that the party against whom a prohibitory order was made must be served with the order, but it should have notice of the order before it could be expected to obey.
Such notice must be from sources connected with the court passing the order.
The alleged knowledge of the party cannot be made, to depend on the veracity of the witnesses examined by the party praying for action.
In re Bryant L.R (1987 6) In Ex Parte Langly, Exparte Smith.
In re Bishop L. R. and The Seraglio.
L. R. , discussed.
|
Civil Appeal Nos.
2330 2331 of 1969.
Appeals by Special Leave from the Judgment and order dated 17/ 18 1 69 of the Gujarat High Court in Second Appeal No. 187 and 857/61.
H. section Parihar and I. N. Shroff for the Appellant.
K. J. John for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
These two Civil Appeals are by the Kathiawar Industries Ltd. by special leave against the judgment of the Gujarat High Court holding that the appellants are liable to pay octroi duty on uncrushed salt which is brought by the appellant to the factory situate within the octroi limits and crushed there.
The appellant is running a salt manufacturing works at Jaffrabad called "Nawabsidi Mohmad Khan Salt Works".
The company had constructed salt works, grinding mills, trolly tracks and a jetty at e port site.
The major portion of the salt works is situate out of the Municipal limits.
The salt is manufactured outside the municipal limits.
The grinding mills and the part of the trolly track leading to jetty come within the municipal limits of the respondent Jaffrabad Municipality.
The Municipality by a notice dated 3 1 1955 demanded from the appellant Rs. 7289 6 0 as arrears of octroi.
The appellant paid under protest and filed the suit out of which this appeal arises before the Civil Judge Gohilwad, District Bhavnagar, against the respondent for a declaration that the salt manufactured by the appellant at its salt works at Jaffrabad and exported uncrushed and/or crushed was not liable to octroi duty and that the goods passing through municipal limits from the salt works are not liable to octroi duty, and for an injunction restraining the respondent from recovering an amount of Rs. 7289 6 0 and for a further injunction restraining the Municipality from hindering or obstructing the free passage of salt and goods and for the refund of Rs. 250.
The appellant also filed another suit for the refund of Rs. 1271 14 O paid under protest.
These two suits were decreed, the court declaring that the salt manufactured by 246 the appellant company is not liable to octroi duty.
The court also granted an injunction as prayed for.
The Municipality preferred appeals.
The appellate court while dismissing the appeals and confirming the decree of the trial court observed that the perpetual injunction granted by the trial court would not apply to the salt entering the octroi limits for consumption or use for the factory situated within the octroi limits of the municipality.
The Municipality preferred two Second Appeals to the High Court of Gujarat at Ahmedabad.
A Bench of the High Court allowed the appeals except to the extent of confirming the declaration that uncrushed salt of the appellant company which is directly sent from the stacking ground to the jetty is not liable to octroi provided the plaintiff company followed the prescribed rules and formalities.
The other claims in the suits were dismissed.
Against the judgment of the High Court the plaintiff company has preferred these two appeals.
The only question that falls for consideration in these civil appeals is whether the salt manufactured by the appellant outside the octroi limits of the respondent and brought by the appellant within those limits for the purpose of being crushed into powder in the appellant 's factory situate within those limits and then exported is liable to octroi.
The facts as found by the High Court and which cannot be questioned are that the salt works consists of (i) salt pans; (ii) stacking ground for the salt collected from the pans; (iii) trolly track for carrying salt from stacking ground to the factory within the octroi limits of the Municipality and to the jetty which is outside the octroi limits; (iv) jetty; (v) Power house; (vi) store room; (vii) workshop and (viii) grinding mill which is referred to in the evidence as the crushing factory.
(f these, the crushing factory and part of the trolly track (about 1400 feet) are within the octroi Limits of the Municipality and the rest outside those limits.
Thus it is not in dispute that only the crushing factory and part of the trolly track are within the octroi limits.
salt is prepared is the salt pans outside the octroi limit and the salt which is to be crushed is taken to the crushing factory and the salt which is not to be crushed is taken in uncrushed form directly to the jetty over the trolly track part of which passes through the octroi limits of the Municipality.
The salt that is crushed in the crushing factory is also after crushing taken by the trolly to the Jetty.
From the jetty the salt whether crushed or uncrushed, as the case may be, is exported by steamers.
The High Court has found that the salt which is taken to the crushing factory within the octroi limits for the purpose of crushing and is crushed and later taken to the jetty is liable to octroi.
The question is whether this levy is sustainable in law.
247 In 1948, on the formation of Saurashtra State, Jaffrabad came with in the territorial limits of the Saurashtra State and the Bombay District Municipal Act, 1901, as adapted and applied to Saurashtra State became applicable to Jaffrabad.
The Jaffrabad Municipality, the predecessor of the respondent, was constituted under the Bombay District Municipal Act.
1901 .
The State of Saurashtra, within the territorial limits of which the said Municipality was situate, published an ordinance on 31 8 1949 being ordinance, No. 47 of 1949 called the Saurashtra Terminal Tax and octroi ordinance, 1949.
The ordinance extended to the whole of The State of Saurashtra and came into force from 31 8 1949.
Section 2 clause (2) of the ordinance defines 'octroi ' as including a terminal tax.
Section 3 empowers the Government to impose terminal tax and octroi duty.
It provided that octroi may be imposed on "animals or goods, or both, within the octroi limits brought for consumption or use therein".
Under section 4 Government is empowered to make rules.
In exercise of the powers under the ordinance the State Government n made rules relating to octroi known as the Saurashtra octroi and Terminal Tax Rules on 8th December, 1949 which was published in the Saurashtra Gazette on 15th December, 1949.
Rule 3 is the charging rule which provides that octroi is payable in respect of goods set out in the Schedule I attached to the Rules and prescribed that octroi shall be payable at the nakas at rates set out therein.
Item No. 23 is "Salt for Factory".
Schedule II which gives a list of items which are exempt from octroi duty contains in item No. 6, a sub item in Gujarat which means "Salt".
Thus under item 23 "Salt for Factory" is liable to octroi duty.
The octroi duty may be imposed under section 3 on "animals or goods, or both, within the octroi limits brought for consumption or use therein".
Oh the facts found, namely that uncrushed salt was brought into the factory situate within the octroi limits and crushed salt taken away for export from the octroi limits can it be said that the salt thus brought are goods for consumption or use therein.
It is the common case that the uncrushed salt as brought into the octroi limits is crushed and in the crushed form sent to the jetty for export.
The finding of the High Court is that the crushing of the uncrushed salt and sending the crushed salt to the jetty within the octroi limits will be used therein as required under section 3.
In this appeal it is necessary for us to consider the scope of the I words "consumption" and "use".
The precise meaning to be given to the words "consumption" and "use will depend upon the context in 17 475 SCI/79 248 which they are used.
These words are of wide import.
In the Constitution of India, Entry 52 in List II in Seventh Schedule a right to impose tax "on entry of goods into the local area for consumption, use or sale" is conferred.
In Burmah Shell oil Storage & Distributing Co. India Ltd. vs The Belgaum Borough Municipality this Court after tracing the history of octroi and terminal tax observed that while terminal tax is a kind or octroi which is concerned only with the entry of goods in a local area irrespective of whether they would be used there or not, octrois were taxes on goods brought into the area for consumption.
use or sale.
They were leviable in respect of the goods put to some use or the other in the area but only if they were meant for such user.
In considering the meaning of the words "consumption" and "use" this Court observed in Burmah Shell case (supra) that the word consumption; its primary sense means the act of consuming and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article.
But in some legal contexts, the word "consumption '? has a wider meaning.
It is not necessary that by the act of consumption the commodity must be destroyed or used up.
n M/s.
Anwarkhat Mahboob Co. vs The State of Bombay (now Maharashtra) and others, the question that arose was whether conversion of one commodity into another commercially different article would amount to consumption.
The facts of the case were that tobacco was purchased and in the Bombay State the stem and dust from the tobacco was removed.
It was contended that removing the stem and dust from the tobacco did not amount to consumption of tobacco or had the effect of converting tobacco into an article commercially different.
The Court held that when the tobacco was delivered in the State of Bombay for the purchase of changing it into a commercially different article, viz., biddipatti the delivery was for the purpose of consumption.
This Court followed the decision in State of Travancore Cochin and ors.
v Sanmugha Vilas Cashew Nut Factory and Ors.
wherein it was held that the raw cashew nuts were put through a process and new articles of commerce, namely cashew nut oil and edible cashew nut kernels were obtained.
The Court expressed the view that the raw cashew nut is consumed in the process.
On the facts the High Court found alter referring to the different processes of baking or roasting.
Shelling pressing, pealing etc.
that although most of the process is done by hand, part of it is also done mechanically by drums.
Oil is extracted out of the outer shells as a result of roasting.
After roast 249 ing the outer shells are broken and the nuts are obtained.
The i J poison is eliminated by pealing oil the inner skin.
By this process of manufacture.
the respondents really consume the raw cashew and produce new commodities.
This Court accepted this finding and observed at p. 113 that the raw cashew nuts, after they reach the respondents, are put through a process and new articles of commerce, namely, cashew nut oil and edible cashew nut kernels, are obtained.
In Anwarkhan Mahboob Co. (supra) this Court gave the example of the process through which cotton is put through before ultimately the final product the wearing apparel is consumed by men, women and children.
The Court observed: "But before cotton has become a wearing apparel, it passes, through the hands of different producers, each of whom adds some utility to the commodity received by him.
There is first the act of ginning; ginned Cotton is spun into yarn by the spinner; the spun yarn is woven into cloth by the weaver; the woven cloth is made into wearing apparel by the tailor.
" At each of these stages distinct utilities are produced and what is produced is at the next stage consumed.
It is usual, and correct to speak of raw cotton being consumed in ginning.
Applying this test the conclusion is irresistible that when uncrushed salt is crushed in the factory it is commercially a different article and the uncrushed salt must be held to have been consumed.
The word "use" is of wider import than "consumption".
It cannot be denied that the uncrushed salt has been used and by the user a new product crushed salt has come into existence.
On a consideration of the facts and circumstances of the case we are satisfied that octroi is leviable on the uncrushed salt which is brought to the octroi area and crushed as the activity would amount to both consumption and use of the uncrushed salt.
In the result the appeals fail and are dismissed with costs.
N.V.K. Appeals dismissed.
|
In 1948 on the formation of Saurashtra State, Jaffrabad came within its territorial limits and the Bombay District Municipal Act, 1901 as adapted and applied to the said State became applicable to Jaffrabad.
Jaffrabad Municipality the predecessor of the respondent was constituted under the Bombay District Municipal Act, 1901.
The State of Saurashtra, within the territorial limits of which the said Municipality was situate, promulgated ordinance No. 47 of 1949 on 31 X 49 called the Saurashtra Terminal octroi ordinance, 1949.
Section 2 cl.
(2) of the said ordinance defines "octroi" as including a terminal tax.
Section 3 empowered the Government to impose terminal tax and octroi duty, and provided that octroi may be imposed on "animals or goods, or both, within the octroi limits brought for consumption or use therein.
" Section 4 empowered the Government to make rules in exercise of which the State Government made the Saurashtra octroi and Terminal Tax Rules on 8th December, 1949.
Rule 3, the charging rule provided that octroi is payable in respect of goods set out in Schedule I of the Rules and prescribed that it shall be payable at the nakas at rates set out therein.
Item No. 23 is "Salt for Factory".
Schedule II enumerated a list of items which are exempt from octroi duty and contained in Item No. 6, a sub item in Gujarat which means "salt".
The appellant was running a salt manufacturing works at Jaffrabad.
The company had constructed salt works, grinding mills, trolly tracks and a jetty at the port site.
The major portion of the salt works is situated out of the municipal limits.
The salt is manufactured outside the municipal limits.
The grinding mills and the part of the trolly track leading to jetty came within the municipal limits of the respondent Jaffrabad Municipality.
The salt is prepared in the salt pans outside the octori limit and the salt which is crushed is taken to the crushing factory and the salt which is not to be crushed is taken in uncrushed form.
directly to the jetty over the trolly track part of which passes through the octroi limits of the municipality.
The salt that is crushed in the crushing factory is also after crushing taken by trolly to the jetty.
From the jetty the salt whether crushed or uncrushed, as the case may be is exported by steamers.
244 The Municipality demanded from the appellant octroi in respect of salt manufactured by it.
The appellant paid under protest and filed a suit against the respondent for declaration that the salt manufactured by the appellant at its salt works at Jaffrabad and exported uncrushed and/or crushed was not liable to octroi duty and the goods passing through municipal limits from the salt works are not liable to octroi duty and for an injunction restraining the respondent from recovering the amount claimed as octroi.
Another suit claiming refund of the octroi paid was also filed.
The two suits were decreed, the court declaring that the salt manufactured by the appellant company is not liable to octroi duty.
The Municipality being aggrieved preferred appeals and the appellate court while dismissing the appeals and confirming the decrees of the trial court held that the perpetual injunction granted by the trial court would not apply to the salt entering the octroi limits for consumption or use for the factory situated within the octroi limits of the Municipality.
The Municipality preferred second appeals to the High Court, which allowed them except to the extent of confirming the declaration that uncrushed salt of the appellant company which is directly sent from the stacking ground to the jetty is not liable to octroi provided the plaintiff company followed the prescribed rules and formalities.
The other claims in the suits were however dismissed.
On the question whether the salt manufactured by the appellant outside the octroi limits of the respondent and brought within those limits for the purpose of being crushed into powder in the appellant 's factory situated within those limits and then exported is liable to octroi.
^ HELD: 1.
Octroi is leviable on the uncrushed salt which is brought to the octroi area and crushed as the activity would amount to both consumption and use of the uncrushed salt.
[249 F] Burmah Shell oil Storage Distributing Co. India Ltd. vs The Belgaum Borough Municipality [1963] Supp.
2 SCR 216; M/s. Anwarklan Mahboob Co. vs The State of Bombay (now Maharashtra) [161] 1 SCR 709, State of Travancore Cochin & Ors.
vs Shanmugha Vilas Cashew Nut Factory & ors.
; , referred to.
In the Constitution of India, Entry 52 in List II in Seventh Schedule a right to impose tax "on entry of goods into the local area for consumption, use or sale" is conferred.
The precise meaning to be given to the words "consumption" and "use" will depend upon the context in which they are used.
These words are of wide import, the word "use" being of wider import than "consumption".
[248A. 247H, 249E].
While terminal tax is a kind of octroi which is concerned only with the entry of goods in a local area irrespective of whether they would be used there or not, octrois were taxes on goods brought into the area for consumption, use or sale.
They are leviable in respect of the goods put to some use or the other in the area but only if they were meant for such use.
[248B] 4.
The word "consumption" in its primary sense means the act of consuming and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article.
But in some leal contents the word 245 "consumption" has a wider meaning.
It is not necessary that by the act of consumption the commodity must be destroyed or used up.
[248C D] In the instant case the uncrushed salt is crushed in the factory which is commercially a different article and the uncrushed salt must be held to have been consumed.
The uncrushed salt has been used and by the use a new product crushed salt has come into existence.
[249E]
|
Civil Appeal No. 1455 of 1969 Appeal by Special Leave from the Judgment and Order dated 7 12 1967 of the Punjab and Haryana High Court in F.A.O. No. 10 of 1963.
Hardev Singh and R. section Sodhi for the Appellants.
R. A. Gupta for Respondent No. 1.
V. C. Mahajan, Naunit Lal and Kailash Vasdev for Respondent No. 2.
The Judgment of the Court was delivered by KAILASAM J.
This appeal is by special leave granted by this Court to Bishan Devi widow of late Bhagwan Das and her four children against the judgment and order dated 7th December, 1967 of the High Court of Punjab & Haryana dismissing the Claimants ' F.A.O. No. 10 of 1962 against the award of Punjab Motor Accidents Claims Tribunal, Chandigarh, dismissing their claim.
The appellants filed a petition on 4th September, 1961 before the Chairman, Motor Accidents Claims Tribunal, Punjab, Chandigarh alleging that the husband of the first appellant died by having been run over by a lorry at midnight between the 8th and 9th July, 1961, at about a distance of 60 feet from the road.
It was alleged that the truck was coming from Jullundur and it took a sudden turn and ran over the first appellant 's husband, Shri Bhagwan Das, and that it was being driven in a rash and negligent manner.
The appellants 2 to 5 were the minor children of the first appellant, all of them being below 11 years 303 of age on the date of the filing of the petition.
It was alleged that the monthly income of the deceased was Rs. 109/ per month and a claim was made for Rs. 50,000 as compensation.
The respondents to the petition were (1) Sirbaksh Singh and (2) The Motor Owners ' Mutual Insurance Co. Ltd., Belgaum the insurer.
The written plea was filed by the second respondent, the insurer, on 10th October, 1961.
Some of the pleas are noteworthy and it is necessary to set them out in some detail.
In para 4 the insurer pleaded that the "truck was stolen by somebody while it was standing.
A report to the police was made to this effect.
Whoever made this accident, if any, drove the truck without the consent of the owner, and, therefore, the respondents are not liable".
In its reply parawise in paragraph 1 it reiterated "This truck did not meet with any accident nor was any intimation sent to the replying respondent".
In paragraph 2 it was again reiterated "No accident took place as alleged.
Somebody stole away the truck without the knowledge of the owner or driver.
The respondents are not liable to pay any compensation.
The person liable is the person who was driving the truck at the relevant time and not the owner.
" In paragraph 11 it was pleaded "that the replying respondent is, in any case, absolved from any possible liability in connection with the alleged accident under the provisions of Sections 95 and 96(2) of the ".
In paragraph 12 it was stated that the "offending vehicle was being driven at the relevant time by a driver who had no driving licence and was not even an authorised driver of respondent No. 1, as he had stolen the truck and the owner is therefore not liable".
Again in paragraph 13 the insurer pleaded that the "truck at the time of the accident was being unauthorisedly used and driven without the permission or authority of the owner.
As the truck was being used without the authority of the owner, therefore, the owner is not vicariously liable for the tort.
The replying respondent is, therefore, also not liable." The first respondent, the owner of the vehicle filed his written statement on 16th November, 1961.
In his statement he stated while dealing with the merits in paragraph 1 that "this truck did not meet with any accident nor was any intimation sent to the replying respondent".
In paragraph 2 he stated that "No such accident occurred as alleged in which the husband of the applicant may have been killed due to the negligence of the driver of respondent No. 1.
Allegation of negligence on the part of the driver is denied as incorrect.
" On these pleadings parties went to trial.
The claimants examined 5 witnesses AWs 1 to AWs 5.
AW. 1 is Bachan Singh.
He was sleeping on the night of occurrence on the roof of the Trade Union Office.
The witness and others heard hue and cry at night when the offending truck 304 ran over the deceased.
Bachan Singh and others came down and extricated the deceased and two other persons from underneath the truck.
The deceased died at the spot and two other injured were removed to the Civil Hospital, Jullundur.
AW. 2 is Darshan Singh.
He stated that he was sleeping in his truck on the night of the accident.
He on hearing the alarm got up and saw the two constables where the accident had taken place.
Bhagwan Das was extricated from underneath the truck with two other injured persons.
Bhagwan Das died at the spot.
According to the witness the accident took place at 2 A.M. and the deceased was carried in the same offending truck to the hospital.
AW. 3 is not a material witness as he does not speak of the incident but only saw the dead body and identified it.
AW. 4 is Shiv Charan Das.
He and another constable were on patrol duty on the night of the occurrence.
At 1 a.m. the truck came from Jullundur side at a fast speed and turned towards the adda of the Union.
Three persons including the deceased were sleeping on the kacha on cot which were run over.
The deceased was injured seriously.
He along with others were removed to the Civil Hospital, Jullundur, in the same truck.
The witness lodged the F.I.R. with the A.S.I. who came at the spot from Kartarpur.
In cross examination the witness stated "So far as I remember Anoop Singh had no driving licence." AW. 5 was on patrol duty along with AW. 4 and at about 1 a.m. he saw the truck coming from Jullundur side with registration No. PNJ 6430 at a fast speed.
The truck turned to its left and overran the three cots on which three persons were sleeping and struck against the door of union office.
The sleepers on the cots were injured and Bhagwan Das had died subsequently.
According to the witness one Anoop Singh was driving the truck.
In cross examination he stated "I do not know if Anoop Singh possessed the driving licence".
On the side of the respondents three witnesses RWs.
1 to 3 were examined.
1 is the owner of the vehicle.
He stated that on the night of the occurrence they drove the truck from Jullundur to Jallowal, his village, and parked it at 11.30 p.m. on the roadside.
They left the truck and slept in their houses.
They were informed by one Ishar Singh that the truck was missing.
They left in search of the truck at about 1 a.m. at Bhogpur.
At Bhogpur they learnt at 1.30 a.m. that the said truck was involved in an accident.
He did not know who removed the truck.
Though he went to report the loss of the truck to the police, as he learnt that the truck was caught in an accident he did not go to the police station and lodge the report about the theft of the vehicle.
He denied that Anoop Singh was driving the truck and caused the accident.
2 is Anoop Singh.
He stated that he did not know driving 305 and had not driven the truck in question nor did he cause any accident.
The evidence of RW.
3 is not material.
On the pleadings and the evidence referred to the Motor Accidents Claims Tribunal came to the conclusion that the claimants had failed to establish the identity of the driver and that the claimants were not even aware of the name of the driver who had driven the offending truck.
Thus the applicants had failed in proving their case.
In view of this finding the Claims Tribunal observed that it had no other alternative but to decide the issue against the applicants.
Because of this finding it felt it was not necessary to discuss the other issues.
The appeal by the claimants was rejected by the High Court.
The High Court agreed with the finding of the Claims Tribunal and observed that "There is no doubt that the evidence on record is not enough to show that Anup Singh or any other person directly or tacitly authorised by Sirbaksh was driving the truck at the time of accident.
Anup Singh as is evident from the material on the record did not possess the driving licence.
It is difficult to believe that Sirbaksh Singh could have allowed him to drive his truck without a driving licence.
" Holding that the truck was stolen by some irresponsible person who did not know driving and caused the accident by his reckless driving the High Court found that the owner of the truck cannot be held to be responsible.
It is distressing to note that neither the Claims Tribunal nor the High Court considered the relevant evidence in the case.
The claim was rejected by the Tribunal on the ground that the identity of the driver had not been established and by the High Court on the ground that "It is evident that Anoop Singh did not possess a driving licence and that the truck was stolen by some irresponsible person who did not know driving and that the owner cannot be held to be responsible".
We cannot help observing that the plea put forward by the insurer is on the face of it frivolous and totally unacceptable.
According to the insurer by his written statement which was filed on 10th October, 1961 a month before the written statement of the owner was filed, it was pleaded that somebody stole away the truck without the knowledge of the owner or the driver.
It was further contended that the vehicle was being driven at the relevant time by a person who had no driving licence and was not even an authorised driver of respondent No. 1 as he had stolen the truck.
The plea of the owner in his written statement which was filed on 16th November, 1961 more than a month thereafter is that "This truck did not meet with any accident nor was any intimation sent to the replying respondent".
It may be noted that in this written statement which was filed after a fairly long interval there is no allegation by the owner that the truck was stolen.
We do not know 306 on what basis the insurer about a month before the written statement was filed by the owner alleged that the truck was stolen without the knowledge of the owner or the driver.
While the owner did not complain about any theft of the vehicle the insurer professes further knowledge that the vehicle was driven by somebody who had no driving licence without the authorisation of the owner.
The F.I.R. was lodged at the police station at 4 30 a.m. at Kartarpur which is 12 miles from the scene of occurrence.
The occurrence took place at about 2 a.m.
In the F.I.R. which was lodged without any delay, Shivcharan Das Constable, who is examined as AW. 4 stated that he was on patrol duty along with Joginder Nath and when they reached the pucca road near Truck Stop Union Bhogpur the truck No. 6430/PNJ which was being driven by Anoop Singh driver at a very fast speed and carelessly, came and turned to the left below the road towards Truck Union.
The truck overran the three cots and collided against the doors of the room of Truck Union Office and stopped.
All the three cots were smashed and the three persons sleeping over them were seriously injured.
He further stated that Anoop Singh ran away leaving the truck.
The injured along with the deceased were taken to the Civil Hospital Bhogpur for treatment.
As the doctor was not present the two injured were taken to Jullundur in the same truck.
The F.I.R. was immediately registered.
This witness in his evidence corroborated what he stated in the F.I.R. The evidence of A.W.4 was also corroborated by the testimony of AW. 5, Joginder Nath, who was on patrol duty along with AW. 4.
He stated that at about 1 a.m. a truck came from Jullundur side with registration No. PNJ 6430 with fast speed.
It turned to its left and overran the three cots in which three persons were sleeping and struck against the door of the Union 's office.
The Motor Accidents Claims Tribunal rejected the evidence of AWs.
4 and 5 on the ground that as the time of accident is said to be 1 a.m. it is not possible for the witnesses to have recognised the driver.
The evidence of AW. 4 was rejected as he failed to identify Anoop Singh.
5 stated that he knew Anoop Singh and that it was he who was driving the truck and that Anoop Singh ran away after causing the accident.
Neither AW. 4 nor AW. 5 was asked that they would not have been in a position to see the driver as they were about 30 to 40 yards away when the accident took place.
According to AW.
4 the deceased and the other injured were removed to the Bhogpur hospital and from there to the Jullundur hospital in the same truck.
We fail to understand the basis on which the Claims Tribunal came to the conclusion that the identity of the driver was not established.
Equally, unacceptable is the conclusion of the High Court that "as suggested by the counsel for the respondents the truck was stolen by some irres 307 ponsible person who did not know the driving and by his reckless act caused the accident.
" There has been practically no discussion of the evidence of AWs.
4 and 5.
There is no reference to the prompt F.I.R. lodged by AW. 4 who was on patrol duty wherein the material particulars about the incident and the driver have been furnished.
The suggestion made by the counsel for the respondents that the truck was stolen, as pointed earlier, was not pleaded by the owner of the vehicle even though he filed his written statement on 16th November, 1961, about a month after the date of the occurrence.
All that the owner stated was that the truck did not meet with any accident.
When he was examined he stated that he parked the truck at 11 30 p.m. on the roadside but when he returned he found the truck missing.
He left in search of the truck at 1 a.m. and learnt at 1 30 a.m. that the truck was involved in an accident.
Though he went to report the loss of the truck as he learnt that it was involved in an accident he did not go to the police station and lodge a report regarding theft.
This statement is directly contrary to what he stated in the written statement that the truck did not meet with any accident.
The insurer who filed his written statement a month before the owner filed the written statement stated that the truck was stolen by somebody and that a report to the police was made to this effect.
No such report was ever made to the police and this statement is clearly false.
Later in the course of the statement the insurer stated that the truck did not meet with any accident.
He further went to the extent of stating that somebody stole away the truck without the knowledge of the owner of the driver, and that if at all it is only the person who was driving the truck who is liable and not the owner.
It is significant to note that no one was examined to substantiate the facts alleged in the written statement of the insurer.
The insurer was not satisfied with the above mentioned false, frivolous and irresponsible allegations.
He proceeded to state that the driver who was driving the vehicle did not have a driving licence and was not the authorised driver of the owner as he had stolen the truck.
Apart from not examining himself the insurer did not make any attempt to substantiate his plea that the driver who was driving the vehicle did not have the driving licence.
We are constrained to state that the plea taken by both the owner and the insurer is palpably false and made without any sense of responsibility with a view to somehow escape the liability.
It is most unbecoming of an insurance company to have acted in this callous and irresponsible manner.
There is no finding by the Claims Tribunal that the truck was driven by an unauthorized person.
The High Court found that the truck ought to have been stolen and driven by some irresponsible person who did not know the driving.
The High Court has stated "Anoop Singh as is 308 evident from the material on record did not possess the driving licence".
The evidence that Anoop Singh was driving the vehicle was given by AWs.
4 and 5, the policemen on patrol duty.
According to AW.
4 the truck was driven by Anoop Singh.
In fact in his F.I.R. he stated that it was Anoop Singh who was driving the truck.
In cross examination the witness stated that the case against Anoop Singh is still pending in the court and as far as he could remember he had no driving licence.
5 when questioned stated: "I do not know if Anoop Singh possessed the driving licence".
According to the owner Anoop Singh was not the driver and it was wrong to say that Anoop Singh was driving the truck and caused the accident.
Anoop Singh when examined as RW.2 stated that he did not know driving and had not driven the truck in question nor did he cause any accident.
As we have pointed out earlier the evidence of the owner of the truck is totally unreliable.
The evidence of RW. 2 is self serving and is made with a view to escape the prosecution that was launched against him.
The only material about Anoop Singh not having a driving licence is the statement of AW. 4 in cross examination that he did not remember whether Anoop Singh had a licence and that of AW. 5 that he did not know whether Anoop Singh possessed the driving licence.
It is surprising that the High Court observed "It is evident from the material on record that Anoop Singh did not possess the driving licence." Under Sec.
96(2) (b) (ii) the insurer can defend a claim for compensation on the ground that the vehicle was driven by a person who was not duly licensed.
Apart from making the averment in his written statement the insurer did not take any steps to establish that the vehicle was driven by a person who was not properly licensed.
The evidence of AWs.
4 and 5 who have been examined clearly establishes that Anoop Singh was driving the vehicle.
The two stray suggestions and the reply given by the two witnesses is not sufficient to establish that Anoop Singh was not licensed to drive a truck.
It is the duty of the insurer to have substantiated his plea.
We have no hesitation in rejecting the insurer 's plea as false especially as the owner who filed the written statement a month later did not support the former 's plea.
The deceased at the time of his death was working as Patwari and was drawing Rs. 109/ p.m. as his salary.
The wife of the deceased Bishan Devi as AW. 6 has deposed that the deceased was drawing a salary of Rs. 109/50 per month out of which he used to handover Rs. 100/ to her for household expenses.
The deceased had many more years to go and his contribution to the household which consisted of his wife and four children would have increased.
In the circumstances we feel that a compensation of Rs. 20,000/ and costs of 309 Rs. 2,500/ in all the courts is payable by the two respondents to her and the four children.
The wife and the four children will take the amount equally.
The amount of Rs. 20,000/ will bear interest at 6% per annum from the date of the claim i.e. from 4th September, 1961.
There will be a joint decree against both the respondents.
The instant case brings into focus the difficulties experienced by dependants in obtaining relief before the Motor Accidents Claims Tribunal.
The victim in this case Bhagwan Das was run over by a Motor vehicle on the night between 8th and 9th July, 1961 leaving behind him his wife Bishan Devi and four minor children.
For Eighteen long years they have been before courts asking for some compensation for the death of their bread winner due to rash and negligent driving of a motor vehicle.
One is tempted to remark that they would have been better of but for their hope of getting some relief in courts.
They not only had to spend their time in courts but to borrow to fight for their rights.
It is common knowledge that such helpless and desperate condition is exploited by unscrupulous persons who manage to get away with the bulk of the compensation money if and when the claimants succeed in getting it.
The law as it stands requires that the claimant should prove that the driver of the vehicle was guilty of rash and negligent driving.
The burden thus placed is very heavy and difficult to discharge by the claimant.
The records of police investigation are not made available to the Tribunal.
The officers who investigated the accident are seldom available to give evidence before the Claims Tribunal and assist in coming to a proper conclusion.
The insurance company in quite a few cases, as in the present one, takes an unreasonable stand and raises all sorts of untenable pleas just to thwart relief to the dependants.
In many of the claims it turns out to be beyond the capacity of the claimant to maintain his claim in a court of law.
Due to the inordinate delay in disposal of claim petitions before the motor Claims Tribunal the badly needed relief to the claimants is not available for several years.
Further time is taken in appeals.
All along the dependants will have to carry on without any relief.
It has been time and again pointed out by courts that insistence of proof of rash and negligent driving causes considerable hardship on the claimants.
We may point out that repeated suggestions have been made by this Court and several High Courts expressing the desirability of bringing a social insurance which would provide for direct payment to the dependants of the victim.
This Court in Minu B. Mehta and Anr.
vs Balkrishna Ramchandra Nayan and Anr. has referred to the deci 310 sion of the Kerala High Court in Kasavan Nair vs State Insurance Officer where the High Court expressed itself thus: "Out of a sense of humanity and having due regard to the handicap of the innocent victim in establishing the negligence of the operator of the vehicle a blanket liability must be cast on the insurers.
" The Madras High Court in M/s. Ruby Insurance Co. Ltd. vs V. Govindaraj and Ors. has suggested the necessity of having social insurance to provide cover for the claimants irrespective of proof of negligence to a limited extent say Rs. 250/ to Rs. 300/ a month.
In a recent decision in the State of Haryana vs Darshan Devi & Ors.
this Court observed: "Now that insurance against third party risk is compulsory and motor insurance is nationalised and transport itself is largely by State Undertakings, the principle of no fault liability and on the spot settlement of claims should become national policy.
" Unless these ideas are accepted by the legislature and embodied in appropriate enactments Courts are bound to administer and give effect to the law as it exists today.
It is for the legislature to make provisions for immediate and adequate relief to the dependants in motor accident cases.
The legislature may consider making the liability to pay minimum compensation absolute as is provided for to the dependants of victims in rail and air accidents.
When a person dies in a motor accident, the number of his dependants and the period of their dependency may be ascertained.
The minimum compensation may be paid every month to the dependants according to their share for the period to which they are entitled.
The insurance companies are now nationalised and the necessity for awarding lump sum payment to secure the interest of the dependants is no longer there.
Regular monthly payment could be made through one of the nationalised banks nearest to the place of residence of the dependants.
Payment of monthly instalments and avoidance of lump sum payment would reduce substantially the burden on the insurer and consequently of the insured.
Ordinarily in arriving at the lump sum payable, the Court takes the figure at about 12 years payment.
Thus in the case of monthly compensation of Rs. 250/ payable, the lump 311 sum arrived at would be between 30,000/ and 35,000/ .
Regular monthly payment of Rs. 250/ can be made from the interest of the lump sum alone and the payment will be restricted only for the period of dependency of the several dependants.
In most cases it is seen that a lump sum payment is not to the advantage of the dependants as large part of it is frittered away during litigation and by payment to persons assisting in the litigation.
It may also be provided that if the dependants are not satisfied with the minimum compensation payable they will be at liberty to pursue their remedies before the Motor Accident Claims Tribunal.
N.V.K. Appeal allowed.
|
The appellants in their claim petition, before the Motor Accidents Claims Tribunal, claimed Rs. 50,000/ as compensation alleging that the husband of the first appellant was run over by a truck which was driven in a rash and negligent manner.
Appellants 2 to 5 were the minor children of the first appellant.
The claim was contested by the owner of the truck, Respondent No. 1 and the insurer, Respondent No. 2.
A written plea was filed by the second respondent contending that the truck had been stolen by somebody while it was standing, that a report to the police had been made to this effect and that the truck was driven without the consent of the owner and consequently the respondents were not liable.
It was further pleaded that the replying respondent was absolved from any possible liability in connection with the alleged accident under the provisions of Ss. 95 and 96 (2) of the .
The first respondent in his written statement filed about a month after that of the second respondent, contended that the truck did not meet with any accident nor was any intimation sent to the replying respondent.
The Motor Accident Claims Tribunal, came to the conclusion from the pleadings and evidence that the claimants had failed to establish the identity of the driver and the claimants not even being aware of the name of the driver who had driven the offending truck, had failed to prove their case and rejected the claim.
The appeal of the claimants to the High Court was rejected, the High Court agreeing with the finding of the Claims Tribunal and further holding that the truck was stolen by some irresponsible person who did not know driving and by reckless driving caused the accident and therefore the owner of the truck cannot be held responsible.
Allowing the appeal, ^ HELD: 1.
According to the insurer by his written statement which was filed a month before the written statement of the owner it was pleaded that somebody stole the truck without the knowledge of the owner or the driver.
The plea of the owner in his written statement filed more than a month there after, was that the truck did not meet with any accident.
While the owner did not complain about any theft of the vehicle, the insurer professed further knowledge that the vehicle was driven by somebody who had no driving licence 301 and without the authorisation of the owner.
Apart from not examining himself the insurer did not make any attempt to substantiate his plea that the driver who was driving the vehicle did not have the driving licence.
The plea taken by both the owner and insurer is palpably false and made without any sense of responsibility with a view to somehow escape liability.
It is most unbecoming of an insurance company to have acted in this callous and irresponsible manner.
[305 F H, 306B, 307G] 2.
There is no finding by the Claims Tribunal that the truck was driven by an unauthorised person.
The High Court found that the truck ought to have been stolen and driven by some irresponsible person who did not know driving.
According to AW 4 the truck was driven by RW 2.
In fact in the F.I.R., AW 4 stated that it was RW 2 who was diving the truck.
In cross examination he stated that the case against RW 2 is still pending in the court and as far as he could remember he had no driving licence.
The evidence of the owner of the truck is totally unreliable.
The evidence of RW 2 is self serving and is made with a view to escape the prosecution that was launched against him.
It is therefore surprising that the High Court observed that it is evident from the material on record that RW 2 did not possess the driving licence.
[307H 308D] 3.
Under section 96(2)(b)(ii) the insurer can defend a claim for compensation on the ground that the vehicle was driven by a person who was not duly licensed.
Apart from making the averment in his written statement the insurer did not take any steps to establish that the vehicle was driven by a person who was not properly licensed.
The evidence of AWs.
4 and 5 clearly establishes that R.W. 2 was driving the vehicle.
[308E F] 4.
The Motor Accident Claims Tribunal rejected the evidence of AWs.
4 and 5 on the ground that as the time of accident is said to be 1 a.m. it is not possible for the witnesses to have recognised R.W. 2 (driver).
The evidence of AW 4 was rejected as he failed to identify RW 2.
AW 5 stated that he knew RW 2 and that it was he who was driving the truck and that he ran away after causing the accident.
The basis on which the Claims Tribunal came to the conclusion that the identity of the driver was not established is not acceptable.
Equally unacceptable is the conclusion of the High Court that as suggested by the counsel for the respondents the truck was stolen by some irresponsible person who did not know driving and by his reckless act caused the accident.
There has been no discussion of the evidence of AWs 4 and 5.
[306F G, H 307A] 5.
The deceased at the time of his death was working as a Patwari and was drawing Rs. 109/ per month as his salary, out of which he used to handover Rs. 100/ to Appellant No. 1 for household expenses.
The deceased had many more years to go and his contribution to the household which consisted of his wife and four children would have increased.
Rs. 20,000/ as compensation and Rs. 2,500/ as costs awarded.
[308H 309A] 6.
The instant case brings into focus the difficulties experienced by dependants in obtaining relief before the Motor Accidents Claims Tribunal.
The law as it exists, requires that the claimant should prove that the driver of the vehicle was guilty of rash and negligent driving.
The burden thus placed is very heavy and difficult to discharge by the claimant.
The records of police investigation are not made available to the Tribunal.
The officers who investigated the accident are seldom available to give evidence before the Claims Tribunal and assist it in coming to a proper conclusion.
The insurance company in quite a 302 few cases, takes an unreasonable stand raises all sorts of untenable pleas just to thwart relief to thee dependants.
In many of the claims it turns out to be beyond the capacity of the claimant to maintain his claim in a court of law.
It is for the legislature to make provisions for immediate and adequate relief to the dependants in motor accident cases.
[309B, E F, 310E] 7.
The legislature may consider making the liability to pay minimum compensation absolute as is provided for to the dependants of victims in rail and air accidents.
When a person dies in a motor accident, the number of his dependants and the period of their dependency may be ascertained.
The minimum compensation may be paid every month to the dependants according to their share for the period to which they are entitled.
The insurance companies being nationalised the necessity for awarding lump sum payment to secure the interest of the dependants is no longer there.
Regular monthly payments could be made through one of the nationalised banks nearest to the place of residence of the dependants.
Payment of monthly instalments and avoidance of lump sum payment would reduce substantially the burden on the insurer and consequently of the insured.
[310E G] Minu B. Mehta & Anr.
vs Balkrishna Ramchandra Nayan & Anr., 1977.
Accidents Claims Journal 118; State of Haryana vs Darshan Devi & Ors., 1979 Accidents Claims Tribunal 205; referred to.
|
Criminal Appeal No. 530 of 1978 From the Judgment and Order dated 13.9.1978 of the Punjab and Haryana High Court in Criminal Appeal No. 1154 of 1975.
M.L. Verma, S.K. Bagga and Mrs. section Bagga for the Appellant.
Tara Chand Sharma and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by AHMADI, J.
The appellant, having been convicted by the learned Sessions Judge, Chandigarh under Section 302.
I.P.C., and his appeal against conviction having been dis missed by the High Court of 943 Punjab & Haryana, has preferred this appeal by special leave.
The conviction of the appellant is principally based on the ocular evidence of PW 2 Kesho Gupta and PW 4 Varinder Singh.
The facts emerging from the evidence of these two main witnesses coupled With the evidence of the other prose cution witnesses may be stated as follows: PW 5 Mangal Dass was the owner of House No. 3220 in Sector 23 D, Chandigarh, consisting of the ground floor and the first floor.
The ground floor was occupied by Mangal Dass himself while the first floor consisting of four rooms and a kitchen was tenanted; two rooms and a kitchen were rented to PW 4 while the other two rooms were occupied by Sikander Lal, the father of the appellant and Amrit Lal (the acquitted accused).
PW 2 Kesho and his brother Nitya Nand (deceased) belonged to village Narnaul to which PW 4 also belonged.
They had come to Chandigarh a couple of years back and were sharing the accommodation with PW 4.
As Amrit Lal 's marriage was scheduled on December 7, 1974, a request was made to PW 4 by Sikander Lal to permit the use of the kitch en for a few days.
Accordingly, the possession of the kitch en was delivered to Sikander Lal on December 4, 1974 on a clear understanding that it would be returned to PW 4 after the marriage.
As the possession of the kitchen was not returned immediately after the marriage, PW 2 and his de ceased brother Nitya Nand demanded possession thereof from Sikander Lal.
They were initially put off but according to the prosecution the possession of the kitchen was delivered on January 1, 1975.
However, as the kitchen had to be cleaned it was not occupied by PW 2 and PW 4 till January 3, 1975 on which date the family members of Sikander Lal are stated to have re entered the kitchen.
It may here be men tioned that this part of the prosecution evidence has not been accepted by the learned Sessions Judge.
According to the learned Sessions Judge, the possession of the kitchen was not delivered to PW 4 till January 3, 1975 and that led to the quarrel in which PW 2 received a knife injury on the neck and his brother Nitya Nand lost his life.
On this aspect of the matter, the High Court has not expressed any opinion.
On a perusal of the relevant evidence we are in clined to think that the finding of fact recorded by the learned Sessions Judge in this behalf is correct.
On January 3, 1975, at about 7.15 p.m., PW 2 and his deceased brother had an heated argument with the appellant and his brother Amrit Lal in regard to the return of the kitchen.
In the course of this heated exchange PW 2 is alleged to have showered filthy abuses.
Although PW 2 denies this fact, PW 4 has admitted the same.
PW 2 also threatened to throw out the utensils and lock the kitchen.
Since 944 PW 2 was uttering filthy abuses in the presence of the appellant 's sister and Nitya Nand did not restrain him, the appellant got enraged, went into the kitchen and returned with a knife with which he inflincted one blow on the neck of PW 2 causing a bleeding injury.
In the melee the appel lant inflicted three knife blows to Nitya Nand; one on the shoulder, the other on the elbow and the third on the chest, as a result whereof Nitya Nand collapsed to the floor and later died while on the way to the hospital.
The fact that Nitya Nand died a homicidal death is not in dispute.
The appellant 's defence was that on the date of the incident PW 2 and his deceased brother had demanded vacant possession of the kitchen and on being told that PW 4 had permitted them to continue to occupy it they uttered filthy abuses in the presence of his sister and on being asked to desist from using such language PW 2 began to throw out the utensils from the kitchen.
When the appellant tried to stop him from doing so, PW 2 took out a knife from his pant pocket whereupon the appellant took shelter behind a door.
PW 2 rushed towards him with the knife but in the meanwhile Nitya Nand moved in between and sustained the injuries in question.
The courts below have, however, concluded, and in our opinion rightly, that the appellant had in the course of the quarrel given stab wounds to PW 2 and the deceased Nitya Nand.
The learned Advocate for the appellant submitted that there was no previous iII will between the parties, on the contrary the relations were cordial and the appellant was not the one who had started the quarrel but he acted in the heat of passion during a sudden quarrel without any premedi tation and hence Exception 4 to Section 300, IPC was clearly attracted.
On the other hand the learned counsel for the State argued that the High Court had rightly held that the appellant had acted in a cruel and unusual manner and was not entitled to the benefit of the said exception.
He sub mitted that the appellant had attacked an unarmed person and had caused as many as three injuries which showed that he had acted in a cruel manner.
The appellant 's counsel coun tered by pointing out from the evidence of PW 1 Dr. Goyal that the appellant had a deformity in the left leg which restricted his movement and he would ordinarily not venture to attack unless he was forced by circumstances to use the weapon to contain PW 2.
Exception 4 to Section 300 reads as under: "Exception 4: Culpable homicide is not murder if it is 945 committed without premeditation in a sudden fight in the heat of passion upon a sudden quarrel and without the offender having taken undue advantage or acted in a cruel or unusual manner.
Explanation: It is immaterial in such cases which party offers the provocation or commits the first assault." To invoke this exception four requirements must be satisfied, namely, (i) it was a sudden fight; (ii) there was no premeditation; (iii) the act was done in a heat of pas sion; and (iv) the assailant had not taken any undue advan tage or acted in a cruel manner.
The cause of the quarrel is not relevant nor is it relevant who offered the provocation or started the assault.
The number of wounds caused during the occurrence is not a decisive factor but what is impor tant is that the occurrence must have been sudden and unpre meditated and the offender must have acted in a fit of anger.
Of course, the offender must not have taken any undue advantage or acted in a cruel manner.
Where, on a sudden quarrel, a person in the heat of the moment picks up a weapon which is handy and causes injuries, one of which proves fatal, he would be entitled to the benefit of this exception provided he has not acted cruelly.
In the present case, the deceased and PW 2 had entered the room occupied by Sikander Lal and his family members and had demanded vacant possession of the kitchen.
When they found that the appel lant was disinclined to handover possession of the kitchen, PW 2 quarrelled and uttered filthy abuses in the presence of the appellant 's sister.
On the appellant asking him to desist he threatened to lock up the kitchen by removing the utensils, etc., and that led to a heated argument between the appellant on the one side and PW 2 and his deceased brother on the other.
In the course of this heated argument it is the appellant 's case that PW 2 took out a knife from his pant pocket.
This part of the appeIIant 's case seems to be probable having regard to the antecedents of PW 2.
It is on record that PW 2 was convicted at Narnaul on two occa sions under Section 411, IPC and his name was registered as a bad character at the local police station.
It was presuma bly because of this reason that he had shifted from Narnaul to Chandigarh a couple of years back and had started to live in the premises rented by PW 4.
When the appellant found that PW 2 had taken out a pen knife from his pocket he went into the adjoining kitchen and returned with a knife.
From the simple injury caused to PW 2 it would appear that PW 2 was not an easy target.
That is why the learned Sessions Judge rejected the case that Amrit Lal had held PW 2 to facilitate an attack on him by the appellant.
It further 946 seems that thereafter a scuffle must have ensued on Nitya Nand intervening to help his brother PW 2 in which two minor injuries were suffered by the deceased on the left arm before the fatal blow was inflicted on the left flank at the level of the 5th rib about 2" below the nipple It may incidentally be mentioned that the Trial Court came to the conclusion that the injury found on the neck of PW 2 was a selfinflicted wound and had therefore acquitted the appel lant of the charge under Section 307, IPC, against which no appeal was carried.
We have, however, proceeded to examine this matter on the premise that PW 2 sustained the injury in the course of the incident.
From the above facts, it clearly emerges that after PW 2 and his deceased brother entered the room of the appellant and uttered filthy abuses in the presence of the latter 's sister, tempers ran high and on PW 2 taking out a pen knife the appellant picked up the knife from the kitchen, ran towards PW 2 and inflicted a simple injury on his neck.
It would be reasonable to inter that the deceased must have intervened on the side of his brother PW 2 and in the course of the scuffle he received injuries, one of which proved fatal.
Taking an overall view of the inci dent we are inclined to think that the appellant was enti tled to the benefit of the exception relied upon.
The High Court refused to grant him that benefit on the ground that he had acted in a cruel manner but we do not think that merely because three injuries were caused to the deceased it could be said that he had acted in a cruel and unusual manner.
Under these circumstances, we think it proper to convict the accused under Section 304, Part I, IPC and direct him to suffer rigorous imprisonment for 7 years.
In the result, this appeal partly succeeds.
The order of conviction and sentence passed under Section 302, IPC is set aside and the fine, if paid, is directed to be refunded.
The appellant is convicted under Section 304 Part I, IPC and is directed to suffer rigorous imprisonment for 7 years.
S.K.A. Appeal allowed.
|
The deceased and his brother P.W. 2 were sharing accom modation with P.W. 4 as a tenant on the 1st Floor of a house in Chandigarh.
The father of the appellant also occupied two rooms on the same floor as a tenant.
As a marriage was scheduled in the family of the appellant 's father a request was made to P.W 4 to permit the use of the kitchen for a few days.
The possession of the kitchen was delivered on a clear understanding that it would be returned to P.W. 4 after the marriage.
The possession of the kitchen was however not delivered to P.W. 4 and that led to the quarrel.
The de ceased and his brother P.W. 2 had an heated argument with the appellant in regard to the return of the kitchen.
P.W. 2 was alleged to have showered filthy abuses in the presence of the appellant 's sister, and taken out a pen knife from his pocket and also threatened to throw out the utensils and lock up the kitchen.
The appellant got enraged, went into the kitchen and returned with a knife with which he inflict ed one blow on the neck of P.W. 2 causing a bleeding injury and also inflicted three knife blows to the brother of P.W. 2 as a result whereof he collapsed on the floor and later died while on the way to the hospital.
The appellant was convicted by the Sessions Judge under Section 302, Indian Penal Code and his conviction having been upheld by the High Court, he preferred an appeal by special leave to this Court.
It was contended for the appel lant that there was no previous iII will between the par ties, on the contrary the relations were cordial and the appellant was not the one who had started the quarrel but he acted in the heat of passion during a sudden quarrel without any premeditation and hence Exception 4 to Section 300, I.P.C. was applicable.
On the other hand counsel for the State argued that the High Court had rightly held that the appellant had acted in a cruel and unusual manner and was not entitled to the benefit of the said Exception, and that the three injuries inflicted showed that the appellant had acted in a cruel manner.
942 Partly allowing the appeal, this Court, HELD: To invoke Exception 4 to Section 300 I.P.C. four requirements must be satisfied, namely (i) it was a sudden fight; (ii) there was no premeditation; (iii) the act was done in a heat of passion, and (iv) the assailant had not taken any undue advantage or acted in a cruel manner.
The cause of the quarrel is not relevant nor is it relevant who offered the provocation or started the assault.
The number of wounds caused during the occurrence is not a decisive factor but what is important is that the occurrence must have been sudden and unpremeditated and the offender must have acted in a fit of anger.
[945B D] Where, on a sudden quarrel, a person in the heat of the moment picks up a weapon which is handy and causes injuries, one of which proves fatal, he would be entitled to the benefit of this Exception provided he has not acted cruelly.
[945D E] In the instant case, after P.W. 2 and his deceased brother entered the room of the appellant and uttered filthy abuses in the presence of the latter 's sister, tempers ran high and on P.W. 2 taking out a pen knife, the appellant picked up the knife from the kitchen, ran towards P.W. 2 and inflicted a simple injury on his neck.
It would be reasona ble to infer that the deceased must have intervened on the side of his brother P.W. 2 and in the course of the scuffle he received injuries, one of which proved fatal.
Under these circumstances, it is proper to convict the accused under Section 304, Part 1, I.P.C. and direct him to suffer rigor ous imprisonment for 7 years.
[946C E]
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: Special Leave Petition (Crl.) No. 2088 of 1979.
From the Judgment and Order dated 25 7 1979 of the Allahabad High Court in Criminal Revision No. 1189/79.
N. Ali Khan and A. D. Mathur for the Petitioner The Judgment of the Court was delivered by KRISHNA IYER, J.
Counsel for the petitioner states that the sentence imposed upon his client for the offence under section 7 read with section 16 of the Prevention of Food Adulteration Act must be reduced because the adulterant, namely, prohibited coal tar dye, is, in his submission, non injurious or an innocent mix.
Therefore, the imprisonment part of the sentence, it was urged, should be eliminated.
It is true that the High Court has observed that the "colour which was mixed with powdered chillies" is not mentioned in the Public Analyst 's report to be injurious to human life.
It does not follow that because it is not specifically mentioned to be injurious, it is non injurious.
Absence of evidence is not equal to evidence of absence.
For ought we know, the prohibition under the Act and the Rules has been imposed because it is harmful to human health.
It is true that the High Court has, under a mis conception, reduced the sentence, but we cannot be pressurised further into following the wrong path.
The special leave petition is dismissed.
V.D.K. Petition dismissed.
|
HELD: The prohibition under the Prevention of Food Adulteration Act and the Rules has been imposed because it is harmful to human health.
[312 G] Absence of evidence is not equal to evidence of absence.
Non mention in the Public Analyst 's report that the "colour which was mixed with powdered Chillies" was injurious to human life does not amount to the adulterant being non injurious.
When the High Court under this misconception has already reduced the sentence, this Court cannot under article 136 of the Constitution be pressurised further to follow the wrong path.
[312 F H]
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Civil Appeal Nos. 1105, 1245 and 1269 of 1978.
From the Judgment and order dated 12 6 78 of the Andhra Pradesh High Court in appeal against order No. 147/78.
AND SPECIAL LEAVE PETITION (CIVIL) NOS.
3648 3649/78 In the matter of H.E.H.
The Nizam 's Jewellery Trust.
465 Rajni Patel, Malini Kapadia, P. G. Gokhale, B. R. Agarwala and Gujarat & Co. for the Appellant in C.A. 1105 and for Respondent No. 3 in CA 1269/178.
O. P. Verma, B. V. Singh, Anil B. Diwan, B. Parthasarathi and J. V. Suryanarayan Rao for Respondent in CA 1105/78.
section V. Gupte, section T. Desai and A. Subba Rao for RR 4, 6 and 7 in C.A. 1105/78 and Appellant in CA 1269/78.
A. K. Sen, Anil B. Diwan, section section Hussaine, J. B. Dadachanji, K. J. John and A. G. Menses for Respondent No. 8 in CA 1105/78, 1245/78 and 1269/78.
F. section Nariman, P. R. Mridul, B. Jaivalu, Dhimant Thakkar, P. H. Parekh, C. B. Singh, Miss Vineeta Caprihan and B. L. Verma for the Appellant in C.A. 1245/78.
B. A. Zaibala, Dhimant Thakkar, P. H. Parekh and Miss Kamlesh Bansal for the Petitioner in SLP 3648/78.
n B. A. Zaibala, Dhimant Thakkar, P. H. Parekh and Mukul Mudgal for the Petitioner in SLP 3649/78.
The Judgment of the Court was delivered by SEN J.
In these appeals, one of which is by special leave and the other two on certificate, brought from a judgment of the Andhra Pradesh High Court dated June 12, 1978, the short question is whether that Court was justified in setting aside the alleged sale of 37 items of jewellery belonging to H.E.H. the Nizam 's Jewellery Trust, effected by the Board of Trustees, in exercise of their discretionary power of sale under cl. 13 of the trust deed in favour of the appellants and other successful tenderers for Rs. 14.43 crores, and accepting instead the offer of the eighth respondent, Peter Jansin Fernandez for Rs. 20.25 crores made during the pendency of the appeal before The facts of the case, so far as they are material, are not now in dispute, and are as follows: The late H.E.H. Nawab Mir Sir Osman Ali Khan Bahadur, the Nizam of Hyderabad, by ah indenture dated March 29, 1951, created a trust called H.E.H. The Nizam 's Jewellery Trust, in respect of 107 items of extremely valuable, rare and priceless jewellery of exquisite design and beauty studded with emeralds, diamonds, sapphires, rubies etc.
Of the highest quality and purity belonging to him, specified in the first Schedule, and Government securities of the aggregate face value 466 of Rs. 10 lakhs, specified in the Second Schedule, for the benefit of his two sons, Prince Azam Jha and Prince Muazzam Jah; two grandsons, Prince Mukarram Jah and Prince Muffakham Jah; two granddaughters, Princes Fatima Fouzia and Princess Amina Mirzia; daughter Shahzadi Begum, and his step brother Sahebzada Nawab Basalat Jah Bahadur.
Clause 13 of the trust deed, exhibit 'A ', confers upon the trustees the power of sale of the Jewellery, the material portion of which is in these terms: "13.
Subject to the Trusts aforesaid in respect of the articles referred to in clause 3(c), (d)7 (e) and (f) hereof, during the lifetime of his eldest son Prince Azam Jah (if and so long as the Dynasty of the Settlor continues and Prince Azam Jah succeeds him as the Nizam of Hyderabad) it shall be at the option of the trustees either to keep the said jewels and other articles mentioned in the first Schedule hereunder written unsold or to sell the same or any part thereof at such time or times and in such manner as they may in their discretion think fit, but subject as aforesaid, after death of the Settlor as well as of the said Prince Azam Jah the Trustees shall sell the said jewels and other articles specified in the First Schedule hereunder written within a period of three years after the date of the death of the survivor of the Settlor and the said Prince Azam Jah and any such sale as aforesaid shall be effected by the Trustees at such price or prices or for such consideration and on such terms as the trustees may in their absolute discretion think fit and either in India or in any foreign country without the trustees being liable or accountable to any person whomsoever for the propriety of or justification for any such sale or for the reasonableness or otherwise of the price or consideration or other terms in respect of the sale of any of the said articles. " The said jewellery is kept in the safe deposit vault of the Mercantile Bank Ltd. at Bombay.
R. N. Malhotra, Addl.
Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs, is the Chair man of the present Board of Trustees of H.E.H.
The Nizam 's Jewellery Trust, as a nominee of the Government of India.
The other four trustees are: Prince Muffakham Jah, Zaheer Ahmed, Ataur Rehmarr and M. A. Abbasi.
M. A. Ashruff is the Secretary of the Trust.
467 It appears that Prince Azam Jah died in October 1970 and there after, on July 1, 1972 the trustees submitted a memorial to the then Prime Minister of India to acquire the jewellery as they were of great historical and cultural value and keep it intact as a national heritage, and not allow it to pass into the hands of people who were interested only in their money value.
It appears that the trustees acted upon legal opinion that there was no objection to the sales being arranged through negotiation on the basis of valuation by two independent valuers.
The Government of India constituted an Experts Committee whose function was purely of an advisory nature, with a view to guide the Government whether any part of the jewellery should be acquired as antiques under the Antiquity and Art Treasures Act, 1972.
It was required to select and evaluate such items of antique jewellery as had to be acquired in the national interest.
The Experts Committee inspected the jewellery at the vault of the Mercantile Bank.
During these proceedings the Government appointed a Committee of Valuers which by its report dated January 3, 1976, valued all the 107 items of jewellery at Rs. 6,62,58,500 while Vithaldas, RW 6, the valuer appointed by the trustees, by his valuation report dated March 18, 1976 valued these 37 items of jewellery at Rs. 10,26,30,000.
Eventually, the Government of India acquired 18 selected pieces of antique jewellery for their cultural and historical importance at a mutually negotiated price of Rs. 1.17 crores.
It has been represented that the beneficiaries are in very straitened circumstances due to the abolition of privy purse, heavy incidence of income tax and wealth tax, and are heavily indebted due to the trustees applying the income of the trust largely towards payment of taxes, making it increasingly difficult to maintain themselves.
The beneficiaries were, therefore, pressing the Board of Trustees to effect an immediate sale of the 37 items of jewellery.
On January 9, 1978 it is alleged that there was a meeting of the Board of Trustees.
Malhotra, who is the Chairman, conveyed to the trustees that the Government of India were not likely to acquire any of the 37 pieces of jewellery with regard to which negotiations were being made.
The Board of Trustees accordingly passed a resolution to sell the jewellery immediately.
The next meeting of the Board was held on January 25, 1978 but Malhotra could not attend it.
Pursuant to the resolution of the Board of January 9, 1978, the Secretary of the trust applied to the Director of Archaeological Survey of India, for the grant of clearance for sale of the said jewellery; and 468 in consultation with Dinshaw Jehangir Gazdar, RW 3, a noted jeweller of Bombay, with the concurrence of M. A. Abbasi decided upon the procedure to be adopted for the eventual sale of these 37 items of jewellery.
It appears that the conditions of sale, exhibit B 49, were got drafted by M. A. Abbasi, one of the trustees, and M. A. Ashruff, Secretary, through a firm of solicitors.
Conditions 11 and 12, which formed an integral part of the contract of sale, are as follows: "11.
Tenders will be opened by the Trustees on the date announced at the time of inspection and the party whose tender is accepted will be notified soon thereafter.
The jewellery shall on acceptance of the tender become immediately the property of the buyer and shall be available for delivery to the buyer immediately thereafter on payment of the balance of 90% of the tendered amount as specified in para 12 below.
If delivery is not taken at that time the jewellery will be held for and on behalf of the tenderer at his risk.
Tenderers whose offers are accepted will be required to deposit in full the tendered amount (after deducting the amount of 10% deposited as per clause 4 above) on the date or dates to be announced on the day of inspection before taking delivery.
It is hereby agreed that if the tenderer fails to pay the balance amount within the stipulated period, the sale shall stand cancelled and the earnest money paid by him to the Trust shall be forfeited by the Trustees and the Trustees shall be at liberty to offer the same jewellery at the next sale and any deficiency arising at such sale together with all expenses arising from the subsequent sale shall be borne by the tenderer who shall also pay interest at the rate of 10% per annum to the Trust until the completion of the resale.
" On January 31, 1978, Gazdar sent intimations (Exs. B.130 133) to some foreign and Indian nationals abroad regarding the intended sale of the jewels.
It appears that M. A. Ashruff, Secretary, also addressed letters dated February 8/10, 1978 (Exs.
B.72 87) and also sent telegrams dated February 25, 1978 (Exs.
B.88 100) to 29 reputed dealers, seven of whom were jewellers from abroad and the remaining 22 in the country, as per list exhibit B 46.
The letters of the Secretary as far as material, read: "The unique collection of the fabulous oriental jewellery of the once richest man of the world, HEH the Nizam 469 of Hyderabad and Berar, the erstwhile premier prince of India, is coming up for sale in Bombay sometime during the first or second week of March 1978.
The exact dates will be notified later.
" The telegrams sent by him mentioned that: 'inspection of the jewellery could be had from March 6 to 9 '.
It would thus appear that the intending buyers were not notified the date of sale.
The 37 items of jewellery put up for sale were divided into 16 groups.
Inspection of these 37 items of jewellery was to be offered to the intending bidders from March 6 to March 9.
During the course of inspection, however, the trustees decided to restrict the period of inspection till March 8 and they informed the intending bidders accordingly, and asked them to give their bids before a particular hour an March 9.
On the 8th of March, Malhotra was present throughout, at the Mercantile Bank Ltd., and there was also a meeting of the Board of Trustees.
The resolution of the Board of Trustees of March 8, 1978 (exhibit B. 106) was in these terms: "1.
To confirm the minutes of the last meeting.
The Minutes of the last meeting of the Trustees held on 5th March, 1978 were confirmed.
Consideration and decision on tenders received.
Resolved that the tenders received be examined and decided by the Trustees present at the meeting to be held for the purpose on 9th March, 1978.
And further resolved that in case such Trustees did not find a satisfactory offer or offers in respect of any of the items offered for sale, they may reject the tendered offers and negotiate the sale of any item with any party for a higher price.
Delivery of articles sold.
Resolved that the delivery of articles sold be arranged on dates convenient to the Trustees preferably not later than 25th March 1978.
" The Chairman of the Board of Trustees, Malhotra was admittedly not present in Bombay on March 9, 1978 when the tenders were opened by the remaining four trustees.
He had to be away from Bombay on the morning of 9th and 10th March due to official 470 preoccupation at New Delhi.
He was busy at Delhi heading a group which was negotiating with a high powered Russian delegation to settle the rupee rouble exchange ratio and connected matters.
He could not leave Delhi from March 9 to 23, during which period the talks commenced earlier on January 28, 1978, had entered a crucial stage.
These talks required his personal presence at Delhi, because they were matters of national importance.
On March 9, 1978, the remaining four trustees are alleged to have opened the tenders and accepted all the highest tenders except in respect of item No. 16 of Group XIV, which was negotiated on the next day for a higher price of Rs. 6.92 crores.
On March 10, 1978, the Secretary addressed letters of acceptance Exs.
B.54 65, to the appellants and other successful bidders, requiring them to pay the balance of 90 per cent of the tender price on or before March 21 and 22, 1978 as the case may be, and to take delivery of the items of jewellery purchased by them.
In respect of the appellants M/s. Shanti Vijay & Co. the date fixed was March 17, 1978.
On March 10, 1978, the first respondent, Princess Fatima Fouzia, one of the beneficiaries and a grand daughter of the Nizam, instituted the present proceedings, being O.P. No. 141 of 1978 in the Court of the Chief Judge, City Civil Court, Hyderabad, under section 74 of the Trusts Act for removal of the present trustees for alleged dereliction of duty, negligence and mismanagement on their part, with particular .
reference to the manner in which the 37 items of jewellery belonging to the trust were brought to sale.
She also filed an application for temporary injunction under ord. 39, r. 1 of the Civil Procedure Code for restraining the trustees from taking any further steps towards the finalization of the sale of jewellery.
The application was taken up by the Court on March 14, 1978, and the learned Judge on the same day, granted an ad interim injunction restraining the trustees from taking any steps to finalise the sale of the jewellery.
On March 16, 1978, M. A. Abbasi, one of the trustees filed a counter and prayed for vacating the injunction and ultimately the Court after hearing the parties vacated the injunction on March 27, 1978.
On March 28, 1978, the first respondent, Princess Fatima Fouzia filed an appeal before the Andhra Pradesh High Court and on April 13, 1978 the High Court directed that the status quo ante be maintained.
It appears that in the meanwhile, the eighth respondent, Peter Jansim Fernandez, made an offer to purchase the 37 items of jewellery in one lot for Rs. 20.25 crores and also applied to be impleaded as a party respondent in the appeal.
On April 18.
1978, the 471 appellant M/s. Shanti Vijay & Co., one of the successful bidders, also applied to be impleaded as a party respondent.
On April 21, 1978, the High Court impleaded the appellant as a party to the appeal, and in order to test the bona fides of the eighth respondent, Peter Jansin Fernandez, directed that he should deposit the amount of Rs. 20.25 crores within one week from that date.
On such deposit being made, the eighth respondent along with his foreign counterpart were to be B. given an opportunity to inspect the 37 items of jewellery which were previously offered for sale by the Board of Trustees.
On May 8, 1978, the State Bank of India overseas Branch, Bombay furnished an unconditional guarantee to the tune of Rs. 20.25 crores on behalf of the eighth respondent and his counterpart.
The eighth respondent C: having furnished the bank guarantee, the High Court directed that inspection of the jewellery be granted to him and his counterpart at the Mercantile Bank Ltd. On May 27, 1978.
After an inspection of the 37 items of jewellary, the eighth respondent, Peter Jansin Fernandez, confirmed his offer and deposited the amount of Rs. 20.25 crores in Court, and was, therefore, permitted to intervene.
At this stage, the first respondent, Princess Fatima Fouzia, filed an application to withdraw the appeal.
The parties were heard on the application, but before any orders could be passed, her sister, Princess Amine Mirzia, the second respondent, applied for permission to be impleaded as appellant No. 2, as there was a danger of entire body of the beneficiaries being deprived of an amount of Rs. 5.78 crores.
On June 12, 1978, Princess Fatima Fouzia was permitted to withdraw and her sister Princess Amina Mirzia was brought on record as appellant No. 2.
The High Court by its order dated Jun, 12, 1978 set aside the alleged sale of the 37 items of jewellery by the Board of Trustees in favour of the appellant and other successful tenderers for a sum of Rs. 14.43 crores on the ground that there was no concluded contract between the parties and instead accepted the offer of the eighth respondent, Peter Jansin Fernandez, for the sale of the aforesaid jewellery to him for Rs. 20.25 crores.
When the matter came up for hearing before this Court, a grievance was made that the High Court had no power to set aside the sale of the jewellery by the Board of Trustees for Rs. 14.43 crores without impleading the other successful tenderers and without affording an opportunity to the appellants M/s. Shanti Vijay & Co. to substantiate their claim that there was a concluded contract for the sale of the jewellery to them for Rs. 14.43 crores.
Inasmuch as the appellants M/s. Shanti Vijay & Co. were alone a party respondent to the 472 appeal and the remaining successful tenderers were not so impleaded, the matter was remitted by this Court by its order dated September 14, 1978, to the High Court for a decision afresh on the question whether there was a concluded contract or not, after impleading all the necessary parties and affording them an opportunity to lead such oral or documentary evidence, as they desired.
In compliance of the order of this Court, the High Court impleaded the other tenderers, respondents Nos. 7 to 17 in the appeal and they were given an opportunity to substantiate their claim and they, as well as the opposite parties, filed their statements and counter statements touching upon the question of the factum, validity and propriety of the alleged sales effected by the Board of Trustees of the 37 items of jewellery for Rs. 14.43 crores in favour of the appellants and other tenderers.
In the present case, the learned Judges of the High Court in their judgment dated February 28, 1979 have very carefully examined all the evidence and have reached a result unfavourable to the appellants.
It would serve little purpose to go through the evidence which has already been dealt with in detail by these learned Judges, seeing that the accuracy of their statement of facts and the soundness of their reasoning has not been successfully criticized.
It is sufficient to say that we entirely agree with the judgment and reasoning of Kondaiah J., who delivered the judgment of the High Court on remand.
We shall only touch upon the salient features to show that no other conclusion is possible.
There was, in fact, no evidence that any binding contract came into existence.
In these appeals, three questions arise for consideration.
The first is, whether there was a concluded contract effected between the appellants and the other successful bidders of the one part, and the Board of Trustees of the other, for the sale of the 37 items of jewellery for Rs. 14.43 crores by the alleged acceptance of their bids by the four trustees on March 9, 1978; secondly, whether there was frustration of contract in that the ad interim injunction of March 14, 1978 made further performance of the alleged contracts impossible, and thirdly, whether the exercise of the discretionary power of sale exercised by the trustees conferred on them by cl. 13 of the trust deed, which is subject to the Court 's over riding power under section 49 of the Trusts Act to interdict the sale and issue necessary directions in that behalf, ought not to be set aside as an improvident sale because of the fact that an amount of Rs. 20.25 crores for the 37 items of jewellery had been offered by the eighth respondent, which showed that the trustees had not acted with prudence and due care or attention, or whether it 473 merely indicates an error of judgment on their part and the sale by them was on a mistaken impression of the actual value of the jewellery.
This in the arguments before us has resolved into two subsidiary questions, namely (1) whether in the absence of a provision for the B. delegation of powers in the trust deed, it was competent for four of the Trustees to effect a sale, and if so, whether in the absence of authorisation by R. N. Malhotra, Chairman of the Board of Trustees, the remaining four trustees could exercise the power of sale of the jewellery under cl. 13 of the deed; and (2) whether, if there was a valid acceptance of the bids as alleged, by the remaining trustees, on March 9, 1978, the Chairman of the Board of Trustees could not have accorded his approval on the Secretary 's note, exhibit B 124, dated March 14, 1978, in view of the ad interim injunction granted by the Court of the Chief Judge, City Civil Court, Hyderabad, dated March 14, 1978, by which the trustees were r strained from taking any further steps to finalize the sale of the jewellery.
The law governing the execution of trusts is well settled.
In the case of a private trust, where there are more trustees than one, all must join in the execution of the trust.
The concurrence of all is in general necessary in a transaction effecting the trust property, and a majority cannot bind the trust estate.
In order to bind the trust E. estate, the act must be the act of all.
They constitute one body in the eye of law, and all must act together.
This is, of course, subject to any express direction given by the settlor.
The Judicial Committee in Lala Man Mohan Das vs Janki Prasad quoted a passage from Lewin 's Law of Trusts, 15th ed., p. 190, to the effect : "In the case of co trustees the office is a joint one.
Where the administration of the trust is vested in co trustees they all form as it were but one collective trustee, and there fore must execute the duties of the office in their joint capacity.
It is not uncommon to hear one of several trustees spoken of as the acting trustee but the Court knows no such distinction: all who accept the office are in the eye of the law acting trustees.
If any one refuses or be incapable to join, it is not competent for the others to proceed without him, but the administration of the trust must in that case devolve upon the Court.
However, the act of one trustee done with the sanction and approval of a co trustee may be 474 regarded as the act of both.
But such sanction or approval must be strictly proved.
" which, in their opinion, contains a correct statement of law applicable in England and that the same doctrine applied to India also.
The ' decision in Lala Man Mohan Das 's case has been followed with approval by this Court in L. Jankirama Iyer & Ors.
vs Neelakanta Iyer & ors.
It follows as a necessary corollary, that where there are several trustees they must act unanimously in making a sale or a contract of sale, unless it is provided otherwise by the terms of the deed.
In exercising the power of sale, as in the exercise of other powers, a trustee cannot, therefore, properly delegate the performance of the acts which he ought personally perform.
Although a trustee may listen to the opinions and wishes of others, he must exercise his own judgment.
Thus a trustee for sale of property, cannot leave the whole conduct of the sale to his co trustees.
The reason for this is the settlor has entrusted the trust property and its management to all the trustees, and the beneficiaries are entitled to the benefit of their collective wisdom and experience: Underhill 's Law of Trusts and Trustees, 12th Ed., pp. 434, 442 43: Scot on Trusts, vol.
2, p. 1033.
In L. Janakirama Iyer 's case this Court observed that all acts which the trustees intend to take for executing the trust, must be taken by all of them acting together, as provided by section 48 of the Trusts Act, 1882.
Section 48 of the Trusts Act provides as follows: "48.
When there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides.
" It is axiomatic that where there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides.
Therefore, as laid down by this Court in L. Janakirama Iyer 's case, if the validity of an alienation effected by the trustees falls to be considered only in the light of s 48, the fact that out of the three trustees only two have executed the sale deed would by itself make the transaction invalid and would not convey a valid title to the transferee.
In the present case, as the High Court rightly observes, there is no such clause in the trust deed authorising the execution of the trusts to be carried out not by all but by one or more or majority of the trustees.
In the absence of such a specific provision, the general law 475 envisaged in section 48 of the Act would govern the rights of the parties.
We are, accordingly, of the opinion that the alleged contracts of sale entered into by the four trustees were not binding and of no legal effect, and could not be enforced.
It must necessarily follow that the alleged contracts for sale entered into by them could not ripen into concluded contracts so as to bind the entire body of beneficiaries.
It was not disputed that a trustee cannot delegate his functions except as provided in section 47, which reads: "47.
A trustee cannot delegate his office or any of his duties either to a co trustee or to a stranger, unless (a) the instrument of trust so provides, or (b) the delegation is in the regular course of business, or (c) the delegation is necessary, or (d) the beneficiary, being competent to contract, consents to the delegation.
" Section 48 is a corollary of section 47 for, if the trustees cannot delegate their duties, it follows that they must all personally perform those duties, and not appoint one of themselves to manage the business of the trust; for the settlor has trusted all his trustees, and it behoves each and every one of them to exercise his individual judgment and discretion on every matter, and not blindly to leave any questions to his co trustees or co trustee.
In the course of the arguments, the resolution of the Board of Trustees dated March 8, 1978 has been discussed with great minuteness, but we have no doubt that the view taken of it by the High Court was right.
The language used is perhaps not of a trained draftsman, but it clearly does not, in terms, confer 'authorisation ' upon the remaining four trustees to accept the bids, or any one of them.
It Learned counsel for the appellants strenuously urges that the resolution of March 8, 1978 is in two parts.
It is pointed out that the second part unequivocally confers upon the trustees the power of rejection of bids.
It is, therefore, urged that the first part must be construed with reference to the second.
It is said that we must correlate the second part to the First, and when so read, the words "be examined and decided" must, in the context in which they appear, mean the conferment of authority to reach a 'decision ', i.e., as to acceptance or rejection of bids.
It was also submitted that the words "by the trustees present" clearly meant the remaining four trustees.
It was argued that when the Board of Trustees met on March 8, 1978, the trustees knew full well that R. N. Malhotra, the Chairman could not be present at the meeting of the Board of Trustees to be held on March 9, 1978 as he had to leave Bombay on the morning of the 9th, as his presence in Delhi was 476 required for pressing official business.
Upon these premises, it is contended that the resolution of March 8, 1978 cannot but be construed as giving 'authorisation ' to the remaining four trustees to accept the bids on March 9, 1978.
While we are not oblivious of Malhotra 's statement that it was decided at the meeting on March 8, 1978 that 'the trustees were free to accept the highest tenders, if they did not see any reason to reject the same ' and also that 'if the trustees felt that a higher amount could be obtained, they could negotiate with the tenderer and obtain a higher price ' May be, that is what the trustees meant, i.e., the remaining four trustees, were fully authorised to deal with the matter in all its aspects.
But that intention of trustees is not at all manifested in the resolution of March 8, 1978, the terms of which are clear and explicit.
In the case of a trust, we are clearly of the view that the 'authorisation ' must be express, specific and in the clearest of terms.
The word "be examined and decided" in the first part of the resolution may mean anything, and are not necessarily susceptible of the only construction as contended for, namely that of 'acceptance '.
The expression "to negotiate for sale" in relation to the authority of an estate agent, has a definite legal connotation.
He gets an authority to find a purchaser, but he cannot bind the principal by entering into a contract of sale: Chadburn vs Moore and Rosenbaum vs Belson.
These two decisions have been approved of by this Court in Abdul Ahmed vs Animendra Kissen Mitter laying down that there is a substantial difference between 'to sell ' and 'to find a purchaser '.
There is no reason why the same principle should not apply with regard to the authority, if any, of the remaining trustees, in terms of the resolution of March 8, 1978.
If the second part of the resolution has to be construed with reference to the first, as is contended for, then their authority was limited to find purchasers for the jewellery, and then place the matter before a meeting of the Board of Trustees, for acceptance of their bids.
When the trustees took care in drafting the second part which relates to rejection of bids, there was no reason for their leaving any ambiguity in the first part.
It is not permissible to spell out something which is not explicit, by merely saying that it is implicit, when the language is clear and it does not bear out any such construction.
We arc not prepared to take a view which would be prejudicial to the entire body of beneficiaries.
There is no reason why the words "be examined and decided" in the first part, should not have their plain meaning that 477 the tenders were to be opened and examined by the remaining four trustees to see if they were valid tenders.
The first part did not, in our opinion, give any 'authorisation ' to the remaining trustees to accept any of the tenders.
If they did not find a satisfactory offer or offers for any of the items offered for sale they could only under the second part reject the tenders submitted.
It is needless to stress that delegation must be express.
The trend of cross examination of Malhotra also shows that his concurrence was necessary.
What transpired on March 9, 1978 is completely shrouded in mystery.
The Secretary 's note, exhibit B 124 dated March l 4, 1978 reveals that the tenders were received on March 9, 1978 in sealed covers accompanied by ten per cent of the value of jewellery tendered for, in room No. 305, Ambassador Hotel, Bombay, between 3 and 4 p.m.
It asserts that 27 tenders were received and they were opened at 4.30 p.m.
On the same day, in the presence of the trustees and except for item No. 16 of group XIV, they accepted the same.
As regards item No.1, of group XIV, negotiations were entered into with the appellants, M/s. Shanti Vijay & Co., the highest tenderer and the price of Rs. 6,81,00,000 offered by them for item No. 16 was enhanced to Rs. 6,92,00,000 which the trustees accepted.
It then mentions that acceptance letters were issued to all the tenderers whose tenders had been accepted.
The date for delivery of groups VII and XIV had been fixed for March 17, 1978 and for the other items on March 21 and 22, 1978.
The Secretary 's note, exhibit B 124 reached R. N. Malhotra, the Chairman of the Board of Trustees at New Delhi on March 23, 1978 and bears his initials of that date It is accepted before us that Malhotra was not aware till March 23, 1978 that the tenders or any of them had been accepted by the four trustees On March 9, 1978.
In his examination in chief, he states that one or two days after he had left for Delhi, the Secretary rang him up at Delhi.
He says: 'I remember that the Secretary of trust intimated to me on phone that the trustees had opened the tenders and the highest amount offered for all the items was over 14 crores.
I remember I received that phone call one or two Days after I reached Delhi and at a time when I was in my office.
I enquired of the Secretary whether the amount was the total of the highest bid for each item and he confirmed it.
I made a particular enquiry from the Secretary as to how much amount the item consisting of 22 emeralds had fetched.
The Secretary told me that item fetched over six crores.
As I was 478 broadly aware of the values of the jewels, per the valuations earlier made.
I said "Teek Hai".
" During his cross examination, he states: "When the Secretary telephoned to me within one or two days after I left Bombay he did not inform me as such that the trustees have accepted the tenders." He then goes on to say that he read in the newspapers that a suit had been instituted against the trustees at Hyderabad and that an injunction was granted, and accordingly rang up the Secretary of the Trust, and states: "I remember it was about 15th of March, 1978 and I rang up the Secretary on that very day to enquire what it was about.
Till then the Secretary did not inform me about the institution of the proceedings in the City Civil Court.
It will be more correct to say that I had not received any intimation from the Secretary before I contacted him on telephone.
" It, therefore, appears that the Secretary drew up the note, exhibit B 124, in undue haste despite the Court 's order granting the injunction.
It is not disputed that Malhotra had no knowledge of the acceptance of the tenders till March 23, 1978 when the note of the Secretary, exhibit B 124 reached him.
It is also not disputed before us that no minutes of the alleged meeting of the remaining four trustees held on March 9, 1978 exist.
We have gone through the Minutes Book of the Board of Trustees.
It reveals that minutes were regularly kept and indeed each and every meeting began with the confirmation of the minutes of the earlier meeting.
The minutes of the meetings held on March S, 1978 and of March 8, 1978 are there.
Thereafter appears the minutes of a meeting held on May 15, 1978, exhibit B 125.
But there are no minutes of the alleged meeting held on March 9, 1978.
It is thus clear that no meeting of the Board of Trustees was held at all on March 9, 1978.
The story of the alleged acceptance of bids by the remaining four trustees on March 9, 1978 appears to be.
complete myth.
The Secretary 's note, exhibit B 124 was intended to mislead R. N. Malhotra, the Chairman of the Board of Trustees, in a frantic attempt to obtain his concurrence to something which never transpired.
One fact in particular may be alluded to.
The absence of any minutes of the alleged meeting held on March 9, 1978 must, as it should, clearly excite our suspecision about the genuineness of the sale.
nm attention was drawn to the tabular statement prepared by the 479 Secretary containing acceptance of bids by the four trustees, exhibit B 123.
The authenticity of this document is not beyond question.
It is a tabular chart running into 34 large sheets with minute details.
On each of the sheets there is a letter 'A ' encircled against the highest tender, and at the foot appear the alleged initials of three trustees bearing the date March 9, 1978.
None of the remaining trustees except M. A. Abbasi have entered the witness box.
We do not know whether the initials at the foot of the document, exhibit B 123, are of the trustees or not, as none has proved them.
Nothing is known as to when the initials were put and by whom.
There is another alarming feature.
According to Abbasi, he encircled the highest tender with the letter 'A ' and then initialed it on the statement exhibit B 123.
During his cross examination, he gave a lie to this and asserted that the letter 'A ' encircled against the highest tender was not inscribed by him but by the Secretary and he only initialed it.
Though the other three trustees are alleged to have put their initials at the foot of the statement on March 9, 1978, there is nothing on record to show that all this was done that day, at one Sitting, at the same time.
This document certainly cannot take the place of the minutes of the alleged meeting.
The Secretary 's note, exhibit B 124 shows that the sealed tenders were received between 3 and 4 p.m. and they were opened at 4.30 p.m., i.e. within half an hour.
It was humanly impossible to prepare this document within such a short time.
Furthermore, if the four trustees with the assistance of the Secretary, could prepare these large tabular charts there was no reason why they could not record the minutes of the meeting, if any, held on that day showing that there was acceptance of the bids by them.
The Minutes Book is the primary evidence, and the chart cannot form the basis for a finding that there was any acceptance of the tenders on March 9, 1978.
It is apply clear that there was no meeting of the Board of Trustees on March 9, 1978.
The allegation that there was such a meeting, is completely belied by the affidavit of M. A. Abbasi, the material portion of which may be extracted: "8.
Out of the 107 items of jewellery only 37 items were put up for sale in the first instance and tenders invited.
About sixty foreign and Indian buyers of repute inspected the jewellery between the 6th and 8th March 1978 at Bombay.
On 9th March 1978 the trustees received the tenders and the same were opened on the 10th March 1978.
The highest tenders received were accepted and letters of acceptance were issued on the same day to the persons whose 480 tenders had been accepted.
In no case has any lower tender been accepted.
" This tends to suggest that the alleged meeting was held not on March 9, 1978 but on March 10, 1978.
He clearly states that the tenders were opened on March 10, 1978, they were accepted on that day and letters of acceptance were sent to the persons on the same day whose tenders had been accepted.
This is in contradiction with the Secretary 's note exhibit B 124.
It is quite clear to our mind that either M. A. Abbasi is not speaking the whole truth or that the story of the alleged meeting of the Board of Trustees of March 9, 1978 was feigned to beguile R. N. Malhotra, the Chairman of the Board of Trustees and also the beneficiaries.
We cannot rely on the bare assertion of M.A. Abbasi, RW 1 that the bids were accepted by the trustees on March 9, 1978.
It must, accordingly, be held, for all these reasons, that the High Court was justified in setting aside the alleged sale of 37 items of Jewellery belonging to H.E.H. the Nizam 's Jewellery Trust effected by the Board of Trustees in favour of the appellants and other tenderers for Rs. 14.43 crores on the ground that there was no concluded contract between the parties.
The second question is perhaps a more difficult one for the appellants to surmount, though the difficulty was sought to be explained away by saying that they had fulfilled their part of the con tract and they should not be deprived of the fruits of their bargain merely because of the Court 's injunction.
It is unfortunate that this aspect of the case was not submitted to the High Court, and we, there fore, have not the assistance of that Court 's opinion.
We, however, think, that the meaning of section 56 of the Contract Act is clear.
The section, insofar as material, runs as follows: "56.
An agreement to do an act impossible in itself void.
A contract to do an act which after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
" In the present case, cls.
11 and 12 of the conditions of sale embodied the terms of the contract.
By cl. 11, time is made the essence of contract.
Clause 11 cannot be read in isolation but both cls.
11 and 12 must be read together because they form an integral part of the contract.
These clauses in addition to making time the essence of contract, clearly provide that in the event there was a failure to pay 90 481 per cent of the tender amount, i.e., the balance of the price "the contract would be deemed to have been cancelled".
It is, however, argued that upon acceptance of the tender, the property in the goods passed to the buyer.
We are afraid, we cannot appreciate this line of argument.
It totally ignores the effect of the defeasance clause contained in cl. 12.
On a reading of both cls.
11 and 12 together, there can be no doubt that the passing of the property was dependent upon the tender of the balance of the price and the taking delivery of the goods upon payment.
Even assuming that there was acceptance of tenders by the four trustees on March 9, 1978, as alleged, hl terms of the resolution of March g, 1973, the contract was frustrated by the grant of an ad interim injunction by the Court of the Chief Judge, City Civil Court, Hyderabad on March 14, 1973.
The grant of such injunction prevented the performance of the alleged contracts.
The appellants could not have tendered 90 per cent of the tender amount, i.e., the balance of the price, by the stipulated date or taken delivery of the jewellery so long as the injunction lasted.
It is, however, pointed out that the appellants M/s. Shanti Vijay & Co. by their lawyer 's notice dated March 15, , confirmed that they had sent a telegram making a demand for delivery of the two items of the jewellery purchased by them against payment of Rs. 8.52 crores.
It is true that the letter was accompanied with a photostat copy of a certificate of foreign inward remittance of the amount.
But the fact remains that in terms of the said notice, the appellants never made a tender of the balance amount to the Board of Trustees at the Mercantile Bank at Bombay on March 17, 1978.
They knew full well that the trustees would not accept the amount nor could deliver all the jewellery in question, in view of the injunction granted by the Court.
The injunction, in terms, restrained the trustees "from taking any steps to finalise the sale of the jewellery".
The injunction was not vacated till March 27, 1978.
Even after the injunction was vacated, the appellants or other successful tenderers never made an attempt to pay the balance amount till April 13, 1978, on which date the High Court passed an order for maintaining the status quo ante.
It is nobody 's case, that a new contract was ever entered into.
We are clearly of the opinion that there was a frustration of the alleged contracts, in the facts and circumstances of the present case.
It was faintly argued by learned counsel appearing for some of the appellants that by reason of the concluding words without the trustees being liable or accountable to any person whomsoever ' in cl. 13 of the trust deed, the discretionary power of sale conferred upon the trustees 482 was not liable to be interfered with under section 49 of the Trusts Act, which is in these terms: "49.
Where a discretionary power conferred on a trustee is not exercised reasonably and in good faith, such power may be controlled by a principal Civil Court of original jurisdiction.
" After a stage in the arguments before us, learned counsel appearing for the Board of Trustees was at pains to impress upon us, that the trustees would be "subject to the directions of the Court" and would act in the best interests of the beneficiaries.
This if we may say so, is a complete change of front.
On the contrary, the submission in the High Court was that, not only the Court will refuse to restrain the exercise of discretionary power, but it will give no relief to the beneficiaries where honest exercise of such a power has by an error of judgment led to loss for, as Lord Normand said in Dundee General Hospitals Board of Management vs Walker : "It is one thing to say that the trustees must honestly discharge their trust and keep within the bounds of the powers and duties entrusted to them, and quite another to say they must not fall into errors which other persons, including a court of law, might consider unreasonable." The learned Judges of the High Court, however, have rightly, in our opinion, repelled the contention.
It was certainly open to the Board of Trustees to effect a sale of the 37 items of jewellery under cl. 13 of the deed.
But the power, although discretionary, must be exercised reasonably and in good faith.
The power conferred on the Board of Trustees is no doubt discretionary, but the principle embodied in section 49 viz., that when such discretionary power is not exercised reasonably and in good faith, such power may be controlled by a court.
There was no warrant for the suggestion made by the Board of Trustees before the High Court that the power is absolute.
The law on the subject is succinctly stated in Underhill 's Law of Trusts and Trustees, 12th Ed., p. 472: ". it would seem that, even where trustees claim to exercise their discretion as to investments, the court will, in a proper case, direct an inquiry whether it is for the interest of the beneficiaries that a particular investment should be continued or called in.
So, too, where absolute discretion has been given to trustees to do a particular act (e.g., to sell the 483 trust property), the court cannot compel them to exercise the power; but if they do exercise it, the court will see that they do not exercise it improperly or unreasonably.
" The proposition is no doubt one which speaks for itself.
When it appears from the facts that the act of the trustees in offering for sale these 37 items of jewellery at an inadequate price of Rs. 14.43 crore was not the act of all, that it was undoubtedly an improvident sale as the jewellery has been found to be worth Rs. 20.25 crores, if not more; and more so, when the alleged sale was effected by them in favour of the appellants and other bidders without trying to ascertain their actual price, it certainly follows that they acted in flagrant disregard of the interests of the entire body of beneficiaries.
It is somewhat disconcerting that throughout this litigation, the trustees should have, as they appear to have done, aligned themselves with the appellants and other successful tenderers.
They not only asserted that there was a 'concluded contract ' for the sale of 37 items of jewellery by the alleged acceptance of bids by them on March 9, 1978, but also that the Court had no power to interdict the sale under section 49.
If we may say so, the attitude adopted by the Board of Trustees was clearly against the interests of the beneficiaries.
In the present case, evidence is tendered by the trustees, not for the purpose of showing that they tried to protect the interest of the beneficiaries, but for proving facts from which it could be inferred that, accepting that the price of Rs. 14.43 crores offered by the appellants and other tenderers was wholly inadequate, the discretionary power of sale was not liable to be interfered with.
It remains then to determine whether on the whole of the evidence as tendered, the appellants have established facts from which a sale in their favour could be inferred or, that the act of the trustees was not a bona fide exercise of their power so as to attract the Court 's over riding power to annul the sale under section 49 of the Trusts Act.
The testimony, of Dinshaw Jahangir Gazdar RW 3, Kashmir Chand RW 4 and Vithaldas RW 6 goes to show that they have been in jewellary business since long, and selling jewellery belonging to several Indian princes.
Dinshaw Jahangir RW 3, was a consultant to the late Nizam for sale of his jewellery, and had also arranged the sale of jewellery belonging to late Salarjung of Hyderabad.
Kashmir Chand, RW 4, partner of the appellant firm M/s. Shanti Vijay & Co., had participated in the sale of jewellery belonging to the Maharajahs of Gwalior, Darbhanga, Jodhpur and Bikaner.
Vithaldas, RW 6, is one of approved valuers appointed by the Government of India, and had 484 valued the jewellery belonging to the Paiga of Khrusheed Jah and also some jewels belonging to the late Salarjung.
At the instance of the Government of India, he had valued the jewellery belonging to he Nizam as also the Nawab of Rampur.
According to these jewellers, the only method of sale adopted in all these sales was to inform reputed jewellers both in the country and abroad.
and none of the sales were by advertisement in the press.
As regards value of the jewellery, Dinshaw Jahangir Gazdar, RW 3, and M. A. Abbasi, RW 1, want us to believe that Rs. 14.43 crores was the 'best possible price ' that the 37 items of jewellery could ever fetch, despite the fact that the eighth respondent, Peter Jansin Fernandez, made an offer of Rs. 20.25 crores for the same, during the course of the proceedings.
For this they largely relied upon the valuation report of Vithaldas, RW 6, showing that these 37 items of jewellery were worth Rs. 10,36,30,00.
We shall deal with these witnesses later It is somewhat strange that the Board of Trustees should have, acted in a cavalier fashion in disposing of the jewellery, without trying to ascertain their actual value.
The alleged sale effected by them was clearly detrimental to the interests of the beneficiaries.
M. A. Abbasi, RW 1. admits during his cross examination, that 'the trustees had no definite idea of the value of the 37 items of jewellery ' when they were offered for sale.
He further admits that he did not consult anyone except Dinshaw Jahangir Gazdar, RW 3, about the actual value.
He also admits that he did not get in touch with any curators of Museums of foreign countries to find out whether they were interested in purchasing any of the items, nor were any letters sent to any jewellers of Holland, Belgium, United Kingdom, Switzerland and Geneva.
Even in this country, the trustees did not appear to have written to any jeweller from Calcutta, Madras, Hyderabad or Bangalore.
M. A. Abbasi states that the trustees were advised particularly by Dinshaw Jahangir Gazdar that it was not desirable to give publicity in the daily newspapers as undesirable elements might step in for inspecting the jewels and he could not assure them the bona fides of every such person, who wanted to inspect the jewellery.
He, therefore, approached some of the jewellers through letters.
Then we come to Dinshaw Jahangir Gazdar, RW 3.
It is true that this witness has wide experience in jewellery business and tries to assert that the amount of Rs. 14.43 crores offered by the successful tenderers was a 'very good price ', but then had to admit that he does not possess any qualification in gemmology.
According to this witness.
485 'there is no principle as such in valuing an item of jewellery.
One looks at it and values the same. ' He, however, had to admit that he never participated in sales of rare jewels held abroad, nor is he aware of the practice where jewels are sold abroad in auction rooms after proper advertisement.
This witness goes on to say: 'It is only a jeweller who can value jewels by having a look at them.
He will keep in consideration the size, cutting, clarity and lustre, and colour. ' Vithaldas, RW 6, also asserts that the price of Rs. 14.43 crores fetched was a 'very good price ' in March 1978 for these jewels.
When be was confronted with the offer made by the eighth respondent during his cross examination, he stated that according to him an offer of Rs. 20.25 crores for these 37 items of jewellery was a fancy price '.
He explains by saying that a fancy price would be higher than the market price.
All this evidence was led by the appellants and the other tenderers as well as by the Board of Trustees, in trying to establish that the trustees acted honestly and there was no lack of good faith on their part.
It appears that, as so often happens when one deals with another 's property, it matters little to him what price the property fetches.
But in the case of a trust, there arises the duty of the trustees to act with prudence and as a body of reasonable men.
The High Court has come to a definite conclusion that the improvident sale of the jewellery at such a low price without due public notice was not a bona fide exercise of their power conducive of beneficial management.
There is no reason for us to come to a different conclusion.
On the totality of the evidence, in our opinion, the High Court rightly came to the conclusion that though there were no mala fides, corrupt motives, fraud or mis representation on the part of the trustees and they acted honestly, the trustees in the facts and circumstances of the present case, did not act reasonably and in good faith i.e. with due care and attention.
Upon its finding that there was no concluded contract between the parties within the meaning of s 2 (h) of the Contract Act, it accepted the offer of the eighth respondent, Peter Jansin Fernandez, for Rs. 20.25 crores for the purchase of 37 items of jewellery.
It is necessary to mention that upon receipt of the findings recorded by the High Court, these appeals were placed before the Court for orders on April 18, 1979, when it issued a direction to the effect: "The parties will submit the methodology by which a maximum price may be fetched for the benefit of the bene 486 ficiaries.
Any offer which is below Rs. 20 crores will automatically be ignored." Since the Court was rising for the summer vacation from May 5, 1979, learned counsel for the eighth respondent, Peter Jansin Fernandez, made a request for withdrawal of the deposit of Rs. 20.25 crores made by him before the High Court for, the purchase of the 37 items of jewellery, and instead gave an undertaking to furnish an irrevocable bank guarantee by the State Bank of India overseas ' Branch Bombay to that extent.
This was duly complied with by the eighth respondent, Peter Jansin Fernandez; and the irrevocable bank guarantee for Rs. 20.25 crores furnished by him is due to expire on September 20, 1979.
The appeals came up for hearing before the Court on August 18, 19?9 We request to say that though the appellants and other successful tenderers had nearly four months ' time, no better offer than the one made by the eighth respondent, Peter Jansin Fernandez, for Rs. 20.25 crores was forthcoming.
We, therefore, proceeded to hear the appeals on merits.
The parties were heard on all aspects.
The question still remains as to the course open.
Accepting the offer of the eighth respondent, Peter Jansin Fernandez, without inviting fresh tenders would be subject to the same infirmity.
From the evidence on record, it appears nobody really knows the actual value of the 37 items of the jewellery.
It may be well worth more than Rs. 20.25 crores.
We must, therefore, uphold the judgment of the High Court setting aside the alleged sale of 37 items of jewellery belonging to.
H.E.H. the Nizam 's Jewellery Trust, effected by the Board of Trustees in favour of the appellants and other successful tenderers for Rs. 14.43 crores, but set aside its order accepting the bid of the eighth respondent, Peter Jansin Fernandez, for purchase of the jewellery for Rs. 20.25 crores, and direct a re auction on the terms specified separately.
The appeals are disposed of accordingly.
The appellants in all these appeals, excepting Civil Appeal No. 1269 of 1978, shall bear their own costs and pay one set of cost to the respondents as they have substantially failed.
The two special leave applications are also dismissed.
|
The late H.E.H. Nawab Mir Sir Osman Ali, the Nizam of Hyderabad by an indenture dated March 29, 1951 created the trust called H.E.H. the Nizam 's Jewellery Trust in respect of 107 items of extremely valuable, rare and priceless jewellery for the benefit of his two sons, two grand sons, two grand daughters, daughter and step son.
The nominee of the Government of India .
N. Malhotra, Addl.
Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs was made the Chairman of the Board of Trustees.
In addition to the Chairman, there were four trustees and a Secretary for the Trust.
Clause 13 of the trust deed provided that after a period of three years from the date of the death of the settlor and his eldest son the trustees may sell the trust property in their absolute discretion either, in India or in any foreign country without their being liable or accountable to any person whomsoever for the propriety of or justification for such sale, or for reasonableness or otherwise of the price or consideration or other terms in respect of the sale.
Prince Azam Shah the eldest son of the Nizam died in October, 1970 and the trustees on July 1, 1972 submitted a memorial to the Prime Minister to acquire the jewellery as they were of great historical and cultural value and 'keep the same intact as part of the national heritage.
The Government of India appointed an Expert Committee to advise whether any part of the jewellery should be acquired as antiques under the Antiquity and Art Treasures Act 1972 and in pursuance to its report acquired eighteen selected pieces of jewellery at a mutually negotiated price of Rs. 1.17 crores.
It appears that the beneficiaries of the trust were in very straitened circumstances due to abolition of privy purse, heavy incidence of income tax and wealth tax and being thus heavily indebted, pressed upon the Board of Trustees to effect an immediate sale of 37 items of jewellery.
On January 9, 1978 the Chairman conveyed to the trustees that the Government of India were not likely to acquire any of the 37 pieces of jewellery with regard to which tho negotiations were being made.
The Board of Trustees 460 accordingly passed a resolution to sell the jewellery immediately.
Pursuant to the resolution of the Board, the Secretary of the Board decided upon the procedure to be adopted for the sale of the 37 items of jewellery and eventually on March 9, 1978 the tenders that were submitted in respect of the sale of those items were opened by the four trustees, in Bombay, the Chairman R. N. Malhotra being absent due to official pre occupation at New Delhi.
On March 10, 1978 the first respondent in the appeal who was one of the beneficiaries of the Trust and a grand daughter of the Nizam instituted proceedings under section 74 of the Trust Act for removal of the trustees alleging dereliction of duty, negligence and mismanagement on their part in respect of the 37 items of jewellery belonging to the Trust which were brought to sale.
An application for injunction under order 39, Rule 1 of the Code of Civil Procedure was filed for restraining the trustees from taking any further steps towards the finalisation of the sale of the jewellery.
The City Civil Court granted an ad interim injunction restraining the trustees from taking any steps towards the finalisation of the sale of the jewellery, which was got vacated by one of the trustees.
On March 28, 1978, the first respondent filed an appeal in the High Court which directed that status quo ante be maintained.
In the meanwhile, the 8th respondent made an offer to purchase the 37 items of jewellery in one lot for Rs. 20.25 crores and also applied to be impleaded as a party in the appeal.
On April 18, 1978 the appellant, who was one of the successful bidders also, applied to be impleaded as a party respondent.
The High Court impleaded the appellant as a party to the appeal, and in order to test the bona fides of the 8th respondent directed that he should deposit the offered amount within one week.
On such deposit being made, the 8th respondent was allowed to inspect all the items of jewellery.
The first respondent filed an application to withdraw the appeal which was heard but before any orders could be passed, her sister, the second respondent applied for permission to be impleaded as appellant No. 2, as there was a danger of the entire body of the beneficiaries being deprived of an amount of Rs. 5.78 crores.
The first respondent was permitted to withdraw and the second appellant was brought on record.
The High Court set aside the alleged sale of 37 items of jewellery by the Board of Trustees in favour of the appellant and other successful tenderers on the ground that there was no concluded contract between the parties and instead accepted the offer of the eighth respondent.
On appeal to this Court the matter was remitted to the High Court for impleading all the tenderers and affording an opportunity to the appellants to substantiate their claim that there was a concluded contract for the sale of the jewellery to them for Rs. 14.43 crores.
The High Court impleaded the other tenderers, respondents Nos. 7 to 17 and after giving opportunity to substantiate their claims held that no binding contract came into existence.
In appeals to this Court on the questions (1) Whether there was a concluded contract effected between the appellants and the other successful bidders on the one part and the Board of Trustees on the other, for the sale of the 37 items of jewellery for Rs. 14.43 crores by the alleged acceptance of their bids by the four trustees on March 19, 1978.
461 (2) Whether there was frustration of the contract in that the ad interim injunction of the City Civil Court on March 14, 1978 made further performance of the alleged contracts impossible; and (3) Whether the exercise of the discretionary power of sale exercised by the trustees conferred on them by cl. 13 of the trust deed, ought not to be set aside under section 49 of the Trusts Act as an improvident sale because of the fact that an amount of Rs. 20.25 crores for the 37 items of jewellery had been offered by the eighth respondent.
^ HELD: 1.
The High Court was justified in setting aside the alleged sale of 37 items of jewellery belonging to H.E.H. the Nizam 's Jewellery Trust affected by the Board of Trustees in favour of the appellants and other tenderers for Rs. 14.43 crores on the ground that there was no concluded con tract between the parties.
[480D] 2.
The contract was frustrated by the grant of an ad interim injunction by the Court of the Chief Judge, City Civil Court, Hyderabad on March 14, 1978.
The grant of such injunction prevented the performance of the alleged contacts.
The appellants could not have tendered 90 percent of the tender amount, i.e., the balance of the price, by the stipulated date or taken delivery 1 of the jewellery so long as the injunction lasted.
[481C] 3.
The High Court had come to a definite conclusion that the improvident sale of the jewellery at such a low price without due public notice was not a bonafide exercise of power, conducive of beneficial management.
There is no reason to come to a different conclusion.
When one deals with another 's property, it matters little to him what price the property fetches.
But in the case of a trust there arises the duty of the trustees to act with prudence and as a body of reasonable men.
[485E, D] 4(a).
In the case of a private trust, where there are more trustees than one, all must join in the execution of the trust.
The concurrence of all is in ' general necessary in a transaction affecting the trust property, and a majority cannot bind the trust estate.
In order to bind the trust estate the act must be the act of all.
They constitute one body in the eye of law, and all must act together.
This is, subject to any express direction given by the settlor.
[473 E] Lala Mohan Das vs Janki Prasad, LR (1944) 72 IA 39, L. Jankiranza Iyer & ors vs Neelakanta lyer & Ors., [1962] Supp.
I SCR 206; Lewin 's Law of Trusts, 15th Ed. 198 referred to.
Where there are several trustees they must act unanimously in making a sale or a contract of sale, unless it is provided otherwise by the terms of the deed.
In exercising the power of sale, as in the exercise of the other powers, a trustee cannot, therefore, properly delegate the performance of the acts which he ought personally perform.
Although a trustee may listen to the opinion and wishes of others, he must exercise his own judgment.
A trustee for sale of property, cannot leave the whole conduct of the sale 11 531SCI/79 462 to his co trustees.
The reason for this is that the settler has entrusted the trust property and its management to all the trustees, and the beneficiaries are entitled to the benefit of their collective wisdom and experience.
[474C D] Underhill 's Law of Trusts and Trustees, 12th Ed., pp. 434, 442 443, Scot on Trusts, Vol.
p. 1033, 5.
All acts which the trustees intend to take for executing the trust must be taken by all of them acting together, as provided by section 48 of the Trusts Act, 1882.
Where there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides.
If the validity of an alienation affected by the trustees falls to be considered only in the light of section 48, the fact that out of the three trustees only two have executed the sale deed would by itself make the transaction invalid and would not convey a valid title to the transferee.
[474E G] 6.
The High Court rightly observed, there is no clause in the trust deed authorising the execution of the trusts to be carried out not by all but by one or more or majority of the trustees.
In the absence of such a specific provision, the general law envisaged in section 48 of the Act would govern the rights of the parties.
The alleged contracts of sale entered into by the four trustees were not binding and of no legal effect, and could not be enforced.
It must necessarily follow that the alleged contracts for sale entered into by them could not ripen into concluded contracts so as to bind the entire body of beneficiaries.
[474H 475B] 7.
Section 48 is a corollary of section 47.
If the trustees cannot delegate their duties, it follows that they must all personally perform those duties, and not , appoint one of themselves to manage the business of the trust; for the settlor has trusted all his trustees, and it behoves each and every one of them to exercise his individual judgment and discretion on every matter, and not bindly to leave any questions to his co trustees or co trustee.
The view taken by the High Court of the resolution of the Board of Trustees dated March 8, 1978 was right.
The language used in the resolution is perhaps not of a trained draftsman, but it clearly does not, in terms, confer 'authorisation ' upon the remaining four trustees to accept the bids, or any of them.
[475D F] 8.
The statement of Malhotra that it was decided at the meeting on March 8, 1978 that 'the trustees were free to accept the highest tenders, if they did not see any reason to reject the same ' and also that 'if the trustees felt that a higher amount could be obtained they could negotiate with the tenderer and obtain a higher price ' is of little consequence.
Perhaps that is what the trustees meant, i.e., the remaining four trustees, were fully authorised to deal with the matter in all its aspects.
But that intention of the trustees is not at all manifested in the said resolution, the terms of which are clear and explicit.
[476B C] 9.
In this case of a trust, the 'authorisation ' must be express, specific and in the clearest of terms.
The words "be examined and decided" in the first part of the resolution may mean anything, and are not necessarily susceptible of the only construction as contended for, namely that of 'acceptance '.
The expression "to negotiate for sale" in relation to the authority of an estate agent, has a definite legal connotation.
He gets an authority to find a purchaser, 463 but he cannot bind the principal by entering into a contact of sale.
There is a substantial difference between 'to sell ' and 'to find a purchaser '.
[476D E] , Chadburn vs Moore, ; Rosenbaum vs Abdul Ahmed vs Animendra Kissen Mitter, ; referred to 10.
If the second part of the resolution has to be construed with reference to the first, as is contended for, then their authority was limited to find purchasers for the jewellery, and then place the matter before a meeting of the Board of Trustees, for acceptance of their bids.
When the trustees took care in drafting the second part which relates to rejection of bids, there was no reason for their leaving any ambiguity in the first part.
It is not permissible to spell out something which is not explicit, by merely saying that it is implicit, when the language is clear and it does not bear out any such construction.
A view which would be prejudicial to the entire body of beneficiaries is not to be taken.
There is no reason why the words 'be examined and decided ' in the first part, should not have their plain meaning that the tenders were to be opened and examined by the remaining four trustees to see if they were valid tenders.
The first part did not, give any 'authorisation to the remaining trustees to accept any of the tenders.
If they did not find a satisfactory offer or offers for any of the items offered for sale they could only under the second part reject the tenders submitted.
Delegation must be express.
The trend of cross examination of Malhotra, also shows that his concurrence was necessary.
[476F, 477B] 11.
The Secretary drew up the note, dated March 14, in undue haste despite the Court 's order granting the injunction.
[478D] 12.
The minutes of the meetings held on March 5, 1978 and of March 8, 1978 are there.
Thereafter appears the minutes of a meeting held on May 15, 1978, Ext.
B. 125.
But there are no minutes of a meeting held on March 9, 1978.
It is thus clear that no meeting of the Board of Trustees was held at all on March 9, 1978.
The absence of any minutes of the alleged meeting held on March 9, 1978 must, as it should, clearly excite suspicion about the genuineness of the sale.
exhibit 123 is the tabular statement prepared by the Secretary containing acceptance of bids by the four trustees.
The authenticity of this document is not beyond question.
It is a tabular chart running into 34 large sheets with minute details.
On each of the sheets there is a letter 'A ' encircled against the highest tender, and at the foot appear the alleged initials of three trustees bearing the date March 9, 1978.
None of the remaining trustees except M. A. Abbasi have entered the witness box and none of the trustees has proved the initials at the foot of the document, exhibit 123, Nothing is known as to when the initials were put and by whom.
Though the other three trustees are alleged to have put their initials at the foot of the statement on March 9, 1978, there is nothing on record to show that all this was done that day, at one sitting, at the same time.
[478F, 478H 479D] 13.
If the four trustees with the assistance of the Secretary, could prepare these large tabular charts there was no reason why they could not record the 464 minutes of the meeting, if any held on that day showing that there was acceptance of the bids by them.
The Minutes Book is the primary evidence, and the chart cannot form the basis for a finding that there was any acceptance of the tenders on March 9. 1978.
[479E F] In the instant case, cls.
11 and 12 of the conditions of sale embodied the terms of the contract.
By cl. 11, time is made the essence of contact.
Clause 11 cannot be read in isolation, but both cls.
11 and 12 must be read together because they form an integral part of the contract.
These clauses in addition to making time the essence of contract, clearly provided that in the event there was a failure to pay 90 percent of the tender amount, the balance of the price "the contract would be deemed to have been cancelled. ' on a reading of both cls.
11 and 12 together there can be no doubt that the passing of the property was dependent upon the tender of the balance of the price and the taking delivery of the goods upon payment.
[480H 481B] 14.
It was certainly open to the Board of Trustees to effect a sale of the 37 items of jewellery under cl. 13 of the deed.
But the power, although discretionary, must be exercised reasonably and in good faith.
The power conferred on the Board of Trustees is no doubt discretionary, but the principle embodied in section 49 is that when such discretionary power is not exercised reasonably and in good faith, such power may be controlled by a court.
There was no warrant for the suggestion made by the Board of Trustees before the High Court that the power is absolute.
[482E G] Underhill 's Law of Trusts & Trustees, 12th Ed. 472 p. 472, referred to 15.
On the totality of the evidence, the High Court rightly came to the conclusion that though there were no mala fides corrupt motives, fraud or mis representation on the part of the trustees and they acted honestly, the trustees in the facts and circumstances of the case, did not act reasonably and in good faith i.e. with due care and attention.
[485F] 16.
Upon the finding that there was no concluded contract between the parties within the meaning of section 2(h) of the Contract Act, the High Court accepted the offer of the eighth respondent for Rs. 20.25 crores for the purchase of the 37 items of jewellery, but this part of the order is set aside as acceptance of his bid without calling for fresh tenders would be subject to the same infirmity.
From the evidence on record that no body knows the actual value of the jewellery and it may be well worth more than Rs. 20.25 crores, and therefore reauction ordered.
[485G, 486E, G]
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Civil Appeal Nos.
1394/74, 543/75 and 242/79.
Appeals from the Judgment and Order dated 22 5 1973 of the Allahabad High Court in Special Appeals Nos. 26/73, 682/72 and 502/72.
AND SPECIAL LEAVE PETITION (CIVIL) No. 2152 of 1974.
From the Judgment and Order dated 22 5 1973 of the Allahabad High Court in Spl.
Appeal No. 469/72.
J. P. Goyal and section K. Jain for the Appellants in CA 1394/74.
G. section Chaterjee for the Petitioners in SLP 2152/74.
A. P. section Chauhan and V. C. Prashar for the RR 3 & 4 in CA 1394/ 74.
section N. Andley, Uma Datta and Tara Chand Sharma for the Appellants in CA 543/75.
R. N. Dixit for the Appellant in CA 242/79.
E. C. Agarwala for the Respondent in CA 543/75.
1208 The Judgment of the Court was delivered by CHANDRACHUD, C.J.
In view of the Judgment of this Court in State of Bombay vs Narothamdas, Jethabhai & Anr.(1) Union of India vs Mohindra Supply Company(2) and Ram Adhar Singh vs Ramroop Singh & Ors.(3) and in view of the fact that the Special Leave Petition filed against the judgment rendered by the High Court of Allahabad, upholding the validity of the 1962 Act was dismissed by the Constitution Bench of this Court after an elaborate argument, there is no substance in the contention that either the U.P. High Court (Abolition of Letters Patent Appeals) Act, 1962 or the U.P. High Court (Abolition of Letters Patent Appeals) (Amendment) Act, Act 33 of 1972 is unconstitutional.
The challenge to these Acts on the ground of their unconstitutionality is, therefore, rejected.
Learned counsel appearing on behalf of the appellants have very fairly conceded that position.
Accordingly, the Civil Appeals and the Special Leave Petition are dismissed.
There will be no order as to costs.
However, the appellants may, if so advised, ask for special leave to appeal from the judgment of the learned single judge.
We are sure that the delay caused in filing the S.L.Ps in this Court will be condoned since the appellants were pursuing their remedy by filing these appeals in this Court.
Learned counsel for the appellant in Civil Appeal No. 543/75 says that the appellant has already filed special leave petition (Civil) No. 361 of 1976 in this Court challenging the decision of the learned single judge of the Allahabad High Court on the merits of the matter.
He has also filed an application seeking leave of this Court for urging additional grounds and an application for condonation of delay in filing the Special Leave Petition.
The petition for permission to urge additional grounds, except on Constitutional points, shall be treated as having been filed in the S.L.P.
These three petitions will be listed before the Division Bench on 4 10 1979.
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HELD : Neither the U.P. High Court (Abolition of Letters Patent Appeals) Act, 1962 nor the U.P. High Court (Abolition of Letters Patent Appeals) (Amendment) Act, 1962, is unconstitutional.
[1208C] State of Bombay vs Narothamdas, ; ; Union of India vs Mohindra Supply Co. ; and Ram Adhar Singh vs Ramroop Singh & Ors., ; ; followed.
[The Court under its inherent powers condoned the delay in filing of S.L.P. challenging the decision of the High Court on merits and allowed the petitioner to urge additional grounds except on constitutional points].
|
: Special Leave Petition (Crl.) No. 1383 of 1978.
From the Judgment and Order dated 3 1 1978 of the Punjab and Haryana High Court in Crl.
A. No. 1039/74.
K. L. Jogga and L. N. Gupta for the Petitioner.
Hardev Singh for the Respondent.
The Order of the Court was delivered by SHINGHAL, J. We have heard learned counsel for the parties at length.
Accused Bachan Singh, Gurnam Singh and Chanan Singh were convicted by the Sessions Judge of Gurdaspur of an offence under section 304 Part I read with section 149 I.P.C. and were sentenced to rigorous imprisonment for 10 years and a fine of Rs. 1000/ .
They were also convicted of an offence under section 148 I.P.C. and sentenced to rigorous imprisonment for 2 years.
The remaining two accused Ravail Singh and Vir Singh were convicted of an offence under section 304 Part I read with section 149 I.P.C., but they were sentenced to rigorous imprisonment for 5 years and a fine of Rs. 500/ .
Further, they were convicted of an offence under section 147 I.P.C. and were sentenced to rigorous imprisonment for 1 year.
An appeal was filed by the accused against their conviction and sentence; and the State filed an appeal for their conviction and sentence under section 302 I.P.C. A revision petition was filed under 647 section 401 Crl.
P.C. for enhancement of the sentence of imprisonment and fine "to meet the ends of justice".
The High Court of Punjab and Haryana made an express order on December 9, 1974 that the revision petition would be heard alongwith the criminal appeal (No. 1039 of 1974) filed by the accused.
By its impugned Judgment dated January 3, 1978, the High Court dismissed the appeal which was filed by the accused, but enhanced the sentence of Bachan Singh, Gurnam Singh and Chanan Singh accused under section 304 Part I read with section 149 I.P.C. to rigorous imprisonment for life and of accused Ravail Singh and Vir Singh under the same section to rigorous imprisonment for 10 years.
While making that order, the High Court observed that the State appeal "for enhancement of punishment" was "partly accepted".
That is why all the five accused have applied to this Court for special leave under article 136 of the Constitution.
It has been argued by learned counsel for the accused that the High Court committed an error of law in enhancing the sentence of the accused without giving them a reasonable opportunity of showing cause against such enhancement and without allowing them to plead for their acquittal or for reduction of the sentence as contemplated by sub section (3) of section 377 of the Code of Criminal Procedure.
It appears to us, however, that as the State Government did not file an appeal against the sentence under sub section (1) of section 377 Cr.P.C, and as it is not disputed before us that its appeal was directed against the acquittal of the accused for the offence under section 302 I.P.C., there is no justification for the argument that the High Court committed an illegality in not complying with the requirement of sub section (3) of that section for giving the opportunity to the accused of showing cause against the enhancement of the sentence or of pleading for their acquittal or for reduction of the sentence.
As has been stated, a petition was filed under section 401 Cr.
P.C. for enhancement of the sentence, and it was clearly maintainable as it was not permissible for the revision petitioner to file an appeal under section 377.
It will be recalled that the High Court made an express order on December 9, 1974, for the hearing of the revision petition alongwith the appeal which had been filed by the accused.
The fact therefore remains that the High Court had before it the above mentioned appeals which had been filed by the accused and the State, and the revision petition under section 401 Cr.
P.C. for enhancement of the sentence.
While that court dismissed the appeal of the 648 accused, and allowed the appeal of the State in part, it forgot to make a reference to the revision petition while drawing up the operative part of its order.
That was an inadvertent mistake for, after reading the impugned judgment of the High Court, we have no doubt that it effectively disposed of both the appeals and the revision petition even though the wordings of the judgment in that respect were not quite appropriate.
But, even otherwise, there is no merit in the grievance of the accused that they were not given the opportunity of showing cause against the enhancement of the sentence or to plead for their acquittal or for reduction of the sentence.
The opportunity for pleading for acquittal was amply furnished at the hearing of their own appeal against their conviction, and the same appeal furnished them the necessary opportunity for pleading for the reduction of the sentence.
That in fact was the subject matter of their appeal.
It is not disputed before us that the High Court heard the State appeal against the acquittal of the accused, alongwith the appeal which was filed by the accused, and that furnished further opportunity to the accused to plead for their acquittal, or reduction of sentence, or to show cause against the enhancement of the sentence.
There is thus no force in the argument to the contrary.
It has to be appreciated that in respect of the petition which was filed under section 401 Cr.P.C. for the exercise of the High Court 's powers of revision, it was permissible for it to exercise the power of a Court of Appeal under section 386 for enhancement of the sentence, and if that had been done, there is no justification for the argument that the enhancement was illegal.
There is another reason for this view.
It was permissible for the High Court under section 397 Cr.
P.C. to call for and examine the record of the proceeding before the trial court for the purpose of satisfying itself as to the correctness, legality or "propriety" of any finding, "sentence" or order, recorded or passed by that inferior court.
The High Court 's power of revision in the case of any proceeding the record of which has been called for by it or which otherwise comes to its knowledge, has been stated in section 401 Cr.
P.C. to which reference has been made above.
That includes the power conferred on a Court of Appeal under section 386 to enhance or reduce the sentence.
So when the record of the case was before the High Court in connection with the two appeals and the revision petition referred to above, there was nothing to prevent the High Court from invoking its powers under section 397 read with section 401 Cr.
P.C. and to make an order for the enhancement of the sentence.
649 There is thus no force in the argument to the contrary.
All the same, we gave an opportunity to the learned counsel for the accused to advance his arguments on question of sentence and all that he was able to argue was that as the accused had undergone a portion of the sentence and, as the offence was committed in 1972, the High Court was not justified in enhancing the sentence.
As is obvious, both these arguments are untenable and inconsequential because of the concurrent findings of the trial court and the High Court that the accused emerged from the house of accused Bachan Singh as soon as Sarup Singh (deceased) reached the place of occurrence, shouted that he should be taught a lesson for getting liquor recovered from them and beat him with their respective weapons.
It has been found further that while accused Vir Singh caught hold of the hair of the deceased and Ravail Singh caught hold of his legs and felled him on the ground, Gurnam Singh, who was armed with a datar, dealt belows on his right knee while Chanan Singh gave a kirpan blow on his left hand, and then accused Gurnam Singh gave a blow on his right knee while Chanan Singh gave a kirpan blow on his left hand and he, Gurnam Singh and Bachan Singh dealt further blows on his left leg near the knee, as a result of which the left leg was completely severed from the body.
It has also been concurrently found that the accused took away the chopped off leg of the deceased after wrapping it in his turban, and that he succumbed to the injuries soon after.
The facts and the circumstances which have thus been established by the evidence of Pal Singh P.W.4, and Nishan Singh P.W.5, on which reliance has been placed by both the courts, justify the view taken by the High Court that the accused deserved the sentence awarded to them by it.
Learned counsel for the accused tried to argue that the conviction of the accused was not justified on the merits, and took us through the finding in regard to the motive for the offence, the nature of the medical evidence, the plea of self defence taken by accused Bachan Singh and the relationship of eye witnesses Pal Singh P.W.4 and Nishan Singh P.W.5 with the deceased.
Apart from the fact that there was no occasion for us to consider those arguments, we have no hesitation in saying that they are without merit.
In the view we have taken, the petition for special leave is dismissed.
V.D.K. Petition dismissed.
|
Against their conviction and sentence passed by the Sessions Judge, Gurdaspur, the appellants preferred an appeal to the High Court.
The State filed an appeal for their conviction and sentence under section 302 I.P.C. A revision petition was also filed under Section 401 Crl.
P.C. for enhancement of the sentence of imprisonment and fine "to meet the ends of justice".
Though the High Court made an express order on December 9, 1974 that the revision petition would be heard along with the criminal appeal, the High Court by its impugned judgment dated January 3, 1978, dismissed the appeal filed by the accused, but enhanced the sentence of Bachan Singh, Gurnam Singh and Chanan Singh accused under Section 304 Part I read with Section 149 I.P.C. to rigorous imprisonment for life and of accused Ravail Singh and Vir Singh under the same section to rigorous imprisonment for 10 years.
While making that order, the High Court observed that the State appeal "for enhancement of punishment" was partly accepted, without reference to the revision petition.
Hence the petition for special leave under Article 136 of the Constitution on the ground that the High Court committed an error of law in enhancing the sentence of the accused without giving them a reasonable opportunity of showing cause against such enhancement and without allowing them to plead for their acquittal or for reduction of the sentence as contemplated by sub section (3) of section 377 of the Code of Criminal Procedure.
Dismissing the petition the Court, ^ HELD: 1.
The revision petition under section 401 Crl.
P.C. for enhancement of the sentence was maintainable as it was not permissible for the revision petitioner to file an appeal under section 377.
The High Court effectively disposed of both the appeals and the revision petition even though there was an inadvertent mistake in not making a reference to the revision petition in the judgment.
[647 F G, 648 B] 2.
The opportunity for pleading for acquittal was amply furnished to the accused at the hearing of their own appeal against their conviction, and the same appeal furnished them the necessary opportunity for pleading for their acquittal or the reduction of the sentence.
That, in fact, was the subject matter of their appeal.
The fact that the appeal filed by the State 5 625SCI/79 646 against the acquittal of the accused under section 302 I.P.C. was heard along with their appeal against conviction and sentence, itself furnished an opportunity to show cause against the enhancement of the sentence.
[648 C D] 3.
(a) In the petition filed under section 401 Crl.
P.C. for the exercise of the High Court 's power of revision, it was permissible for it to exercise the power of a Court of appeal under section 386 for enhancement of the sentence.
[648 E F] (b) It was also permissible for the High Court under Section 397 Crl.
P.C., to call for and examine the record of the proceedings before the trial court for purpose of satisfying itself as to the correctness, legality or "propriety" of any finding, "sentence" or order recorded or passed by that inferior Court.
The High Court 's power of revision under section 401 Crl.
P.C. in the case of any proceeding the record of which has been called for by it or which otherwise comes to its knowledge includes the power conferred on a court of appeal under section 386 to enhance or reduce the sentence.
So when the record of the case was before the High Court in connection with the two appeals and the revision petition there was nothing to prevent the High Court from invoking its power under section 397 read with 401 Crl.
P.C. and to make an order for the enhancement of the sentence.
[648 F H]
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Civil Appeal No. 2411 of 1978.
Appeal by Special Leave from the Judgment and order dated 26 7 1978 of the Karnataka High Court in Writ Petition No. 10203/ 77.
And ORIGINAL JURISDICTION: Writ Petitions Nos.
4473 4474, 4415, 4488, 4528, and 4539 of 1978.
(Under Article 32 of the Constitution).
D G. B. Rikar, K. R. Nagaraja and Mrs. Gayathri Balee for the Petitioner (In WP.
4473 4474, 4488, 4539/78).
R. B. Datar and Navin Sinha for the Petitioner (In WP.
4415 and 4528 and for Appellant in CA 2411/78).
V. A. Sayield Mohammad and N. Nettar for the State of Karnataka and for Respondent No. 3 in WPs.
4473 4474, 4488, 4528 and 4539 and C.A. 2411/78.
L. N. Sinha, Attorney General, K. K. Venugopal, Additional Solicitor General, V. A. Sayied Mohammad and Vineet Kumar for Karnataka State Road Transport Corporation (in All W.P.s & C.A.).
It would, therefore, be convenient to dispose them of by this common judgment.
The short question involved in these cases is, whether the employees of the erstwhile contract carriage operators in the State of Karnataka acquired a vested right of absorption in service with the Karnataka State Road Transport Corporation under sub cl.
(3) to cl. 20 of the Karnataka Contract Carriages (Acquisition) ordinance 1976.
688 It will be convenient to refer in the first place to the legislative changes.
On January 30, 1976 the Karnataka Contract Carriages (Acquisition) ordinance, 1976 was promulgated by the Governor of Karnataka under cl.
(1) of article 213 of the Constitution.
The said ordinance was promulgated with the object of acquiring contract carriages operating in the State and for certain matters connected therewith.
On the same day, i.e., on January 30, 1976 the State Government issued a notification under cl.
4(1) of the ordinance vesting every contract carriage owned or operated by such contract carriage operator, along with permit, in the State Government absolutely free from all encumbrances.
On the same day, the State Government made an order under sub cl.
(1) to cl. 20 of the ordinance transferring all the contract carriages that vested in the State Government under the notification issued under sub cl.
(1) to cl. 4 of the ordinance, to the Karnataka State Road Transport Corporation (hereinafter referred to as 'the Corporation ').
Sub clause (3) to cl. 20 of the ordinance provided for absorption of certain categories of employees of contract carriage operators in the service of the Corporation.
It also provided the ratio for absorption for different categories of employees that were entitled to be absorbed in the service of the Corporation.
The ordinance was subsequently replaced by the Karnataka Contract Carriages (Acquisition) Act, 1976, Which was published in the gazette on March 12, 1976.
The ordinance was repealed by the Act, and it re enacted the provisions of the repealed ordinance, with a saving clause in sub section
(2) of section 31, for preservation of anything done or action taken.
The Act was substantially in similar terms except for the difference that the ratio prescribed by proviso to sub cl.
(3) to cl. 20 of the ordinance, which laid down the categories of persons who could be absorbed in the service of the Corporation, was substantially altered and a new ratio was inserted in the proviso to sub section
(3) of section 19 of the Act.
Otherwise, sub section
(3) of section 19 of the Act and sub cl.
(3) to cl. 20 of the ordinance were identical in every respect.
Under proviso to sub cl.
(3) to cl. 20, the total strength of the employees of the erstwhile contract carriage operators allowable for absorption was 7.9 per vehicle, while under proviso to sub section
(3) of section 19 of the Act the same works out to 4.45 per vehicle.
Further, while under the ordinance conductors were entitled to be absorbed, the ratio provided under the Act shows that conductors are not included in the categories of persons who can be absorbed in the service of the Corporation.
689 It appears that although as many as 785 contract carriages were A notified for acquisition, only 601 vehicles were actually acquired.
The change in the ratio of absorption from 7.9 per vehicle under sub cl.
(3) to cl. 20 of the ordinance to 4.45 per vehicle under sub section
(3) of section 19 of the Act adversely affected a large number of employees of the erstwhile contract carriage operators.
A large number of writ petitions were, therefore, filed in the High Court challenging the vires of the proviso to sub section
(3) of section 19 of the Act on various grounds, but by the judgment under appeal the High Court has repelled all the contentions.
Thereafter, the remaining writ petitions were all withdrawn.
The appeal is against the judgment of the High Court and the employees have also directly approached the Court under article 32.
Before dealing with the contention advanced in the appeal, it is necessary to set out the relevant provisions.
Sub clause (3) to cl. 20 of the ordinance read as follows: "20.(3) Every person who is a workman within the meaning of the (Central Act 14 of 1947) and has been immediately before the commencement of this ordinance exclusively employed in connection with the acquired property, shall ', on and from the notified date, become an employee of the corporation on the same terms and conditions applicable to the employees holding corresponding posts in the corporation.
Any person not willing to become such an employee of the corporation shall be entitled to retrenchment compensation as provided in the : Provided that the number of workmen that shall become employees of the corporation under this sub section shall not exceed the following scale, the junior most being excluded: Scale per vehicle 1.
Drivers . .
1.5 2.
Conductors .
2.65 3.
Supervision .
0.125 4.
Higher Supervision staff and Managers .
0.075 5.
Ministerial and Secretariat staff .
0.8 6.
Technical staff including Foreman .
2.75 690 Sub section (3) of section 19 of the Act, which replaced sub cl.
(3) to cl. 20 of the ordinance, provides: "19.(3) Every person who is a workman within the meaning of the (Central Act 14 of 1947) and has been immediately before the commencement of this Act exclusively employed in connection with the acquired property, shall, on and from the notified date, become an employee of the corporation on the same terms and conditions applicable to the employees holding corresponding posts in the corporation.
Any person not willing to ' become such an employee of the Corporation shall be entitled to retrenchment compensation as provided in the .
Provided that the number of workmen that shall become employees of the Corporation under this sub section shall not exceed the following scale, the junior most being excluded: Scale per vehicle 1.
Drivers . . .
1.5 2.
Supervision staff and managers .
0.1 3.
Ministerial and Secretariat Staff.
0.1 4.
Technical staff including foreman.
2.75 4.45" The saving clause to be found in sub section
(2) of section 31 of the Act, so far as material, runs thus: "31 (2) Notwithstanding such repeal: (i) anything done or any action taken under the said ordinance, shall be deemed to have been done or taken under the corresponding provisions of this Act.
" It is strenuously argued that it is clear from the language of subcl.
(3) to cl.
(20) of the ordinance that there was, by operation of law, automatic absorption of the employees of the erstwhile contract carriage operators to the extent provided therein with effect from January 30, 1976, the date on which the notification was issued under sub cl.
(1) to cl. 4 and the date on which the Government made an order under sub cl.
(1) to cl. 20.
It is submitted that the words "shall become an employee of the Corporation", ill sub cl.
(3) to cl. 20 are clear and unambiguous and they must result in the consequence that all persons employed in connection with the acquired 691 contract carriages, became employees of the Corporation.
It is said A that, though the process of absorption may take time, as and when the necessary steps were taken to fit in such employees falling within the categories mentioned in the proviso to sub cl.
(3) to cl. 20, their absorption relates back to the notified date, i.e. January 30, 1976.
In other words, the submission was that the legal effect of absorption of such ' employees under sub cl.
(3) to cl. 20 of the ordinance is automatic.
That being so, their right of absorption could not be whittled down by the subsequent enactment of the new proviso to sub section
(3) of section 19 of the Act, inasmuch as they had acquired a vested right to absorption in the ratio mentioned in sub cl.
(3) to cl. 20 of the ordinance.
C The ordinance promulgated by the Governor in the instant case was a 'legislative act ' of the Governor under article 213(1) and, therefore, undoubtedly a temporary statute, and while it was still in force the Repealing Act was passed containing the saving clause in section 31(2) (i) providing that, notwithstanding such repeal, 'anything done ' or any 'action taken ' under the repealed ordinance shall be deemed to have been done or taken under the corresponding provisions of the Act.
The enquiry is, therefore, limited to the question whether anything was done or action taken under the repealed ordinance.
If that be so, a further question arises on the submission whether the words 'things done ' in section 31 (2) (i) reasonably interpreted can mean not only things done but also the legal consequences flowing therefrom.
In considering the effect of an expiration of a temporary Act, it would be unsafe to lay down any inflexible rule.
It certainly requires very clear and unmistakable language in a subsequent Act of the legislature to revive or re create an expired right.
If, however, the right created by the statute is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which it was created has expired.
In order to see whether the rights and liabilities under the repealed ordinance have been put an end to by the Act, 'the line of enquiry would be not whether ', in the words of Mukherjea J. in State of Punjab vs Mohar Singh(1), 'the new Act expressly keeps alive old rights and liabilities under the repealed ordinance but whether it manifests an intention to ' destroy them '.
Another line of approach may be to see as to how far the new Act is retrospective in operation.
It is settled both on principle and authority, that the mere right existing under the repealed ordinance, to take advantage of the pro 11 visions of the repealed ordinance, is not a right accrued.
Sub section 692 (2) of section 31 of the Act was not intended to preserve abstract right conferred by the repealed (ordinance.
The legislature has the competence to so re structure the ordinance as to meet the exigencies of the situation obtaining after the taking over of the contract carriage services.
It could re enact the ordinance according to its original terms, or amend or alter its provisions.
What were the 'things done ' or 'action taken ' under the repealed ordinance ? The High Court rightly observes that there was neither anything done nor action taken and, therefore, the petitioners did not acquire any right to absorption under sub cl.
(3) to cl. 20.
The employees of the former contract carriage operators in normal course filled in the pro form giving their service particulars and reported to duty.
This was in the mere 'hope or expectation ' of acquiring a right.
The submission of these 'call reports ' by the employees did not subject the Corporation to a corresponding statutory obligation to absorb them in service.
As a matter of fact, nothing was done while the ordinance was in force.
The Act was published on March 12, 1976.
on May 29, 1976, the Corporation sent up proposals for equation of posts to be filled in by the employees of the former contract carriage operators.
The meeting of the Committee set up by the Government for laying down the principles for equation of posts and for determination of inter se seniority, met on June 2, 1976.
The Committee decided that even in the case of helpers cleaners, there should be a 'trade test ' and ' the staff cleared by the Committee for the posts of helper 'B ' helper 'A ' and assistant artisans should be on the basis of their technical competence, experience, ability etc.
The Committee also decided that all other employees of contract carriage operators who were, eligible for absorption, should be interviewed by that p Committee for the purpose of absorption on the basis of experience, ability, duties and responsibilities.
These norms were not laid down till June 2, 1976.
Till their actual absorption, the employees of the erstwhile contract carriage operators had only an incohate right.
The distinction between what is, and what is not a right preserved by the provisions of section 6 of the General Clauses Act is often one of great fineness.
What is unaffected by the repeal of a statute is a right acquired or accrued under it and not a mere 'hope or expectation of ', or liberty to apply for, acquiring a right.
In Director of Public Works vs Ho Po Sang( ') Lord Morris speaking for the Privy Council observed: "It may be, therefore, that under some repealed enactment, a right has been given, but that, in respect of it, some 693 investigation or legal proceeding is necessary.
The right is then unaffected and preserved.
It will be preserved even if a process of quantification is necessary.
But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether so to right should be or should not be given.
On a repeal the former is preserved by the Interpretation Act.
The latter is not." (Emphasis supplied) It must be mentioned that the object of section 31(2) (i) is to preserve only the things done and action taken under the repealed Ordinance, and not the rights and privileges acquired and accrued on the one side, and the corresponding obligation or liability incurred on the other side, so that if no right acquired under the repealed ordinance was preserved, there is no question of any liability being enforced.
Further, it is significant to notice that the saving clause that we are considering in section 31(2) (i) of the Act, saves things done while the ordinance was in force; it does not purport to preserve a right acquired under the repealed ordinance.
It is unlike the usual saving clauses which preserve unaffected by the repeal, not only things done under the repealed enactment but also the rights acquired thereunder.
It is also clear that even section 6 of the General Clauses Act, the applicability of which is excluded, is not intended to preserve the abstract rights conferred by the repealed Ordinance.
It only applies to specific rights given to an individual upon the happening of one or other of the events specified in the statute.
Employees in excess of the scale prescribed for the categories specified under proviso to sub section
(3) of section 19 of the Act are clearly not entitled for absorption.
Though sub cl.
(3) to cl. 20 of the ordinance provided for absorption of certain classes of employees in a particular ratio with effect from January 30, 1976, it does not follow that there was an automatic absorption as from that date.
Every such person eligible for absorption had to fulfill three conditions, viz., (1) he had to be a workman within the meaning of the ; (2) he should have been immediately before the commencement of the ordinance, exclusively employed in connection with the acquired property, and (3) he had to come within the ratio provided in the proviso to sub cl.
(3) to cl. 20.
The whole object of inserting sub cl.
(3) to cl. 20 of the ordinance was to obviate the unemployment of persons suitable for employment.
For this purpose the Corporation had necessarily to screen the applicants.
It is necessary to mention that cl. 5 of the Ordinance, which corresponds to section 5 of the Act, provided that every contract carriage 8 625SCI/79 694 operator shall within 15 days from the notified date or within such further time as the State Government may allow, furnish to the State Government or any officer authorised by it in this behalf, complete particulars among others of persons who were in their employment immediately before the notified date.
It was only after such information was received that steps had to be taken for the purpose of ascertaining as to who were entitled to be absorbed in the service of the Corporation in accordance with sub cl.
(3) to cl. 20 of the ordinance.
The authorities after collecting the necessary information had to determine not only the corresponding posts to which the erstwhile employees of the contract carriage operators could be absorbed in the service of the Corporation but also their relative seniority, for the purpose of excluding the employees who were in excess of the scale for the purpose of absorption.
As sub cl.
(3) to cl. 20 itself provides that a person who is not willing to become an employee of The Corporation is entitled to retrenchment compensation as provided for in the , the authorities were also required to ascertain as to whether the employee, who was entitled to be absorbed in service, was willing to become an employee of the Corporation or not.
It was only if the employee was willing to be absorbed in the service of the Corporation that the Corporation could absorb him in service, provided the other conditions specified in sub cl.
(3) to cl. 20 were satisfied.
Thus it is clear that several steps had to be taken by the authorities before identifying and determining the persons who could be absorbed in the service of the Corporation, in accordance with sub cl.
(3) to cl. 20 of the ordinance.
The very fact that all these Various steps were necessary to be taken, which necessarily takes time, shows that automatic absorption of the employees of the erstwhile contract carriage operators was not legally permissible.
When the ordinance came to be replaced by the Act, the Corporation felt that the number of employees of the erstwhile contract carriage operators was too large for its requirements.
The legislature, therefore, stepped in and reduced the scale of absorption in the proviso to sub section
(3) of section 19 from 7.9 per vehicle to 4.45 per vehicle.
This is, in our judgment, sufficient for the determination of the appeal.
But, as we have formed a clear opinion on the other aspect, we do not hesitate to express that opinion.
That contention is of this nature.
It is pointed out that the employees of the erstwhile contract carriage operators acquired vested right to absorption in the service of 695 the Corporation by virtue of sub cl.
(3) to cl. 20 of the repealed ordinance with effect from January 30, 1976, which cannot be taken away by the proviso to sub section
(3) of section 19.
Even if contrary to the decision reached by us, it were possible to hold that they had some kind of such right, that right is expressly taken away by the legislature.
The contention does not take note of the fact that by sub section
(1) of section 1 the Act was brought into force with effect from January 30, 1976, i.e., the date on which the ordinance was promulgated.
The Act substitutes a 'new ' proviso in sub section
(3) of section 1 in place of the old proviso to sub cl.
(3) to cl. 20 of the ordinance, altering the whole basis of absorption.
The new proviso is given a retrospective effect, and it now holds the field from the notified date i.e., January a 30, 1976.
The proviso in sub cl.
(3) to cl. 20 laying down a particular ratio of absorption, is pro tanto avoided by an express enactment of a 'new ' proviso to sub section
(3) of section 19 which is entirely inconsistent with it.
When an ordinance is replaced by an Act which is made retrospective in operation, anything done or any action taken under the ordinance stand wholly effected.
In the result, the appeal as well as the writ petitions must fail and are dismissed.
There shall be no order as to costs.
N.V.K. Appeal and Petitions dismissed.
|
The Karnataka Contract Carriage (Acquisition) ordinance, 1976 was promulgated on January 30, 1976 with the object of acquiring the contract carriages operating in the State.
Sub clause (3 ) to cl. 20 of the ordinance provided for absorption of certain categories of employees of contract carriage operators in the service of the Corporation, and the ratio for absorption for the different categories of employees that were entitled to be absorbed.
On the same day, the State Government made an order under sub cl.
(I) to cl. 20 of the ordinance transferring the contract carriages that vested in the State Government to the Karnataka State Road Transport Corporation.
This ordinance was subsequently replaced by the Karnataka Contract Carriages (Acquisition) Act, 1976 which was published in the Gazette dated March 12, 1976.
The ordinance was repealed by the Act, which re enacted the provisions of the repealed ordinance, with a saving clause in sub section
(2) of section 31 for presentation of any thing done or any action taken.
The Act was substantially in similar terms, except for the difference that the ratio prescribed by proviso to sub cl.
(3) to cl. 20 of the ordinance which laid down the categories of persons who could be absorbed in the service of the Corporation, was substantially altered and a new ratio was inserted in the proviso to sub section
(3) of section 19 of the Act.
Otherwise, sub section
(3) of section 19 of the Act and sub cl.
(3) to cl. 20 of the ordinance were identical in every respect.
Under the Proviso to sub cl.
(3) to cl. 20, the total strength of the employees of the erstwhile Carriage operators allowable for absorption was 7.9 per vehicle while under the proviso to sub section
(3) of section 19 of the Act, the ratio worked out to 4.45 per vehicle.
Further, while under the ordinance, conductors were entitled to be absorbed, the ratio provided under the Act showed that conductors were not included in the categories of persons who could be absorbed in the service of Corporation.
The change in the ratio of absorption from 7.9 per vehicle under. sub cl.
(3) to cl. 20 of the ordinance to 4.45 per vehicle under sub section
(3) of section 19 of the Act adversely affected a large number of employees of the erstwhile contract carriage operators who filed writ petitions in the High Court, 685 challenging the vires of the proviso to sub section
(3) of section 19 of the Act, which dismissed the writ petitions.
In the appeal and the writ petitions to this Court the question for consideration was, whether the employees of the erstwhile contract carriage operators in the State of Karnataka acquired a vested right of absorption in the service with the Karnataka State Road Transport Corporation under sub cl.
(3) to cl. 20 of the Karnataka Contract Carriage (Acquisition) ordinance 1976.
Dismissing the appeal and writ petitions; ^ HELD: 1.
The High Court rightly observed that there was neither anything done nor action taken and, therefore, the petitioners did not acquire any right to absorption under sub cl.
(3) to cl. 20.
[692 C] 2.
The ordinance promulgated by the Governor in the instant case was a 'legislative act ' of the Governor under article 213(1) and, therefore, undoubtedly a temporary statute, and while it was still in force the repealing Act was passed containing the saving clause in section 31(2)(i) providing that, notwithstanding such repeal, 'anything done ' or any 'action taken ' under the repealed ordinance shall be deemed to have been done or taken under the corresponding provisions of the Act.
[691 C D] 3.
In considering the effect of an expiration of a temporary Act, it would be unsafe to lay down any inflexible rule.
It requires very clear and unmistakable language in a subsequent Act of the legislature to revive or re create an expired right.
If, however, the right created by the statute is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which it was created has expired.
In order to see whether the rights and liabilities under the repealed ordinance have been put an end to by the Act, 'the line of enquiry would be not whether the new Act expressly keeps alive old rights and liabilities under the repealed ordinance but whether it manifests an intention to destroy them.
Another line of approach may be to see as to how far the new Act is retrospective in operation.
[691 F G] State of Punjab vs Mohar Singh, ; , referred to 4.
(i) Sub section
(2) of section 31 of the Act was not intended to preserve abstract rights conferred by the repealed ordinance.
The legislature had the competence to so re structure the ordinance as to meet the exigencies of the situation obtaining after the taking over of the contract carriage services.
It could re enact the ordinance according to its original terms, or amend or alter its provisions.
[692 A] (ii) When the ordinance came to be replaced by the Act, the Corporation felt that the number of employees of the erstwhile contract carriage operators was too large for its requirements.
The legislature, therefore stepped in and reduced the scale of absorption in the proviso to sub section
(3) of section 19 from 7.9 per vehicle to 4.45 per vehicle.
[694G] 5.
The object of section 31(2)(i) is to preserve only the things done and action taken under the repeated ordinance and not the rights and privileges acquired and accrued on the one side, and the corresponding obligation or liability 686 incurred on the other side, so that if no right acquired under the repealed ordinance was preserved, there is no question of any liability being enforced.
It is unlike the usual saving clauses which presented unaffected by the repeal, not only things done under the repealed enactment but also the rights acquired thereunder.
[693 C, D] 6.
(i) Every person eligible for absorption had to fulfil three conditions, viz., (1) he had to be a workman within the meaning of the ; (2) he should have been, immediately before the commencement of the ordinance, exclusively employed in connection with the acquired property, and (3) he had to come within the ratio provided in the proviso to sub cl.
(3) to cl. 20.
The whole object of inserting sub cl.
(3) to cl. 20 of the ordinance was to obviate the unemployment of persons suitable for employment, for which purpose, the Corporation had necessarily to screen the applicants.
[693 G] (ii) It was only if the employee was willing to be absorbed in the service of the Corporation that the Corporation could absorb him in service, provided the other conditions specified in sub cl.
(3 ) to cl. 20 were satisfied.
[694 E] (iii) Thus it is clear that several steps had to be taken by the authorities before identifying and determining the persons who could be absorbed in the service of the Corporation, in accordance with sub cl.
(3) to cl. 20 of the ordinance, which indicates that automatic absorption of the employees of the erstwhile contract carriage operators was not legally permissible.
[694 F] 7.
The distinction between what is and what is not a right presented by the provisions of section 6 of the General Clauses Act.
is often one of great fineness.
What is unaffected by the repeal of a statute is a right acquired or accrued under it and not a mere 'hope or expectation of ', or liberty to apply for acquiring a right.
[692 G] Director of Public Works vs Ho Po Sang, [1962] 2 All.
ER 721 PC, referred to.
The Act substitutes a 'new ' proviso in sub section
(3) of section 19 in place cf the old proviso to sub cl.
(3) to cl. 20 of the ordinance, altering the whole basis of absorption.
The new proviso is given a retrospective effect, and it holds the field from the notified date i.e., January 30, 1976.
The proviso in subcl.
(3) to cl. 20 laying down a particular ratio of absorption, is pro tanto avoided by an express enactment of a 'new ' proviso to sub section
(3) of section 19 which is entirely inconsistent with it.
When an ordinance is replaced by an Act which is made retrospective in operation, anything done or any action taken under the ordinance stand wholly effected.
[695 C] 9.
(i) The employees of the former contract carriage operators in normal course filled in the pro forma giving their service particulars and reported to duty.
This was in the mere 'hope or expectation ' of acquiring a right.
The submission of these 'call reports ' by the employees did not subject the Corporation to a corresponding statutory obligation to absorb them in service.
[692 C] (ii) The meeting of the Committee set up by the Government for laying down the principles for equation of posts and for determination of inter sc seniority, met on June 2, 1976.
The Committee decided that even in the 687 case of helpers cleaners, there should be a 'trade test ' and the staff cleared by the Committee for the posts of helper 'B ', helper 'A ' and assistant artisans should be on the basis of their technical competence, experience, ability etc.
The Committee also decided that all other employees of contract carriage operators, who were eligible for absorption, should be interviewed by that Committee for the purpose of absorption on the basis of experience, ability duties and responsibilities.
These norms were not laid down till June 2, 1976 Till their actual absorption, the employees of the erstwhile contract carriage operators had only an inchohate right.
[692 E F]
|
Civil Appeal No. 80 of 1977.
Appeal by Special Leave from the Judgment and order dated 4 11 1976 of the Punjab and Haryana High Court in Civil Rev. No. 226 of 1971.
Suresh Sethi (Amicus Curiae) for the Appellant.
Yogeshwar Prasad and Mrs. Rani Chhabra for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against the judgment of the Punjab and Haryana High Court dated 4th November, 1976 dismissing the revision petition filed by the appellant before the High Court.
This case has rather a chequered career and travelled through various stages and finally when it came to the High Court the case was remanded and after remand another re vision petition was filed before the High Court which was heard by a Single Judge who referred it to a Division Bench as in his opinion a substantial question of law was involved in the case.
When the case went before the Division Bench consisting of Pandit and B. section Dhillon, JJ.
the two Judges differed from each other and the case was referred to a third Judge, namely, Mittal, J. who agreed with Pandit, J. and dismissed the petition.
Hence this appeal.
In order to understand the point of law involved in this case, it may be necessary to give a brief resume of the facts leading to the appeal.
It appears that the appellant defendant was a tenant of a shop belonging to one Sher Singh and was situated in Gurgaon Cantonment.
Sher Singh gave an application on 21 3 1967 under the provisions of the East Punjab Urban Rent Restriction Act 1949 (hereinafter referred to as the Act) against the defendant appellant for eviction from the shop on the ground that he had defaulted in payment of the rent and arrears for the period 9 11 1965 to 8 3 1967.
Notice of this application for 11th May 1967 was issued on the 22nd March, 1967 and was actually served on the defendant appellant on 22nd April, 1967.
on the 29th April, 1967 the defendant appellant made an application before the Senior Sub Judge who was also the Rent Controller for depositing a sum of Rs. 179.48 being the rent along with interest due.
The amount was however deposited before the Rent Controller on the 4th May, 1967.
It appears that the first date of the hearing of the 839 application was 11th May, 1967 on which date the Rent Controller made the following order: "Present: Mr. Vijay Pal Singh for the petitioner Mr. P. L. Kakkar for the respondent The respondent 's counsel Sh.
P. L. Kakkar has been informed that the petitioner has deposited Rs. 179.48 paise on 4 5 67.
Papers are filed.
" Even before this date when the amount was actually deposited by the appellant, the Rent Controller had passed the following order: "Present: Sh.
Shiv Narain Petitioner .
The rent be deposited at the responsibility of the petitioner and after that notice be issued on payment of P.F. for the respondent for 11 5 67.
" It is, therefore, manifest that in the instant case a deposit of the rent and the arrears along with interest had actually been made before the first date of hearing to the knowledge of the Court and the Court had acknowledged the fact of the deposit of the amount.
Again, on the first date of hearing i.e. 11th May, 1967 the Rent Controller informed counsel for the applicant respondent that a sum of Rs. 179.48 had been deposited.
It is, therefore, clear that the applicant respondent 1 ' was apprised clearly of the fact that the amount in question had actually been deposited and was at his disposal and he could withdraw the same from the Court of the Rent Controller whenever he liked.
Despite these facts, the Rent Controller held in its order dated the 2nd December, 1967 that the deposit was not made in accordance with the proviso to section 13(2) (i) of the Act, and, therefore, the appellant being a defaulter the application was allowed and ejectment was ordered.
Thereafter, the appellant went up in appeal to the District Judge who was the Appellate Authority under the Act which differed from the view taken by the Rent Controller and by his order dated 22nd February, 1968 having held that the deposit was valid dismissed the application filed by the respondent for evicting the appellant.
Thereafter a revision was filed to the High Court which was remanded to the District Judge for deciding the case afresh, and particularly having regard to the decision of this Court in the case of Shri Vidya Prachar Trust vs Pandit Basant Ram(l).
On remand the District Judge accepted the application of the respondent and affirmed the order of the Rent Controller directing ejectment of the appellant.
Thereafter the 840 appellant filed a revision before the High Court which, as already indicated, had a varied career before the High Court and was ultimately decided against the appellant and in favour of the applicant respondent The three Judges of the High Court who heard the case have been greatly influenced by the decision of this Court in Shri Vidya Prachar Trust case (supra).
It appears that the previous Division Bench of the Punjab and Haryana High Court in the case of Mehnga Singh & Ors.
vs Dewan Dilbagh Rai & ors had followed the Supreme Court decision and taken the view that the deposit in the circumstances was not valid.
We have gone through the judgment of the Judges of the High Court and we are unable to agree with the interpretation placed by them oh the proviso to section 13(2)(i) of the Act.
We are also constrained to observe that the High Court has misapplied the decision of this Court in Vidya Prachar Trust case (supra) which is clearly distinguishable from the facts and circumstances of this case.
Before dealing with the point of law involved it may be necessary to extract portions of the Act with which we are concerned.
In the instant case, we are mainly concerned with section 13 of the Act which may be extracted thus: "13.
(1) x x x (2) A landlord who seeks to evict his tenant shall apply to.
the Controller for a direction in that behalf.
If the Con troller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied (i) that the tenant has not paid or tendered the rent due by him in respect of the building or rented land within fifteen days after the expiry of the time fixed in the .
agreement of tenancy with his landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable: Provided that if the tenant on the first hearing of the application for ejectment after the due service pays or tenders the arrears of rent and interest at six per cent per annum on such arrears together with the cost of application assessed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid.
X X X X X 841 The Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application.
" The decision of the case mainly turns upon the interpretation of the proviso to section 13, which requires three essential conditions: (1) that there must be an application for ejectment before the Court, (2) that even after due service the tenant does not pay or tender the arrears of rent and interest at 6 per cent per annum together with costs assessed by the Controller, (3) that if the payment as required by the aforesaid two conditions is made then the tenant shall be deemed to have paid rent within the time required by law.
The last part of section 13 enjoins that where the conditions of the proviso are not fulfilled the Controller shall make an order directing the tenant to put the landlord in possession and where he is satisfied that the rent has been paid, the application of the landlord must be rejected.
Thus, the sole question which has to be determined in the instant case is as to whether or not the deposit made by the appellant was legally valid.
The grounds on which the High Court held the deposit to b invalid were (1) that the rent was deposited in the Court of the Rent Controller without there being any express provision in the Act requiring the tenant to deposit the rent in Court, (2) that even if the deposit be held to be valid since it was made not on the date of the first hearing but before that date, the deposit did not conform to the conditions required in the proviso.
Thirdly, the High Court relied mainly on the decision of this Court in Vidya Prachar Trust case (supra) and held that the deposit was not valid.
Before examining the case of this Court in the case of Vidya Prachar Trust case (supra) it may be necessary to comment on the reasons given by the High Court in rejecting the case of the appellant.
We have already indicated above that tho appellant first moved the Rent Controller for making a deposit of Rs. 179.48 and then made the actual deposit on the 4th May, 1967 i.e. to say a week before the date of the first hearing fixed by the Rent Controller.
It is also not disputed before us or for that matter also, also before the courts below that the amount deposited by the appellant consisted of not only the arrears of rent but also costs and interest as required by the proviso to section 13 of the Act.
Fourthly, it is also established that after the deposit was made before the Rent Controller he did not return the same to the appellant on the ground that he had no jurisdiction to receive it but oh the other hand directed that notice of the deposit may be given to the respondent 842 for 11 5 1967.
Furthermore, the trial court on 11 5 1967 that is the first date of hearing recorded an order that the respondent 's counsel had been informed that the amount had been deposited.
There is magical formula or prescribed manner in which rent can be deposited by the tenant with the landlord.
The rent can be deposited by placing the money in the hands of the landlord which would amount to actual tender.
The second mode of payment is to deposit the amount in the court where a case is pending in such a manner so as to make the amount available to the landlord without any hitch or hindrance whenever he wants it.
Even the Act does not prescribe any particular mode of deposit.
In fact, the use of the words "tender or deposit" in the proviso clearly postulate that the rent can be given to the landlord in either of the two modes.
(1) It may be tendered to the landlord personally or to his authorised agent or it may be deposited in Court which is.
dealing with the case of the landlord to this knowledge so that the landlord may withdraw the deposit whenever he likes.
In the instant case the appellant tenant chose the second course.
How can it be said that a deposit before the Rent Controller where the case of the landlord was sub judice would not be a valid deposit if it was in fact in existence on the date of the first hearing to the knowledge of the landlord.
The reasoning of the High Court that the rent was deposited earlier than 11 S 1967 and is therefore, invalid does not appear to us at all.
In fact, if the tenant deposits the rent even before the first date of hearing it is a solid proof of his bonafides in the matter and the Legal position would be that if the rent is deposited before the first date of hearing, it will be deemed to have been deposited on the date of the hearing also because the deposit continues to remain in the court on that date and the position would be as if the tenant has deposited the rent in court for payment to the landlord.
This is ' more particularly so when the Controller gave notice to counsel for the respondent on the first date of hearing that the amount had been deposited with the Controller.
In these circumstances, we ar, satisfied that all the conditions necessary for the application of the proviso have been completely fulfilled in this case and the High Court was not at all justified in allowing the application of the landlord and directing ejectment of the appellant.
Coming now to the case of Vidya Prachar Trust case (supra) which is the sheet anchor of the judgment of the High Court we think that it is clearly distinguishable from the facts of this case.
In the first place, although in that case also an application under section 13 of the Act had been made by the applicant for the eviction of the respondent on the ground that rent was not paid, the tenant on the first date of hearing did not tender the rent, cost and interest as required 843 by the proviso but only a part of the rent.
It is, therefore, manifest A that in the case which was being dealt with by the Supreme Court the first condition enjoined by the proviso was not fulfilled at all and on that ground alone it could be held that the deposit was not valid.
Secondly, the deposit in that case was made not before the Rent Controller under the proviso to section 13 of the Act but was made before the Judge under section 31 of the Punjab Relief of Indebtedness Act which had absolutely no application to proceedings for eviction taken under the Act.
Thus, a deposit made before some other court had no nexus with the arrears of rent for which an application for ejectment was filed before the Rent Controller.
Thirdly, it was pointed out by this Court that the tenant had deposited even on. month 's rent in advance which under the provisions of section 19 read with section 6 of the Act was an offence if the landlord had withdrawn the rent.
Thus, the tenant in that case had deposited the rent in a manner and under circumstances under which it could not be made available to the landlord even if he wanted to withdraw it because the landlord may have entailed a criminal penalty.
These are the facts on the basis of which this Court held that the deposit was not valid.
In this connection this Court observed as follows: "There is only one saving for the tenant and that is when he tenders the full rent in Court before the Rent Controller together with interest and costs.
In the present case, the tenant did tender rent but only for a portion of the period and he relied on his deposit under the Relief of Indebtedness Act as due discharge of his liability for the earlier period.
It may be stated that the deposit before the Senior Sub Judge was made not only of arrears of rent but prospectively for some future period for which the rent was then not due.
" It appears from the observations of this Court extracted above that the deposit was prima facie invalid.
This Court further observed as follows: It is impossible to think that the landlords would be required to go to the Court of the Senior Sub Judge with a view to finding out whether their tenants have deposited rent due to them or not. on the whole, therefore, we are of opinion that the deposit under section 31 of the Relief of Indebtedness Act did not save the tenant from the consequences of the default as contemplated by section 13 of the Urban Rent Restriction Act.
" 844 The effect of this observation is that the deposit was made in a wrong court and under such circumstances that the deposit could not be available to the landlord whenever he wanted.
It was against the background of these special facts and circumstances that this Court in the Vidya Prachar Trust case (supra) held that the deposit was not valid.
In the instant case we find that the deposit made by the appellant does not suffer from any such infirmities as were present in Vidya Prachar Trust case (supra).
Finally, we would like to observe that the Rent Control Act is a piece of social legislation designed to protect the tenant from eviction by landlords on frivolous, insufficient or purely technical grounds.
Even as the Act allows eviction of the tenant on the ground of non payment of arrears of rent the proviso affords sufficient protection to the tenant against eviction if the tenant deposits the rent in accordance with the proviso.
Vidya Prachar Trust case (supra) was reconsidered by this Court in a recent decision in the case of Duli Chand vs Maman Chand by a Bench of three Hon 'ble Judges of which one of us (Kailasam, J.) was a party and while distinguishing the case this Court made the following observations: "We need not deal with all the contents that have been canvassed on both sides.
Nor do we feel the necessity of reconsidering the decision in Vidya Prachar Trust vs Basant Ram because on facts, the instant case is clearly distinguish able from that case.
Here, before us, the rent for the months of February, March and April 1964 was deposited by the tenant to the credit of the landlord in the very court of the Rent Controller in which the landlord subsequently filed the eviction petition.
The deposit lying in the Treasury was in the legal custody and control of the court of the Rent Controller, and at the first hearing, if not earlier, the landlord was informed that he was entitled to withdraw that deposit.
Thus, even if the tenant had obtained the order of the Rent Controller for making the deposit, by referring to section 31 of the Relief Act, the fact remained that the money was in custodia legis and could be ordered to be paid to the land lord there and then by the Court at the first hearing.
" It was further held by this Court that where the tenant makes the deposit of the arrears of rent and interest informing the landlord at the 845 first hearing then the requirement of the law has been sufficiently complied with.
In this connection, the Court observed thus: "The tenant by making deposit of the arrears of rent and interest and costs and informing the landlord at the first hearing that he could receive the same from the Court, had substantially complied with the requirement of the said.
proviso.
" In the instant case w, have already pointed out that the appellant had fulfilled all the conditions of the proviso and had deposited the rent arrears, costs and interest on the first date of hearing and he, therefore, complied with all the requirements of the proviso and was, therefore, entitled to the protection given by the statute.
In view of the legal opinion we have formed regarding the interpretation of proviso to section 13 of the Act it is manifest that the judgment of the High Court is legally erroneous and the case of Mehnga Singh (supra) is hereby overruled, as it had wrongly applied and misconstrued the decision of this Court in Vidya Prachar Trust case (supra).
For these reasons, therefore, we allow this appeal, set aside the judgment of the High Court and dismiss the application of the respondent for ejectment of the appellant.
In the peculiar facts and circumstances of this case the parties will pay and bear their own costs throughout.
S.R. Appeal allowed.
|
The proviso to clause (1) of sub section (2) of section 13 of the East Punjab Urban Rent Restriction Act, 1949, states that "if the tenant on the first hearing of the application for ejectment after due service pays or tenders the arrears of rent and interest @ 65% per annum or such arrears together with the cost of application assessed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within the time showed in clause (i) of sub section (2) of section 13 of the Act, 1949".
In such circumstances, an order for eviction against the tenant cannot be passed.
The appellant was a tenant under the respondent landlord Sher Singh.
On 21 3 67, Sher Singh tiled an application under Section 13 of the East Punjab Urban Rent Restrictions Act, 1949 for ejectment of the appellant tenant from the tenanted shop situate in Gurgaon Cantonment, on the ground of arrears of rent for the period from 9 11 65 to 8 3 67 at the agreed rate @ Rs. 15/ pm.
The notice of the application for ejectment with the first date of hearing as 11 5 67 was served on the appellant tenant on 22 4 67.
On 29 4 1967 the appellant tenant made an application before the very same Rent Controller praying for payment of arrears of rent i.e. Rs. 178.48 for the above period computed @ Rs. 10.62 p.m., being the fair rent fixed by that Court on 20 4 67 in an earlier application for fixation of fair rent.
The said amount was actually deposited on the court of the Rent Controller on 4 5 67.
On 11 5 67 the appellant tenant tendered in the court to the landlord a further sum of Rs. 25/ being the costs and Rs. 2/ being the interest.
This was not accepted on the ground that the lender was not a valid one within the meaning of section 13(2)(i) of the Act.
This objection was accepted by the Rent Controller and an ejectment order was passed.
On first appeal the District Judge reversed the said order.
In the Revision before the High Court, the High Court remanded the matter to the first Appellate Court for fresh orders in view of this Court 's ruling in Vidya Prachar Trust vs Basant Ram [1970] 1 S.C.R. 66.
The First Appellate Court affirmed the ejectment order.
In the further revision to the High Court, the learned single Judge referred it to the Division Bench which in turn referred it to a third Judge.
The third Judge agreed with the single Judge that the payment of fair rent fixed on 4 5 67 was not a valid tender within the meaning of section 13(2)(i) of the Act.
The single Judge, therefore, dismissed the revision petition and confirmed the orders of ejectment of the courts below.
Allowing the appeal by special leave, the Court.
837 ^ HELD : 1.
Proviso to section 13(2)(i) of the East Punjab Urban Rent Restrictions Act, 1949 requires three essential conditions: (1) that there must be an application for ejectment before the Court, (2) that even after due service the tenant does not pay or tender the arrears of rent and interest at 6 per cent per annum together with costs assessed by the Controller, (3 ) that if the payment as required by the aforesaid two conditions is made then the tenant shall be deemed to have paid rent within the time required by law.
The last part of section 13 enjoins that where the conditions of the proviso are not fulfilled the Controller shall make an order directing the tenant to put the landlord in possession and where he is satisfied that the rent has been paid, the application of the Landlord must be rejected.
[841 A C] 2.
There is no magical formula or any prescribed manner in which rent can be deposited by the tenant with the landlord.
The rent can be deposited by placing the money in the hands of the landlord which could amount to actual tender.
The second mode of payment is to deposit the amount in the court where a case is pending in such a manner so as to make the amount available to the landlord without any hitch or hindrance whenever he wants it.
Even the Act does not prescribe any particular mode of deposit.
In fact, the use of the words "tender or deposit" in the proviso clearly postulate that the rent can be given to the landlord in either of the two modes.
(I) It may be tendered to the landlord personally or to his authorised agent or it may be deposited in Court which is dealing with the case of the landlord to his Knowledge so that the landlord may withdraw the deposit whenever he likes.
In the instant case the appellant tenant chose the second course.
[842 A C] 3.
A deposit before the Rent Controller where the case of the landlord was subjudice would be a valid deposit, if it was in fact in.
existence on the date of the first hearing to the knowledge of the landlord.
In fact, if the tenant deposits the rent even before the first date of hearing it is a solid proof of his bonafides in the matter and the legal position would be that if the lent is deposited before the first date of hearing, it will be deemed to have been deposited on the date of the hearing also because the deposit continues to remain in the court on that date and the position would be as if the tenant had deposited the rent in court for payment to the landlord.
[842 D E] In the instant case, all the conditions necessary for the application of the proviso have been completely fulfilled.
This is more particularly so when the Controller gave notice to the counsel for the respondent on the first date of hearing that the amount had been deposited with the Controller.
[842 E F] Vidya Prachar Trust vs Pandit Basant Ram, [1970] 1 S.C.R. explained and distinguished.
Dulichand vs Maman Chand, C.A. 1744/69 dated 27 3 79 followed Mehnga Singh & Ors.
vs Dewan Dilbagh Rai & Ors., overruled.
Observation: The Rent Control Act is a piece of social legislation designed to project the tenant from eviction by landlords on frivolous, insufficient or purely technical ground.
Even as the Act allows eviction of the tenant on the ground of 838 non payment of arrears of rent the proviso affords sufficient protection to the tenant against eviction if the tenant deposits the rent in accordance with the proviso.
[844 B C]
|
l Appeals Nos.
67 to 75 of 1959.
Appeals by special leave from the judgment and order dated May 7, 1954 of the U.P. Board of Revenue, in Second Appeals Nos.
53 to 61 of 1945 46.
section P. sinha, J. P. Goyal and Sadhu Singh, for the appellants.
Bishan Narain and E. L. Mehta, for the respondents.
February 15.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
These nine.
appeals, by special leave, are against the orders of the Board of Revenue, Uttar Pradesh, dismissing nine 219 second appeals filed by the appellants in circumstances hereinafter, mentioned, on the ground that the orders of the First Appellate Court in three other connected first appeals had become final and operated as res judicata.
Khub Chand had three sons Karan Singh, Hoshiar Singh and Mukhtiar Singh.
Each of these brothers instituted four suits.
Hoshiar Singh instituted suit No. 48 of 1944 under section 175 of the U.P. Tenancy Act, 1939 (U.P. XVII of 1939), against one Bhartu, suit No.49 against Har Gyan, Mukhtiar Singh and Data Ram, sons of Sis Ram, brother of Bhartu, suit No.50 against Har Gyan and Mukhtiar Singh, sons of Sis Ram, and suit No. 51 against one Banwari.
Karam Singh similarly instituted suits Nos. 63, 61, 60 and 62 against similar defendents respectively.
Mukhtiar Singh 's suits against those defendants, respectively.
were Nos.67, 65, 64 and 66.
Each of these suits was for different sets of plots.
The allegations of the plaintiffs in each suit and the contentions of the defendent in each suit were similar and therefore similar issues were framed in each suit and all the suits were tried together and were disposed of by one common judgment.
Twelve decrees were, however, prepared.
Against the twelve decrees the defendants judgment debtors in each decree filed twelve first appeals in the Court of the Additional Commissioner, Meerut Division.
The Additional Commissioner dismissed three appeals for default, These were the appeals which were filed against Hoshiar Singh, Karam Singh and Mukhtiar Singh by Banwari.
The Additional Commissioner heard the remainmg nine appeals on merits and dismissed them.
The defendants judgment debtors then filed nine second appeals before the Board of Revenue.
They were dismissed as barred by res judicata on May 7, 1954.
The applications for special leave were filed in this Court in November 1954.
Special leave was 220 granted on April 18, 1955.
By the time the appeals came up for hearing, some other events took place and as a result of them the respondents filed an application for adducing additional evidence under O.XLV, rr. 1 to 5, Supreme Court Rules in November 1959, and also included in their statement of case a narration of those events and their effect.
It appeals that the villages in which the lands in suit were situate, come under Consolidation Operations under the U.P. Consolidation of Holding.s Act, 1953(U. P. V of 1954), hereinafter called the Act, sometime in July 1954, when a declaration was issued by the State Government under s.4 of the Act to the effect that it had been decided to make a Scheme of consolidation for that area.
In December 1954, a statement of plots and tenure holders was prepared and in May 1955 a statement of proposals under s.19 was prepared; in August 1955 final statements in chak form 25 were issued.
On October 17, 1955, the State Government published a notification under s.52 of the Act.
section 52 of the Act then read: "As soon as may be after the tenure holders have entered into possession of their new holding in pursuance of ;Section 26, the State Government shall issue a notification in the Official Gazette that the Consolidation opera tions have been closed in the village and the village shall then cease to be under consolidation operation.
" It is thus seen that this village remained under Consolidation operations from some time in July 1954 to October 17, 1955.
The appellants did not file any objections before the Consolidation authorities under s.12 of the Act disputing the correctness or the nature of the entries in the statement prepared under s.11 or under s.20 against the statement of proposals prepared under s.19 221 Section 21 provides for the fixing of a date for the enforcement or the consolidation scheme.
Section 25 provides for the issuing of the allotment order showing the new fields allotted to each tenure holder in accordance with the said scheme.
Section 26 provides for the tenure holders to enter into possession of the fields allotted to them on or after a certain date.
Section 27 provides for the preparation of new village maps, khasra and the record of rights, in accordance with the Provisions of the U. P. Land Revenue Act, 1901.
Its sub s (2) provides that all entries in the record of rights prepared under sub s.(1) small be final and conclusive, Section 30 provides that the rights, title, interest and liabilities of the tenure holder in his original holding shall be extinguished and he will have the same rights, title, interest and liabilities subject to modification, if any, in the plots allotted to him under s.25 with effect from the date on which he enters into possession of the plots allotted to him.
It was contended for the respondents that in view of these consolidations operation and s.5 of the Act, as amended up to date, these appeals have become infructuous as this Court cannot pass any orders on the merits of the controversy.
The Act has been amended several times since it was origi nally enacted.
The various amendina Acts are: Act XXVI of 1954 which came into force on December 13, 1954; Act XIII of 1955 which me into force on June 10, 1955; Act XX of 1955 whcih came into force on October 21, 1955; Act XXIV of 1956 which came into force on July 3, 1956; Act XVI of 1957 which came into force on May 25, 1957 and Act XXXVIII of 1958 which came into force on November 19, 1958.
During the period the village in suit was under Consolidation Operations, the Act applicable 222 to the proceedings was the Original Act as amended by Acts XXVI of 1954 and XIII of 1955.
The other Acts came into force subsequent to the issue of the notification under s.52 of the Act.
It is necessary to bear this in mind in view of the contentions raised.
Section 5 of Act V of 1954 was as follows (1) Upon the publication of the declaration under section 4, the district or the local area; as the case may be, shall be deemed to be under consolidation operations from the date of such publication until this publication of the Notification under section 52 in the official Gazette to the effect that the consolidation operations have been closed.
(2) Where a district or any other local area is under consolidation operations, the duty of preparing and maintaining the maps the khasra and the annual register under Chapter ITI of the U.P. Land Revenue Act, 1901, shall stand transferred to the Settlement Officer (Consolidation), and thereupon all the powers conferred on the Collector, Assistant Collecter and the Tahsildar under the said Chapter shall, so long as that district or the area remains under consolidation operations be exercised respectively by the Settlement Officer (Consolidation), Consolidation Officer and the Assistant Consolidation Officer.
" Act XXVI of 1954 deleted the last portion of sub s.(2) commencing from the words "and there.
No change in this section was made by the Amending Act XIII of 1955.
There was therefore nothing in this section which in any way would have affected the hearing of these appeals, during or after the consolidation operations.
223 Section 12 of Act V of 1954 provided for the publication of the statement of plots and tenure holders prepared under section II and for filing objections disputing the correctness or nature of entries in it.
Its subsections (4), (5) and (6) were : " (4) Where the objection filed under sub section (1) involves a question of title and such question has not already been determined by a competent court, the Consolidation Officer shall refer the question for determination to the Arbitrator.
(5) All suits or proceedings in the court of first instance or appeal in which a question of title in relation to same land has been raised, shall be stayed.
(6) The decision of the Arbitrator under sub section (4) shall be final.
" There was nothing in these sub sections which provided as to how the suits or proceedings stayed been under sub section (5) would be decided or how matters in connection of which no objection bad raised under s.12 would be dealt with.
These provisions too did not affect the pending Appeals as no objection had been filed under s.12.
Act XXVI of 1954 amended sub s.(4) to the effect that the objection coming under sub s.(4) would be referred to the Civil Judge, who will then refer it to the Arbitrator, and substituted another sub section in the place of original sub s.(5).
The substituted sub s.(5) read : "(5) Upon the making of reference under sub section (4) all suits or proceedings in the Court of first instance, appeal, reference or revision in which the question of title in relation to the same land has been raised, shall be stayed." This amendment in sub s.(5) stayed the suits and 224 proceedings not only in the Courts of the first instance and appeal but also in the Courts of reference and revision, but did not affect these appeals.
Sub s.(2) of s.27 as originally enacted, was not amended up to the 17th October, 1955.
Its sub s.(2) made the entries in the record of rights Prepared under sub s.(1) final and conclusive. 'We are not concerned with its effect in these appeals.
Section 49 of the Act bars the jurisdiction of Civil Courts.
This section, before its amendment by Act XTTT of 1955, which came into force on June 10, 1955, did not bar the institution of a suit or proceedings in the, revenue court.
It did so after the amendment.
;,) appeals had been filed long before the amendment.
We may state that no objection was raised on behalf of the respondent to the effect that these appeals could not have been instituted, but we have discussed that matter, in view of the fact that the appeals were filed after the State Government had made a declaration under s.4 of the Act.
We have not been referred to any provision in these, Acts, viz. Act V of 1954, Act xxvr of 1954 and Act XIII of 1955 which would lead to the conclusion that these appeals have become infructuous.
Act XX of 1955 made an amendment in s.27 of the Act.
The amendment however does not affect the question before us.
Act XXIV of 1956 which came into force on July 3, 1956, substituted a new section 5 in the place of the old.
The substituted section 5 read : "5.
When the declaration under section 4 has been published in the Gazette, the consequences as hereinafter set forth shall, 225 from the date specified thereunder till the publication of the notification under section 52 in the Official Gazette to the effect that the consolidation operations have been closed, ensue in the area to which the declaration relates, namely ; (a) the district or the local area, as the case may be, shall be deemed to be under consolidation operations from the specified date, and the duty of preparing and maintaining the khasra and the annual Register under Chapter III of the U.P. Land Revenue Act, 1901, shall stand transferred to the Settlement Officer (Consolidation), and (b) all proceedings for the correction of any such records pending before any court or authority shall be stayed but without pre judice to the right of the persons affected to agitate the question before the Assistant Consolidation Officer under sub section (3) of Section 8, or in proceedings commenced under and in accordance with section 10" Clearly, cl.
(b) does not apply to these appeals as they have not arisen out of proceedings for the correction of village records.
Act XXIV of 1956 made certain amendments in section 11 with which we are not concerned.
We are not also concerned with the amendments this Act made in subs.
(1) of section 12.
It substituted a new sub section (5) and added sub section
These new subsections (5) and (7)are: "(5) Upon the publication of the statement under section 11, all suits or proceedings in the Court of first instance, appeal, reference or revision, in which the question of title in respect of any plot mentioned in the statement with reference to clause (c) of sub section (1) of section II has been raised, shall be 226 stayed to the extent it relates to such plot and shall thereafter be disposed of in the manner prescribed.
(7) A question of title in respect of any plot mentioned in the statement in clause (c) Of sub section 1 of section 11, which might and ought to have been raised under subsection (1) but had not been raised, shall not be raised in any objection filed under subsection (2) of section 20, or under sub section (1) of section 34.
" It is for the first time that such suits and proceedings in the various Courts had to be stayed in which a question of title in respect of any plot mentioned in the statement with reference to el.
(c) of sub section
(1) of section 11 had been raised and that these stayed suits or proceedings were to be decided subsequently in the manner prescribed, i. e., in the manner laid down under rules framed under the Act.
These provisions of sub section
(5) do not affect the appeals as they were prospective in operation and could apply to those cases only in which at atements under section 11 were filed after the amendment had been made.
The amendments made by the other sections of this Act and Act XVI of 1957, do not affect the hearing of the appeals in any way.
Thereafter case Act XXXVIII of 1958.
This Act again substituted a new section 5, and the relevant portion of the substituted section reads: 5.Upon the publication of the notification under section 4 in the Official Gazette, the consequences, as hereinafter set forth, shall, subject to the provisions of this Act, from the date specified thereunder till the publication of notification under section 52 or sub section (1) of section 6, as.
the case may 227 be, ensue in the area to which .
the declaration relates; namely x x x x x (b) (1) all proceedings for correction of the records and all suits for declaration of rights and interest over land , or for posses sion of land or for partition, pending before any authority or court, whether of first ins tance, appeal or reference or revision, shall stand stayed, but without prejudice to the right of the persons affected to agitate the right or interests in dispute in the said pro ceedings or suits before the consolidation au thorities under and in accordance with the provisions of this Act and the Rules made thereunder: (ii) the findings of consolidation autho rities in proceedings under this Act in respect of such right or interest in the land, shall be acceptable to the authority or court before whom the proceeding or suit was pending which may, on communication thereof by the parties concerned.
proceed with the proceeding or suit, as the case may be; These provisions operate prospectively.
The consequences mentioned in section 5 ensue upon the publication of the notification under section 4 in the Gazette and continue up to the publication of the notification under section 52.
They do not continue thereafter and could not operate on these cases in which the notification under section 52 was issued on the 17th October 1955.
They do not therefore bar the hearing of these appeals.
These a peals have not.
therefore become infructuous.
Sections 7, 8, 9, 10, 11, 11 A, 11 B, 12, 12 A, 12 B, 12 C and 12 D have been substituted by new section which apply to proceedings taken in consolidation operations subsequent to the coming into force of 'the Amending Act XXXVIII of 1858.
Sub section
(1) of 228 is.
12 makes it clear that the matters mentioned in that sub section cannot be raised subsequent to the date of notification under section 52.
There has been no material change made in as. 27 and 30, but section 49 now reads: "49.
Notwithstanding anything contained in any other law, for the time being in force the declaration and adjudication of rights of tenure holders in respect of land lying in an area, for which a declaration has been issued under section 4, or adjudication of any other right arising out of consolidation proceedings and in regard to which a proceeding could or ought to have been taken under this Act, shall be done in accordance with the provisions of this Act and no civil or revenue court shall entertain any suit or proceeding with respect to rights in such land or with respect to any other matters for which a proceeding could or ought to have been taken under this Act.
" This now provides that the adjudication of ' rights of tenure holders in respect of land lying in an area under consolidation operations shall be done in accordance with the provisions of the Act.
This leads practically to the same result to which cl.
(ii) of sub section
(b) of section 5 leads to.
The provisions of this section are not expressly limited to the period between the declaration under section 4 and the notification under section 52, but can be so construed as they relate back to section 5 (b) (ii) of the Act as the declara tion and adjudication of rights have to be done in accordance with the provisions of the Act.
Further the amended provision would apply to the proceedings regarding rights in land in the area for which a declaration under section 4 has been issued after the amendment.
We are therefore of opinion that these appeals have not become infructuous.
229 On the merits, we are of opinion that the Board of Revenue erred in holding that the appeals before it were barred by res judicata.
It is essential for any previous Adjudication of a point to bar its consideration second time that, the previous adjudication must have been between the same parties and that it be with respect to the same matter.
The three suits in which judgments became final were against one Banwari and ', not against any of the present appellants.
The matter in issue in those three suits were also different 'from that in the suits which have given rise to these appeals.
Each of the twelve suits related to different plots.
A common judgment on account of similar questions being raised for decision in the different suits, does not always make that judgment amount to one judgment in those suits.
Such a judgment will ordinarily be deemed to be really so many judgments as the suits disposed of by it.
This Court expressed a similar view in Badri Narayan Singh vs Kamdeo Prasad Singh(1).
We therefore allow the appeals, set aside the order of the Court below and remand the appeals to it for further hearing and decision according to law. ' We may make it clear that it can take into consideration the effect of the Consolidation Act and proceedings thereunder, after giving an opportunity to the parties to submit what, they like in regard to them costs to abide the result.
Appeals.
|
K, H and M filed four suits each against four sets of defendants in respect of different sets of plots under section 175 U. P. Tenancy Act, 1939.
Since similar points were involved the twelve suits were tried together and were disposed of by a common judgment decreeing them.
Twelve decrees were prepared and the defendants preferred twelve appeals to the Additional Commissioner.
Three appeals by one set of the defendants B were dismissed for default and the remaining nine were dismissed on merits.
Against the dismissal of the nine appeals on merits the three sets of defendants preferred nine second appeals before the Board of Revenue but they were dismissed as barred by res judicata on May 7, 1954.
In November, 1954, the appellants filed petitions for special leave before the Supreme Court and on April 18, 1955, special leave was granted.
In July 1954, the villages in Which the lands in suit were situate came under consolidation operations under the U. P. Consolidation of Holdings Act, 1953, and the operations were completed by the publication of a notification 218 under section 52 of the Act on October 17, 1953.
The appellants did not file any objections before the consolidation authorities.
The respondent contended that in view of the consolidation operations the appeals before the Supreme Court had become infructuous.
Held, that the appeals had not become infructuous.
There was nothing in the U. P. Consolidation of Holdings Act, 1953, as it stood during the period the village in suit was under consolidation operations which could have in any way affected these appeals, during or after the consolidation operations.
The subsequent Amending Acts did not affect the appeals as they were prospective in operation and applied only to cases where the consolidation operations were started after the Amending Acts had come into force.
Held, further that the appeals before the Board of Revenue were not barred by resjudicata.
It was essential for the bar of res judicata that the previous and judication must have been between the same parties.
The three suits in which judgments had become final were against one B and not against any of the appellants .
The matter in issue in those three suits was different from that in the other nine suits as each of the suits related to different plots.
The common judgment was really twelve judgments in the twelve suits.
Badri Narayan Singh vs Kamdeo Prasad Singh, (1962) 3. section C. R. 759 referred to.
|
Civil Appeal No. 1897 of 1976 .
Appeal by Special Leave from the Judgment and order dated 24 10 1975 of the Kerala High Court in T.R.C. No. 86/74.
Dr. V. A. Seyid Muhammed and K. R. Nambiar for the Appellant.
Dr. Y. section Chitale and Mrs. Sunanda Bhandare for the Respondent.
The assessee is a private limited company carrying on business as sole selling agent for a certain brand of welding electrodes.
For the goods supplied to retailers, it charged them the catalogue price less trade discount.
The catalogue price is the price which the retailer is entitled to charge the consumer.
For the assessment year 1971 72, the returns filed under the showed a taxable turnover of inter State sales amounting to Rs. 8,71,624.
This figure was derived by deducting from the catalogue price the amount of Rs. 1,06,708 paid as trade discount by the assessee to retailers.
The 933 Sales Tax Officer refused to allow the deduction and computed the taxable turnover at Rs. 9,78,332.
The Sales Tax Officer was of the view that the amount paid by way of trade discount could not be excluded from the catalogue price.
The assessee appealed, and the Appellate Assistant Commissioner upheld its claim that trade discount did not form part of the turnover, and it could not therefore attract sales tax.
A second appeal filed by the Revenue was dismissed by the Appellate Tribunal.
The Revenue applied in revision to the High Court of Kerala and the revision application has been dismissed.
The Revenue appeals.
It is contended before us by the Revenue that the High Court has erred in affirming that an amount paid by way of trade discount cannot be included in the taxable turnover for the purpose of assessment.
It is pointed out that the definition of "sale price" in section 2(h) of the permits the deduction of sums allowed as cash discount only and makes no reference to sums allowed by way of trade discount.
It is contended that in effect the assessee enters into two distinct contracts with the retailer, the first contract relates to the sale of goods at the catalogue price and the second contract stipulates that notwithstanding the liability of the retailer under the first contract to pay the entire sale price, he may actually pay the sale price less trade discount.
On that submission, it is sought to be urged that since the sale is effected under the first contract, the entire amount treated as consideration for the sale under that contract has to be included in the taxable turnover.
We have considered the matter carefully and in our judgment the appeal must fail.
At the outset, it is appropriate that we set forth the two relevant definitions contained in the .
Section 2(j) defines "turnover" to mean "the aggregate of the sale prices received and receivable by him (the dealer) in respect of sales of any goods in the course of inter State trade or commerce . . . ".
And section 2(h) of the Act defines the expression "sale price" to mean "the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade . . . ".
It is true that a deduction on account of cash discount is alone specifically contemplated from the sale consideration in the definition of "sale price" by section 2(h), and there is no doubt that cash discount cannot be confused with trade discount.
The two concepts are wholly distinct and separate.
Cash discount is allowed when the purchaser makes payment 934 promptly or within the period of credit allowed.
It is a discount granted in consideration of expeditious payment.
A trade discount is a deduction from the catalogue price of goods allowed by wholesalers to retailers engaged in the trade.
The allowance enables the retailer to sell the goods at the catalogue price and yet make a reasonable margin of profit after taking into account his business expense.
The outward invoice sent by a wholesale dealer to a retailer shows the catalogue price and against that a deduction of the trade discount is shown.
The net amount is the sale price, and it is that net amount which is entered in the books of the respective parties as the amount realisable.
Orient Paper Mills Ltd. vs State of Orissa.
Under the , the sale price which enters into the computation of the turnover is the consideration for which the goods are sold by the assessee.
In a case where trade discount is allowed on the catalogue price, the sale price is the amount determined after deducting the trade discount.
The trade discount does not enter into the composition of the sale price, but exists apart from and outside it and prior to it.
It is immaterial that the definition of "sale price" in section 2(h) of the Act does not expressly provide for the deduction of trade discount from the sale price.
Indeed, having regard to the circumstance that the sale price is arrived at after deducting the trade discount, no question arises of deducting from the sale price any sum by way of trade discount.
Nor is there any question here of two successive agreements between the parties, one providing for sale of the goods at the catalogue price and the other providing for an allowance by way of trade discount.
Having regard to the nature of a trade discount, there is only one sale price between the dealer and the retailer, and that is the price payable by the retailer calculated as the difference between the catalogue price and the trade discount.
There is only one contract between the parties, the contract being that the goods will be sold by the dealer to the retailer at the aforesaid sale price.
We have been referred to Ambica Mills Ltd. & Ors.
vs The State of Gujarat & Anr.
Where the Gujarat High Court rejected the claim of the manufacturer to a deduction of the remission allowed from the sale price to the purchaser on account of a general fall in prices when delivery of the goods was effected.
In our opinion, the case supports the view we are taking.
The sale price remained the stipulated price in the contract between the parties.
The fail in prices 935 occurred after the contract of sale had been finalised, and with a view to relieving the purchaser to some extent of the loss which could have been occasioned thereby, the manufacturer sought to bear part of the loss by granting a rebate or remission to the purchaser.
The Revenue relies on India Pistons Limited vs State of Tamil Nadu.
In that case, the bonus of which deduction was sought by the assessee from the turnover was paid under a bonus discount scheme, not to all customers but only to distributors whose net purchases from the assessee exceeded the target figure agreed to between the parties.
The amount of rebate allowed was credited to the customer 's account and treated as a reserve from which the distributors could make future purchases.
The rebate of bonus discount was not allowed as a deduction by the Madras High Court and, in our opinion, rightly so.
It was in the nature of an incentive bonus paid to distributors whose net purchases exceeded the target figure.
It did not, and could not, affect the sale value of the goods sold by the assessee.
The sale price remained undisturbed in the contract between the parties.
In our judgment, the sale price which enters into the computation of the assessee 's turnover for the purpose of assessment under the is obtained after deducting the trade discount from the catalogue price.
The trade discount allowed by the assessee cannot be included in the turnover.
In the result, the appeal fails and is dismissed with costs.
N.K.A Appeal dismissed.
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The respondent assessee is a private limited company carrying on business as sole selling agents for a certain brand of Welding Electrodes.
It charged the catalogue price less trade discount from retailers for the goods supplied.
The catalogue price is the price which the retailer is entitled to charge the consumer.
The returns field under the , showed a taxable turnover of inter state sales amounting to Rs. 8,71,624/ for the assessment year 1971 72.
This figure was derived by deducting Rs. 1,06,708/ from the catalogue price paid as trade discount by the assessee to the retailers.
The Sales Tax officer, refused to allow the deduction and computed the taxable turnover at Rs. 9,78,332/ .
On appeal, the Appellate Assistant Commissioner upheld the assessee 's claim that trade discount did not form part of the turn over and could not, therefore, attract sales tax.
A second appeal was dismissed by the Appellate Tribunal.
A revision application by the Revenue to the High Court was also dismissed.
It was contended (i) that the High Court erred in affirming that an amount paid by way of trade discount, could not be included in the taxable turnover for the purpose of assessment, (ii) that in effect the assessee entered into two distinct contracts with the retailer, the first contract related to the sale of goods at the catalogue price and the second contract stipulated that the retailer could actually pay the sale price less trade discount and that since the sale was effected under the first contract the entire amount treated as consideration for the sale under that contract had to be included in the taxable turn over.
Dismissing the appeal, ^ HELD: It is true that a deduction on account of cash discount is alone specifically contemplated from the sale consideration in the definition of "Sale price" by section 2(h) and that cash discount cannot be confused with trade discount.
They are two separate and distinct concepts.
Cash discount is allowed when the purchaser makes payment promptly or within the period of credit allowed.
It is a discount granted in consideration of expeditious payment.
A trade discount is a deduction from the catalogue price of goods allowed by wholesalers to retailers engaged in the trade.
The allowance enables the retailer to sell the goods at the catalogue price and yet make a reasonable margin of profit after taking into account his business expense.
The outward invoice sent by a wholesale dealer to a retailer shows the catalogue price and against that a deduction of the trade discount is shown.
The net amount is the sale price, and it is that net amount which is entered in the book 's of the respective parties as the amount realisable.
[933 G H,934A C] 932 Orient Paper Mills Ltd. vs State of Orissa (1975) 35 S.T.C. 34 referred to.
Under the Sales Tax Act.
the sale price which enters into the computation of the turnover is the consideration for which the goods are sold by the assessee Where trade discount if allowed on the catalogue price, the sale price is the amount determined after deducting the trade discount.
It is immaterial that the definition of "Sale Price" in section 2(h) of the Act does not expressly provide for the deduction of trade discount from the sale price.
Having regard to the circumstance that the sale price is arrived at after deducting the trade discount, no question arises of deducting from the sale price any sum by way of trade discount.
Nor is there any question here of two successive agreements between the parties, one providing for sale of the goods at the catalogue price and the other providing for an allowance by way of trade discount.
Having regard to the nature of trade discount, there is only one sale price between the dealer and the retailer and that is the price payable by the retailer calculated at the difference between the catalogue price and the trade Discount.
There is only one contract between the parties, the contract being that the goods will be sold by the dealer to the retailer at the aforesaid sale price.
The sale price which enters into the computation of the assessee 's turnover for the purpose of assessment under the Sales Tax Act, is obtained after deducting the trade discount from the catalogue price.
The trade discount allowed by the assessee cannot be included in the turnover.
[934 C E, F, 935] Orient Paper Mills Ltd. vs State of Orissa (1975) 35 STC 84, Ambica Mills Ltd. vs The State of Gujarat and another (1964) 15 STC 367, affirmed.
India Pistons Ltd. vs State of Tamil Nadu (1974) 33 STC 472, distinguished.
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not competent to refer the second question, and the reference to that extent must be considered void.
Section 256(1) of 945 the Income Tax Act, 1961 entitles the assessee or the Commissioner, as the case may be, to apply to the Appellate Tribunal to refer to the High Court any question of law arising out of the order made by the Appellate Tribunal under section 254.
It is clear that the statute expressly contemplates an application in that behalf by a party desiring a preference to the High Court.
The application has to be filed within a prescribed period of limitation.
If the application is rejected by the Appellate Tribunal, it is the applicant thus refused who is entitled to apply to the High Court.
The form of reference application prescribed by rule 48 of the Income Tax Rules, 1962 specifically requires the applicant to state the questions of law which he desires to be referred to the High Court.
In every case, it is only the party applying for a reference who is entitled to specify the questions of law which should be referred.
Nowhere does the statute confer a right in the non applicant (a phrase used here for convenience) to ask for a reference of questions of law on the applicant.
[950 A, C D E, F G and 952 E] The party who is aggrieved and who desire a reference to the High Court must file a reference application for that purpose.
It is not open to him to make a reference application filed by the other party the basis of his claim that a question of law sought by him should be referred.
But on a reference application filed by the aggrieved party it is open to the non applicant who is not aggrieved by the result of the appeal, to ask for a reference of those questions of law which arise on its submissions negatived in appeal by the Appellate Tribunal.
[951 A B, C] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2099 of 1972.
From the Judgment and Order dated 18 1 1972 of the Kerala High Court in I.T.R. No. 88/1969.
B. B. Ahuja and Miss A. Subhashini for the Appellant.
Nemo for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
This is an appeal by certificate under section 261 of the Income Tax Act, 1961 against the judgment of the High Court of Kerala interpreting the words "accumulated profits" in section 2(6A)(e) of the Indian Income Tax Act, 1922.
The assessee is the Managing Director of a private limited company called R. K. V. Motors & Timber (P) Limited.
The company maintains an accounts pertaining to him in its books.
The accounts showed that as on March 31, 1958 a sum of Rs. 36,546.17 np. was due to him by the company.
In January, 1959 for the first time he became indebted to the company in the sum of Rs. 3,757.04 np.
His drawings increased, and as on March 31, 1959 the total amount due by him stood at Rs. 25,107.22np.
It is also relevant to state that the Balance Sheet of the company as on March 31, 1958 showed a net profit of Rs. 18,950.98 np.
946 The assessee was originally assessed for the assessment year 1959 60 (the relevant previous year being the year ended March 31, 1959) on a total income of Rs. 43,407.
Thereafter, the Income Tax Officer came to know that the assessee had been withdrawing moneys from the company, and in the belief that those amounts were liable to be treated as "dividend" under section 2(6A) (e) of the Indian Income Tax Act, 1922, he reopened the assessment by virtue of section 147 of the Income Tax Act, 1961.
In the assessment proceedings which followed, the assessee claimed that the accumulated profits of the company amounted to Rs. 1,050 only, and that amount alone could be considered as "dividend" under section 2(6A)(e).
The figure was worked out on the basis that a sum of Rs. 11,000 as a provision for tax and of Rs. 6,900 as a provision for dividend had to be adjusted against the balance of Rs. 18,950 in the Profit & Loss Account.
The Income Tax Officer rejected the contention of the assessee and determined a sum of Rs. 25,107 as dividend under section 2(6A) (e).
He arrived at this figure by including the current profits of the company for the account year ending March 31, 1959.
The Appellate Assistant Commissioner dismissed an appeal filed by the assessee.
The Income Tax Appellate Tribunal, in second appeal, upheld the claim of the assessee that the words "accumulated profits" in section 2(6A)(e) could not be construed as including current profits, but it rejected the contention that the two sums of Rs. 11,000 and Rs. 6,900 had to be taken into account in determining the figure of the accumulated profits.
Accordingly, it determined the accumulated profits at Rs. 18,950.
The Revenue applied for a reference to the High Court of Kerala, and at its instance the Tribunal referred the following question to the High Court: "Whether, on the facts and in the circumstances of this case, the Appellate Tribunal was legally correct in holding that the accumulated profit will not include current profits for the purpose of section 2(6A) of the Indian Income Tax Act, 1922 ?" The assessee also requested the inclusion of a question, and therefore the second question referred to the High Court was: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that Rs. 18,950 constituted accumulated profits for the purpose of section 2(6A) of the Indian Income Tax Act, 1922 ?" 947 The High Court, by its judgment dated January 18, 1972 has answered the first question in the affirmative and the second question in the negative, both questions being answered in favour of the assessee.
And now, the present appeal by the Revenue.
We have heard Shri B. B. Ahuja, for the Revenue.
No one appears for the assessee.
The Indian Income Tax Act, 1922 did not originally contain any definition of "dividend", and the meaning of that word was confined to the connotation it held under the law relating to companies.
By section 2 of the Indian Income Tax (Amendment) Act, 1939, the Indian Legislature inserted sub section (6A) in section 2 of the Act and set forth an inclusive definition.
Certain clauses of the sub section were amended thereafter, and in their ultimate form section 2(6A)(c) and section 2(6A)(e) read as follows: "6(A) "Dividend" includes (c) Any distribution made to the shareholders by a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation, whether capitalised or not.
(e) Any payment by a company, not being a company in which the public are substantially interested within the meaning of section 23A, of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder, to the extent to which the company in either case possesses accumulated profits.
" The question is whether the profits earned by the company during the year in which the loans were advanced to the assessee, that is to say the current profits, can be regarded as included within the accumulated profits of the company.
It will be noticed that the expression "accumulated profits" occurs in section 2(6A) (c) of the Act.
Construing that clause in Girdhardas & Co. Ltd., vs Commissioner of Income Tax, Ahmedabad, the Bombay High Court said : "The limitation imposed by the Legislature is that the profits must in the first place be accumulated in contradistinc 948 tion to the profits being current. ".
The Madras High Court in Commissioner of Income Tax, Madras vs M. V. Murugappan and Others and Commissioner of Income tax, Madras vs A. M. M. V. Valliammai Achi & Others took the same view.
It analysed the concept of "accumulated profits" and in that connection particularly referred to the observations of Isaacs and Rich JJ.
in Hooper & Harrison Limited (In Liquidation) vs Federal Commissioner of Taxation who relied on Hollins vs Allen and Sproule vs Bouch and Commissioner of Inland Revenue vs Blott where the distinction between current profits and accumulated profits was graphically brought out.
The decision of the Madras High Court was affirmed in appeal by this Court in Commissioner of Income tax, Madras vs M. V. Murugappan & Ors.
and it was observed that "The profits of the year in the course of which the company was ordered to be wound up not being accumulated profits were not part of the dividend.
" Thereafter, the Bombay High Court in Commissioner of Income Tax (Central) Bombay vs P. K. Badiani, while interpreting section 2(6A) (e) of the Act, applied the same construction and held that the expression "accumulated profits" in that clause must mean profits which had accumulated prior to the accounting year of which the income profits and gains were being assessed, while current profit would mean the profits of the accounting year In a recent case, Commissioner of Income Tax, Madras II vs G. Sankaran, the Madras High Court has reaffirmed that the expression "accumulated profits" in section 2(6A) (e) cannot take in current profits.
The position appears to be well settled.
Except for T. Sundaram Chettiar vs Commissioner of Income Tax, Madras and T. Manickavasagam Chettiar vs Commissioner of Income tax, Madras, in which the ratio is far from clear, a long line of judicial decisions has taken the view that the words "accumulated profits" in section 6(2A) of the Indian Income Tax Act, 1922 cannot be construed 949 to include current profits.
We are in agreement with that view, being persuaded in that behalf by the reasoning which has prevailed in the aforementioned cases.
The distinction between "accumulated profits" and "current profits" has long held the field, and as the learned judges of the High Court of Australia observed in Hooper & Harrison Ltd. (In Liquidation) (supra), it has been well known in judicial decision and in the mercantile world for well over a century.
Moreover, this Court in M. V. Murugappan (supra) has also taken the view that current profits cannot be included in accumulated profits.
It appears to be now the established law of the land.
An attractive submission was raised on behalf of the Revenue that in the Twelfth Report of the Law Commission of India, the authors of the Report consider that the intention of the Legislature was to include current profits in the expression "accumulated profits" in section 2(6A) and that the present definition of "accumulated profits" by Explanation 2 to section 2(22) of the Income Tax Act.
1961 only clarifies what the true intent was all along.
In the view which has found favour with us, we are not persuaded by that submission.
Accordingly, we hold that the High Court was right in answering the first question in favour of the assessee and against the Revenue.
The second question is whether the provision for payment of tax and dividend can be taken into account when computing the accumulated profits as on March 31, 1958.
The Revenue contends that this question should not have been referred by the Appellate Tribunal to the High Court at the instance of the assessee because no reference application was made by the assessee.
The only reference application, it is pointed out, before the Appellate Tribunal was the reference application filed by the Commissioner of Income Tax.
We are of opinion that the Revenue is right.
The objection was taken by the Revenue before the Appellate Tribunal when the statement of case was being prepared, but the Appellate Tribunal overruled the objection, relying on Girdhardas & Co. Ltd. vs Commissioner of Income Tax, Ahmedabad.
It does not appear that the Revenue contended before the High Court that the reference made to it by the Appellate Tribunal was incompetent insofar as the second question was concerned.
Since, however, the objection pertains to the competence of the reference to the extent that it covers the second question and, therefore, relates to the jurisdiction of the High Court to 950 consider and decide that question, we are of opinion that the Revenue is entitled to raise that question before us.
Section 256(1) of the Income Tax Act, 1961 entitles the assessee or the Commissioner, as the case may be, to apply to the Appellate.
Tribunal to refer to the High Court any question of law arising out of the order made by the Appellate Tribunal under section 254.
A period of limitation for making such application is prescribed.
If the application is rejected by the Appellate Tribunal the applicant is entitled to apply to the High Court, again within a prescribed period of limitation, and the High Court may, if it is not satisfied of the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and refer it.
It is clear that the statute expressly contemplates an application in that behalf by a party desiring a reference to the High Court.
The application has to be filed within a prescribed period of limitation.
If the Application is rejected by the Appellate Tribunal, it is the applicant thus refused who is entitled to apply to the High Court.
If the Appellate Tribunal allows the application made to it, section 256(1) requires it to draw up the statement of the case and refer it to the High Court.
The statement of the case is drawn up on the basis of the application made by the applicant, who in that application must specify the questions of law which, he claims, arise out of the order of the Appellate Tribunal made under section 254.
The form of reference application prescribed by rule 48 of the Income Tax Rules, 1962 specifically requires the applicant to state the questions of law which he desires to be referred to the High Court.
He may, in appropriate cases, be permitted by the Appellate Tribunal, to raise further questions of law at the hearing of the reference application.
But in every case, it is only the party applying for a reference who is entitled to specify the questions of law which should be referred.
Nowhere in the statute do we find a right in the non applicant (a phrase used here for convenience) to ask for a reference of questions of law on the application made by the applicant.
In this connection, two categories of cases can be envisaged.
One consists of cases where the order of the Tribunal under section 254 has decided the appeal partly against one party and partly against the other.
This may be so whether the appeal consists of a single subject matter or there are more than one independent claims in the appeal.
In the former, one party may be aggrieved by the grant of relief, even though partial, while the other may be aggrieved by the refusal to grant total relief.
In the latter, relief may be granted or 951 refused with reference to individual items in dispute, and accordingly one party or the other will be aggrieved.
In either case, the party who is aggrieved and who desires a reference to the High Court must file a reference application for that purpose.
It is not open to him to make a reference application filed by the other party the basis of his claim that a question of law sought by him should be referred.
The second category consists of cases where the order made by the Appellate Tribunal under section 254 operates entirely in favour of one party, although in the course of making the order the Appellate Tribunal may have negatived some points of law raised by that party.
Not being a party aggrieved by the result of the appeal, it is not open to that party to file a reference application.
But on a reference application being filed by the aggrieved party it is open to the non applicant, in the event of the Appellate Tribunal agreeing to refer the case to the High Court, to ask for a reference of those questions of law also which arise on its submissions negatived in appeal by the Appellate Tribunal.
It is, as it were, recognising a right in the winning party to support the order of the Appellate Tribunal also on grounds raised before the Appellate Tribunal but negatived by it.
There are, therefore, those two categories, one in which a non applicant can ask for the reference of questions of law suggested by it and the other in which it cannot.
To the extent to which the Courts have omitted to consider the distinction between these two categories, they have erred.
There are cases where it has been held that there is an absolute bar against a non applicant seeking a reference of questions of law on a reference application made by the other party.
They include : Commissioner of Income Tax, Madras vs section K. Srinivasan and Commissioner of Income Tax, Madras vs Ramdas Pharmacy.
cases taking the opposite extreme view are : Commissioner of Income Tax vs Bantiah Bank Ltd., followed in Girdhar Das & Co. Ltd. (supra) and Educational & Civil List Reserve Fund No. 1 through H. H. Maharana Bhagwat Singhji of Udaipur & Ors.
vs Commissioner of Income Tax, Delhi and Rajasthan Smt.
Dhirajben R. Amin vs Commissioner of Income Tax, Gujarat II, Ahmedabad and Commissioner of Wealth Tax, Gujarat II vs Mrs. Arundhati Balkrishna.
The judgment in the last case was affirmed by this Court in Commissioner of Wealth Tax, Gujarat vs Arundhati 952 Balkrishna but the point raised before us does not appeal to have been taken there.
The observations in Bantiah Bank Limited (supra) seem to show that the High Court was alive to the possibility of a winning party being deprived of the right to raise questions of law which could properly arise as further questions because they would be intimately involved in a decision on the questions referred at the instance of the applicant, but it failed to classify such a case separately from the case where a non applicant seeks to raise independent and unassociated questions of law.
Cases in which a distinction was noticed between the two categories but no opinion was expressed on the right of a winning party to raise questions of law without applying for a reference are Commissioner of Income Tax vs Jiwaji Rao Sugar Co. Ltd., followed in Commissioner of Income Tax, M.P. vs Dr. Fida Hussain G. Abbasi and Commissioner of Income Tax, Madras vs K. Rathnam Nadar.
Some attention has been given to the distinction between the two categories in Commissioner of Income Tax, West Bengal vs A. K. Das.
In the present case, the question whether the provision of Rs. 11,000 for tax and Rs. 6,900 for dividend can be taken into account when determining the accumulated profits as on March 31, 1958 is not relate to the question whether accumulated profits can take in current profits.
The two questions involve the grant of separate and distinct reliefs and the decision on one question does not affect the decision on the other.
Accordingly, we hold that the Appellate Tribunal was not competent to refer the second question, and the reference to that extent must be considered void.
In the circumstances, it is not necessary to examine the second question on its merits.
The judgment of the High Court must be set aside so far as it incorporates its opinion on the second question.
Accordingly, the appeal is allowed to the extent that the judgment of the High Court on the second question is set aside while the appeal is dismissed in respect of the judgment on the first question.
There will be no order as to costs.
N.K.A. Appeal allowed in part.
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The assessee was the Managing Director of a Company originally assessed on a total income of Rs. 43407/ for the assessment year 1959 60.
Thereafter the Income Tax Officer came to know that the assessee had been withdrawing moneys from the Company and that those amounts were liable to be treated as dividend under section 2(6A)(e) of the Act, he re opened the assessment.
In the assessment proceedings that followed, the assessee claimed that the accumulated profits of the Company amounted to Rs. 1050 only and that amount alone could be considered as dividend under section 2(6A)(e) of the Act.
The figure was worked out on the basis that Rs. 11,000 as a provision for tax and Rs. 6,900 as a provision for dividend had to be adjusted against the balance of Rs. 18,950 in the Profit and Loss Account.
The Income Tax Officer rejected the contention of the assessee.
The Appellate Assistant Commissioner dismissed the appeal filed by the assessee.
The Income Tax Appellate Tribunal in second appeal, upheld the claim of the assessee that the words "accumulated profits" in section 2(6A) (e) of the Act could not be construed as including current profit but it rejected the contention that the two sums of Rs. 11,000 and Rs. 6,900 had to be taken into account in determining the figure of the "accumulated profits".
It determined the "accumulated profits" at Rs. 18,950.
The Revenue obtained a reference to the High Court on the question: "Whether the Appellate Tribunal was legally correct in holding that the accumulated profit will not include "current profits" for the purpose of section 2(6A) of the Act.
" A second question was referred to the High Court at the instance of the assessee : "Whether the Tribunal was right in holding that Rs. 18,950 constituted accumulated profits for the purpose of section 2(6A) of the Act.
" The High Court answered both the questions in favour of the assessee, the first question in the affirmative and the second question in the negative.
On appeal to this Court, ^ HELD: 1.
"Current profits" that is to say, profits earned by the Company during the year in which the loans were advanced to the assessee cannot be regarded as included within the "accumulated profits" of a Company within the meaning of section 2(6A) (e) of the Act.
[947G 948E] Commissioner of Income Tax, Madras vs M. V. Murugappan
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Civil Appeal No. 2422 of 1978.
Appeal by Special Leave from the Judgment and Order dated 13 2 1978 of the Kerala High Court in TRC No. 63/76.
M.M. Abdul Khader, V.J. Francis and M.A. Firoz for the Appellant.
The Judgment of the Court was delivered by BHAGWATI, J.
The questions of law which arise for determination in this appeal lie in a very narrow compass and do not present any difficulty in answering them.
They are the usual type of questions that arise under the Sales Tax legislation, namely, whether a particular commodity sold or purchased by the assessee falls within one entry or another.
The assessee always contends that it falls within an entry which attracts lesser rate of tax while the Revenue invariably seeks to bring it within the entry attracting a larger rate of tax.
Two questions arise here for consideration.
One question is whether certain ornaments and other articles of gold purchased by the assessee with a view to melting them and making new ornaments 940 or other articles out of the melted gold fall within Entry 56 in the First Schedule of the Kerala General Sales Tax Act, 1963 (hereinafter referred to as "the Act") which reads "Bullion and Specie".
If the ornaments and other articles of gold purchased by the assessee fall within this Entry, the turn over of purchases of these goods would be liable to be taxed at the rate of 1 per cent, while it would have to suffer tax at the rate of 3 per cent if these goods do not fall within the Entry and are taxable under section 5A read with sec.
5(1) (ii) of the Act.
The other question relates to taxation of the turnover of sales of G.I. Pipes effected by the assessee and it raises the point whether G.I. Pipes sold by the assessee fall within Entry 26A in the First Schedule to the Act which reads "Water Supply and Sanitary Fittings".
If they do not fall within this Entry, the turn over of their sales would be liable to be taxed at the rate of 3 per cent under section 5(1) (ii) of the Act, but if they do, then the rate of tax would be 7 per cent.
The Sales Tax Officer, and in appeal the Appellate Assistant Commissioner decided both the questions against the assessee and taxed the turn over of purchases of ornaments and other articles of gold at the rate of 3 per cent and the turn over of sales of G.I. Pipes at the rate of 7 per cent.
The Tribunal, on further appeal by the assessee, disagreed with the view taken by the tax authorities and holding that the ornaments and other articles of gold purchased by the assessee were "Bullion and specie" within the meaning of Entry 56 and G.I. Pipes sold by the assessee were not covered by the expression "water supply and sanitary fittings" in Entry 26A, taxed the assessee at the lesser rates as claimed by him.
The Revenue thereupon took the matter by way of revision to the High Court, but the High Court also took the same view and affirmed the judgment of the Tribunal.
This decision of the High Court is assailed in the present appeal preferred by the Revenue after obtaining special leave from this Court.
We will first consider the question whether the ornaments and other articles of gold purchased by the assessee fall within the description of "Bullion and specie" given in Entry 56.
There are two expressions in this Entry which require consideration; one is "bullion" and the other is "specie".
Now there is one cardinal rule of interpretation which has always to be borne in mind while interpreting entries in Sales Tax legislation and it is that the words used in the entries must be construed not in any technical sense nor from the scientific point of view but as understood in common parlance.
We must give the words used by the legislature their popular sense meaning "that sense which people conversant with the subject matter with 941 which the statute is dealing would attribute to it".
The word "bullion" must, therefore, be interpreted according to ordinary parlance and must be given a meaning which people conversant with this commodity would ascribe to it.
Now it is obvious that "bullion" in its popular sense cannot include ornaments or other articles of gold.
"Bullion" according to its plain ordinary meaning means gold or silver in the mass.
It connotes gold or silver regarded as raw material and it may be either in the form of raw gold or silver or ingots or bars of gold or silver.
The Shorter Oxford Dictionary gives the meaning of "bullion" as "gold or silver in the lump; also applied to coined or manufactured gold or silver considered as raw material." So also in Jowitt 's Dictionary of English Law and Wharton 's Law Lexicon we find that the following meaning is given for the word "bullion", "uncoined gold and silver in the mass.
These metals are called so, either when melted from the native ore and not perfectly refined, or where they are perfectly refined, but melted down into bars or ingots, or into any unwrought body, of any degree of fineness".
It would, therefore, be seen that ornaments and other articles of gold cannot be regarded as "bullion" because, even if old and antiquated, they are not raw or unwrought gold or gold in the mass, but they represent manufactured or finished products of gold.
Nor do they come within the meaning of the expression "specie".
The word "specie" has a recognised meaning and according to Webster 's New World Dictionary, it means "coin, as distinguished from paper money".
The Law Dictionaries also give the same meaning.
Wharton 's Law Lexicon and Jowitt 's Dictionary of English Law state the meaning of "specie" as "metallic money" and in Black 's Law Dictionary, it is described as "coin of the precious metals, of a certain weight and fineness, and bearing the stamp of the Government, denoting its value as currency" while "Words and Phrases Permanent Edition Vol.
39A" also gives the same meaning.
Therefore, according to common parlance, the word "specie" means any metallic coin which is used as currency and if that be the true meaning, it is obvious that ornaments and other articles of gold cannot be described as "specie".
It would thus seem clear that the ornaments and other articles of gold purchased by the assessee do not fall within Entry 56 and they are, accordingly, liable to be taxed not at the lesser rate of 1 per cent applicable to "bullion and specie" but at the general rate of 3 per cent under section 5A read with Section 5(1) (ii) of the Act.
That takes us to the second question in regard to taxability of the turnover of sales of G.I. Pipes made by the assessee.
The Revenue 942 contended that G.I. Pipes fall within the description "water supply and sanitary fittings" in Entry 26A so as to be exigible to tax at the higher rate of 7 per cent while the assessee contended that they are not covered by this expression and are, therefore, taxable only at the lesser rate of 3% under sec.
5(1) (ii) of the Act.
The determination of this question turns on the true interpretation of the words "water supply and sanitary fittings".
So far as the expression "sanitary fittings" is concerned, it has received judicial interpretation by this Court in State of Uttar Pradesh vs Indian Hume Pipe Ltd. where it has been laid down that "sanitary fittings" according to the popular sense of the term mean such pipes or materials as are used in lavatories, urinals or bath rooms of private houses of public buildings.
The G.I. Pipes sold by the assessee would, therefore, fall within the description of "sanitary fittings" only if it can be shown and the burden of so doing would be on the Revenue, that they were meant for use in lavatories, urinals or bath rooms.
It does not appear that the attention of the assessee and the tax authorities was drawn to this aspect of the question and hence no material was brought on record which would throw light on the question as to what was the use for which the G.I. Pipes were meant.
If the G.I. Pipes were heavy and intended to be laid underground for carrying supply of water from one place to another, they would obviously not be "sanitary fittings".
This is, however, a question which has not been considered by the Revenue authorities and the case would, therefore, have to be remanded to the Appellate Assistant Commissioner for the purpose of determining whether having regard to the meaning which this Court has placed on the expression "sanitary fittings", the G.I. Pipes sold by the assessee fall within that description.
But the Revenue contended that even if the G.I. Pipes are not "sanitary fittings" within the meaning of that expression, they would still fall within the description "water supply. .fittings".
Now, it must be remembered that the category of goods in Entry 26A is not described as "water supply pipes" but as "water supply and sanitary fittings".
The use of the word "fittings" suggests that the expression is intended to refer to articles or things which are fitted or fixed to the floor or walls of a building and they may in a given case include even articles or materials fitted or fixed outside, provided they can be considered as attached or auxiliary to the building or part of it, such as, for example, a pipe carrying faecal matter from the commode to the sceptic tank, but they cannot include pipes laid underground 943 for carrying water supply.
Moreover, the words "water supply. . fittings" do not occur in isolation, but they are used in juxtaposition of the words "sanitary fittings".
The entire expression "water supply and sanitary fittings" is one single expression and the words "water supply. fittings" must receive colour from the immediately following words "sanitary fittings".
We are, therefore, of the view that the expression "water supply. fittings" in the context in which it occurs means such pipes or materials as are meant for use for supply of water to or in lavatories, urinals or bath rooms of private houses or public buildings and they do not include heavy pipes which are laid underground as mains for carrying water supply from one area or place to another.
Therefore, even for the purpose of determining whether G.I. Pipes sold by the assessee are "water supply. . fittings", it would have to be found as to what is the purpose for which they were meant to be used and since the question has not been approached from this point of view, we think it desirable that the case be sent back to the Appellate Assistant Commissioner for the purpose of determining whether, in the light of this meaning placed by us on the words "water supply. fittings", the G.I. Pipes sold by the assessee could be said to be "water suply. . . fittings.
" We, therefore, allow the appeal, set aside the orders made by the High Court, the Tribunal and the Appellate Assistant Commissioner and hold that so far as the ornaments and other articles of gold purchased by the assessee are concerned, they were liable to be taxed at the general rate of 3 per cent under section 5A read with section 5(1) (ii) of the Act and so far as G.I. Pipes sold by the assessee are concerned, we remand the case to the Appellate Assistant Commissioner for the purpose of deciding on the basis of the existing material as also such further material as may be adduced, whether G.I. Pipes sold by the assessee fell within the description "water supply and sanitary fittings" so as to be exigible to sales tax at the higher rate of 7 per cent under Entry 26A.
There will be no order as to costs of the appeal.
N.V.K. Appeal allowed.
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On the questions (1) Whether the ornaments and other articles of gold purchased by the assessee fell within the description of "Bullion and specie" given in Entry 56 in the First Schedule of the Kerala General Sales Tax Act 1956 and (2) the taxability of the turn over of sales of G.I. Pipes made by the assessee.
^ HELD: 1.
One cardinal rule of interpretation while interpreting entries in Sales Tax legislation is that the words used in the entries must be construed not in any technical sense nor from the scientific point of view but as under stood in common parlance.
The words used by the legislature must be given their popular sense meaning, "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it." [940 H, 941A] 2.
"Bullion" in its popular sense cannot include ornaments or other articles of gold.
"Bullion" according to its plain ordinary meaning means gold or silver in the mass.
It connotes gold or silver regarded as raw material and it may be either in the form of raw gold or silver or ingots or bars of gold or silver.
[941 B] 3.
Ornaments and other articles of gold cannot be regarded as "bullion" because, even if old and antiquated, they are not raw or unwrought gold or gold in the mass, but they represent manufactured or finished products of gold.
Nor do they come within the meaning of the expression "specie".
The word "specie" means coin, as distinguished from paper money".
[941 D] 4.
The ornaments and other articles of gold purchased by the assessee do not fall within Entry 56 and they are, liable to be taxed not at the lesser rate of 1 per cent applicable to "bullion and specie" but at the general rate of 3 per cent under section 5A read with section 5(i) (ii) of the Act.
[941 G, 943 E] 5.
In State of Uttar Pradesh vs Indian Hume Pipe Ltd., 39 STC 355 it has been held by this Court that 'sanitary fittings ' according to the popular sense of the term means such pipes or materials as are used in lavatories urinals or bath rooms of private houses or public buildings.
[942 C] 939 6.
The G.I. Pipes sold by the assessee would fall within the description of 'sanitary fittings ' only if it can be shown and the burden of so doing would be on the Revenue, that they were meant for use in lavatories, urinals or bath rooms.
The attention of the assessee and the tax authorities was not drawn to this aspect of the question and no material was brought on record which would throw light on the question as to what was the use for which the G.I. Pipes were meant.
If the G.I. Pipes were heavy and intended to be laid underground for carrying supply of water from one place to another they would obviously not be 'sanitary fittings '.
[942 C E] 7.
The category of goods in Entry 26A is not described as 'water supply pipes ' but as 'water supply and sanitary fittings '.
The words 'water supply. fittings ' do not occur in isolation but they are in juxtaposition of the words 'sanitary fittings '.
The entire expression 'water supply and sanitary fittings ' is one single expression and the words 'water supply. fittings ' must receive colour from the immediately following words 'sanitary fittings '.
The expression 'water supply. .fittings ' in the context in which it occurs means such pipes or materials as are meant for use for supply of water to or in lavatories, urinals or bath rooms of private houses of public buildings and they do not include heavy pipes which are laid underground as mains for carrying water supply from one area or place to another.
[942 G, 943 A B] 8.
As far as G.I. Pipes sold by the assessee are concerned the case remanded to the Appellate Assistant Commissioner for the purpose of deciding on the basis of the existing material as also such further material as may be adduced, whether G.I. Pipes sold by the assessee fall within the description "water supply and sanitary fittings" so as to be exigible to sales tax at the higher rate of 7 per cent under Entry 26A. [943 F]
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onstrued.
One should not concentrate too much on one rule and pay too little atten tion on the other, for that would lead astray and result in hardship, such construction should be avoided.
[955C D] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 30373038 of 1984 From the Judgment and Order dated 12.12.
1983 of the Bombay 950 High Court in W.P. No. 1189 of 1980.
S.K. Dholakia, A.S. Bhasme and A.M. Khanwilkar for the Appellant.
N.B. Shetya, S.B. Bhasme, section Ramachandran, R. Ramachan dran, Maknand Adkar and Mrs. M. Karanjawala for the Respond ents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
These two appeals by special leave are by the State of Maharashtra.
They are directed against the judgment of the High Court of Bombay dated 12th January, 1983 by which the High Court issued the following two directives to the State Government: "(1) To recast the Revised/Final Sen iority List dated 20.12.
1982 vis a vis the persons shown in the category of 'Late Pass ing ' and assign them seniority strictly in accordance with Rule 2 and the other Govern ment orders referred to in Paragraph 96 of the judgment; and (2) The seniority in the Superintend ent 's cadre so fixed should also be considered as seniority for further promotions.
" The background to these directives is, in outline, this: Respondents 1 to 8 are Assistant Secretaries/Section Officers/ Superintendents in different departments of the Government of Maharashtra.
The State Government prescribed departmental examinations as a condition precedent for promotion to the cadre of Superintendents.
The examination was required to be conducted every year, and the officials have to pass within the stipulated period.
Those who could not pass within the time frame would lose their seniority but they will be promoted as and when they qualify them selves.
The Government for some reason or the other could not hold the examinations every year.
Particularly in 1968, 1969 & 1970, the Government did not hold the examinations.
The Government, however, did not pass any order extending the period prescribed for passing the examinations, nor promoted the seniors subject to their passing the examina tion.
The juniors who qualified themselves were promoted overlooking the case of seniors and seniors were only pro moted upon their passing the examination.
In the cadre of Superinten 951 dents, however, the Government revised the seniority list so as to reflect the rankings in the lower cadre irrespective of the date of promotion.
The validity of the revision of seniority was challenged before the High Court.
The High Court conceded the power to the Government to relax the rules relating to passing of the examination in case of hardship, but refused to recognise the power of the Govern ment to give seniority to those who could not pass the examination within the time schedule.
The High Court was of opinion that without specific orders of the Government relaxing the conditions of the rules, the persons could not be given seniority for 'Late Passing '.
There are also other reasons given by the High Court which we will presently consider.
But before that, it is important that we should have a chronology of the relevant rules and resolutions of the Government.
It is as follows: On 22nd August, 1951, the Government made a resolution prescribing departmental examination for the members of the Upper Division of the Subordinate Secretariat Service, and further directing that only those persons who pass the examination should be promoted as Superintendents.
The accompanying rules (The 1951 Rules) thereunder provided the procedure for passing the examination as well as the conse quences of failure to pass the examination.
On 24th August, 1955, the Government framed rules (The 1955 Rules) under the proviso to Article 309 of the Constitution specifically providing power to dispense with, or relax, the requirements of the operation of any rule regulating the conditions of service of Government servants; or of any class thereof if it causes undue hardships in any particular case.
On 15th January, 1962, the Government issued a circular purporting to restrict the scope of the rule permitting relaxation only in respect of travelling allowance rules, leave rules, etc.
The circular also clarified that the 1955 Rules could not be invoked for conferring benefit on an individual by relaxing the conditions relating to recruitment, promotion, grant of extension of service or re employment.
On 28th December, 1961, the Government made the revised rules in supersession of the 1951 Rules.
They were brought into force with effect from 1st January, 1962 (the 1962 Rules).
They were made appl icable to all persons recruited to the Upper Division of the Subordinate Secretariate Service on or after that date and also to those who have been in service prior to 1st Jan uary, 1962 unless they had already passed the examination under the 1951 Rules.
The rules 1 to 5 are as follows: "1.
Every member of the Upper Divi sion of the Subordinate Secretariat Service will be required to pass within 952 nine years from the date of his entry in the Upper Division, a departmental examination for promotion to the posts of Superintendents according to the prescribed syllabus.
For being eligible to appear for the examination a candidate must have passed the Post Recruit ment Training Examination for Junior Assistant and must have also completed not less than five years ' continuous service in the Upper Division.
(2) Subject to Rule 1, a candidate will be allowed to appear for the examination in three chances which must be availed of within a period of four years.
This period of 4 years will not be extended for any reasons irrespective of the fact whether a candidate has availed himself of 3 chances or not during the period.
Similarly no candidate will be allowed to take during this period more than 3 chances.
A candidate who does not pass the examination at the end of 9 years service in the Upper Division, will lose his seniority to all those candidates who pass the examination before he passes it.
(3) No persons shall be appointed to the post of Superintendent unless he has passed the Superintendents ' Examination.
Provided that this rule shall not apply to short term vacancies not exceeding two months.
(4) Subject to the condition of loss of seniority laid down in rule 2, a candidate will be allowed to take the examina tion in any number of chances after the com pletion of 9 years ' service.
(5) The examination will be held once a year.
XXX XXX XXX XXX " On December 28, 1970, proviso to above rule 3 has been added.
The said proviso reads: "Provided that if the Superintendent 's Examination is not held in any year, a person who has completed 9 years service and who has not exhausted all the permissible chances, may be promoted to the post of Superintendent, provided further that he is otherwise suitable for promo tion, subject to the clear condition that he will have to pass 953 the examination at the earliest opportunity whenever it is held." "It is further clarified that promo tions to the posts of Superintendents should, in view of the above amendments, be given only after ensuring that there are no persons who have passed the Superintendents Examination earlier for being promoted to the posts of Superintendents.
" We may incidentally refer to the subsequent rules made by the Government, although it is not applicable to the present case.
On June 6, 1977, the Government framed the rules called "The Maharashtra Government Subordinate Service Rules, 1977".
Rule 7 of the rules provides that if, for any reason, the examination is not held in any particular year, that year shall be excluded in computing the period speci fied under the rules.
This is, indeed, the true reflection of the underlying concept of purpose of the earlier rules.
Against this backdrop, we may now consider whether the Government was justified in re arranging the seniority by giving benefit to persons in the category of "Late Passing".
We are not concerned herein about the seniority of persons in whose favour the Government has made individual orders extending the period for passing the examination.
We will consider such cases a little later.
For the present, we may examine the rights of those "Late Passing" where the Government has not made any specific order relaxing the conditions for passing the examination.
Under the 195 1 Rules, the candidate could appear for the examination after two years of his entering into the cadre.
He has three chances and he must pass within 6 years of his joining service.
Under the 1962 Rules the scheme provided was slightly different.
Under that scheme, candidate was allowed to take the examination only after completing five years service in the cadre.
He had three chances for taking the examination and that must be availed of within four years.
That means he must pass the examination within the 9 years ' service.
Under both the Rules, the Government was required to hold the examination every year, but no examination was held in 1968, 1969 & 1970.
This is not in dispute.
For a proper appreciation of the question raised, we must first try to understand the hardship resulted by not holding the examination in 1968, 1969 & 1970.
It is as follows: The candidates recruited in 1960 have lost one chance in 1968.
Those recruited in 1961 are deprived of two chances in 1968 and 1969.
The candidates recruited in 1962 are 954 denied of three chances in 1968, 1969 & 1970 and those of the year 1963 have lost two chances in 1969 and 1970.
The last batch to lose one chance in 1970 is of the year 1964.
The aforesaid Rules expressly provided power to the Government to grant more chances for passing the examination in any individual case or in class of cases.
Under the 1955 Rules, the Government preserved power to dispense with, or relax the requirements of any rule regulating "the condi tions of service of government servants; or of any class thereof".
In the exercise of this power, the Government could dispense or relax the operation of any rule, if it causes undue hardships in any particular case.
It is need less to state that this power includes the power to relax the conditions prescribed for promotion since promotion is a condition of service.
There is no restriction as to the exercise of the power or discretion.
The High Court, howev er, has observed that the scope of this power has been constrained by the circular dated 15th January, 1962.
The circular states that the 1955 Rules permitting relaxation cannot be utilised to relax the rules which regulate condi tions of service.
It further states that the scope of the Rules should be limited only to matters relating to travel ling allowance, leave, etc.
But this appears to be an exer cise in vain.
The circular is an executive instruction whereas the 1955 Rules are statutory since framed under the proviso to Article 309 of the Constitution.
The Government could not have restricted the operation of the statutory rules by issuing the executive instruction.
The executive instruction may supplement but not supplant the statutory rules.
The High Court was in error in ignoring this well accepted principle.
When we turn to the 1962 Rules with the amendments made in 1970, it becomes more clear about the power of the Gov ernment to relax the conditions for passing the examination.
The proviso dated 28th December, 1970 to rule 3 specifically provides that if the examination is not held in any year, a person Could be promoted to the cadre of Superintendent if he has completed nine years ' service.
The only condition is that he should not have exhausted all the permissible chances.
The promotion, made should be subject to the condi tion that he will have to pass the examination at the earli est opportunity whenever it is held.
The benefit of this proviso was evidently not extended to any of the persons falling into the category of "Late Passing".
Counsel for the contesting respondents however, urged that the proviso does not entitle the candidate to get his legitimate seniority if 955 he does not pass the examination at the end of nine years ' service.
He depended upon rule 2 of the 1962 Rules which states that the candidate who does not pass the examination within 9 years ' service will lose his seniority to all those candidates who pass the examination earlier.
He also argued that the proviso is only to rule 3 and not to rule 2 and the Government has no power to restore the seniority of a person who has lost it by the operation of rule 2.
This is a question of construction of the rules which form part of the scheme prescribing a condition for promo tion.
We do not have to reflect upon the rules of interpre tation since they are well settled.
They are now like the habits of driving which have become ingrained.
They come to our assistance by instinct.
We are to use the different rules meticulously to give effect to the scheme as we use the clutch, brake and accelerator for smooth driving.
These rules are to be harmoniously construed.
We should not con centrate too much on one rule and pay too little attention on the other.
That would lead us astray and result in hard ship.
We must avoid such construction.
Rule 2 of the 1962 Rules no doubt states that a candidate who does not pass the examination at the end of nine years ' service will lose his seniority.
But this rule cannot be read in isolation as the High Court did.
It has to be read along with the other rules since it is a part of the scheme provided for promotion.
Rule 5 requires the Government to hold the examination every year.
This rule is the basis of the entire scheme and the effect of other rules depends upon holding the examination.
If examination is not held in any year, the rule 2 cannot operate to the prejudice of a person who has not exhausted all his chances.
The person who has not exhausted the avail able chances to appear in the examination cannot be denied of his seniority.
It would be unjust, unreasonable and arbitrary to penalise a person for the default of the Gov ernment to hold the examination every year.
That does not also appear to be the intent or purpose of the 1962 Rules.
If the examination is not held in any year, the person who has not exhausted all the permissible chances has a right to have his case considered for promotion even if he has completed 9 years ' service.
The Government instead of promoting such persons in their turn made them to wait till they passed the examination.
They are the persons falling into the category of "Late Passing".
To remove the hardship caused to them the Government wisely restored their legiti mate seniority in the promotional cadre.
There is, in our opinion, nothing improper or illegal in this action and indeed, it is in harmony with the object of the 1962 Rules.
956 This takes us to the question whether the Government was justified in individual cases to relax the period for pass ing the examination.
It is said that the number of persons failing into this category are not more than five.
In the rejoinder filed on behalf of the Government, it is stated that the Government made some orders extending the period for individuals to pass the examination on administrative grounds or on some genuine hardships.
It is also stated that such orders were made upon recommendations by the respective departments and those persons passed the examination within the period extended.
There is no reason to doubt the cor rectness of these statements made in the rejoinder.
The power to relax the conditions of the rules to avoid undue hardship in any case or class of cases cannot now be gain said.
It would be, therefore, futile for the respondents to make any grievance.
In the result and for the reasons stated, we allow these appeals and in reversal of the judgment of the High Court, we dismiss the writ petitions filed by the contesting re spondents.
In the circumstances of the case, however, we make no order as to costs.
Y.L. Appeals allowed.
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Respondents 1 to 8 are Assistant Secretaries/Section Officers/ Superintendents who are working in different departments of the State of Maharashtra.
Under the Rules governing their Service conditions the Govt. had prescribed Departmental Examination for promotion to the cadre of Superintendents; the passing of the examination was a condi tion precedent for the officials for being promoted as superintendents.
The Examination in question was required to be conducted every year and the officials were required to pass the same within the stipulated period; and the offi cials who were not able to pass the said examination within the prescribed period were to lose their Seniority, but they were permitted to take the examination in any number of chances after the expiry of the stipulated period and they were to be promoted only when they qualify themselves.
The Govt.
as required under the Rules, could not hold the exami nation every year particularly in the years 1968, 1969 & 1970.
The Govt.
neither extended the period within which the officials were required to pass the examination nor promoted the seniors in the cadre of Superintendents subject to their passing the examination and instead thereof the juniors in the cadre who had qualified in the examination were promoted to the cadre of Superintendents.
The seniors in the cadre were promoted only when they qualified the examination i.e. later in point of time.
The Govt. issued a revised Seniority List relating to the cadre of Superintendents.
In the said List the Respond ents herein were shown juniors to those persons who had not only qualified the Dept. Examination later in point of time but also promoted after them.
Being aggrieved, the Respond ents herein challenged the validity of the revi 948 sion of the Seniority List as also the validity of the Rules being violative of article 14 & 16 of the Constitution by filing a Writ Petition in the Bombay High Court.
The High Court allowed the Writ Petn.
and issued the following two directives to the State Govt.
(1) To recast the Revised/Final Seniority List dated 20.12.1982 vis a vis the persons shown in the Category of "Late Passing" after considering the objections of the Writ Petitioners and Ors.
and assign them seniority strictly in accordance with Rule 2 and the other Government Orders referred to in paragraph 96 of the Judgment, and (2) The Seniority in the Superintendent 's Cadre so fixed should also be considered as seniority for further promo tions.
Being dissatisfied with the said order of the High Court, the State of Maharashtra filed appeals in this Court after obtaining Special Leave.
Allowing the appeals this Court, HELD: Under the 1951 Rules, the candidate could appear for the examination after two years of his entering into the cadre.
He had three chances and he must pass within six years of his joining Service.
Under the 1962 Rules a candi date was allowed to take the examination only after complet ing five years service in the cadre.
He had three chances for taking the examination and that must be availed of within four years.
That means he must pass the examination within 9 years ' service.
Under both the Rules, the Govt was required to hold the examination every year, but no examina tion was held in 1968, 1969 and 1970.
[953F G] Those recruited in 1961 are deprived of two chances in 1968 three chances in 1968, 1969 & 1970 and those of the year 1963 have lost two chances in 1969 & 1970.
The last batch to lose one chance in 1970 is of the year 1964.
[953H; 954A] Under the 1955 Rules, the Government preserved power to dispense with or relax the requirements of any rule regulat ing "the conditions of service of Government servants; or of any class thereof".
[954B] 949 There is no restriction as to the exercise of the power or discretion.[954C] The Circular dated January 15, 1962 is an executive instruction whereas the 1955 Rules are statutory since framed under the proviso to article 309 of the Constitution.
The Government could not have restricted the operation of the Statutory Rules by issuing the executive instruction.
The executive instruction may supplement but cannot supplant the statutory rules.
[954D E] Rule 2 of the 1962 Rules no doubt states that a candi date who does not pass the examination at the end of 9 years service will lose his seniority.
But this rule cannot be read in isolation.
[955D] If examination is not held every year.
The rule cannot operate to the prejudice of a person who has not exhausted all his chances.
The person who has not exhausted the avail able chances to appear in the examination cannot he denied of his seniority.
It would be unjust, unreasonable and arbitrary to penalise a person for the default of the Gov ernment to hold the examination every year.
That does not also appear to be the intent or purpose of the 1962 Rules.
[955E F] The Govt.
instead of promoting such persons in their turn made them to wait till they passed the examination.
They are the persons failing into the category of "Late Passing".
To remove the hardship caused to them the Govt.
wisely restored their legitimate seniority in the promotion al cadre.
There is nothing improper or illegal in this action and indeed, it is in harmony with the object of 1962 Rules.
[955G H] The Court need not have to reflect upon the Rules of interpretation since they are well settled.
They are now like the habits of driving which have become ingrained.
They come for assistance by instinct.
The different rules have to be used meticulously to give effect to the scheme as the clutch, brake and accelerator are used for smooth driving.
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N: Criminal Appeal No. 243 of 1979.
Appeal by Special Leave from the Judgment and Order dated 13 9 1978 of the Delhi High Court in Criminal Revision No. 271/78.
U. R. Lalit, R. Bana, M. N. Shroff and Miss A. Subhashini for the Appellant.
K.L. Arora, R. section Sodhi and H. C. Gulati for Respondent No. 1.
V. B. Ganatra, I. N. Shroff and H. section Parihar for Respondent No. 3.
The Judgment of the Court was delivered by SEN J.
In this appeal, by special leave, from the judgment of the Delhi High Court, two questions arise which are one of very general importance.
The first is, in a case where the manufacturer of an article of food is a company, which has nominated a person under sub so 1019 (2) of section 17 of the , as the person responsible, whether the sales manager at one of its branches can be prosecuted for an offence punishable under s.16 (1) (a) read with s.7 (i) of the Act, when the article of food sold at the branch is found to be adulterated within the meaning of s.2 (ia) of the Act.
The second is, whether after the introduction of the new s.17 by Act 34 of 1976, when an offence is committed by a company, which has nominated a person responsible under s.17 (2), it is not permissible to prosecute any other officer of the company not being nominated under subs.
(2), unless there is allegation that the offence had been committed 'with the consent or connivance of, or was attributable to, any neglect on the part of such officer.
Upon the first question the facts lie within the smallest possible compass.
On June 23, 1977 the Delhi Administration filed a complaint under s.7 (i) read with s.16 (1) (a) and s.17 against (1) M/s. Ahmed Oomar Bhoy, Ahmed Mills, Bombay, manufacturers of the well known 'postman ' brand or refined groundnut oil, (2) their distributors M/s. Gainda Mull Hem Raj, New Delhi, a partnership firm, and its managing Partner Mehar Chand Jain, (3) M/s. Amar Provision & General Store, Netaji Nagar Market, New Delhi and its owner Amrik Lal, the retailer, (4) Y. A. Khan, Manager Quality Control, Ahmed Mills appointed by the manufacturers as the person responsible under section 17(2) of the Act, and (5) the two Sales Managers, Delhi Branch of M/s. Ahmed Oomer Bhoy, manufacturers, I. K. Nangia and Y. P. Bhasin.
It was alleged that on August 31, 1976, S.D. Sharma, Food Inspector, New Delhi Municipal Committee lifted a sample of 'Postman ' brand refined groundnut oil from M/s. Amar Provision & General Store, which was sold/supplied to it by M/s. Gainda Mull Hem Raj on August 20, 1976, and the same by the Public Analyst by his report dated September 9, 1976 was found to be adulterated due to the presence of 'castor oil ' (Not an edible oil).
It was further alleged that this adulterated article of food was supplied/sold to M/s. Gainda Mull Hem Raj by M/s. Ahmed Oomer Bhoy on August 20, 1976 through its Sales Managers at Delhi, I. K. Nangia and Y. P. Bhasin.
The Metropolitan Magistrate, Delhi by his order dated April 1, 1978 found that there was a prima facie case against M/s. Ahmed Oomer Bhoy, the manufacturers of the 'Postman ' brand refined groundnut oil, their distributors at Delhi M/s. Gainda Mull Hem Raj and M/s. Amar Provision Store, the retailer, as well as against Y. A. Khan, the Quality Control Manager, Ahmed Mills, but declined to issue any 1020 process against the respondents I. K. Nangia and Y. P. Bhasin, the two Sales Managers of M/s. Ahmed Oomer Bhoy at Delhi observing that though they had effected the sale of the adulterated article of food 'they were not concerned with the manufacture of the article in question but had only effected the sale thereof '.
He accordingly, dismissed the complaint against them holding that their prosecution was misconceived.
The Delhi Administration moved the High Court in revision but it declined to interfere.
There can be no doubt that the order made by the learned Metropolitan Magistrate refusing to issue any process against the respondents is wholly unwarranted.
It cannot be said that there is no material for presuming that these respondents had not committed an offence and, therefore, it was not open to the learned Metropolitan Magistrate to come to the conclusion that there was no basis for proceeding against them.
The test as laid down by this Court in the State of Bihar vs Ramesh Singh is that at the initial stage, if there is a strong suspicion which leads the Court to think that there is a ground for presuming that the accused has committed an offence, then it is not open to the Court to say that there was no sufficient ground for proceeding against the accused.
In the instant case, the allegations in the complaint constitute a prima facie case against the respondents of having committed an offence under s.7 (i) read with s.16 (1) (a) of the Act.
In the complaint, the material allegations are as follows: "6.
That the adulterated article of food was supplied/ sold to M/s. Gainda Mull Hem Raj on 20 8 76 by M/s. Ahmed Oomer Bhoy through its sales managers at Delhi I. K. Nangia and Y. P. Bhasin.
That accused Y. A. Khan is the Quality Control Manager of accused No. 5 and accused I. K. Nangia and Y. P. Bhasin are the Sales Managers (Local Branch) of accused No. 5 and were incharge of and responsible to it for the conduct of its business at the time of commission of offences by accused No. 5.
" The words "were incharge of" and "responsible to it for the conduct of its business" are wide enough to include all the business activities of M/s. Ahmed Oomer Bhoy at Delhi.
It is a common ground that they have a Delhi Office at 2 A/3, Asaf Ali Road, New Delhi, and 1021 that the two respondents I.K. Nangia and Y. P. Bhasin are the Sales Managers.
The complaint makes a specific allegation that the respondents were incharge of and were responsible to their employers for the conduct of their business at Delhi.
section D. Sharma, Food Inspector, PW 1 has stated during the enquiry under section 202 of the Code of Criminal Procedure that the adulterated article of food in question was sold by them to the distributors M/s.
Gainda Mull Hem Raj vide bill No. 62 dated August 20, 1976.
Further, he goes on to, say, that they were incharge of and responsible to M/s. Ahmed Oomer Bhoy for the conduct of their business in Delhi at that time.
Now, the person actually effecting the sale of an adulterated article of food is directly liable under s.7 (i) of the Act, which reads: "7.
No person shall himself or by any person on his behalf manufacture for sale, or store, sell or distribute.
(i) any adulterated food;" The manufactures M/s, Ahmed Oomer Bhoy, Bombay became liable because they were directly selling the adulterated article through their branch office at Delhi.
The respondents I. K. Nangia and Y. P. Bhasin also became liable because of the words "by any person on his behalf" which include their agents and servants.
That appears to be the true construction of the section.
In view of this, the learned Metropolitan Magistrate could not have dismissed the complaint against the respondents.
It appears that M/s. Ahmed Oomer Bhoy, Bombay had appointed the accused Y. A. Khan, Manager Quality Control, Ahmed Mills to be the person responsible for the company under s.17 (2) on July 31, 1976.
It is argued on the strength of section 17 (1) (a) (i) that the respondents could not, therefore, be prosecuted for the offence committed by M/s. Ahmed Oomer Bhoy.
This contention, in our opinion, needs only to be stated to be rejected.
Not only does it involve attributing to the Legislature something which was never intended, but it conflicts with the ordinary canons of constructions.
The question turns upon a proper construction of the new section 17, introduced by Act 34 of 1976, which in so far as material reads: "17.
(i) Where an offence under this Act has been committed by a company (a) (i) the person, if any, who has been nominated under sub section (2) to be in charge of, and responsible to, the 1022 company for the conduct of the business of the company (hereafter in this section referred to as the person responsible), or (ii) where no person has been so nominated, every person who at the time the offence was committed was incharge of and was responsible to, the company for the conduct of the business of the company; and (b) the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence.
(2) Any company may, by order in writing, authorise any of its directors or managers (such manager being employed mainly in a managerial or supervisory capacity) to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission by the company of any offence under this Act and may give notice to the Local (Health) Authority, in such form and in such manner as may be prescribed, that it has nominated such director or manager as the person responsible, along with the written consent of such director or manager for being so nominated.
Explanation.
Where a company has different establishments, or branches or different units in any establishment or branch, different persons may be nominated under this sub section in relation to different establishments or branches or units and the person nominated in relation to any establishment, branch or unit shall be deemed to be the person responsible in respect of such establishment, branch or unit.
(3) x x x x x x x (4) Notwithstanding anything contained in the foregoing sub sections, where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is 1023 attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, [not being a person nominated under sub section (2)] such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
" On the plain meaning of the section, when an offence has been committed by a company, where there is no nomination under section 17 (2), every person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business, is deemed to be guilt of the offence and is liable to be proceeded against and punished.
Notwithstanding the nomination of a person under s.17 (2), any director, manager, secretary or other officer of the company [not being a person nominated under sub section
(2)] can also be vicariously made liable if it is proved that the offence has been committed "with the consent or connivance of, or is attributable to any neglect on the part of such person '.
It is, however, strenuously urged that the company having nominated the accused Y. A. Khan, Quality Control Manager, Ahmed Mills to be the person responsible under s.17 (2), he is the only person liable to be proceeded against throughout the country and the prosecution of the respondents is wholly misconceived.
Our attention has been drawn to the nomination form, and it says that he shall be responsible for the company.
We are afraid, there is no substance in this contention.
There is nothing in the document to show that the nomination is effective not only for the registered office of the company at Bombay but also for all its branches in different States.
Such a construction would, in our opinion, render the Explanation to section 17 (2) wholly illusory.
Where there is a large business organization with a widespread network of sales organisations throughout the country, it ought to nominate different persons for different places or face the consequences set forth in s.17 (1) (a) (ii).
The Explanation appended to s.17 (2) does, in terms, contemplate that where a company has different establishments or branches or different units in any establishment or branch, it may nominate different persons in relation to different establishments or branches or units and the person so nominated in relation to any establishment or branch or unit shall be deemed to be the person responsible in respect of such establishment or branch or unit.
The language of the Explanation shows a purpose and, therefore, a cons 1024 truction consistent with that purpose must reasonably be placed upon it.
We are clear that the Explanation to section 17(2), although in terms permissive, imposes duty upon such a company to nominate a person in relation to different establishments or branches or units.
There can be no doubt that this implies the performance of a public duty, as otherwise, the scheme underlying the section would be unworkable.
The case, in our opinion, comes with in the dictum of Lord Cairns in Julius vs Lord Bishop of Oxford: "There may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something, in the conditions under which it is to be done, something in the title of the persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed to exercise that power when called upon to do so.
" The Explanation lays down the mode in which the requirements of section 17 (2) should be complied with.
Normally, the word 'may ' implies what is optional, but for the reasons stated, it should in the context in which it appears, mean 'must '.
There is an element of compulsion.
It is power coupled with a duty.
In Maxwell on Interpretation of Statutes, 11th Edn.
at p. 231, the principle is stated thus: "Statutes which authorise persons to do acts For the benefit of others, or, as it is sometimes said, for the public good or the advancement of justice, have often given rise to controversy when conferring the authority in terms simply enabling and not mandatory.
In enacting that they "may" or "shall, if they think fit", or, "shall have power", or that "it shall be lawful" for them to do such acts, a statute appears to use the language of mere permission, but it has been so often decided as to have become an axiom that in such cases such expressions may have to say the least a compulsory force, and so could seem to be modified by judicial exposition." (Emphasis supplied).
Though the company is not a body or authority, there is no reason why the same principle should not apply.
It is thus wrong to suggest 1025 that the Explanation is only an enabling provision, when its breach entails in the consequences indicated above.
It is not left to one 's choice, but the law makes it imperative.
Admittedly, M/s. Ahmed Oomer Bhoy had not at the material time nominated any person, in relation to their Delhi branch.
The matter is, therefore, squarely covered by section 17 (1) (a) (ii).
On the two questions formulated, the answer is self evident.
The individual liability of the sales manager is distinct and separate from the corporate liability of the manufacturer.
In case of a 'company prosecution ', the company along with its agent, that is, the person nominated under s.17 (2) as well as the sales manager can both be prosecuted under s.7 (i) read with s.16 (1) (a).
Notwithstanding the nomination of a person responsible under section 17(2), there can also be prosecution of any director, manager, secretary or other officer of the company under section 17(4).
But in such a case it is necessary for the prosecution to prove that the offence has been committed 'with the consent or connivance of, or is attributable to, any neglect on the part of such person '.
The result, therefore, is that the order of the Metropolitan Magistrate is set aside and he is directed to issue summons to the respondents and proceed with the trial according to law.
V.D.K. Appeal allowed.
|
On August 31, 1976, the Food Inspector lifted a sample of 'Postman ' brand refined ground nut oil from M/s. Amar Provision & General Stores, which was sold/supplied to it by M/s. Gainda Mull Hem Raj on August 20, 1976 and the same was found, as per the Public Analyst 's report dated September 9, 1976, to be adulterated due to the presence of Castoroil (not an edible oil).
This adulterated article of food was supplied/sold to Gainda Mull Hemraj by M/s. Ahmad Oomer Bhoy through its sales managers at Delhi, T. K. Nangia and Y. P. Bhasin.
On June 23, 1977, the Delhi Administration filed a complaint under section 7(1) read with Section 16(1)(a) and Section 17 against (i) M/s. Ahmed Oomer Bhoy Ahmed Mills, Bombay manufacturers of well known brand Postman groundnut oil (ii) their distributors M/s. Gainda Mull Hemraj, New Delhi, a partnership firm, and its managing Partner Meher Chand Jain (iii) M/s. Amar Provision and General Stores, Netajinagar Market, New Delhi and its owner Amrik Lal, the retailer (iv) Y. A. Khan, Manager, Quality Control, Ahmed Mills appointed by the manufacturers as the person responsible under section 17(2) of the Act, and (v) The two sales managers, Delhi Branch of M/s. Ahmed Oomer Bhoy, manufacturers, I.K. Nangia and Y. P. Bhasin.
The Metropolitan Magistrate, Delhi by his order dated April 1, 1978 found that there was a prima facie case against all except the two sales managers and issued process accordingly.
He dismissed the complaint against the respondents on the ground "that they were not concerned with the manufacturer of the article in question, but had only effected the sale thereof".
The Delhi Administration moved the High Court in revision against dismissal, but it declined to interfere.
1017 Allowing the appeal by special leave the Court, ^ HELD: 1.
At the initial stage, if there is strong suspicion which leads the Court to think that there is a ground for presuming that the accused had committed an offence, then it is not open to the Court to say that there was no sufficient ground for proceeding against the accused.
[1020 C D] In the instant case, the allegations in the complaint constitute a prima facie, case against the respondents of having committed an offence under section 7(1) read with section 16(1)(a) of the .
The words "were in charge of" and "responsible to it for the conduct of its business" are wide enough to include all the business activities of M/s. Ahmed Oomer Bhoy at Delhi who have their office at Delhi and the two respondents are the sales Managers.
[1020 E, G H, 1021 A] State of Bihar vs Ramesh Singh, ; ; applied.
The person actually effecting the sale of an adulterated article of food is directly liable under section 7(i) of the Act.
The manufacturers M/s. Ahmed Oomer Bhoy, Bombay became liable because they were directly selling the adulterated article through their branch office at Delhi.
The respondents I. K. Nangia and Y. P. Bhasin also became liable because of the words "by any person on his behalf" in Section 7 which includes their agents and servants.
In view of this, the learned Metropolitan Magistrate should not have dismissed the complaint against the respondents.
[1021 C F] 3.
On the plain meaning of the new section 17, introduced by Act 34 of 1976, when an offence has been committed by a company, where there is no nomination under s 17(2), every person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business, is deemed to be guilty of the offence and is liable to be proceeded against and punished.
Notwithstanding the nomination of a person under section 17(2), any director, manager, secretary or other officer of the company [not being a person nominated under sub section
(2)] can also be vicariously made liable if it is proved that the offence has been committed "with the consent or connivance of, or is attributable to any neglect on the part of such person".
[1023 B D] 4.
To construe section 17(2) of the Act to mean that the only person liable to be proceeded is the named/nominated person under section 17(2) would render the Explanation to Section 17(2) wholly illusory.
[1023 E F] 5.
Where there is a large business organisation, with a widespread network of sales organisation throughout the country, it ought to nominate different persons for different places or face the consequences set forth in section 17(1)(a)(ii).
The Explanation appended to section 17(2) does, in terms, contemplate that where a company has different establishments or branches or different units in any establishment or branch, it may nominate different persons in relation to different establishments or branches or units and the person so nominated in relation to any establishment or branch or unit shall be deemed to be the person responsible in respect of such establishment or branch or unit.
The language of the Explanation shows a purpose and, therefore, a construction consistent with that purpose must reasonably be placed upon it.
[1024 F H, 1025 A] 1018 The Explanation to section 17(2), although in terms permissive imposes a duty upon such a company to nominate a person in relation to different establishments or branches or units.
There can be no doubt that this implies the performance of a public duty, as otherwise, the scheme underlying the section would be unworkable.
[1024 A D] The Explanation lays down the mode in which the requirements of section 17(2) should be complied with.
Normally, the word 'may implies what is optional, but for the reasons stated, it should in the context in which it appears.
mean 'must '.
There is an element of compulsion.
It is a power coupled with a duty.
Though the company is not a body or authority, there is no reason why the same principle should not apply.
It is thus wrong to suggest that the Explanation is only an enabling provision, when its breach entails in the consequences indicated above.
It is not left to one 's choice, but the law makes it imperative.
Admittedly, M/s. Anand Oomer Bhoy had not at the material time nominated any person, in relation to their Delhi branch.
The matter is, therefore, squarely conversed by section 17(1)(a)(ii).
[1024D E, H, 1025 A] Julias vs Lord Bishop of Oxford, ; quoted with approval.
The individual liability of the sales manager is distinct and separate from the corporate liability of the manufacturer.
In case of a 'company prosecution ', the company alongwith its agent, that is, the person nominated under section 17(2) as well as the sales manager can both be prosecuted under section 7(i) read with section 16(1) (a).
Notwithstanding the nomination of a person responsible under section 17(2), there can also be prosecution of any director, manager, secretary, or other officer of the company under section 17(4).
But in such a case it is necessary for the prosecution to prove that the offence has been committed 'with the consent or connivance of, or is attributable to, any neglect on the part of such person '.
[1025 B D]
|
Civil Appeal No. 2233 of 1969.
From the Judgment and Order dated 11 3 1968 of the Rajasthan High Court in Writ Petition No. 126/62.
Sobhagmal Jain and section K. Jain for the Appellant.
E. C. Agarwala and Girish Chandra for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by certificate by Shri Abdul Qadir from the judgment of the Rajasthan High Court dismissing his Writ Petition.
The house in question belonged to one Mohammed Amin Khan.
The appellant purchased the house from the said owner on 10 7 1948 for Rs. 12,000.
It appears that neither the appellant nor Mohammed Amin Khan was an evacuee within the meaning of the , hereinafter called the Evacuee Property Act.
But under some mistaken notion probably the appellant was treated as an evacuee and the house was declared as an evacuee property on 15 11 1951 in accordance with the Evacuee Property Act.
After such declaration the question that the property was an evacuee property could not be reopened and became final.
Upon that footing the appellant filed an application on 26 9 1953 under section 16(1) of the Evacuee Property Act, as the section then stood, for grant of a certificate.
On 27 10 1956 the Central Government granted a certificate under the unamended provision of law contained in section 16.
Pursuant to the above the appellant made an application to the Assistant Custodian of Evacuee Property for restoration of the house under sub section (2) of section 16.
The Asstt.
Custodian, respondent No. 1 passed an order on 18 3 1957 restoring the house to the appellant.
But before that Shri Ajjumal, respondent No. 2 had been inducted as a tenant in the house by the Custodian after it was declared as an evacuee property.
The appellant was directed to take symbolic possession of the house allowing the said tenant to continue in its occupation on receipt of rent from him.
The appellant came to know later that on 11 11 1960 the Central Government passed an order under section 20A of the , hereinafter 995 referred to as the Displaced Persons Act, whereby it was ordered that in respect of the house in question action be taken in accordance with the said provision of law.
On 6 12 1960 the Central Government ordered that it had revised its order dated 11 11 1960 and the petitioner was entitled to compensation only under section 20A of the Displaced Persons Act.
In the Civil Suit filed by the appellant against Ajjumal it transpired that a sale deed had been executed in his favour as he was a displaced person in occupation of the house and the appellant was entitled to compensation only.
He, therefore, filed a writ petition in the High Court to challenge the action of the Assistant Custodian, respondent No. 2 and the Union of India, respondent No. 3.
The writ case was contested by all the respondents and it was asserted that Ajjumal being a sitting allottee had to be rehabilitated and the appellant was entitled to compensation only.
The High Court has quoted section 16 of the Evacuee Property Act as it stood prior to 22 18 1956 and the section as it came into force after that date.
It has rightly pointed out that there was a change of procedure in the two provisions.
According to section 16 as it stood before 22 10 1956 the application for certificate was to be made to the Central Government and the Central Government in its discretion was to issue the certificate.
On the issuance of such a certificate after following certain procedure the restoration order had to be made by the Custodian of the Evacuee Property.
In the present case only a certificate was issued on 27 10 1956.
The High Court is right in holding that the certificate so issued in accordance with the old law was not valid.
Attempts were made before the High Court to show that the said certificate was issued pursuant to an order alleged to have been made on 1 10.1956.
The High Court was not satisfied about the correctness of this new stand.
Nothing could be pointed out to us to persuade us to take a view different from the one taken by the High Court in regard to the question of the invalidity of the certificate issued in favour of the appellant on 27 10 1956.
There is another difficulty in the way of the appellant and that comes in because of the provision of law contained in section 20A of the Displaced Persons Act.
The said section also had undergone a change from time to time and at the relevant time sub section (1) of section 20A stood as follows: (1) Where any evacuee or his heir has made an application under Sec.
16 of the Evacuee Property Act and the Central Government is of opinion that it is not expedient or 996 practicable to restore the whole or any part of such property to the applicant by reason of the property or part thereof being in occupation of a displaced person or otherwise, then, notwithstanding anything contained in the Evacuee Property Act and this Act, it shall be lawful for the Central Government (a) to transfer to the applicant in lieu of the evacuee property or any part thereof, any immovable property in the compensation pool or any part thereof, being in the opinion of the Central Government as nearly as may be of the same value as the evacuee property or, as the case may be, any part thereof, or (b) to pay to the applicant amount in cash from the compensation pool in lieu of the evacuee property or part thereof as the Central Government having regard to the value of the evacuee property or part thereof may, in the circumstances deem fit.
Explanation: The provisions of this sub section shall apply, whether or not, a certificate for the restoration of the evacuee property has been issued to the applicant under sub sec.
(1) of sec.
16 of the Evacuee Property Act, as in force before the commencement of the Administration of Evacuee Property (Amendment) Ordinance, 1956, if the evacuee property has not in fact been restored to the applicant.
" It would be noticed that the provisions of section 20A (1) have got the over riding effect by virtue of the Explanation appended to it even after a certificate for the restoration of the evacuee property had been issued to the applicant on 27 10 1956.
In spite of the certificate it was open to the Central Government not to allow restoration of the house to the appellant and to pay him compensation only.
The Central Government has adopted the latter course.
Respondent No. 2, a displaced person, was inducted as a tenant in the property long time back.
The property was sold to him also by the Custodian.
In such a situation it was just and proper to refuse restoration of the property to the appellant and to pay him compensation only.
But we were informed that the amount of compensation payable to the appellant has been determined at a somewhat low figure being in the neighborhood of Rs. 8,000 only.
The appellant had 997 purchased the house for Rs. 12,000 in the year 1948.
In that view of the matter we recommend for consideration of the Government whether it would be possible for them to enhance the amount of compensation at least to the figure of Rs. 12,000.
The matter is finally within their jurisdiction and they may decide it as they think it fit and proper to do.
For the reasons stated above this appeal fails and is dismissed but without costs.
P.B.R. Appeal dismissed.
|
The appellant purchased a house in July, 1948.
Although neither the vendor nor the appellant was an evacuee within the meaning of the , the appellant was treated as an evacuee and the house was declared evacuee property in 1951.
In response to the appellant 's petition filed in 1953, a certificate was granted by the Government under the unamended provisions of section 16 of the Act.
When the appellant asked for restoration of the house the Assistant Custodian passed an order in 1957 granting restoration.
In the meantime since respondent No. 2 had been inducted as a tenant in the house by the Custodian after it was declared evacuee property the appellant was asked to take symbolic possession of the house allowing the tenant to continue in possession.
Section 20A(1) of the provided that where an evacuee had made an application under section 16 of the Evacuee Property Act, 1950 and the Central Government is of opinion that it is not expedient or practicable to restore the whole or any part of the property to the applicant, it shall be lawful for the Central Government to pay to the applicant the value of the property in cash from the compensation pool in lieu of the evacuee property.
The Explanation to this section provided that the provisions of this sub section shall apply, whether or not a certificate for the restoration of the evacuee property had been issued to the applicant under section 16(1) of the 1950 Act.
The Central Government revised its earlier order dated November 11, 1960 and gave compensation to the appellant under section 20A of the 1954 Act.
The appellant 's writ petition challenging the order of the Assistant Custodian was dismissed by the High Court.
Dismissing the appeal, ^ HELD: 1.
According to section 16 of the 1950 Act, as it stood before October 22, 1956, an application for certificate was to be made to the Central Government.
On the issuance of the certificate, restoration order was made by the Custodian of Evacuee Property.
In the instant case the certificate was issued on October 27, 1956.
The High Court was therefore right in holding that the certificate issued in accordance with the old law was not valid.
[995 D F] 2.
The provisions of section 20A(1) have got the over riding effect by virtue of the Explanation appended to it even after a certificate for the restora 994 tion of the evacuee property had been issued to the applicant on October 27, 1956.
In spite of the certificate it was open to the Central Government not to allow restoration of the house to the appellant and to pay him compensation only.
The Central Government has adopted the latter course.
Respondent No. 2, a displaced person, was inducted as a tenant in the property a long time back.
The property was sold to him by the Custodian.
In such a situation it was just and proper to refuse restoration of the property to the appellant and to pay him only compensation.
[996 F H]
|
LATE JURISDICTION: Civil Appeal No. 1479 of 1971.
From the Judgment and Order dated 25 4 1969 of the Gujarat High Court in SCA No. 271/65.
G.A. Shah, N.S. Pande and M.N. Shroff for the Appellant.
P.R. Mridul, Vimal Dave and Miss Kailash Mehta for Respondent No. 1.
I. N. Shroff and H. section Parihar for Respondent No. 2.
The Judgment of the Court was delivered by SEN, J.
This appeal on certificate from a judgment of the Gujarat High Court raises a question as to the validity or otherwise or a fresh notification issued by the Government of Gujarat under section 6 of the d Acquisition Act, 1894, consequent upon an earlier notification under section 6 of the Act being discovered to be invalid.
The first respondent in this case owned certain land bearing Final Plot No. 38 forming part of Town Planning Scheme No. III (Ellis bridge) situate within the city of Ahmedabad.
At the request of the second respondent Sri Ayodhya Nagar Co operative Housing Society Ltd., registered under the Bombay Co operative Societies Act, 1925, now deemed to be registered under the Gujarat Co operative Societies Act, 1961, formed with the object of enabling its members to construct houses, the State Government on August 3, 1960 issued a notification 286 under section 4 stating that the land was likely to be needed for a public purpose.
This was followed by a notification of the State Government dated August 21, 1961 under section 6 of the Act stating that the land was to be acquired at the expense of Sri Ayodhya Nagar Cooperative Housing Society Ltd. for the public purpose specified in column 4 of the schedule annexed thereto.
The public purpose specified in column 4 of the schedule was 'For construction of houses for Sri Ayodhya Nagar Co operative Housing Society Ltd., Ahmedabad.
The entire expense of the acquisition was to be borne by the second respondent, i.e., the Co operative Housing Society.
The first respondent moved the High Court under article 226 of the Constitution challenging the validity of the notification under section 6 on the ground that the acquisition of the land for a public purpose at the expense of the second respondent was legally invalid.
On December 4, 1961 the High Court issued an ad interim injunction restraining the appellant from proceeding with the acquisition proceedings.
While this writ petition was pending, the State Government by its notification dated May 27, 1963 cancelled the notification under section 6.
on September 10, 1964 the State Government issued a fresh notification under section 6 stating that the land was to be acquired at the public expense, for the public purpose specified in column 4 of the schedule.
The public purpose specified in column 4 in the schedule was 'For housing scheme undertaken by Sri Ayodhya Nagar Co operative Housing Society Ltd. The High Court following its earlier decision in Dosabhai Ratansha Keravala vs State of Gujarat & Ors.
struck down the second notification under section 6 dated September 10, 1964.
It held inter.
alia that the first notification under section 6 issued on August 21, 1961 being an acquisition for a society at its cost, was valid and the Government could have proceeded to complete the acquisition under it but, under a false sense of apprehension as to its validity, the Government cancelled it on May 27, 1963.
There was no justification for cancelling the first notification under section 6 and even if the Government wanted to cancel it out of a feeling of apprehension as to its validity, the Government need not have taken one year and ten months to do so.
(2) After the issue of the first notification under section 6 on August 21, 1961, the notification dated August 3, 1960 under section 4 was exhausted and, therefore, could not be used to support the second notification issued under section 6 on September 11, 1964.
(3) The cancellation of the first notification under section 6 by the notification dated May 27, 1963 did not have the effect of reviving the notification under section 4 so as to make it available for supporting the second notification under section 6.
The second notifi 287 cation under section 6 not being supported by any notification under section 4 Was consequently invalid.
(4) A notification under section 6 in order to be valid must follow within a reasonable time after the issue of a notification under section 4.
The notification under section 4 was issued on August 3, 1960 and the second notification under s 6 on September 10, 1964 and there was thus an interval of about four years and one month between the two notifications.
This interval of time, could not be regarded as reasonable.
Even tested by the yardstick of reasonable time provided by the legislature in the second proviso introduced in section 6 by the Land Acquisition (Amendment and Validation) Act.
1967, namely three years, the period of about four years and one month between the two notifications under section 4 and section 6 would be clearly unreasonable.
The second notification must, therefore, be held to be invalid on this ground also.
We are clearly of the opinion that the High Court was in error m striking down the second notification under section 6 issued on September 10, 1964.
In Valjibhai.
Muljibhai Soneji.
vs State of Bombay the Court held that the Government has no power to issue a notification for acquisition of land for a public purpose, where the compensation is to be entirely paid by a company.
The first notification issued by the Government under section 6 for acquisition of the land for a public purpose, at the expense of the second respondent, the Co operative Society, was, therefore, invalid.
The State Government was, there fore, justified in issuing the second notification under section 6 after removing the lacuna i.e., by providing for acquisition of the land for the said public purpose, at public expense.
In an endeavour to support the judgment, counsel for the first respondent advanced a three fold contention.
It was urged, firstly, that successive notifications cannot be issued under section 6 placing reliance on State of Madhya Pradesh & Ors.
vs Vishnu Prasad Sharma & Ors.
It was pointed out that the Land Acquisition (Amendment and Validation) Act, 1967 had a limited scope and it validated only successive notifications issued under section 6 in respect of different parcels of land but did not validate successive notifications in respect of the same land.
Further, it was urged that the Act was not retrospective in operation and, therefore, the validity of the second notification dated September 10, 1964 had to be Adjudged with reference to the pre amendment law, i.e., according to the law as declared by this Court in Vishnu Prasad Sharma 's case.
Secondly, it was urged, on the strength of the deci 288 sion in Dosabhai Ratansha Karevala 's case (supra) that a notification under section 4 is exhausted when it is followed by declaration under section 6 It was urged that the first notification under section 6 dated August 21, 1961 was valid and the High Court was, therefore, justified in holding that with its cancellation, the notification under section 4 lapsed.
Thirdly, it was urged that there was unreasonable delay in issuing the second notification under section 6 and, this, by itself, was sufficient to invalidate it.
In Vishnu Prasad Sharma 's case the Court held that sections 4, S A and 6 are integrally connected and present a complete scheme for acquisition and, therefore, it was not open to the Government to make successive declarations under section 6.
Wanchoo J. (as he then was), speaking for himself and Mudholkar J., observed: "It seems to us clear that once a declaration under section 6 is made, the notification under section 4(1) must be exhausted, for it has served its purpose.
There is nothing in sections 4, 5 A and 6 to suggest that section 4(1) is a kind of reservoir from which the government may from time to time draw out land .
and make declarations with respect to, it successively.
If that was the intention behind sections 4, S A and 6 we would have found some indication of it in the language used there in But as we read these three sections together we can only find that the scheme is that section 4 specifies the locality, then there may be survey and drawing of maps of the land and the consideration whether the land is adapted for the purpose for which it has to be acquired, followed by objections and making up of its mind by the government what particular land out of that locality it needs.
This is followed by a declaration under section 6 specifying the particular land needed and that in our opinion completes the process and the notification under section 4(1) cannot be further used there after.
At the stage of section 4 the land is not particularised but only the locality is mentioned; at the stage of section 6 the land in the locality is particularized and thereafter it seems to us that the notification under section 4(1) having served its purpose exhausts itself.
" Sarkar J., in a separate but concurring judgment, observed: "My learned brother has said that sections 4, 5A and 6 of the Act have to be read together and.
so read, the conclusion is clear that the Act contemplates only a single declaration under section 6 in respect of a notification under section 4.
" 289 After rejecting the contention that the Government may have difficulty A in making the plan of its projects complete at a time, particularly where the project is large, and therefore, it is necessary that it should have power to make successive declarations under section 6, he observed: "I cannot imagine a Government, which has vast resources, not being able to make a complete plan of its project at a time.
Indeed, I think when a plan is made, it is a complete plan.
I should suppose that before the Government starts acquisition proceedings by the issue of a notification under section 4, it has made its plan for otherwise it cannot state in the notification, as it has to do, that the land is likely to be needed.
Even if it had not then completed its plan, it would have enough time before the making of a declaration under section 6 to do so.
I think, therefore, that the difficulty Of the Government, even if there is one, does not lead to the conclusion that the Act contemplates the making of a number of declarations under section 6.
" In the present case, the question, however, does not arise as the first notification under section 6 dated August 21, 1961 being invalid, the Government was not precluded from making a second notification.
Due to the invalidity of the notification under section 6, the notification under section 4 still held the field and on its strength another notification under section 6 could be issued.
It is, therefore, not necessary to deal with the effect of the validating Act.
The matter is squarely covered by the decision of the Court in Girdharilal Amratlal Shodan & Ors.
vs State of Gujarat & Ors.
The Court rejected the contention that by cancelling the first notification under section 6, as here, the Government must be taken to have withdrawn from the acquisition and consequently could not issue a second notification under section 6.
there also the first notification under section 6 was invalid and of no effect, as the Government had no power to issue a notification for acquisition for a public purpose where the compensation was to be paid entirely by a company? as held by this Court in Sham Behari & Ors.
vs State of Madhya Pradesh & Ors.
It will be noticed that in Girdharilal Amratlal Shodan 's case the facts were identical.
On August 3, 1960 the Government of Gujarat issued a notification under section 4 in respect of certain land falling in Final Plot No. 460 of the Town Planning Scheme No. III of Elisbridge in the city of Ahmedabad, stating that the land was likely to be needed for a public purpose, viz., for construction of houses for Sri Krishna 290 kunja Government Servants ' Co operative Housing Society Ltd. On July 18, 1961 the State Government issued a notification under section 6 stating that the land was to be acquired for the aforesaid public purpose at the expense of Sri Krishnakunj Government Servants ' Co operative Housing Society Ltd.
On September 22, 1961, the landholder filed a writ petition in the High Court for an order quashing the notification under section 6.
During the pendency of the proceedings, the Government issued a notification dated April 28, 1964 cancelling the aforesaid notification dated July 18, 1961.
On August 14, 1964 the Government issued a fresh notification under section 6 stating that the land notification under section 6 staling that the land was needed to be acquired at the public expense for a public purpose viz, for the housing scheme undertaken by Sri Krishnakunj Government Servants ' Co operative Housing Society Ltd. The contention was that by cancelling the first notification under section 6, the Government must be deemed to have withdrawn from the acquisition and cancelled the notification under section 4, and therefore, could not issue the second notification under section 6, without issuing a fresh notification under section 4.
It was also urged that the power of the State Government to issue a notification under section 6 was exhausted, and the Government could not issue a fresh notification under section 6.
The Court rejected both the contentions observing: "Having regard to the proviso to ' section 6, of the Act, a declaration for acquisition of the land for a public purpose could only be made if the compensation to be awarded for it was to be paid wholly or partly out of public revenues or some fund controlled or managed by a local authority.
The Government had no power to issue a notification for acquisition for a public purpose where the compensation was to be paid .
entirely by a company.
The notification dated JULY 18, 1961 was, therefore, invalid and of no effect, see Shyam Behari vs State of Madhya Pradesh.
The appellants filed the writ petition challenging the aforesaid notification on this ground.
The challenge was justified and the notification was liable to be quashed by the Court.
" "The State Government realised that the notification was invalid, and without waiting for an order of Court.
cancelled the notification on April 28, 1964.
The cancellation was in recognition of the invalidity of the notification.
The Government had no intention of withdrawing from the acquisition.
Soon after the cancellation, the Government issued a fresh notification under section 6 whereas in this case the notifi 291 cation under section 6 is incompetent and invalid, the Government may treat it as ineffective and issue a fresh notification under section 6.
This is what, in substance, the Government did in this case.
The cancellation on April 28, 1964 was no more than a recognition of the invalidity of the earlier notification.
" The first notification issued under section 6 on August 21, 1961 was obviously invalid and of no effect.
By the issue of this notification, the Government had not effectively exercised its powers under section 6.
In the circumstances, the Government could well issue a fresh notification under section 6 dated September 10, 1964.
In State of Gujarat vs Musamiyan Imam Haider Bux Razvi & Anr. etc.
this Court while reversing the decision of the Gujarat High Court in Dosabhai Ratansha Kerravala (supra) on which the High Court based its decision, has laid down two important principles: (1) In view of the decisions of this Court in Pandit Jhandu Lal & Ors.
vs The State of Punjab & Ors., Ratilal Shankarbhai & Ors.
vs State of Gujarat & Ors.
and Ram Swarup vs The District Land Acquisition Officer, Aligarh & Ors.
the acquisition of land for a co operative housing society is a public purpose.
The Government is the best Judge to determine whether the purpose in question is a public purpose or not; and, it cannot be said that a housing scheme for a limited number of persons cannot be construed to be a public purpose inasmuch as the need of a section of the public may be a public purpose.
(2) When a notification under section 6 is invalid, the government may treat it as ineffective and issue a fresh notification under section 6, and nothing in section 48 of the Act precludes the government from doing so, as held by this Court in Girdharilal Amratlal Shodan.
The High Court had not the benefit of these decisions when it held that acquisition of land for a co operative housing society was not a public purpose and, therefore, the first notification dated August 21, 1961 issued under section 6 of the Act was valid.
The substratum on which the decision of the High Court rests has, therefore, disappeared.
This Court in Musamiyan 's case distinguished the decision in State of Madhya Pradesh & Ors.
vs Vishnu Prasad Sharma & Ors.
(supra) by quoting the passage referred to above.
The decision in Vishnu Prasad Sharma 's case is not an authority for the proposition that where a notification under section 6 is found to be invalid it cannot be followed by a fresh notification under section 6.
In fact, the decision of the High Court 292 runs counter to what it had observed in Dosabhai Ratansha Keravala 's case, after referring to the decisions of this Court in Vishnu Prasad Sharma 's case and Girdharilal Amratlal Shodan 's case: "If the first section 6 notification is invalid, that is, non est, section 4 notification cannot be regarded as exhausted, for its purpose is yet unfulfilled; its purpose could be fulfilled only by issue of a valid notification under section 6.
" There remains the question whether the High Court was right in quashing the second notification under section 6 on the ground of unreasonable delay in its issuance.
The respondent had not taken any such ground in the writ petition filed by him.
The High Court was, therefore, not justified in observing that 'the appellant had not explained the delay by filing any affidavit '.
We fail to appreciate that if there was no ground taken, there could be no occasion for filing of any such affidavit.
Further, the delay, if any, was of the respondent 's own making.
He had challenged the first notification under section 6, presumably on the ground that the acquisition being for a public purpose, could not be made at the expense of the second respondent.
The challenge was justified and the State Government, therefore, withdrew the first notification under section 6 without waiting for an order of the High Court.
The cancellation was in recognition of the invalidity of the notification.
The Government had no intention of withdrawing from the acquisition.
Thereafter, the Government issued a fresh notification under section 6 making a declaration for acquisition of the land for a public purpose at public expense.
There is nothing in the Act which precludes the Government from issuing a fresh notification under section 6, if the earlier notification is found to be ineffective.
The delay of one year and four months between the date of cancellation and the issue of the second notification cannot be regarded to be unreasonable, in the facts and circumstances of the case.
In somewhat similar circumstances, this Court recently in Gujarat State Transport Corpn.
vs Valji Mulji Soneji held the delay of about fifteen years in making the second notification under section 6 not to be unreasonable.
We cannot, therefore, uphold the High Court 's decision that the second notification must be struck down on the ground of delay.
In the result, the appeal succeeds and is allowed with costs, the judgment of the High Court is set aside, and the writ petition filed by the first respondent is dismissed.
Respondent No. 1 shall bear the costs.
N.K.A. Appeal allowed.
|
The first respondent owned certain Land forming part of a town planning scheme, situated within the city limits.
At the request of the second respondent, a Corporative Housing Society, the State Government issued a Notification under section 4 of the Act on August 3, 1960 stating that the land was likely to be needed for a public purpose and it was followed by a further notification of the State Government under Section 6 of the Act dated August 21, 1961 that the land was to be acquired at the expense of the Cooperative Housing Society for the public purpose specified in column 4 of the Schedule to the notification.
The entire expense of the acquisition was to be borne by the second respondent.
The first respondent moved the High Court under Article 226 of the Constitution challenging the validity of the notification under section 6 of the Act.
During the pendency of the Writ Petition, the appellant by a notification dated May 27, 1963 cancelled the earlier notification under section 6 and issued a fresh notification.
The High Court struck down the second notification dated September 10, 1964 issued under section 6 of the Act.
In the appeal to this Court, on the question of the validity of the 2nd notification dated September 10, 1964. ^ HELD: (i) The High Court was in error in striking down the second notification under section 6 of the Act issued on September 10, 1964.
(ii) This Court in Valjibhai Muljibhai Soneji vs State of Bombay has held that the Government has no power to issue a notification for acquisition of land for a public purpose, where the compensation is to be entirely paid by a company.
[287 C D] In the instant case the first notification issued by the Government for acquisition of land for a public purpose at the expense of the second respondent, the cooperative society was therefore, invalid and the Govt.
was justified in issuing the second notification under section 6 after removing the lacuna by providing for acquisition of the land for public purpose, at public expense.
[287 D E] (iii) The acquisition of land for cooperative housing society is a public purpose.
The Govt.
is the best judge to determine whether the purpose in question is a public purpose or not.
It cannot be said that a Housing Scheme for a limited number of persons cannot be construed to be a public purpose.
When a notification under section 6 of the Act is invalid, the Govt.
may treat it as ineffective and issue a fresh notification under section 6 of the Act 2nd nothing in section 48 of the Act precludes the Government from doing so.
[291 C E] 285 Girdharilal Amratlal Shodan & Ors.
vs State of Gujarat Madhya Pradesh & Ors.
; , Pandit Jhandu Lal & Ors.
vs The State of Punjab & Ors. ; Ratilal Shankarbhai & Ors.
vs State of Gujarat & Ors.
A.I.R. , Ram Swarup vs The District Land Acquisition Officer, Aligarh & Ors. , referred to.
(iv) In the instant case, tho Respondent had not taken any ground in the Writ Petition with regard to the delay in the issuance of the second notification.
The High Court was therefore, not justified in observing that "the appellant had not explained the delay by filing any affidavit.
" If there was no ground taken, there could be no occasion for filing of any such affidavit.
[292 B C] (v) There is nothing in the Act which precludes the Govt.
from issuing a fresh notification under section 6 of the Act if the earlier notification is found to be ineffective.
The delay of one year and four months between the date of cancellation and the issue of the second notification cannot be regarded to be unreasonable.
[292 E F] Gujarat State Transport Corpn.
vs Valji Mulji Soneji
|
N: Criminal Appeal No. 406 of 1976.
Appeal by Special Leave from the Judgment and Order dated 1 9 1975 of the Madras High Court in Criminal Appeal No. 823/74.
493 A. N. Mulla, A. T. M. Sampath and P. N. Ramalingam for the Appellant.
A. V. Rangam for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by Special Leave by accused 1 and 2 in S.C. 26 of 1974 on the file of Sessions Judge, South Arcot Division, against their conviction and sentence imposed by the High Court of Judicature at Madras in Criminal Appeal No. 823 of 1974 dated 1st September, 1975.
The two Appellants and Muthuthamizaharasan were accused Noc.
1 3 in the Sessions Court.
The first appellant was found guilty under section 302 I.P.C. and sentenced to imprisonment for life.
The second appellant and the third accused were found guilty of an offence under section 302 read with section 149 I.P.C. and sentenced to imprisonment for life.
On appeal by the two appellants and the third accused, the third accused was acquitted by the High Court and the appellants Nos. 1 and 2 are before us.
The deceased Rasayal is the sister of appellants and the third accused.
The first accused Dhanabal is the eldest and the second appellant and the third accused are his younger brothers.
The second appellant married Laxmi, the daughter of Rasayal.
Rasayal owned about 5 acres of land in Keelakkarai village.
She executed a general power of attorney Exh.
P. 15 on 31st August, 1970 in favour of the second appellant.
Rasayal, after she lost her husband, started leading an immoral life which was disliked by her brothers.
As a result, Rasayal began to cultivate her own land inspite of the power of attorney executed in favour of the second appellant.
There was misunderstanding between the parties and Rasayal had complained to the Police stating that her brothers had threatened to do away with her.
On the date of the occurrence at about 1.30 p.m. on 5th December, 1973, when Rasayal and her farm servant Parmasivam, P.W. 4 were working in her field removing weeds, the two appellants and the third accused converged to the place where Rasayal was working.
The first appellant was armed with Veecharuval, the second appellant was armed with a spade and the third was unarmed.
On seeing them, Rasayal ran towards the channel running adjacent to her fields.
The third accused instigated the first appellant to cut her saying that she was leading an immoral life and that she should not be left.
Thereupon, the first appellant cut Rasayal on the right side of her neck with the Veecharuval and she fell down in the channel, raising an alarm.
494 The second appellant stated that she should not be left at that and that her head should be severed from her body, she being an immoral woman.
Thereupon, the first appellant caught hold of her hair by the left hand and cut her neck with the Veecharuval, severing the head from the trunk.
The occurrence was witnessed by Ramalingam P.W. 1 and Ramakrishnan, P. W. 2 who were returning at that time after spraying insecticides in the fields of P.W. 1 Chelladurai, P.W. 3 who was coming to the field of Rasayal with food for P. W. 4 also saw the occurrence.
Nagappan P.W. 5 who was going towards the scene of occurrence to meet Ramakrishnan P.W. 2 for getting arrears of wages also saw the occurrence.
Soon after the occurrence, the first appellant left taking away the Veecharuval with him and second appellant leaving the spade near the feet of the deceased Rasayal.
P. W. 4 gave a report Ext.
P. 7 to the Sub Inspector of Police, Kamaratchi at 3 p.m. on the same day.
The Sub Inspector recorded the narration of P. W. 4, read it over to him and obtained his signatures.
After registering a case under section 302 I.P.C. he took up the investigation and proceeded to the scene of the occurrence and held the inquest.
The Doctor who conducted the post mortem was of the view that the deceased appeared to have died of severance of the head from the trunk.
During investigation, the Police had section 164 Cr.
P. C. Statements recorded from P.Ws. 1 to 5 before the Sub Magistrate, Chidambaram on 24 12 1973.
During the committal proceedings, P.W. 4 turned hostile but P.Ws. 1, 2, 3 and 5 gave evidence supporting the prosecution.
After committal, P.W. 1, 2, 3 and 5 resiled from the evidence they gave in the Committal Court.
They were treated as hostile by the Prosecution and their evidence before the Committing Court was admitted in evidence under section 288 of the Code of Criminal Procedure.
The High Court relying on the evidence of P.Ws. 1, 2, 3 and 5 which was marked under section 288 of the Criminal Procedure Code, found that it was satisfactorily established that the first appellant cut the deceased on the right side of the neck, that the second accused instigated the first accused to cut her saying that she was an immoral woman and the first appellant caught hold of her hair by the left hand and cut her neck with the Veechruval, severing the head from the trunk and left the place alongwith other accused.
The High Court acquitted the third accused on the ground that in the F.I.R. it was not mentioned that the third accused instigated the first accused to cut the neck of the deceased.
He was given the benefit of doubt and was acquitted.
Mr. Mulla, learned counsel for the appellants, submitted that the conviction of the two appellants based entirely on the retracted evi 495 dence of P.W. 1, 2, 3 and 5 marked in the Sessions Court under section 288 cannot be sustained.
Secondly, the Learned Counsel submitted that the High Court was in error in taking into account the statements recorded from the witnesses under section 164 of the Code of Criminal Procedure in coming to the conclusion that the evidence given in the Committal Court could be relied upon.
Lastly, the Learned Counsel submitted that in any event the case of the second appellant is similar to that of the third accused and that the second appellant ought to have been acquitted.
We have been taken through the relevant evidence of the witnesses, their statements under section 164 of the Code of Criminal Procedure and the evidence given by them in the Committal Court which was transposed to the record of the Sessions Court under section 288 of the Code of Criminal Procedure.
Before considering the questions of law raised by the Learned Counsel, we find that the plea of the learned counsel on behalf of the second appellant has to be accepted.
The case for the prosecution is that the two appellants and the third accused went to the scene of occurrence the first appellant armed with Veecharuval, the second appellant with a spade and the third accused unarmed converged on Rasayal and the first accused gave a cut which resulted in severance of her head.
We feel that when the three brothers went to the scene determined to do away with Rasayal, any instigation was most unlikely.
The first accused who actually caused injury is the eldest brother.
It is difficult for us to accept that before he actually caused the injury, he needed the instigation of the second appellant.
In the deposition of Ramalingam P. W. 1, which was marked under section 288, Code of Criminal Procedure, Ext.
P. 2, he stated that first accused came with Aruval, A 2 with a spade and alongwith A 3 went towards Rasayal Ammal.
A 1 with the Veecharuval cut Rasayal Ammal on her right neck.
The other persons were standing there.
Thus the instigation attributed by the prosecution to the second appellant is not found in the evidence of Ramalingam.
Taking into account the facts and the probabilities of the case, we feel it is most unlikely that the second appellant instigated the first accused as a result of which the first accused caused the fatal injury.
The second appellant is entitled to the benefit of doubt.
His appeal is allowed and his conviction and sentence are set aside.
He is directed to be set at liberty.
We will now take up the first contention of the learned counsel that the conviction based on statements marked under s 288 of 496 the Code of Criminal Procedure is not sustainable for consideration.
section 288 of the Code of Criminal Procedure runs as follows: "The evidence of a witness duly recorded in the presence of the accused under Chapter XVIII may, in the discretion of the Presiding Judge, if such witness is produced and examined be treated as evidence in the case for all purposes subject to the provisions of the ".
The plea of the Learned Counsel is that the evidence marked under section 288 is inadmissible as it was only read in full to the witnesses and had not been put to them passage by passage as required by section 145 of the Evidence Act.
The procedure that was adopted in the Sessions Court was that when the witnesses stated giving a version hostile to the prosecution, he was asked whether he was examined in the Committal Court.
The evidence marked as given by him in the Committal Court was read over to the witnesses by the Public Prosecutor.
The witness admitted that he had given evidence as found in the Exh.
and that he had signed it.
The evidence given in the Committal Court was transposed to the record of the Sessions Court under section 288 of the Code of Criminal Procedure.
The procedure adopted was challenged on the ground that section 288 contemplates that the evidence given during Committal proceedings can be treated as evidence in the case subject to the provisions of the , and, therefore, each and every passage on which the prosecution relies on should have been put to the witnesses before the passages can be marked and treated as substantive evidence.
section 145 of the Evidence Act, runs as follows: "A witness may be cross examined as to previous statements made by him in writing or reduced into writing, and relevant to matters in question, without such writing being shown to him, or being proved; but if it is intended to contradict him by the writing, his attention must, before the writing can be proved be called to those parts of it which are to be used for the purposes of contradicting him.
" Reliance was placed on the decision of this Court in Tara Singh vs State of Punjab, wherein it was held that the evidence in the Committal Court cannot be used in the Sessions Court unless the witness is confronted with his previous evidence as required under 497 section 145 of the Evidence Act.
The Court observed that if the prosecution wishes to use the previous testimony as substantive evidence then it must confront the witness with those parts of it which were to be used for the purpose of contradicting him and then only the matter can be brought in as substantive evidence under section 288.
On the facts of the case the Court found that all that happened was that the witnesses were asked something about their previous statements and they replied that they were made under coercion.
It does not appear that the entire previous statements of the witnesses were put to them and they were asked whether they, in fact, made the statements.
In Bhagwan Singh vs State of Punjab,, this Court distinguished the case of Tara Singh vs State of Punjab (supra) and observed that resort to section 145 of the Evidence Act is necessary only if a witness denies that he made the former statement.
When the witness admits the former statement, all that is necessary is to look to the former statement on which no further proof is necessary because of the admission that it was made.
Hidayatullah, C.J. in State of Rajasthan vs Kartar Singh, while dealing with the procedure to be adopted in treating the statement in the committal court as substantive evidence observed that the witnesses should be confronted with their statements in the Committal Court which are to be read over to them in extenso.
The Chief Justice pointed out that the witnesses in the case admitted that their statements were truly recorded in the Committal Court but denied that they were true statement because they were made to depose that way by the Police.
It would have been useless to point out the discrepancies between the two statements because the explanation would have been the same and in the circumstances, the requirements of section 145 of the were fully complied with.
It is thus clear from the authorities referred to above that the requirements of section 288 would be fully complied with if statements of the witnesses are read in extenso to them and they admit that they have made those statements in the committal Court.
The required procedure has been followed in this case and the attack made by the learned counsel has to fail.
The second legal contention raised by the Learned Counsel was that the High Court was in error in taking into account the statements recorded from the witnesses under section 164 of the Code of 498 Criminal Procedure in coming to the conclusion that the evidence given by them in the Committal Court could be relied upon.
The High Court stated "we are satisfied having regard to 164 statements of P.W. 1 to 3 and 5 that the statements given by those witnesses before the Committing Court are true and could be relied on" and proceeded to observe "that as there are more statements admitted in evidence under section 288 of the Code of Criminal Procedure than one, the evidence of one witness before the Committing Court is corroborated by that given by others".
Mr. Mulla, Learned Counsel, submitted that a statement recorded under section 164 of the Code of Criminal Procedure indicates that the Police thought that the witnesses could not be relied on as he was likely to change and, therefore, resorted to securing a statement under section 164 of the Code of Criminal Procedure.
The statement thus recorded, cannot be used to corroborate a statement made by witness in the Committal Court.
In support of this contention the learned counsel relied on certain observations of this Court in Ram Chandra and Ors.
vs State of U.P.
In that case, in a statement recorded from the witness under section 164 of the Code of Criminal Procedure, the Magistrate appended a certificate in the following terms: "Certified that the statement has been made voluntarily.
The deponent was warned that he is making the statement before the 1st Class Magistrate and can be used against him.
Recorded in my presence.
There is no Police here.
The witness did not go out until all the witnesses had given the statement.
" The Court observed that the endorsement made is not proper but declined to infer from the endorsement that any threat was given to those witnesses or that it necessarily makes the evidence given by the witness in Court suspect or less believable.
The view of the Patna High Court in Emperor vs Manu Chik, where the observations made by the Calcutta High Court in Queen Empress vs Jadub Das, that statements of the witnesses obtained under this Section always raises a suspicion that it has not been voluntarily made was referred to, was relied on by the Learned Counsel.
This Court did not agree with the view expressed in the Patna case but agreed with the view of Subba Rao, J. (as he then was) in Gopisetti Chinna 499 Venkata Subbiah, where he preferred the view expressed by Nagpur High Court in Parmanand vs Emperor, It was observed that the mere fact that the witnesses statement was previously recorded under section 164 will not be sufficient to discard it.
It was observed that the court ought to receive it with caution and if there are other circumstances on record which lend support to the truth of the evidence of such witnesses, it can be acted upon.
During the investigation the Police Officer, sometimes feels it expedient to have the statement of a witness recorded under section 164, Code of Criminal Procedure.
This happens when the witnesses to a crime are closely connected with the accused or where the accused are very influential which may, result in the witnesses being gained over.
The 164 statement that is recorded has the endorsement of the Magistrate that the statement had been made by the witness.
The mere fact that the Police had reasons to suspect that the witness might be gained over and that it was expedient to have their statements recorded by the Magistrate, would not make the statements of the witnesses thus recorded, tainted.
If the witness sticks to the statement given by him to the Magistrate under section 164, Code of Criminal Procedure, no problem arises.
If the witness resiles from the statement given by him under section 164 in the Committal Court, the witness can be cross examined on his earlier statement.
But if he sticks to the statement given by him under section 164 before committal enquiry and resiles from it in the Sessions Court, the procedure prescribed under section 288, Code of Criminal Procedure, will have to be observed.
It is for the Court to consider taking into account all the circumstances including the fact that the witness had resiled in coming to the conclusion as to whether the witness should be believed or not.
The fact that the Police had section 164 statement recorded by the Magistrate, would not by itself make his evidence tainted.
section 157 of the Evidence Act makes it clear that the statement recorded under section 164 of the Code of Criminal Procedure can be relied on for corroborating the statements made by the witnesses in the Committal Court.
This Court has expressed its view that though the statements made under section 164 of the Code of Criminal Procedure, is not evidence, it is corroborative of what has been stated earlier in the Committal Court vide The High Court was right in relying on the statement of the witnesses under section 164 as corroborating their subsequent evidence before the Committal Court.
Equally unsustainable is the plea of the Learned 500 Counsel that a statement recorded under section 288 of the Code of Criminal Procedure of one witness cannot corroborate the statement of another witness under section 288.
The statements are treated as substantive evidence in law and we do not see any flaw in treating the statement of one witness as corroborative of the other.
The result in the question of law raised by the Learned Counsel fail.
The appeal of the first appellant is rejected and his conviction and sentence confirmed.
The appeal of the second appellant is allowed and his conviction and sentence set aside.
He is directed to be set at liberty forthwith.
V.D.K. 1st Appellant 's Appeal dismissed.
2nd Appellant 's Appeal allowed.
|
The appellants and the third accused were brothers of the deceased Rasayal.
They were charged for the offence of committing the offence of murder and were found guilty and sentenced under section 302 read with section 149 I.P.C. to imprisonment for life by the Sessions Court.
In appeal the High Court, acquitted the third accused but confirmed the conviction and sentence of the appellants.
In appeal by special leave, three contentions were raised namely (i) the conviction of the two appellants based entirely on the retracted evidence of PWs.
1,2, 3 and 5 marked in the Sessions Court was wrong (ii) the evidence marked under section 288 was inadmissible as it was only read in full to the witnesses and had not been put to them passage by passage as required in section 145 of the Evidence Act and (iii) the case of the second appellant was similar to that of the third accused and ought to have been acquitted giving him the benefit of doubt.
Accepting the appeal of the 2nd appellant and dismissing the appeal of the first, the Court ^ HELD: 1.
Talking into account the facts and the probabilities of the case it is clear that it was the first appellant who caused the fatal injury and needed no instigation from the second appellant.
There was no evidence as to any overt act, except the presence of the second appellant along with the third accused.
It was most unlikely that the second appellant instigated the first accused as a result of which the first accused caused the fatal injury.
The second appellant is entitled to the benefit of doubt.
[495E G] 2.
The requirements of section 288 of the Criminal Procedure Code would be fully complied with if statements of the witnesses are read in extenso to them 492 and they admit that they have made those statements in the Committal Court.
The required procedure has been followed in this Case.
[497F G] Tara Singh vs State of Punjab, ; , Bhagwan Singh vs State of Punjab, ; State of Rajasthan vs Kartar Singh, ; referred to.
During the investigation the police officer, sometimes feels it expedient to have the statement of a witness recorded under section 164 Code of Criminal Procedure.
This happens when the witnesses to the crime are closely connected with the accused or where the accused are very influential which may result in the witnesses being gained over.
The 164 statement that is recorded has the endorsement of the Magistrate that the statement had been made by the witness.
[499 A C] 4.
The mere fact that the police had reasons to suspect that the witness might be gained over and that it was expedient to have their statements recorded by the Magistrate, would not make the statements of the witnesses thus recorded tainted.
If the witness sticks to the statement given by him to the Magistrate under section 164 Code of Criminal Procedure, no problem arises.
If the witness resiles from the statement given by him under section 164 in the committal court, the witness can be cross examined on his earlier statement.
But if he sticks to the statement given by him under section 164 before committal enquiry and resiles from it in the Sessions Court, the procedure prescribed under section 288, Code of Criminal Procedure will have to be observed.
It is for the Court to consider taking into account all the circumstances including the fact that the witness had resiled, in coming to the conclusion as to whether the witness should be believed or not.
The fact that the Police had section 164 statement recorded by the Magistrate would not by itself make his evidence tainted.
[499 C F] Ram Chandra & Ors.
vs State of U.P. ; explained and relied on.
Section 157 of the Evidence Act makes it clear that the statement recorded under section 164 of the Code of Criminal Procedure can be relied on for corroborating the statements made by the witnesses in the committal court.
Though the statements made under section 164 of the Code of Criminal Procedure, is not evidenced, it is corroborative of what has been stated earlier in the committal court.
[499 F G] State of Rajasthan vs Kartar Singh, ; followed.
A statement recorded under section 288 of the Code of Criminal Procedure of one witness can corroborate the statement of another witness under section 288.
The statements are treated as substantive evidence in law and there is no flaw in treating the statement of one witness as corroborative of the other.
[500 A B]
|
Civil Appeal No. 174 of 1976.
Appeal by Special Leave from the Judgment and order dated 1 11 1974 of the Delhi High Court in L.P.A. No. 19/71.
P. P. Rao, A. K. Ganguli and R. Venkataramani for the Appellant.
T. A. Francis and Miss A. Subhashini for the Respondents.
Admittedly he was appointed by the Comptroller and Auditor General.
The only point that arises or, at any rate, we are concerned with is, as to whether the retirement order is in conformity with Rule 2(a) of the C.C.S. (C.C.A.) Rules 1965.
The appointing 555 authority according to Rule 56(j) is the competent authority.
Who then, is the appointing authority in the context of this case? The answer is to be sought under Rule 2(a) which reads thus: "In these rules, unless the context otherwise, requires 2 (a) appointing authority in relation to a Government servant means (i) the authority empowered to make appointments to the Service of which the Government servant is for the time being a member or to the grade of the Service in which the Government servant is for the time being included, or (ii) the authority, empowered to make appointments to the post which the Government servant for the time being holds, or (iii) the authority which appointed the Government servant to such Service, grade or post, as the case may be, or (iv) where the Government servant having been a permanent member of any other service of having substantively held any other permanent post, has been in continuous employment of the Government the authority which appointed him to that service or to any grade in that service or to that post.
whichever authority is the highest authority.
" The most significant part of the rule states, after setting out alternative authorities, that the appointing authority is one out of these four categories who is the highest.
This is emphatically brought out by the expression "whichever authority is the highest".
There is no doubt that among the four classes of authorities listed under Rule 2(a), the one falling under sub rule (iii) viz. Comptroller and Auditor general (in the present case) is the highest.
It evidently follows that the order of retirement to be legal, must be issued by the Comptroller and Auditor General, but actually the impugned order of retirement was issued by the Director of Commercial Audit.
In fact the order of retirement runs thus: "Whereas the Director of Commercial Audit is of the opinion that it is in the public interest to to do so. " Obviously the Director of Commercial Audit is a lesser official.
The conclusion is, therefore, inescapable that the compulsory retirement is contrary to law.
556 The High Court, in its extensive judgment, considered the scheme of the rules and, indeed, referred to the point mentioned above but after highlighting this question as one most emphasised by the appellant, has slurred over the point and proceeded to discussion of other issues.
We are concerned with the vital perhaps the fatal aspect of the order which has not received due attention at the hands of the High Court.
In this view, on account of the contravention of F.R. 56(j) read with Rule 2(a) of the (C.C.A.), we are constrained to come to the conclusion that the retirement is illegal.
The appellant has already become suparannuated and therefore, he will be eligible to his salary (by which we mean to include other allowances automatically admissible and going with salary) for the period between the date of compulsory retirement and the date of actual superannuation at the age of 58.
It is unfortunate that this legal flaw has proved fatal.
Administrative law is a course necessary for administrative officers at the highest levels so that such flaws may not vitiate orders they pass.
Eventually Government is put to considerable loss for no fault of it except that no proper legal training in this branch of the law for the concerned officers had been given by it.
With these observations we allow the appeal, but parties will bear their costs.
V.D.K. Appeal allowed.
|
Allowing the appeal by special leave, the Court, ^ HELD.
Rule 2(a) of the C.C.S. (C.C.A.) Rules, 1965 states, after setting out alternative authorities, that the appointing authority is one out of four categories who is the highest, by using the expression "whichever authority is the highest".
There is no doubt that of the four classes of authorities listed under Rule 2(a), the one falling under sub rule (iii) viz. Comptroller & Auditor General (in the present case) is the highest.
Therefore the order of the retirement to be legal must be issued by the Comptroller & Auditor General.
The impugned order of retirement issued by the Director of the Commercial Audit who is a lesser official is contrary to law.
On account of the contravention of F.R. 56(j) read with rule 2(a) of the C.C.S. (C.C.A.) Rules, 1965, the retirement is illegal.
[555 E G, 556 B] Observation: Administrative law is a course necessary for administrative officers at the highest levels so that such flaws may not vitiate orders they pass.
|
l Appeals Nos.
51 and 52/61 Appeals from the judgment and decree dated September 23, 1959, of the Allahabad High Court (Lucknow Bench) at Lucknow in C. M. Applications Nos. 15 (O.J.) and 16 (O.J.) of 1957 respectively.
C. B. Agarwala and C. P. Lal, for the Appellants (in both the appeals).
A. V. Viswanatha Sastri, and K. L. Arora, for Respondent No. 1 (in both the appeals).
February 7.
The Judgment of the Court was delivered by SARKAR, J.
These two appeals have been heard together.
The, appellants in each case are the State of Uttar Pradesh, for short called U. P. and some of its officers and the respondents in one appeal are Lakshmi Ice Factory and certain of its workers and in the other the Prakash Ice Factory and certain of its workers.
These appeals involve a question of construction of certain provisions of the U. P. , hereafter referred to as the Act.
By a Notification issued on February 10, 1956, the Government of U. P. referred certain disputes which had cropped up between each of the Ice Factories and its respective workmen, to an Industrial Tribunal for adjudication.
The details of these disputes are not material for these appeals.
The Tribunal heard the matters but failed to pronounce its award in open court.
Instead, on November 8, 1956, the Registrar of the Tribunal informed the Ice Factories that the award of the Tribunal had been submitted to the Government.
On December, 15, 1956, the award was published in the U. P. Gazette and it appeared from this publication that the award was dated November 8, 1956.
On December 26, 1956, the Regional Conciliation Offi cer appointed under the Act " called upon the Ice 61 Factories to implement the award immediately.
Thereupon the Tee Factories moved the High Court at Allahabad on January 3, 1957 under article 226 of the Constitution for writs quashing the award and prohibiting the Government and the workmen from taking steps to implement it.
They contended that the award sought to be enforced was a nullity as it had not been pronounced in open court as required by certain rules to which reference will presently be made.
By a judgment passed on September 23, 1959, the High Court allowed the petitions of the Ice Factories and issued writs quashing the Notification publishing the award.
The appeals are against this judgment of the High Court.
Section 3 of the Act gives the Government power in certain circumstances to make provisions by general, or special order (1) for appointing Industrial courts, (2) for referring any industrial dispute for adjudication in the manner provided in the order and (3) for matters incidental or supplementary to the other provisions of the order.
Under this power the Government had issued an Order dated July 14, 1954 and this Order is hereafter called the "Statutory Order.
" It was under powers conferred by the Act read with the Statutory Order that the Government had issued the Notification of February 10, 1956.
In exercise of powers conferred by el. 8 of the Statutory Order the Government had set up the Tribunal.
Clause 9 of the Statutory Order provides for the procedure to be followed by the Tribunal.
Sub clause (7) of this clause is in these terms: "The decision of the Tribunal shall be in writing and shall be pronounced in open court and dated and signed by the member or members of the Tribunal, as the case may be, at the time of pronouncing it.
" Clause 11 of the Statutory Order gives power to Government to refer any industrial dispute to the Tribunal.
Sub clause (9) of el. 9 of the Statutory Order 62 gives power to the Tribunal to make Standing Orders relating to its practice and procedure.
Under this sub clause the Tribunal framed certain Standing Orders.
Standing Order No. 36 provided.
"Judgment shall be pronounced in open court either immediately after the close of the arguments or on a subsequent date of which previous notice shall be given to the parties.
It shall then be signed and dated by the Tribunal.
" Acting presumably under Standing Order No. 36, the Tribunal in the present case bad fixed a date on which it would pronounce its judgment in open court.
This date does not appear on the record but on September 25, 1956, the Tribunal informed the parties that the date for pronouncing the award had been changed to October 9, 1956.
On that date, however, the award was not pronounced in open court, nor was any intimation of any other date for its pronouncement given to the parties.
The lee Factories first came to know of the making of the award from the letter of the Registrar of the Tribunal dated November 8, 1956 earlier referred to.
The award had in fact never been pronounced in open court.
The first question is whether the provisions in sub el.
(7) of el. 9 are imperative.
The High Court held that they were and thereupon quashed the Notification publishing the award.
The appellants contend that the High Court was in error and that the provisions are only directory and that the failure of the Tribunal to pronounce the award in open Court did not result in the award becoming void.
The Ice Factories contend for the contract view.
Mr. Aggarwala for the appellants referred us to the rule of construction stated in Maxwell on Interpretation of Statutes, 10th ed.
at p. 381, which is as follows : ",Where the prescriptions of a statute relate to the performance of a public duty and 63 where the invalidation of acts done in neglect of them, would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty without promoting the essential aims of the Legislature, such prescriptions seem to be generally understood as mere instructions for the guidance and government of those on whom the duty is imposed, or, in other words as 'directory only".
Ho said that sub el.
(7) of cl. 9 of the Statutory Order imposed a public duty on the Tribunal and as none of the contesting parties to the proceedings before the Tribunal had any control over it, the provision in the Statutory Order as to how the Tribunal is to discharge its duty must be regarded as merely directory and therefore a disregard of that provision by the Tribunal would not render the thing done by it a nullity.
It seems to us that the rule read from Maxwell is not applicable to this case.
It applies only when to hold the prescriptions in a statute as to the performance of a public duty to be imperative would work injustice and hardship without serving the object of the statute.
None of these conditions are present ill the statute now before us.
The rule may be illustrated by reference to the case of Montreal Street Railway Co. vs Normandin(1) which is cited in Maxwell 's book.
That was a case in which certain Statutory provisions as to how the jury list was to be revised had not been followed and the question arose whether the verdict of a jury empannelled out of a list revised in disregard of the provision was a nullity.
It was hold that the verdict was not a nullity as the provision regarding the revision of the jury list was merely directory.
It was further held that the object of the provision was to distribute the burden of jury equally between all liable to it, to secure effective jurors likely to attend and lastly to prevent packing of the jury.
It was said that "It does far less harm to allow cases tried by a jury formed as this one was (1) ; 64 with the opportunities there would be object to any unqualified man called into the box, to stand good, than to hold the proceedings null and void.
So to hold would not, of course, prevent, the courts granting new trials in cases where there was reason think that a fair trial had not been had": P. 176).
The case in hand is wholly different.
The proceedings that were had before the Tribunal would not become null and void if we hold el.
9(7) of the Statutory Order to be imperative,.
A view that the provision was imperative would cause no serious hardship to any one.
The Government can always require the Tribunal to pronounce, its decision in open court extending, if necessary for the purpose.
he time fixed for giving its decision.
Either party of the proceeding can also ask the Government to call upon the Tribunal to pronounce its award in open court.
There is no doubt that the Government will go call upon the Tribunal when the defect s brought to its 'notice for the Government itself referred the matter to the Tribunal for if decision.
As soon as the Tribunal pronounces it,; award in open court, the proceedings will become fully effective.
It is also an accepted rule of construction that enactments regulating the procedure in courts are usually imperative : Maxwell on Interpretation of statues 10th ed.
p. 379.
It further appears to us that the object of the legislature would be defeated by reading cl.
9(7) of the Statutory Order as containing a provision which is merely director vs We now proceed to ascertain that object from the, other provisions in the Statutory Order, the Act and connected legislation.
Section 6 of the IT.
P. Act provides as follows : (1) When an authority to which an industrial dispute has been referred for 65 adjudication has completed it,% enquiry, it shall, within such time as may be ,specified, submit its award to the State Government.
(2) The State Government may. enforce for such period as it may specify all or any of the decisions in the award.
It was under this section that the Tribunal submitted it,% award to the Government and the Government issued the Notification in the Gazette dated December 15, 1956 earlier mentioned and directed that the award be enforced for a period of one year from the date of the publication.
Since the award has to be submitted to the Government by the Tribunal under section 6 of the Act, the award has to be in writing, for a verbal award cannot obviously be submitted to the Government.
It would therefore appear that the provision in sub cle.
(7) of el. 9 of the Statutory Order that the decision of the Tribunal shall be in writing is imperative, This would be an indication that the other provisions in the same sub clause connected with it were intended to be equally imperative.
Then we find that el.
18 of the Statutory Order is in these terms : "The Tribunal or the adjudicator shall hear the dispute and give its or his decision within 180 days (excluding holidays but Dot annual vacations observed by courts subordinate to the High Court) from the date of reference made to it or him by the State Government and shall thereafter as soon as possible, supply a copy of the same to the parties to the dispute. . .
Provided that the State Government may extend the said period from time to time.
" It seems to us that the provision in this clause in clearly mandatory.
The Tribunal has no power to make an award after the time mentioned in it; if it had, the proviso to el.
18 would be wholly unnecessary.
The result therefore is that it is 66 obligatory on the Tribunal to give its decision within 180 days from the date of the reference.
A decision given, that is an award made, beyond this period would be a nullity.
Now when cl. 18 talks of giving a decision, it can only mean giving it in the manner indicated in sub cl, (7) of cl. 9 of the Statutory Order, that is, by pronouncing it in open court, for that is the only manner of giving a decision which that order contemplates.
It would follow that the terms of cl.
9(7) were imperative, for otherwise no one would know whether the terms of el. 18 of the Statutory Order had been complied with, that is to say, no one would know whether the award was void or not.
The provisions of cl.
IS may thus be rendered nugatory by holding el.
9(7) to be only directory.
It would follow that unless the provision as to the pronouncement of the award in open court was mandatory, the intention of the framers of the Statutory Order would be defeated.
Sub clause (2) of cl. 24 of the Statutory Order also leads to the same conclusion.
That sub clause is in these terms : "Clerical or arithmetical mistakes in decisions or awards, or errors arising therein from any accidental slip or omis sion may, within one month of giving the decision or award be corrected by the Tribunal or the adjudicator, either of its or his own motion or on the application of any of the parties.
" Under this rule therefore clerical or arithmetical errors or slips may be corrected within one month of the giving of the decision and the parties have the right to apply for such corrections within that time.
The Tribunal has no right to correct an error beyond that time.
Nor has a party a right to move the Tribunal for making any such corrections after the time has expired.
In order that the intention of cl. 24 (2) may be, given effect to, it is necessary that the date of the 67 giving of the decision should be known.
It cannot promptly be known to the parties unless the award is pronounced in open court.
If any other Manner of the giving of the decision was permissible as would be the result if it was not obligatory to pronounce the decision in open court, then a party may be deprived of its right under cl. 24 to move the Tribunal for correction of errors.
It is for this reason that cl.
9(7) provides that the decision shall be dated and signed at the time of pronouncing it in open court.
This signing and dating of the award after its pronouncement in open court makes it possible to see whether the terms of cls.
18 and 24 (2) have been complied with in any case.
The third thing which to our mind indicates that pronouncement in open court is essential is cl. 31 of the Statutory Order.
That clause is in these terms : "Except as provided in this Order and in the Industrial Disputes (Appellate Tribunal) Act, 1950, every order made or direction issued under the provisions of this Order shall be final and conclusive and shall not be questioned by any party thereto in any proceedings.
" The Industrial Disputes (Appellate Tribunal) Act, 1950 provides for appeals from decisions of certain Industrial Tribunals to the Appellate Tribunal established under it.
Clause 31 therefore makes a decision of the Tribunal on a reference to it final subject to an appeal if any allowed under the Industrial Disputes (Appellate Tribunal) Act, 1950.
Under a. 7 of the Act of 1950, an appeal shall lie to the Appellate Tribunal from any award or decision of an Industrial Tribunal concerning certain specified matters.
Now an Industrial Tribunal mentioned in section 7 includes a Tribunal set up under a State law which law does not provide for an appeal : see a. 2(o)(iii) of the Act of 1950.
The U. P. Act does not provide for any appeal expressly but cl. 31 of the Statutory Order makes a decision of the Tribunal final subject to 68 the provisions of the Act of 1950.
It would therefore appear that an appeal would lie under the Act of 1950 to the Appellate Tribunal constituted under it from a decision of a Tribunal set up under the Statutory Order.
Now under a. 10 of the Act of 1950, an appeal is competent if preferred within thirty days from the date of the publication of the award where such publication is provided for by the law under which the award is made, or from the date of the making of the award where there is no provision for such publication.
Now the U.P. Act or the Statutory Order does not provide for any publication of an award.
Therefore an appeal from the Tribunal set up under the Statutory Order has to be filed within thirty days from the making of the award.
Hence again it is essential that the date of the making of the award shall be known to the parties to enable them to avail themselves of the right of appeal.
This cannot be known unless the judgment is pronounced in open court for the date of award is the date of its pronouncement.
Hence again pronouncement of the judgment in open court is essential.
If it were not so, the provisions for appeal might be rendered ineffective.
For all these reasons it seems to us that the clear intention of the legislature is to make it imperative that judgments should be pronounced in open court by the Tribunal and judgments not so pronounced would therefore be a nullity.
In the view that we have taken it is unnecessary to deal separately with Standing Order No. 36.
The provisions of that Standing Order and cl.
9(7) of the Statutory Order are substantially the same.
They should therefore be interpreted in the same way.
In any case since we have held the el.
9(7) of the Statutory Order to be imperative.
it would not matter whatever view is taken of the Standing Order for the latter cannot affect the former.
69 Mr. Aggarwala then argued that cl.
9(7) of the Statutory Order and Standing Order No. 36 were ultra vires as being in conflict with the Act under which they had been framed.
His contention was this : Under section 6 of the Act all that the Tribunal has to do is to submit its award to the Government after the conclusion of the enquiry before it.
The section does not require the Tribunal to pronounce its decision in open court.
The provisions in the Statutory Order and the Standing Order both of which were made under powers contained in the Act, were therefore in conflict with section 6 and of no effect.
Hence he contended that the question whether the provisions of cl.
9(7) of the Statutory Order or of the Standing Order No. 36 were imperative did not really arise.
It seems to us that this contention of Mr. Aggarwala is without any foundation.
Section 6 when it requires that the Tribunal shall submit its award to the Government necessarily contemplates the making of the award.
Neither section 6 nor any other provision in the Act provides how the award is to be made.
Under section 3(g) however the Government has power by general or special.
order to provide for incidental or supplementary matters necessary for the decision of an industrial dispute referred for adjudication under any order made tinder section 3. 'rho provision as to the pronouncement of the decision in open court in (19(7) of the Statutory Order clearly is within the power,; contemplated in section 3(g).
Section 6 does not prohibit the making of such a provision.
Its main purpose is to direct that the Tribunal shall submit the award to the Government so that it may be enforced.
It has nothing to do with the manner in which the 'Tribunal is to make 70 its award.
A rule duly framed under the Act requiring the Tribunal to pronounce its decision in open court is therefore not in conflict with section 6.
The result is that these appeals fail and are dismissed with costs.
Appeals dismissed.
|
The Government of Uttar Pradesh under section 3 of the U.P. , and the Statutory orders framed thereunder referred certain.
disputes between the respondent Ice Factories and the respective workmen to an Industrial Tribunal.
The Tribunal heard the matters but failed to pronounce its award in open court, as required under the clause 9 (7) of the Statutory Orders.
Instead the Registrar of the Tribunal informed the Ice Factories that the award of the Tribunal had been submitted to the Government.
The award was published in the U.P. Gazette and the Regional Conciliation officer called upon the Ice Factories to implement the award immediately.
The Ice Factories moved the High Court at Allahabad alleging that the award was a nullity as it had not been pronounced in open court as required under the clause 9 (7) of the Statutory Orders and asking for writs to quash it.
High Court issued the writs quashing the Notification publishing the award.
The questions are whether the provisions of sub cl.
(7) of cl. 9 of the Statutory Orders are imperative or merely directory and whether that sub clause is ultra vires as being in conflict with the Act under which it had been framed.
Held, that the clear intention of the legislature is to make it imperative that judgments should be pronounced in open court by the Tribunal and a judgment not so pronounced would therefore be a nullity.
The provision in sub cl.(7) of cl. 9 of the Statutory Order is imperative and not directory.
Held, further, that the provisions as to the pronouncement of the decision in open court contained in cl. 9 (7) of the Statutory Order was clearly within the powers contemplated in section 3 (g) of the Act and section 6 of the Act does not prohibit the making of such provisions.
A rule duly framed under the Act requiring the Tribunal to pronounce its decision in open court is therefore not in conflict with section 6 of the Act.
Montreal Street Railway Co. vs Normandin, ; , referred to.
|
Civil Appeal No. 2098 of 1972 From the Judgment and Order dated 5 8 1971 of the Calcutta High Court in Income Tax Reference No. 109/65.
D.V. Patel, J. Ramamurthy and Miss A Subhashini for the Appellant.
section R. Banerjee, Mrs. Indu Goswamy and Arvind Minocha for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
: This appeal by certificate granted by the High Court at Calcutta under section 66A(2) of the Indian Income tax Act, 1922 is directed against the judgment dated August 5, 1971 of that High Court disposing of an income tax reference.
The respondent assessee is a registered firm and owns several collieries in West Bengal and Bihar.
One of the collieries is known as the South Samla Colliery.
The South Samla colliery was under military occupation from 1942 and was released in 1955.
During the period of military occupation the assessee incurred expenditure on account of minimum royalty payable in respect of the colliery, the surface rent and salaries for the watch and ward employees.
The expenditure was allowed in income tax proceedings as a business expenditure.
After the colliery was released by the military, the assessee incurred a further expenditure amounting to Rs. 1,61,742 on the colliery with a view to resuming mining operations.
The expenditure was incurred during the previous year beginning October 24, 1957 and ending November 11, 1958 relevant to the assessment year 1959 60.
In the assessment proceedings for that assessment year the assessee claimed a deduction of the amount of Rs. 1,61,742 under section 10(2) (xv) of the Indian Income Tax Act, but the deduction was disallowed by the Income tax Officer on the ground that the expenditure was capital in nature.
On appeal, the Appellate Assistant Commissioner affirmed that the expenditure was in the nature of capital expenditure.
The assessee proceeded in second appeal, but the Income Tax Appellate Tribunal, without giving any reasons of its own, merely recorded its agreement with the income tax authorities.
The assessee obtained 761 a reference to the High Court at Calcutta for its opinion on the following question: "Whether on the facts and circumstances of the case, the Income tax appellate Tribunal was justified in holding that the expenditure clammed on the South Samla Colliery at Rs. 1,61,742 was capital in nature.
" The High Court noted the following facts: The assessee carried on business in coal as the owner of various collieries.
The South Samla Colliery, which was one of them, was occupied by the military from 1942 until it was derequisitioned in 1955.
During that period the assessee did not, because he could not, work the colliery.
He continued, however, carrying on his business in coal and working other collieries during that period.
While the South Samla Colliery remained under military occupation the assessee incurred expenditure on payment of surface rent and minimum royalty in respect of that colliery and also on account of salary for the watch and ward staff.
The expenditure had been claimed and allowed as business expenditure of the assessee.
After the colliery was handed over to the assessee upon derequisition, the assessee incurred, during the relevant period, an expenditure of Rs. 1,61,742 in renovating the building, reconditioning the machinery and clearing the land of debris accumulated over a number of years.
The expenditure of Rs. 1,61,742 consisted of Rs. 66,937 spent on the staff and labour force by way of salaries, wages and other benefits and an amount of Rs. 94,805 spent on the purchase of various stores, machinery repairs, dhowrah repairs etc.
This expenditure had to be incurred by the assessee for the purpose of putting the machinery in working order and bringing the colliery to a state where the mining operations could be resumed.
The colliery had not started working and mining operations had not been resumed during the relevant year.
The High Court observed that the assessee was carrying on its business throughout and the circumstance that one of the collieries was not being worked did not affect the carrying on of that business.
The business of the assessee, the High Court said, had to be considered as a whole and not on the basis of its different sources of supply or units of production.
The High Court held that on the facts admitted and found it could not be said that any fresh asset had been acquired by the assessee by spending Rs. 1,61,742.
The expenditure, it observed, was incurred by the assessee for the purpose of carrying on an existing concern and not for acquiring any concern not in existence.
Ac 762 cordingly, it held that the expenditure was in the nature of revenue expenditure and, therefore, answered the question in favour of the assessee.
In this appeal the first contention raised by the Revenue is that the High Court had no jurisdiction to re appraise the facts and therefore its finding on the nature of the expenditure is vitiated.
The contention is without substance.
The facts on which the High Court has relied are admitted between the parties or are facts found by the income tax authorities.
We have no hesitation in rejecting the first contention.
The second contention is that the claim of the assessee must be considered with reference to section 10(2)(v) and not section 10(2)(xv) of the Act.
It is urged that if s.10(2) (v) is the relevant clause, being the specific provision in respect of expenditure on current repairs to buildings and machinery, there is no justification for relying on s.10(2) (xv).
section 10(2) (xv) is a residuary clause, and deals with expenditure not being an allowance of the nature described in any of the preceding clauses of s.10(2).
The submission is that where repairs are effected to buildings and machinery a deduction under s.10(2) is permissible only in respect of current repairs, and repairs which are not "current repairs" are not intended to be the subject of relief.
The Act, it is contended, limits the repairs to "current" repairs.
The repairs made by the assessee, it is said, cannot be described as "current repairs" Now, this contention rests on the principle that if a special provision covers the case, resort cannot be had to a general provision.
It seems to us that if the renovation of the building, the reconditioning of machinery and the removal of debris cannot be described as "current repairs" and we assume that to be so the case would be entitled to consideration under s.10(2)(xv).
Section 10(2)(v) deals with current repairs only.
The subject matter of s.10(2) (v) is "current repairs" and it appears difficult to agree that repairs which are not "current repairs" should not be considered for deduction on general principles or under s.10(2) (xv).
There must be very strong evidence that in the case of such repairs, the Legislature intended a departure from the principle that an expenditure, laid out or expended wholly and exclusively for the purposes of the business, and which expenditure is not capital in nature, should not be allowed in computing the income from business.
There is nothing in the language of s.10(2) (v) which declares or necessarily implies that repairs, other than, current repairs, will not qualify for the benefit of that principle.
We must remember that on accepted commercial practice and trading principles an item of business expenditure must be deducted in order 763 to arrive at the true figure of profits and gains for tax purposes.
The rule was held by the Privy Council in C.I.T. vs Chitnis(1) to be applicable in the case of losses, and it has been applied by the courts in India to business expenditure incurred by an assessee.
Motipur Sugar Factory Ltd. vs C.I.T., Bihar and Orissa(2) and Devi Films Ltd. vs C.I.T. Madras(3).
The principle found favour with this Court in Badridas Daga vs C.I.T.(4) and Calcutta Co. Ltd. vs C.I.T. West Bengal(5).
the contents of that rule be true on general principle, there is good reason why the scope of s.10(2) (xv) should be construed liberally.
In our opinion, even if the expenditure made by the assessee in the present case cannot be described as "current repairs", he is entitled to invoke the benefit of section 10(2) (xv).
We may mention that in The Law Shipping Co. Ltd. vs Commissioners of Inland Revenue(6) it has been held that accumulated arrears for repairs are none the less repairs necessary to earn profits, although they have been allowed to accumulate.
The question then is whether section 10(2) (xv) is attracted.
There can be little doubt that the expenditure incurred is incidental to the business of the assessee.
It was involved in renovating the buildings, reconditioning the machinery and clearing the debris, from the land.
All the work done was for the purpose of resuming the operation of the colliery.
The expenditure was laid out wholly and exclusively for the purposes of the business.
We do not think there can be any dispute as to that.
But the more serious question is whether the expenditure can be regarded as capital in nature, for if that be so the benefit of section 10(2) (xv), on its plain terms, must be denied.
Now, whether an expenditure can be described as capital or revenue falls to be decided by several tests, each one of which approaches the question from one perspective or another, conditioned by the particular facts of each case.
We need not refer to all of them.
On the facts of the present case, it seems sufficient to mention the tests laid down by this Court in Assam Bengal Cement Co. Ltd. vs C.I.T. West Bengal(7).
The business of the assessee in the present case was coal mining, and it was carried on by the operation of a network of collieries.
Hach colliery was a unit of production.
While the several units of production continued to be 764 employed and the business continued to be carried on, one alone of the units, the South Samla Colliery was compelled to suspend production.
The suspension was expected to be of temporary duration, because the property was merely requisitioned for military use, it was not acquired.
As soon as the property was de requisitioned, the assessee took measures to resume production of coal.
It was necessary to remove the impediments which had come in the way by reason of the temporary suspension of work.
The buildings were removated, the machinery reconditioned and the accumulated debris removed from the land.
The colliery was, in a word, reinstated to the condition necessary for ensuring production.
No new asset was brought into existence; no advantage for the enduring benefit of the business was acquired.
An activity which was continuously in operation but had been temporarily suspended was to be resumed.
It is immaterial that during the year under consideration there was no mining activity.
That the colliery was regarded as an asset of a continuing business all along, even during the period of military occupation, is evidenced by the fact that expenditure incurred by the assessee during that period in respect of the colliery was allowed as a permissible deduction in its income tax assessments.
The expenditure of Rs. 1,61,742 under consideration in the present case was also expenditure laid out as part of the process of profit earning.
The nature of the expenditure is clearly revenue in character.
The High Court is right in holding that the expenditure is not of a capital nature.
The appeal is dismissed with costs.
N.V.K. Appeal dismissed.
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The respondent assessee carried on business in coal as the owner of various collieries.
One of the collieries, was occupied by the military from 1942 until it was derequisitioned in 1955.
During that period the assessee did not work the said colliery: although the business in coal and working of the other collieries were carried on.
While the colliery remained under military occupation the assessee incurred expenditure in respect of the colliery on account of payment of surface rent, minimum royalty and salary for the watch and ward staff, which expenditure was claimed and allowed as business expenditure of the assessee.
After the colliery was handed over to the assessee upon derequisition the assessee incurred an expenditure of about Rs. 1.6 lakhs in renovating the building, reconditioning the machinery and clearing the land of all debris accumulated over a number of years.
In the assessment proceedings for the assessment year 1959 60 the assessee claimed deduction of the aforesaid amount under section 10(2)(xv) of the Indian Income Tax Act.
The deduction was disallowed by the Income Tax officer on the ground that the expenditure was capital in nature.
The appeals by the assessee to the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal were dismissed.
In the reference to the High Court at the instance of the assessee the High Court observed that the business of the assessee had to be considered as a whole and not on the basis of its different sources of supply or units of production, and held that on the facts admitted and found it could not be said that any fresh asset had been acquired by the assessee by spending Rs. 1.6 lakhs and that the expenditure was incurred by the assessee for the purpose of carrying on an existing concern.
The expenditure was, therefore, in the nature of a revenue expenditure.
In the appeal by the Revenue to this Court, it was contended: (a) where repairs are effected to buildings and machinery a deduction under section 10(2) is permissible only in respect of "current repairs" and repairs which are not "current repairs" are not intended to be the subject of relief, (b) the repairs made by the assessee cannot be described as "current repairs", and (c) if section 10(2) (v) is the relevant clause, being the specific provision in respect of expendi 759 ture on "current repairs" to buildings and machinery, there is no justification for relying on section 10(2)(xv) a residuary clause.
Dismissing the appeal, ^ HELD: 1.
The High Court was right in holding that the expenditure was not of a capital nature.
[764 E] 2.
The expenditure of Rs. 1.6 lakhs was expenditure laid out as part of the process of profit earning.
The nature of the expenditure was clearly revenue in character.
[764 D] 3.
There can be little doubt that the expenditure incurred was incidental to the business of the assessee.
It was involved in renovating the buildings, reconditioning the machinery and clearing the debris, from the land, for the purpose of resuming the operation of the colliery.
The expenditure was laid out wholly for the purpose of the business.
[763 D] 4.
There must be strong evidence that in the case of repairs which are not "current repairs", the Legislature intended a departure from the principle that an expenditure laid out or expended wholly and exclusively for the purposes of the business, and which expenditure is not capital in nature, should not be allowed in computing the income from business.
There is nothing in the language of section 10(2) (v) which declares or necessarily implies that repairs, other than, "current repairs", will not qualify for the benefit of that principle.
On accepted commercial practice and trading principles an item of business expenditure must be deducted in order to arrive at the true figure of profits and gains for tax purposes.
[762 G 763 A] C.I.T. vs Chitnis 50 I.A. 292; Motipur Sugar Factory Ltd. vs C.I.T. Bihar and Orissa, ; Devi Films Ltd. vs C.I.T. Madras, ; Badridas Daga vs C.I.T. , 15; Calcutta Co. Ltd. vs C.I.T. West Bengal, , 9; the Law Shipping Co. Ltd. vs Commissioners of Inland Revenue 12 Tax Cases 621,625 referred to.
The scope of Section 10(2)(xv) should be construed liberally.
[763 B] In the instant case even if the expenditure made by the assessee cannot be described as "current repairs" he is entitled to invoke the benefit of section 10(2)(xv).
[763 C] 5.
Whether an expenditure can be described as capital or revenue falls to be decided by serial tests, each one of which approaches the question from one perspective or another, conditioned by the particular facts of each case.
[763 F] Assam Bengal Cement Co. Ltd. vs C.I.T. West Bengal referred to.
In the instant case the business of the assessee was coal mining and it was carried on by the operation of a network of collieries.
Each colliery was a unit of production.
While the several units of production continued to be employed and the business continued to be carried on, one alone of all the units, was compelled to suspend production.
The suspension was due to the property being requisitioned for military use.
As soon as it was derequisitioned the assessee 760 took measures to resume production of coal.
The buildings were renovated, the machinery reconditioned and the accumulated debris removed from the land No new asset was brought into existence, no advantage for the enduring benefit of the business was acquired.
The activity which was continuously in operation but had been temporary suspended was resumed.
[763 G 764 C]
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ition No. 355 of 1979.
(Under Article 32 of the Constitution) P. R. Mridul, K. Jayaram, K. Ram Kumar and Aruneshwar Gupta for the Petitioner.
Soli J. Sorabjee, Solicitor General, R. N. Sachthey, E. C. Agarwala and Miss A. Subhashini for Respondent No. 1.
The Judgment of V. R. Krishna Iyer, section Murtaza Fazal Ali, and D. A. Desai, JJ. was delivered by Krishna Iyer, J. and concurring opinion of R. section Pathak and A. D. Koshal, JJ. was delivered by Pathak, J. KRISHNA IYER, J. Is it constitutionally valid or desirable on principle to permit a private citizen, who has but loose nexus with the victim of a crime, to invoke the special power under article 136 of the Constitution for leave to appeal against an acquittal of the alleged criminal thereby putting in peril his life or liberty in the absence of any legislative provision arming such officious outsider with the right to appeal? This issue, profound on its face but unsound on reflection, falls for decision in this writ petition under article 32 of the Constitution.
The facts, compressed into a single sentence, are that the peti 877 tioner was acquitted of a murder charge by the High Court in appeal but the brother of the deceased not the State nor even the first informant moved this Court under article 136, got leave and had his appeal heard which resulted in the petitioner (accused) being convicted and sentenced to the life term under section 302 I.P.C.
The present contention urged to upset that conviction, is that the leave to appeal and the subsequent proceedings were unconstitutional as violative of article 21 the procedural magna carta protective of life and liberty and, therefore, the sentence must fail.
This plea, faintly presented before this Court when the appeal was heard, was briefly considered and rightly rejected.
This second battle, doomed to fail like the first, demands of us a condensed ratiocination in negation of the contention hopefully urged by Sri Mridul, counsel for the petitioner.
Two inter laced issues arise and they turn on (a) the content and character of article 136 vis a vis article 21, and (b) the locus standi of a Good Samaritan, if we may use that expression to refer to a public spirited citizen seeking to trigger the legal process to see that justice is done to his neighbour.
Article 21, in its sublime brevity, guardians human liberty by insisting on the prescription of procedure established by law, not fiat as sine qua non for deprivation of personal freedom.
And those procedures so established must be fair, not fanciful, nor formal nor flimsy, as laid down in Maneka Gandhi 's case.
So, it is axiomatic that our constitutional jurisprudence mandates the State not to deprive a person of his personal liberty without adherence to fair procedure laid down by law.
The question is whether there is any procedure, fair or otherwise, which enables a kindly neighbour who is not a complainant or first informant, to appeal to the Supreme Court against an allegedly erroneous acquittal by the High Court.
The corpus juris contains no black letter law arming any such purely compassionate soul to approach this Court, argues Sri Mridul; and so, his client 's liberty has been deprived by a proceeding initiated by someone without any procedure established by law.
We see the dexterity in the advocacy but reject its efficacy.
Nor are we impressed with the submission that the brother of the deceased in the case, or any other high minded citizen, is an officious meddler who has no business nor grievance when the commission of grievous crime is going unpunished.
There is a spiritual sensitivity for our criminal justice system which approves of the view that a wrong done to anyone is a wrong done to oneself, although for pragmatic considerations the law leashes the right to initiate proceedings in some situations.
Again, 'justice is functionally outraged not only when an 878 innocent person is punished but also when a guilty criminal gets away with it stultifying the legal system.
The deep concern of the law is to track down, try and punish the culprit, and if found not guilty, to acquit the accused.
It is imperative under article 21 that there should be some civilised procedure for holding a man guilty and depriving him of his liberty.
Undoubtedly, this Court, if it grants leave under article 136 and eventually finds him guilty, deprives him of his liberty; and so the crucial question that falls for decision is as to whether there is any procedure as predicated by article 21 independent of or implicit in article 136.
It is apparent that there is no statutory provision which creates a right of appeal in favour of a stranger enabling him to challenge an acquittal by the High Court.
The Criminal Procedure Code does not create such a right of appeal and, speaking generally, a right of appeal is the creature of statute.
So it is submitted that before the court may grant special leave under article 136 there must be an antecedent right of appeal, absent which the question of leave by the court does not arise.
The argument is ingenious but inference is fallacious.
An insightful understanding of the sweep, scope and character of article 136 will easily dispel the dichotomy between an antecedent right of appeal and a subsequent grant of leave, which is the corner stone of the contention of the petitioner.
The jural reach and plural range of the judicial process to remove injustice in a given society is a sure index of the versatile genius of law in action as a delivery system of social justice.
By this standard, our constitutional order vests in the summit court a jurisdiction to do justice, at once omnipresent and omnipotent but controlled and guided by that refined yet flexible censor called judicial discretion.
This nidus of power and process, which master minds the broad observance throughout the Republic of justice according to law, is article 136.
Specificity being essential to legality, let us see if the broad spectrum spread out of article 136 fills the bill from the point of view of "procedure established by law".
In express terms, article 136 does not confer a right of appeal on a party as such but it confers a wide discretionary power on the Supreme Court to interfere in suitable cases.
The discretionary dimension is considerable but that relates to the power of the court.
The question is whether it spells by implication, a fair procedure as contemplated by article 21.
In our view, it does.
Article 136 is a special jurisdiction.
It is residuary power; it is extra ordinary in its amplitude, its limit, when it chases injustice, in the sky itself.
This Court functionally fulfils itself by reaching out to injustice 879 wherever it is and this power is largely derived in the common run of cases from article 136.
Is it merely a power in the Court to be exercised in any manner it fancies? Is there no procedural limitation in the manner of exercise and the occasion for exercise ? Is there no duty to Act fairly while hearing a case under article 136, either in the matter of grant of leave or, after such grant, in the final disposal of the appeal ? We have hardly any doubt that there is a procedure necessarily implicit in the power vested in the summit court.
It must be remembered that article 136 confers jurisdiction on the highest court.
The founding fathers unarguably intended in the very terms of article 136 that it shall be exercised by the highest judges of the land with scrupulous adherence to judicial principles well established by precedents in our jurisprudence.
Judicial discretion is canalised authority not arbitrary eccentricity.
Cardozo, with elegant accuracy, has observed : The judge, even when he is free, is still not wholly free.
He is not to innovate at pleasure.
He is not a knighterrant roaming at will in pursuit of his own ideal of beauty or of goodness.
He is to draw his inspiration from consecrated principles.
He is not to yield to spasmodic sentiment, to vague and unregulated benevolence.
He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to 'the primordial necessity of order in the social life.
Wide enough in all conscience is the field of discretion that remains.
" It is manifest that article 136 is of composite structure, is power cum procedure power in that it vests jurisdiction in the Supreme Court, and procedure in that it spells a mode of hearing.
It obligates the exercise of judicial discretion and the mode of hearing so characteristic of the court process.
In short, there is an in built prescription of power and procedure in terms of article 136 which meets the demand of Art.21.
We may eye the issue slightly differently.
If article 21 is telescoped into article 136, the conclusion follows that fair procedure is imprinted on the special leave that the court may grant or refuse.
When a motion is made for leave to appeal against an acquittal, this Court appreciates the gravity of the peril to personal liberty involved in that proceeding.
It is fair to assume that while considering the petition under article 136 the court will pay attention to the question of liberty, the person who seeks such leave from the court, his motive and his locus standi and the weighty factors which persuade the court to grant special leave.
When this conspectus of processual circumstances and 880 criteria play upon the jurisdiction of the court under article 136, it is reasonable to conclude that the desideratum of fair procedure implied in article 21 is adequately answered.
Once we hold that article 136 is a composite provision which vests a wide jurisdiction and, by the very fact of entrusting this unique jurisdiction in the Supreme Court, postulates, inarticulately though, the methodology of exercising that power, nothing more remains in the objection of the petitioner.
It is open to the Court to grant special leave and the subsequent process of hearing are well established.
Thus, there is an integral provision of power cum procedure which answers with the desideratum of article 21 justifying deprivation of life and liberty.
The wider the discretionary power the more sparing its exercise.
Times out of number this Court has stressed that though parties promiscuously 'provoke ' this jurisdiction, the Court parsimoniously invokes the power.
Moreover, the Court may not, save in special situations, grant leave to one who is not eo nomine a party on the record.
Thus, procedural limitations exist and are governed by well worn rules of guidance.
Sri Mridul urged that every inquisitive benefactor or offensive adventurer cannot 'rush in ' and upset a verdict of acquittal by resort to article 136.
This is really a matter for exercise of judicial discretion and the Court can be trusted to bear in mind time honoured practices and the values of article 21.
But no dogmatic proscription of leave under article 136 to a non party applicant can be laid down inflexibly.
For access to justice is not a cloistered virtue.
It is true that the strictest vigilance over abuse of the process of the court, especially at the expensively exalted level of the Supreme Court, should be maintained and ordinarily meddlesome bystanders should not be granted 'visa '.
It is also true that in the criminal jurisdiction this strictness applies a fortiori since an adverse verdict from this Court may result in irretrievable injury to life or liberty.
Having said this, we must emphasise that we are living in times when many societal pollutants create new problems of unredressed grievance when the State becomes the sole repository for initiation of criminal action.
Sometimes, pachydermic indifference of bureaucratic officials, at other times politicisation of higher functionaries may result in refusal to take a case to this Court under article 136 even though the justice of the lis may well justify it.
While "the criminal law should not be used as a weapon in personal vendettas between private individuals", as Lord Shawcross once wrote, in the absence of an indepen 881 dent prosecution authority easily accessible to every citizen, a wider connotation of the expression 'standing ' is necessary for article 136 to further its mission.
There are jurisdictions in which private individuals not the State alone may institute criminal proceedings.
The Law Reform Commission (Australia) in its Discussion Paper No. 4 on "Access to Courts I Standing: Public Interest Suits" wrote: The general rule, at the present time, is that anyone may commence proceedings and prosecute in the magistrate 's court.
The argument for retention of that right arises at either end of the spectrum the great cases and the frequent petty cases.
The great cases are those touching government itself a Watergate or a Poulson.
However independent they may legally be any public official, police or prosecuting authority, must be subject to some government supervision and be dependent on government funds; its officers will inevitably have personal links with government.
They will be part of the "establishment".
There may be cases where a decision not to prosecute a case having political ramifications will be seen, rightly or wrongly, as politically motivated.
Accepting the possibility of occasional abuse the Commission sees merit in retaining some right of a citizen to ventilate such a matter in the courts.
Even the English System, as pointed by the Discussion paper, permits a private citizen to file an indictment.
In our view, the narrow limits set, in vintage English law, into the concept of 'person aggrieved ' and 'standing ' needs liberalisation in our democratic situation.
In Dabholkar 's case this court imparted such a wider meaning.
The American Supreme Court relaxed the restrictive attitude towards 'standing ' in the famous case of Baker vs Carr.
Lord Denning, in the notable case of the Attorney General of the Gambia vs Pierra Sarr N ' Jie, spoke thus: . the words 'person aggrieved ' are of wide import and should not be subjected to a restrictive interpretation.
They do not include, of course, a mere busybody who is interfering in things which do not concern him; Prof. section A. de Smith takes the same view : All developed legal systems have had to face the problem of adjusting conflicts between two aspects of the public 882 interest the desirability of encouraging individual citizens to participate actively in the enforcement of the law, and the undesirability of encouraging the professional litigant and the meddlesome interloper to invoke the jurisdiction of the courts in matters that do not concern him.
Prof. H.W.R. Wade strikes a similar note : In other words, certiorari is not confined by a narrow conception of locus standi.
It contains an element of the actio popularis.
This is because it looks beyond the personal rights of the applicant; it is designed to keep the machinery of justice in proper working order by preventing inferior tribunals and public authorities from abusing their powers.
In Dabholkar 's case, one of us wrote in his separate opinion : The possible apprehension that widening legal standing with a public connotation may unloose a food of litigation which may overwhelm the judges is misplaced because public resort to court to suppress public mischief is a tribute to the justice system.
This view is echoed by the Australian Law Reforms Commission.
The crucial significance of access jurisprudence has been best expressed by Cappelletti: The right of effective access to justice has emerged with the new social rights.
Indeed, it is of paramount importance among these new rights since, clearly, the enjoyment of traditional as well as new social rights presupposes mechanisms for their effective protection.
Such protection, moreover, is best assured by a workable remedy within the framework of the judicial system.
Effective access to justice can thus be seen as the most basic requirement the most basic 'human right ' of a system which purports to guarantee legal rights.
We are thus satisfied that the bogey of busybodies blackmailing adversaries through frivolous invocation of Art.136 is chimerical.
Access to Justice to every bona fide seeker is a democratic dimension of remedial jurisprudence even as public interest litigation, class action.
883 pro bono proceedings, are.
We cannot dwell in the home of processual obsolescence when our Constitution highlights social justice as a goal.
We hold that there is no merit in the contentions of the Writ petitioner and dismiss the petition.
PATHAK, J: The High Court of Madras in its appellate jurisdiction acquitted the petitioner, Sadhanantham, of charges under section 302 and section 148, I.P.C. Arunachalam, a brother of the deceased, petitioned to this Court under Article 136 of the Constitution for special leave to appeal against the acquittal.
The court granted special leave, and ultimately allowed the appeal, Arunachalam vs P.S.R. Sadhanantham, and setting aside the judgment of the High Court restored the conviction and sentence imposed by the trial court under section 302, I.P.C. The petitioner has filed this writ petition contending that the judgment and order of this Court is a nullity and should be set aside.
The principal contention is that Article 136 did not empower this Court to grant special leave to Arunachalam (the third respondent) and the grant of special leave by the Court and its entertaining the appeal violates Article 21 of the Constitution.
The maintainability of the appeal on the ground that Arunachalam was not entitled to petition under Article 136 of the Constitution for special leave was challenged before the Bench hearing the appeal, but the Bench over ruled the objection holding that it had ample power under Article 136 to entertain the special leave petition.
The learned Judges laid down that the Court had jurisdiction to entertain appeals against judgments of acquittal by the High Court at the instance of private parties.
We have read the judgment of our learned brother V. R. Krishna Iyer, but because of the importance of the question we consider it necessary to set down our own view.
The expense of the appellate jurisdiction of the Supreme Court flows from an entire code of provisions contained in the Constitution.
It includes an appeal on certificate by the High Court under Article 132 that the case involves a substantial question of law as to the interpretation of the Constitution in a civil, criminal or other proceeding disposed of by a judgment, decree or final order of a High Court, and an appeal on certificate under Article 133 that the case involves a substantial question of law of general importance which calls for decision by the Supreme Court.
In a criminal proceeding, disposed of by a judgment or final order or sentence of a High Court, besides cases where the High Court has convicted the accused and sentenced him to death either on reversing in appeal an order of acquittal by 884 the trial court or on the case being withdrawn from the subordinate court to itself for trial, an appeal lies to the Supreme Court where the High Court "certifies that the case is fit one for appeal to the Supreme Court".
Article 135 confers jurisdiction and power on the Supreme Court with respect to any matter to which Article 133 or Article 134 does not apply if such jurisdiction and power were exercisable by the Federal Court immediately before the commencement of the constitution.
Article 136 declares: "136.
(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India." Then follow other provisions to which we need not refer.
Plainly, the jurisdiction conferred by Article 136 seeks to confer on this Court the widest conceivable range of judicial power, making it perhaps among the most powerful courts in the world.
The judicial power reaches out to every judgment, decree, determination, sentence or order effecting the rights and obligations of persons in civil matters, of life and liberty in criminal matters as well as matters touching the Revenues of the State.
It is an attempt to ensure that the foundations of the Indian Republic, which have been laid on the bed rock of justice, are not undermined by injustice anywhere in the land; Bharat Bank Ltd. vs Employees of the Bharat Bank Ltd.
As the Court observed in Durga Shankar Mehta vs Thakur Raghuraj Singh and Others.
Article 136 vests in the Supreme Court a plenary jurisdiction in the matter of entertaining and hearing appeals by grant of special leave.
Nonetheless, there is a limitation which, in our opinion, is of immediate relevance.
It is a limitation inbuilt into the jurisdiction of the Court and flows from the nature and character of the case intended to be brought before the Court.
It is a limitation which requires compliance despite the apparent plenitude of power vested in the Court.
When a petition is presented to the Court under Article 136, the Court will have due regard to the nature and character of the cause sought to be brought before it when entertaining and disposing of the petition.
The question is: Does the brother of a deceased person, who has been murdered, possess the right to petition under Article 136 of the 885 Constitution for special leave to appeal against an acquittal of the accused ? It is a question which touches directly on the nature of a crime and of a criminal proceeding.
Several different definitions of a crime have been attempted (and there are some jurists who say that it is impossible of definition), but there is broad agreement on one attribute of its nature, that it is an illegal act which amounts to a wrong against the public welfare.
Mogul Steamship Co. vs Cm Greger Gew & Co. As a concept, crime has been defined as "any conduct which a sufficiently powerful section of any given community feels to be destructive of its own interests, as endangering its safety, stability or comfort," which "it usually regards as especially heinous and seeks to repress with corresponding severity; if possible it secured that the forces which the sovereign power in the State can command shall be utilised to prevent the mischief or to punish anyone who is guilty of it.
" Crimes were defined by Blackstone as "the breach and violation of public rights and duties which affect the whole community." A crime, therefore, is an act deemed by law to be harmful to society in general even though its immediate victim is an individual.
Murder injures primarily the particular victim, but its blatant disregard of human life puts it beyond a matter of mere compensation between the murderer and the victim 's family.
Those who commit such acts are proceeded against by the State in order that, if convicted, they may be punished.
The notion of crime as a threat to the whole community, is the material counterpart of the formal rule that the State alone is master of a criminal prosecution.
In a criminal proceeding the State stands forward as prosecutor on public grounds.
No private person has a direct interest in a criminal proceeding, although exception may be made by the statute in certain cases.
It is common knowledge that a criminal prosecution is not intended for the private satisfaction of a personal vendetta or revenge.
In India also, the criminal law envisages the State as the prosecutor.
Under the Code of Criminal Procedure, the machinery of the 886 State is set in motion on information received by the police or on a complaint filed by a private person before a Magistrate.
If the case proceeds to trial and the accused is acquitted, the right to appeal against the acquittal is closely circumscribed.
Under the Code of Criminal Procedure, 1895 the State was entitled to appeal to the High Court, and the complainant could do so only if granted special leave to appeal by the High Court.
The right of appeal was not given to other interested persons.
Under the Code of Criminal Procedure 1973, the right of appeal vested in the State has now been made subject to leave being granted to the State by the High Court.
The complainant continues to be subject to the pre requisite condition that he must obtain special leave to appeal.
The fetters so imposed on the right to appeal are prompted by the reluctance to expose a person, who has been acquitted by a competent court of a criminal charge, to the anxiety and tension of a further examination of the case, even though it is held by a superior court.
The Law Commission of India gave anxious thought to this matter, and while noting that the Code recognised a few exceptions by way of permitting a person aggrieved to initiate proceedings in certain cases and permitting the complainant to appeal against an acquittal with special leave of the High Court, expressed itself against the general desirability to encourage appeals against acquittal.
It referred to the common law jurisprudence obtaining in England and other countries where a limited right of appeal against acquittal was vested in the State and where the emphasis rested on the need to decide a point of law of general importance in the interests of the general administration and proper development of the criminal law.
But simultaneously the Law Commission also noted that if the right to appeal against acquittal was retained and extended to a complainant the law should logically cover also cases not instituted on complaint.
It observed: "Extreme cases of manifest injustice, where the Government fails to act, and the party aggrieved has a strong feeling that the matter requires further consideration, should not, in our view, be left to the mercy of the Government.
To inspire and maintain confidence in the administration of justice, that limited right of appeal with leave given to a private party should be retained, and should embrace cases initiated on private complaint or otherwise at the instance of an aggrieved person.
" 887 However, when the Criminal Procedure Code, 1973 was enacted the statute, as we have seen, confined the right to appeal, in the case of private parties to a complainant.
This is, as it were, a material indication of the policy of the law.
Having regard to the fundamental nature of a criminal proceeding to which reference has been made, it is now appropriate to examine the considerations which the Court should keep in mind when entertaining a petition for special leave to appeal by a private party against an order of acquittal.
From what has been said, it is plain that 'access to the jurisdiction under Article 136 cannot be permitted to a private party who seeks to employ the judicial process for the satisfaction of private revenge or personal vendetta.
Nor can it be permitted as an instrument of coercion where a civil action would lie.
In every case, the Court is bound to consider what is the interest which brings the petitioner to court and whether the interest of the public community will benefit by the grant of special leave. 'In a jurisprudence which elevates the right to life and liberty to a fundamental priority, it is incumbent upon the court to closely scrutinise the motives and urges of those who seek to employ its process against the life or liberty of another. ' In this enquiry, the Court would perhaps prefer to be satisfied whether or not the State has good reason for not coming forward itself to petition for special leave.
We think that the Court should entertain a special leave petition filed by a private party, other than the complainant, in those cases only where it is convinced that the public interest justifies an appeal against the acquittal and that the State has refrained from petitioning for special leave for reasons which do not bear on the public interest but are prompted by private influence want of bona fide and other extraneous considerations.
We would restrict accordingly the right of a private party, other than the complainant, to petition for special leave against an order of acquittal.
It is perhaps desirable to keep in mind that what follows from the grant of special leave is an appeal, and the jurisdiction must, therefore, be invoked by a petitioner possessing a locus standi recognised in law.
In regard to the question whether the procedure followed by this Court in disposing of a petition for special leave under Article 136 is consistent with the procedure contemplated by Article 21, we have no hesitation in holding that the principle is inbuilt within the terms of Article 136 itself that the Court in exercising its jurisdiction will do so as a court of law following the well known norms of procedure which have been recognised for long as governing and informing the 888 proceedings of all courts.
We have no hesitation in holding that Article 21 is not violated.
The petitioner has failed to establish that there is a case for interfering with the judgment of this Court allowing the appeal.
The writ petition is dismissed, but in the circumstances there is no order as to costs.
N.V.K. Petition dismissed.
|
The petitioner was acquitted by the High Court in appeal, of charges under sections 302 and 148 I.P.C., but the brother of the deceased not the State nor even the first informant, petitioned this Court under Article 136 of the Constitution for special leave to appeal against acquittal, got leave, had his appeal heard, which was ultimately allowed the court setting aside the judgment of the High Court, and restoring the conviction and sentence imposed by the trial court under section 302 I.P.C. (Arunachalam vs section R. Sadhananthan ; The petitioner filed the writ petition under Article 32 of the Constitution, contending: (1) that Article 136 did not empower the grant of special leave to the brother of the deceased and the grant of special leave by the Court and its entertaining the appeal violated Article 21 of the Constitution, and (2) before the Court may grant special leave under Article 136 there must be an antecedent right of appeal absent which the question of leave by the Court does not arise.
Dismissing the petition, ^ HELD: (per Krishna Iyer, Murtaza Fazal Ali and Desai, JJ).
Justice is functionally outraged not only when an innocent person is punished but also when a guilty criminal gets away with it stultifying the legal system.
[877H, 878A] 2.
An insightful understanding of the sweep, scope and character of article 136 will easily dispel the dichotomy between an antecedent right of appeal and a subsequent grant of leave.
[878D] 3.
The jural reach and plural range of the judicial process to remove injustice in a given society is a sure index of the versatile genius of law in action as a delivery system of social justice.
Our constitutional order vests in the summit court a jurisdiction to do justice, at once omnipresent and omnipotent but controlled and guided by that refined yet flexible censor called judicial discretion.
This nidus of power and process, which master minds the broad observance throughout the Republic of justice according to law, is article 136.
[878E F] 874 4.
In express terms, article 136 does not confer a right of appeal on a party as such but it confers a wide discretionary power on the Supreme Court to interfere in suitable cases.
Article 136 is a special jurisdiction.
It is residuary power; it is extra ordinary in its amplitude, its limit, when it chases injustice, is the sky itself.
This Court functionally fulfils itself by reaching out to injustice wherever it is and this power is largely derived in the common run of cases from article 136.
[878G H, 879A] 5.
There is a procedure necessarily implicit in the power vested in the summit court.
It must be remembered that article 136 confers jurisdiction on the highest court.
The founding fathers unarguably intended in the very terms of article 136 that it shall be exercised by the highest judges of the land with scrupulous adherence to judicial principles well established by precedents in our jurisprudence.
Judicial discretion is canalised authority, not arbitrary eccentricity.
[879A C] 6.
It is manifest that article 136 is of composite structure, is power cum procedure power in that it vests jurisdiction in the Supreme Court, and procedure in that it spells a mode of hearing.
It obligates the exercise of judicial discretion and the mode of hearing so characteristic of the court process.
In short, there is an in built prescription of power and procedure in terms of article 136 which meets the demand of article 21.
[879E F] 7.
If article 21 is telescoped into article 136, it follows that fair procedure is imprinted on the special leave that the court may grant or refuse.
With a motion is made for leave to appeal against an acquittal, this Court appreciates the gravity of the peril to personal liberty involved in that proceeding.
While considering the petition under article 136 the court will pay attention to the question of liberty, the person who seeks such leave from the court, his motive and his locus standi and the weighty factors which persuade the court to grant special leave.
[879F G] 8. 'The wider the discretionary power the more sparing its exercise.
The Court may not, save in special situations, grant leave to one who is not eo nomine a party on the record.
[880C D] 9.
Sometimes indifference of bureaucratic officials, at other times politicisation of higher functionaries may result in refusal to take a case to this Court under article 136 even though the justice of the lis may well justify it.
In the absence of an independent prosecution authority easily accessible to every citizen, a wider connotation of the expression 'standing ' is necessary for article 136 to further its mission.
There are jurisdictions in which private individuals not the State alone may institute criminal proceedings.
[880G H, 881A] 10.
The narrow limits set, into the concept of 'person aggrieved ' and 'standing ' needs liberalisation.
[881E] Baker vs Carr ; , Attorney General of the Gambia vs Pierra Sarr N 'Jie, , Bar Council of Maharashtra vs M. V. Dabholkar, [1975] 2 SCC 702 referred to.
(Per Pathak and Koshal, JJ concurring).
Article 136 seeks to confer on the Supreme Court the widest conceivable range of judicial power, making it perhaps among the most powerful courts in the world.
The judicial power reaches out to every judgment, decree, determi 875 nation, sentence or order affecting the rights and obligations of persons in civil matters, of life and liberty in criminal matters as well as matters touching the Revenues of the State.
It is an attempt to ensure that the foundations of the Indian Republic, which have been laid on the bed rock of justice, are not undermined by justice anywhere in the land.
[884CE] Bharat Bank Ltd. vs Employees of the Bharat Bank Ltd. ; , 474, Durga Shankar Mehta vs Thakur Raghuraj Singh and Others, [1955] 1 S.C.R. 267, 272, referred to.
Article 136 vests in the Supreme Court, a plenary jurisdiction in the matter of entertaining and hearing appeals by grant of special leave.
However, a limitation is inbuilt into the jurisdiction of the Court and it flows from the nature and character of the case intended to be brought before the Court, and it requires compliance despite the apparent plenitude of power vested in the Court.
When a petition is presented to the Court under Article 136, the Court will have due regard to the nature and character of the cause sought to be brought before it when entertaining and disposing of the petition.
[884E G] 3.
A crime is an act deemed by law to be harmful to society in general, even though its immediate victim is an individual.
Murder injures primarily the particular victim, but its blatant disregard of human life puts it beyond a matter of mere compensation between the murderer and the victim 's family.
Those who commit such acts are proceeded against by the State in order that, if convicted, they may be punished.
No private person has a direct interest in a criminal proceeding although exception may be made by the Statute in certain cases.
[885C F] Kenny 's Outlines of Criminal Law, 16th Edn., p. 2 para 3 Blackstones Commentaries, III p. 2, Mogul Steamship Co. vs Mc Greger Gew & Co. ; referred to.
The notion of crime as a threat to the whole community is the material counter part of the formal rule that the State alone is master of a criminal prosecution.
In a criminal proceeding, the State stands forward as prosecutor on public grounds.
No private person has a direct interest in a criminal proceeding, although exception may be made by the statute in certain cases.
A criminal prosecution is not intended for the private satisfaction of a personal vendetta or revenge.
In India, the criminal law envisages the State as the prosecutor.
[885E F] Salmond on Jurisprudence, 12th Edn.
p. 92 para 14 and Current Legal Problems, 1955; Glanville Williams, "The Definition of Crime", p. 107 at p. 122; referred to.
Under the Code of Criminal Procedure 1973, section 378, the right of appeal vested in the State has now been made subject to leave being granted to the State by the High Court.
The complainant continues to be subject to the prerequisite condition that he must obtain special leave to appeal.
The fetters so imposed on the right to appeal are prompted by the reluctance to expose a person, who has been acquitted by a competent court of a criminal charge, to the anxiety and tension of a further examination of the case, even though it is held by a superior court.
[886B C] 876 Law Commission of India 48th Report 1972 pp.
17 21 referred to.
What follows from the grant of special leave is an appeal, and the jurisdiction must, therefore, be invoked by a petitioner possessing a locus standi recognised in law.
[887F G] 7.
Access to the jurisdiction under Article 136 cannot be permitted to a private party who seeks to employ the judicial process for the satisfaction of private revenge or personal vendetta.
Nor can it be permitted as an instrument of coercion where a civil action would lie.
In every case, the Court is bound to consider what is the interest which brings the petitioner to court and whether the interest of the public community will benefit by the grant of special leave.
[887B C] 8.
The Court should entertain a special leave petition filed by a private party, other than the complainant, in those cases only where it is convinced that the public interest justifies an appeal against the acquittal and that the State has refrained from petitioning for special leave for reasons which do not bear on the public interest but are prompted by private influence, want of bona fide and other extraneous considerations.
[887E F] 9.
The procedure followed by this Court in disposing of a petition under Article 136 is consistent with the procedure contemplated by Article 21 for the Court in exercising its jurisdiction will do so as a court of law following the well known norms of procedure which have been recognised for long as governing and informing the proceedings of all courts.
Article 21 is, therefore, not violated.
[887G H, 888A]
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Civil Appeal No. 1802 of 1971.
Appeal by Special Leave from the Judgment and Order dated 2 11 1971 of the Allahabad High Court in S.A. No. 768 of 1964.
Y. section Chitale, Lalji Sahai Srivastava, B. P. Singh and Mukul Mudgal for the Appellant.
R. K. Garg, section P. Singh and Sudama Ojha for Respondent No. 1.
section T. Desai and Uma Datta for Respondent No. 3. section C. Patil for Respondent No. 2 M. Veerappa for Respondent No. 4.
The Judgment of the Court was delivered by SEN J.
This is an appeal by special leave from a judgment and decree of the Allahabad High Court dated November 2, 1971 in a suit for declaration of title to, and possession of house No. C 27/33 situate in Mohalla Jagatganj, Varanasi for arrears of rent and mesne profits in respect thereof.
The principal point in controversy between the parties in this appeal is, whether the plaintiff, Mathura Ahir, being a Sudra could not be ordained to a religious Order and become a Sanyasi or Yati and, therefore, installed as a Mahant of the Garwaghat Math according to the tenets of the 'Sant Mat ' Sampradaya.
A subsidiary question arises as to whether in the absence of proof of the performance of Atma Sradh and the recitation of Pravesh Mantra neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atmavivekanand could be regarded as Hindu sanyasis.
It also raises a further question namely whether the first respondent, Harsewanand, the original plaintiff having died during the pendency of the appeal, the appeal abates in its entirety.
The facts of the case are set forth with utmost particularity in the judgment of the High Court.
It will, therefore, not be inconvenient to deal with them as briefly as possible.
The history of the Garwhaghat Math is as follows: In 1925, Swami Sarupanand Paramhans, disciple of Swami Advaitanand, a Hindu ascetic belonging to the 'Sant Mat ' sect, came from the North Western Provinces, and took his abode at Garwaghat, Mouza Ramna Malhija, in the vicinity of Varanasi City.
He was a religious preceptor of great learning and from his hermitage preached the tenets and precepts of the 'Sant Mat ' and soon had a large following.
He was treated with great veneration and some of his devotees by a registered gift deed dated March 666 18, 1935 endowed the land and building, which he named as 'Bangla Kuti '.
Subsequently the said Bangla Kuti and other lands and buildings appurtenant and adjacent thereto came to be known as the Garwaghat Math of which Swami Sarupanand was initially the mahant.
He paid a visit to village Khuruhja for a couple of days and Baikunth Singh, father of defendant No. 5, Sri Krishna Singh, the appellant, was greatly influenced by his preachings and left for Varanasi for good.
In due course, Baikunth Singh was initiated as chela by Swami Sarupanand who named him as Atmavivekanand.
Swami Atmavivekanand Paramhans was the chief disciple of Swami Sarupanand and was given full rights of initiation and Bhesh by his Guru.
Swami Sarupanand took his samadhi at Meerut in 1936 and after his death, according to his wishes, his Bhesh and Sampradya gave Swami Atmavivekanand Chadar Mahanti of Garwaghat Math and made him the mahant.
Swami Atmavivekanand also had a large following and his 'Sant Mat ' fraternity which comprised of thousands of Grihastha and Virakta disciples made large offerings and gifted extensive properties to him as their religious or spiritual leader.
In 1937, Swami Atmavivekanand initiated the plaintiff Mathura Ahir as his chela and named him as Harsewanand according to the custom and usage of the 'Sant Mat ' sect.
During his lifetime, he purchased the two properties viz., house No. C 27/33, situate in Mohalla Jagatganj and house No. C 4/83, situate in Mohalla Sarai Gobardhan in the city of Varanasi by registered sale deeds dated December 3, and December 22, 1942 from out of the income of the math i.e., the offerings (Bhent) made by the devotees and formed the properties of the math.
Swami Atmavivekanand died at Varanasi on August, 23, 1949.
A Bhandara was held on October 3, 1949 and according to the wishes of Swami Atmavivekanand, the mahantas and sanyasis of the Bhesh and Sampardaya gave the Chadar Mahanti to the plaintiff and installed him as the mahant of the math in place of Swami Atmavivekanand on October 4, 1949 in accordance with the custom and usage of the Sampradaya.
The mahants and sanyasis of the 'Sant Mat ' Bhesh who had assembled for the Bhandara also executed a document to that effect acknowledging him to be the mahant.
The plaintiff having been installed as the mahant, the entire property of the Garwaghat Math along with the two houses in the city of Varanasi, devolved upon him as successor to Swami Atmavivekanand.
On August 21, 1951 the plaintiff respondent No. 1, Harsewanand, brought the suit, out of which this appeal arises, in the court of the City Munsif, Varanasi for ejectment of respondents Nos. 2 to 5 from 667 house No. C 27/33, situate in Mohalla Jagatganj, Varanasi.
It was pleaded that respondent No. 2, Avadesh Narain, defendant No. 1, had taken the house on rent from Swami Atmavivekanand, the late mahant.
It was alleged that he had unlawfully sub let the premises to the respondents Nos. 3 to 5, who were defendants Nos. 2 to 4.
The suit was contested by these respondents who denied the tenancy and inter alia pleaded that they were in occupation of the house as chelas of Swami Atmavivekanand in their own right by virtue of the licence granted to them by him.
They denied the plaintiff 's title as well as right to sue alleging that he was neither a chela of Swami Atmavivekanand nor his successor.
It was also alleged that the house in suit was the personal property of Swami Atmavivekanand and, therefore, on his death his natural son and disciple, Sri Krishna Singh, the appellant became the owner thereof.
The suit which was originally framed by the plaintiff respondent No. 1, Harsewanand, as a suit between a landlord and tenant had, therefore, to be converted into a suit for possession based on title by impleading the appellant, Sri Krishna Singh as defendant No. 5.
It is not necessary to mention in detail the other averments in the plaint, nor is it necessary to mention the various pleas raised in the written statement filed by the defendants.
It will be sufficient, however, to mention that the appellant Sri Krishna Singh in his written statement denied the existence of the math as pleaded by the plaintiff and asserted that the house in it, in any case, was not math property.
He further pleaded that the plaintiff Mathura Ahir being a Sudra, was legally incompetent to become a sanyasi, and that the plaintiff was not the mahant of the Garwaghat Math.
He further claimed that after the death of Swami Atmavivekanand, he became the owner of the house in suit by inheritance, as also of the properties alleged by the plaintiff to belong to Garwaghat Math.
All these properties, according to the appellant, were secular and personal properties of his father Baikunth Singh, who was also known as Swami Atmavivekanand.
In the trial, the issues, as finally framed by the learned Munsif were seventeen in number.
Of these, the following are relevant: (1) Whether the plaintiff is the owner of the premises in suit? (8) Whether the plaintiff was nominated as a mahant and given Chadar in accordance with the custom? Is there any custom as alleged by the plaintiff? (12) Was Swami Atmavivekanand a sanyasi and had he ceased to be a Grihasti? (13) Is the plaintiff a Sudra and not entitled to become sanyasi according to Hindu law? (14) Is the 668 plaintiff chela of Swami Atmavivekanand and entitled to succeed to properties left by him in preference to his son Sri Krishna? (15) Is the house in suit a Math property? It appears that the case came up for hearing before the learned Munsif on October 5, 1953 when the plaintiff 's counsel accompanied by his parocar made oral pleadings under O. 10, r. 1 of the Code of Civil Procedure to the effect: "The 'Sant Mat ' Sampradaya is one of the Dasnami sanyasis founded by the great Sankaracharya, and is governed by Naranjini Math Akhara.
" The learned Munsif found each and every of these issues in favour of the plaintiff and accordingly decreed the suit.
x x x x x x x x x On appeal the III Addl.
Civil Judge, Varanasi by his judgment dated January 14, 1964 reversed some of the aforesaid findings while maintaining the rest.
From the judgment of the Addl.
Civil Judge, the appellant alone preferred an appeal to the High Court which by its judgment dated November 2, 1971 on a careful marshalling of the entire evidence, in the light of well settled principles, agreeing with the learned Munsif, set aside the findings of the learned Civil Judge and decreed the plaintiff 's suit in its entirety.
A learned Single Judge, Kirty J., in the course of his judgment observed that the evidence on record sufficiently established that there had come into existence a math at Garwaghat, of which Swami Atmavivekanand was the mahant.
He referred to the overwhelming evidence led by the plaintiff showing that the building known as 'Shanti Kuti ' and certain other buildings constituted an endowment to the math itself, which was a monastic institution presided over by the mahant.
He further held that the house in dispute was not the personal property of Swami Atmavivekanand but formed an accretion to the math as it had been acquired by him from out of the offerings (Bhent) made by the disciples to him as their religious or spiritual leader for the purposes of the spiritual order of the fraternity and, therefore, the natural heirs of Swami Atmavivekanand could have no claim to the property, which must descend to the plaintiff as a successor to him.
x x x x x x x x On the question whether the plaintiff and his two predecessors, Swami Atmavivekanand and Swami Sarupanand were not legally com 669 petent to hold office of the mahant of the math in question, the learned Single Judge observed: "The finding of the court below on this point is in appellant 's favour, the reason given therefor being that the plaintiff failed to prove that he or his predecessors had performed Atma Sradh and uttered Pravesh Mantra as mandatorily prescribed by Hindu law.
The factual part of the finding, viz., the performance of the Sradh and the utterance of the Mantra, is binding in second appeal, but the conclusion drawn therefrom is one of law.
" After referring to the authorities on the subject, he observes: "A reading of the judgments in the above noted cases will show that the various observations therein in regard to performance of Atma Sradh and other rites (Prajapathiyesthi Viraja Homam etc.) and the utterance of Pravesh Mantra etc. were made with reference to particular sects or categories of sanyasis claiming to belong to a particular religious order or class of such order, or with reference to "Sanatan", i.e., orthodox, Hindu Dharma.
It is true that on cursory reading it would appear as if the observations formulate indispensable legal requirements of the Hindu law universally applicable to every (Hindu) ordained sanyasi, but, upon a careful analysis I have found that that is not so.
The law as stated therein is generally or usually, but not invariably, applicable.
" In conclusion, he observes: "In the absence of any proof that the followers of Sant Math or the tenets of that Math required of its Mahant that he must necessarily belong to the twice born class of Hindus and be a Sanyasi in accordance with all the rites and ceremonies mentioned in the aforesaid cases, I am not prepared to hold that Swami Sarupanand and Swami Atmavivekanand were legally incompetent to be Mahants of the Math or that the plaintiff is a person disqualified from assuming and holding that office." He accordingly held that the plaintiff and his predecessors, Swami Sarupanand and Swami Atmavivekanand were not legally incompetent to be the mahants of the math.
They did not inflict themselves on the religious fraternity of Sant Mat Sampradaya nor had they been foisted into the office of mahant against the will or in spite of the disapproval of the religious fraternity.
In any event, even if the 670 plaintiff was disqualified being a Sudra, he was entitled to sue as the de facto mahant.
During the pendency of the appeal, the respondent plaintiff Mahant Harsewanand having died, respondent No. 1, Mahant Harshankranand was brought on record as an heir and legal representative.
It would be convenient, at the outset, to deal with the view expressed by the High Court that the strict rule enjoined by the Smriti writers as a result of which Sudras were considered to be incapable of entering the order of yati or sanyasi, has ceased to be valid because of the fundamental rights guaranteed under Part III of the Constitution.
In our opinion, the learned Judge failed to appreciate that Part III of the Constitution does not touch upon the personal laws of the parties.
In applying the personal laws of the parties, he could not introduce his own concepts of modern times but should have enforced the law as derived from recognised and authoritative sources of Hindu law, i.e., Smritis and commentaries referred to, as interpreted in the judgments of various High Courts, except where such law is altered by any usage or custom or is modified or abrogated by statute.
On the main, in agreement with the High Court, we are inclined to take the view that though according to the orthodox Smriti writers a Sudra cannot legitimately enter into a religious Order and although the strict view does not sanction or tolerate ascetic life of the Sudras, it cannot be denied that the existing practice all over India is quite contrary to such orthodox view.
In cases, therefore, where the usage is established, according to which a Sudra can enter into a religious order in the same way as in the case of the twice born classes, such usage should be given effect to.
The first question, therefore, to consider here is: Whether there was a math in existence at Garwaghat, and if so, whether the house in suit was an accretion to the math? Math means a place for the residence of ascetics and their pupils, and the like.
Since the time of Sankaracharya, who established Hindu maths, these maths developed into institutions devoted to the teaching of different systems of Hindu religious philosophy, presided over by ascetics, who were held in great reverence as religious preceptors, and princes and noblemen endowed these institutions with large grants of property.
Dr. Bijan Kumar Mukherjea in his Tagore Law Lectures on the Hindu Law of Religious and Charitable Trusts, 4th ed.
, p. 321, succinctly states: " 'Math ' in ordinary language signifies an abode or residence of ascetics.
In legal parlance it connotes a monastic institution presided over by a superior and established for the use and benefit of ascetics 671 belonging to a particular order who generally are disciples or co disciples of the superior.
" x x x x x The property belonging to a math is in fact attached to the office of the mahant, and passed by inheritance to no one who does not fill the office.
The head of a math, as such, is not a trustee in the sense in which that term is generally understood, but in legal contemplation he has an estate for life in its permanent endowments and an absolute property in the income derived from the offerings of his followers, subject only to the burden of maintaining the institution.
He is bound to spend a large part of the income derived from the offerings of his followers on charitable or religious objects.
The words 'the burden of maintaining the institution ' must be understood to include the maintenance of the math, the support of its head and his disciples and the performance of religious and other charities in connection with it, in accordance with usage.
See: Semmantha Pandara vs Sellappa Chetty Mad.
175 Giyana Sambandha Pandara Sannadhi vs Kandasami Tambiran Mad 375; Vidya Purna Tirtha Swami vs Vidyanidhi Tirtha Swamy Mad 435; Ram Prakash Das vs Anand Das (1916) 43 I.A. 73 (PC), Vidya Varuthi Thirtha vs Babuswamy Iyer (1920 21) 48 I.A. 302; Kailasam Pillai vs Nataji Thambiran Mad, 265.
From the principles, it will be sufficiently clear that a math is an institutional sanctum presided over by a superior who combines in himself the dual office of being the religious or spiritual head of the particular cult or religious fraternity, and of the manager of the secular properties of the institution of the math.
In the instant case, the evidence on record sufficiently establishes that a math came to be established at Garwaghat and the building known as 'Bangla Kuti ' and certain other buildings, including the house in suit constituted the endowment of the math itself.
From a review of the general mass of evidence the High Court, agreeing with the learned Munsif, held that the followers of the 'Sant Mat ' fraternity are members of a religious order.
The long line of witnesses who were all disciples of Swami Sarupanand and/or Swami Atmavivekanand have clearly established that it is a religious institution of monastic nature.
It is established for the service of the 'Sant Mat ' cult, the instruction in its tenets and observance of its rites.
The Swamiji who is the Guru is the Mahant, the spiritual and religious leader of the fraternity.
According to the custom and usage of the 'Sant Mat ' Sampradaya, as pleaded by the plaintiff, the initiation of a chela by the Guru results in complete renunciation of the world, and he ceases to have all con 672 nection with his previous Ashramas before becoming a sanyasi.
For becoming a sanyasi it is not necessary that he should be of a particular Varnashram previously, i.e., even a Sudra can become a sanyasi.
The succession to the office of the Mahant is by nomination, i.e., from Guru to chela, the Guru initiates the chela after performing the necessary ceremonies.
The person initiated as a chela adopts the life of a sanyasi and is pledged to lead a life of celibacy and religious mendicancy.
The sitting mahant hands over the management of the math to one of his virtuous chelas fittest to succeed whom he nominates and whom he wishes to install as mahant after him in his place.
He makes clear this desire to the members of his Sampradaya, and also authorises the nominated chela to give Bhesh Dikshawa.
After the death of the mahant, the Bhesh and Sampradaya give Chadar Mahanti of the math to the said disciple at the time of the Bhandara.
The Courts below have concurrently found that the custom or usage, so pleaded has been established.
They further found that the plaintiff Mathura Ahir was initiated as a chela by Swami Atmavivekanand and nominated to be his successor.
They have also found that at the Bhandara held after Swami Atmavivekanand 's death, the plaintiff was installed as the Mahant of Garwaghat Math by the Mahants and Sanyasis belonging to the 'Sant Mat ' Sampradaya, according to the wishes of Swami Atmavivekanand Paramhans.
From the evidence on record, there can be no doubt that the math at Garwaghat belongs to the 'Sant Mat ' Sampradaya, which is a religious Order.
No doubt, the plaintiff Harsewanand, P.W. 15, asserts: "Followers of any religion can become a sanyasi in our cult.
The practice of becoming sanyasi has been prevalent since Satyuga.
Man 's life is divided into three Ashramas.
(Again said): there are four Ashramas viz., Brahmacharya, Grihastha, Vanaprastha and Sanyas.
Varnas are three, Dashnami Sanyasis came into existence after Shankaracharya.
They are Puri, Giri, Bharti, Vana, Tirtha, Aranya, Parvat, Sagar and Saraswati.
I am failing to recollect the name of one of them.
The Sanyasis of Sant Mat are not Dashnami Sanyasis.
Swarupanandji my Guru or I are not Dashnamis, but all these cults are related with Sant Math.
I know Niranjani and Nirvani Akharas.
They belong to Dashnami Sanyasis and Sant Mat Sanyasis.
We have connections with Nirvani and Niranjani Maths.
Some customs of the Maths of those Akharas are observed by us also." (Emphasis supplied) 673 This is, however, contrary to what he had stated in his oral pleadings under O.10, r. 1 of the Code of Civil Procedure.
The fact that the 'Sant Mat ' Sampradaya is one of the Dashnami sects cannot be doubted.
There is unimpeachable testimony of Swami Viveksukhanand, who along with Swami Atmavivekanand and others was initiated as a chela by Swami Sarupanand on the same day, at the same time.
During his cross examination, this witness states: "Sri Swarupanandji was Sadhu of Sant Sanyas Sampradai.
Sant Sanyas Sampradai has been obtaining from ancient time.
This Sampradai is of those ten Sampradai which were founded by Swami Shankracharji.
This (Sampradai) out of the Das nam is Purinama.
There is no branch in Purinama (Sampradai). .Niranjani and Nirvani Akharas are the Akharas of Giri Sampradai.
If a Sanyasi of Giri, Puri, Bharti, or of any Das Nam Sampradai abandons sanyas and re enters into the Grahast Ashram he is called a Gosain.
The rules for making disciples in Giri and Puri Sampradai for making chief disciples, and appointing successor are also one and the same.
The rules, rituals and the ceremonies which are performed at the time of installation to gaddi in both these Sampradai are also one and the same.
There is no difference in Giri and Puri Sampradai.
The rules, practices, rituals and customs followed at the time of installation to gaddi in all the ten sampradaiyas founded by Swami Shankracharyaji are one and the same. ' (Emphasis supplied) Though the math at Garwaghat established by Swami Sarupanand was of recent origin, the High Court observes that the religious order denominated as 'Sant Mat ' has had large following in Punjab and some other parts of India since more than a century.
In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order.
As regards the origin of the Math, it observed: "I have, therefore, no hesitation in holding, in agreement with the finding of the trial court, that there had come into existence a Math at Garwaghat, Varanasi of which Swami Sarupanand was the Mahant.
Here I may also mention that from the evidence on record it appears that 'Sant Mat ' is not of very recent origin.
Although the evidence is somewhat scanty on the point, yet it sufficiently indicates that this Math 674 has had numerous followers in Punjab and some other parts of India since more than a century.
In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order.
Here it may also be mentioned that defendants other than the appellant did not seriously dispute the plaintiff 's allegation in regard to the Math in question and the allegation that Swami Sarupanand and thereafter Swami Atmavivekanand were its Mahants.
" Referring to the nature of the property, it said: "Swami Atmavivekanand before becoming a follower of the Sant Mat was a Grihasth with a family.
From the evidence on the record it transpires that he became a devotee and a disciple of Swami Sarupanand and severed all connections with his family.
In course of time he was held in high esteem by the followers of the Sant Mat at Varanasi and other places and large offerings were made to him by the devotees.
Swami Sarupanand had nominated him to be his successor and after his death Swami Atmavivekanand did assume the office of Mahant of the math.
There is no evidence from which it can be reasonably inferred that he treated or set apart the offerings either in their entirety or some portion thereof as belonging to him personally.
On the contrary the evidence on record and the circumstances show that there was a complete blending of such offerings with the funds of the math and used for its purposes.
There is also no reliable evidence to establish that the offerings which were made to him were made not for the purposes of the spiritual order or the fraternity but for his personal aggrandizement.
Indeed, when a person renounces his family connections and takes to ascetism it would be difficult to hold that he would thereafter start amassing wealth and property for his personal benefit or for the benefit of his family with which he had severed his connection.
Unless specifically proved to the contrary, under such circumstances it must be held that the offerings made to such a person were not offerings made to him personally for his personal benefit but had been made for the benefit of the math or the religious institution itself.
In such a case, to my mind, the natural heirs of the person concerned could have no claim to the property which the person came by in his capacity as the religious or spiritual leader.
The house in suit must be held to be an accretion to the Math.
" 675 All this is borne out by the testimony of plaintiff 's witnesses.
The institution was really built up by Swami Atmavivekanand, who was held in great veneration by the followers of the sect.
He preached the tenets of 'Sant Mat ' and had a large following.
His 'Sant Mat ' fraternity comprised of thousands of Grihastha and Virakta disciples who made large offerings.
All the witnesses speak of such offerings in cash or kind or in the shape of immovable property which were endowed to the math.
There are a number of documents showing the endowment by the disciples of their properties to the math, wherein they have described themselves as 'disciples of Swami Atmavivekanand ' and he is described therein as 'Mahant of the Garwaghat Math '.
Even Avadesh Narain, a Judicial Magistrate, D.W. 1, who practised as a lawyer at Varanasi before he was appointed as a Judicial Officer, admits that Swami Atmavivekanand had a large number of disciples in Uttar Pradesh and Bihar, and that the property of 'Bangla Kuti ' might be worth lakhs of rupees.
The two houses at Varanasi, including the suit house, were purchased by Swami Atmavivekanand from out of the offerings (Bhent) made by his disciples.
We have, therefore, no hesitation in upholding the finding of the High Court as regards the existence of a math at Garwaghat and the suit property being the math property.
We may now deal with the main questions on which the decision of the appeal must turn.
It has been argued that according to the Smritis a Sudra cannot be a sanyasi and, therefore, the plaintiff could not enter the Order of a yati or sanyasi.
It has further been argued that there is no evidence on record in proof of the fact that the plaintiff and his two predecessors Swami Sarupanand and Swami Atmavivekanand had performed Atma Sradh or recited Pravesh Mantra and, therefore, they cannot be regarded as Hindu sanyasis.
It, therefore, becomes necessary to trace the origin of Hindu sanyasis belonging to the Dasnami sects founded by the great Sankaracharya, of which the 'Sant Mat ' Sampradaya appears to be a religious denomination i.e., a sub sect.
The first question is, whether a Brahman alone can become a sanyasi among Dasnamis? The second question is, what are the essential ceremonies prerequisite for the initiation of a Dasnami sanyasi? The third question is, what is the mode of succession to the office a mahant of a math or Asthal belonging to any of the Dasnami sects? It will be convenient to take up the last point first.
The law is well settled that succession to mahantship of a math or religious institution is regulated by custom or usage of the particular institution, except where a rule of succession is laid down by the founder himself who created the endowment: vide Genda Puri vs Chatar Puri [1886] I.A. 100 @ 105, Sital Das vs Sant Ram A.I.R. 676 ; Mahalingam Thambiren vs La Sri Kasivasi ; x x x x x x x x x x One who enters into a religious order severs his connection with the members of his natural family.
He is accordingly excluded from inheritance.
Entrance to a religious order, is tantamount to civil death so as to cause a complete severance of his connection with his relations, as well as with his property.
Neither he nor his natural relatives can succeed to each other 's properties.
Any property which may be subsequently acquired by persons adopting religious orders passes to their religious relations.
The persons who are excluded on this ground come under three heads, the Vanaprastha or hermit; the Sanyasi or Yati, or ascetic, and the Brahmachari, or perpetual religious student.
In order to bring a person under these heads it is necessary to show an absolute abandonment by him of all secular property, and a complete and final withdrawal from earthly affairs.
The mere fact that a persons calls himself a Byragi, or religious mendicant, or indeed that he is such, does not of itself disentitle him to succeed to property.
Nor does any Sudra come under this disqualification, unless by usage.
This civil death does not prevent the person who enters into an order from acquiring and holding private property which will devolve, not of course upon his natural relations, but according to special rules of inheritance.
But it would be otherwise if there is no civil death in the eye of the law, but only the holding by a man of certain religious opinions or professions(1).
Special rules are propounded for succession to the property of a hermit, of an ascetic, and of a processed student.
Yajnavalkya states a special rule of succession in regard to the wealth of ascetics and the like: "The heirs who take the wealth of a Vanaprastha (a hermit), of a Yati (an ascetic) and a Brahmacharin (a student) are in their order, the preceptor, the virtuous pupil, and one who is supposed brother and belonging to the same order".
The Mitakshara explains thus(2): "A spiritual brother belonging to the same hermitage (dharmabhratrekatirthi) takes the goods of the hermit (vanaprastha).
A virtuous pupil (sacchishya) takes the property of a yati (as ascetic).
The preceptor (acharya) is heir to the Brahmachari (professed student).
But on failure of these, any one belonging to the same order or hermitage takes the property; even though sons and other natural heirs exist.
" The property that is referred to is explained in Mitakshara and in the Viramitrodaya as consisting of clothes, books and other requisite 677 articles.
Practically, however, such cases seldom arise.
When a hermit or ascetic holds any appreciable extent of property, he generally holds it as the head of some math or as the manager of some religious or charitable endowment, and succession to such property is regulated by the special custom of the foundation.
Succession to the office of the Mahant or Mathadhipathi or Pandara Sannadhi is to be regulated by the custom of the particular institution.
Even where the Mahant has the power to appoint his successor, it is the custom in the various Maths that such appointments should be confirmed or recognised by the members of the religious fraternity to which the deceased belonged.
According to the text of Yajnavalkya referred to above, the property of a life long student goes to his preceptor, that of a hermit or Vanaprastha goes to his religious brother and that of a sanyasi or Yati goes to his virtuous disciple.
The principle, so far as it affects maths, is shortly this, viz., 'a virtuous pupil takes the property '.
The particular mode in which the virtuous pupil, that is, not merely a chela, or a shishya, fittest to succeed, is ascertained or selected is a matter either of express direction on the part of the founder or of custom in the case of each foundation.
There are instances of maths in which the mahantship descends from Guru to chela i.e., the existing mahant alone appoints his successor, but the general rule is that the maths of the same sect in a district, or maths having a common origin, are associated together the mahants of these acknowledging one of their member as a head who is for some reason pre eminent; and on the occasion of the death of one, the others assemble to elect a successor out of the chelas or disciples of the deceased, if possible or if there be none of them qualified then from the chelas of another mahant.(1) According to the Dharmasastras, in the strict legal sense, a Sudra cannot become a sanyasi or ascetic.
Mahamopadhya Dr. P. V. Kane in 'History of Dharmasastra ', Vol. 2, Pt. 1, p. 163, observes: "As the sudra could not be initiated into Vedic study, the only asrama out of the four that he was entitled to was that of the householder.
In the Anusasanaparva (165. 10) we read 'I am a sudra and so I have no right to resort to the four asramas '.
In the Santiparva (63. 12 14) it is said, 'in the case of a sudra who performs service (of the higher classes), who has done his duty, who has raised offspring, who has only a short span of life left or is reduced to the 10th stage (i.e. is above 90 years of age), the fruits of all 678 asramas are laid down (as obtained by him) except of the fourth '.
Medhatithi on Manu, VI.
97 explains these words as meaning that the sudra by serving brahmanas and procreating offspring as a householder acquires the merit of all asramas except moksa which is the reward of the proper observance of the duties of the fourth asrama." Although the orthodox view does not sanction or tolerate ascetic life of the Sudras, the existing practice all over India is quite contrary to such orthodox views.
In Mukherjea 's Hindu Law of Religious and Charitable Trusts, 4th ed., p. 328, it is said: ". the practice of establishing Maths which began with Brahmin ascetics gradually spread to the Sudras and in course of time it was adopted by dissenting religious sects like the Jains, Kabir Panthis, Nanak Panthis, Jangamus and others though they do not believe in the authority of the Vedas or in the tenets of orthodox Hindu religion.
" At page 338, it is observed: ". . according to orthodox Smriti writers, a Sudra cannot legitimately enter into a religious order.
Consequently, the texts of Hindu Law relating to exclusion from inheritance applicable to a yati or a sannyasi do not, in terms, apply to Sudra ascetics.
On this view, it has been held in a series of cases that a Sudra ascetic is not incapable of inheriting the property of his natural relations under the ordinary law of inheritance.
Although orthodox view does not sanction or tolerate ascetic life of the Sudras, it cannot be denied that the existing practice all over India is quite contrary to such orthodox views.
In cases, therefore, where the usage is established, according to which the property of a Sudra ascetic devolves in the same way as the property of the ascetics of the twice born classes, such usages should be given effect to." (Emphasis supplied) In the words of the Privy Council in Collector of Madura vs Moottoo Ramalinga(1), 'under the Hindu system of law, clear proof of usage will outweigh the written text of the law '.
Golapchandra Sarkar Sastri in his Hindu Law, 8th ed., at pp.
65356, in a passage based on translation of slokas from Maha Nirvana Tantra, observes that in Kali Yug, with numerous sects having their 679 peculiar rites for being ordained to a religious order, there are five castes (varnas), i.e., a fifth caste comprising of all other beings.
He further observes that sanyasam according to Vedic rites does not exit and that all the five castes can become Avadhutha Sanyasis: ". in the advanced state of the Kali age, the Brahmanas and the other (four) castes are all entitled to these two orders of life.
The Brahman, the Kshatriya, the Vaisya, the Sudra, and the general body of human beings, these five are entitled to be initiated as Sannyasis or ascetics according to Tantric system.
" The orthodox rule laid down in the Mitakshara that only the Brahman can enter the fourth Asram of life and are eligible to become sanyasis, has therefore, been commented upon by Golapchandra Sarkar Sastri at p. 662: "It has been held that a Sudra cannot become a sannyasi or ascetic.
This is undoubtedly the doctrine propounded in the Smritis.
But the learned Judges have not taken into consideration the modern usages introduced by the Vaishnava and Tantrika and other systems according to which a Sudra and even a non Hindu such as Mohamedan may become a Hindu sannyasi.
There are many religious sects of ascetics among whom caste distinction is unknown, who accordingly initiate and admit Sudras into their brotherhood if otherwise qualified.
In esoteric Hinduism also, caste is individualistic not hereditary, it being determined by qualification and not by birth.
The highest virtue taught by the Hindu religion is that a man should regard other persons and beings as his own self reproduced in them, as the same Supreme Soul pervades them all." (Emphasis supplied) Here the question arises as to what classes of Hindus should be denominated as Sudras.
It is undoubted that there were originally four classes: (1) the Brahmanas, (2) the Kshatriyas, (3) the Vaishyas, and (4) the Sudras.
The first three were the regenerate, or twice born, classes; the latter, the servile class.
The three regenerate classes exist, it is true; but it often becomes difficult to distinguish a Sudra from one of the regenerate classes.
It is pointed out by Golapchandra Sarkar Sastri at p. 113: "The Smritis, which have thrust into prominence this system, divide men into two large classes namely, the Sudras 680 and the Twice born.
The study of the sacred literature forms the principle of this distinction.
They ordain that by birth all men are alike to Sudras, and the second birth depends on the study of the sacred literature.
Thus Sankha, one of the compilers of the Dharma Shastras, declares "Brahmanas (by birth) are, however, regarded by the wise to be equal to Sudras until they are born in the Veda (i.e., learn the sacred literature), but after that (i.e., this second birth) they are deemed twice born".
Passages to the same effect are found in most of the codes, according to which the recognition of the title of the Twice born to superiority over the Sudras, depends upon acquisition of the knowledge of the Vedas.
" The learned author then goes on to say at p. 184: "According to the Smritis, every man is by birth a sudra; it is by learning the sacred literature, that a man becomes twice born.
The privilege of studying the sacred literature is, no doubt, denied to the sudras as well as to the females of the so called twice born classes.
But the status of being twice born depends on the acquisition of knowledge of the sacred literature.
Manu ordains that a twice born man shall abide with the preceptor, and study the Vedas for thirty six years or half or a quarter of that period, or until knowledge of the same is acquired.
" The consequence of omitting to do the same, according to Manu, is that a twice born man, who without studying the Vedas, applies diligent attention to anything else, soon falls even when living together with his descendants, to the condition of a Sudra.
The learned author has observed that the majority of the so called twice born classes have accordingly become long since reduced to the position of Sudras by reason of neglecting the study of the Vedas from generation to generation.
The learned Single Judge accordingly observes: "It will thus be seen that originally every person was deemed to be born a Sudra and that it was by virtue of intensive study of Vedas that a person attained the status of a twice born person.
With the passage of time running into thousands of years, it is evident that the original hall marks for classification of Sudras and twice born people gradually disappeared and degenerated into the rigid caste system based on birth.
" 681 As Dr. Mukherjea observes, the disciples of Sankara were all Brahmans and originally, according to the rule laid down in Sanyas Grahan Paddhati, the authorship of which is imputed to Sankara himself, only the twice born people can become sanyasis of the Dasnami orders.
As the four stages of life have, in the Vedas, been prescribed only for the twice born, no Sudra can, strictly speaking, become an ascetic, and that is the view entertained by the Smriti writers.(1).
According to the Mitakshara, only the Brahmans can enter the fourth Asram of life and are eligible to become sanyasis; and this view is supported by certain passages from Manu where 'Pravrajya ', i.e. exit from the house, has been spoken of or prescribed for the Brahmans alone, and a text of the Sruiti which says "the Brahmans should become ascetics".
According to Nirnaya Sindhu, which has been quoted in West and Buhler 's Digest of Hindu Law(2), a Kshatriya and a Vaishya can also enter into an order of sanyasis.
Upon a view of all these authorities, it was held by the Madras High Court in Dharampuram vs Virapandiyan(3) and the Calcutta High Court in Harish Chandra vs Atir Mahamed(4), that a Sudra can not become a sanyasi under Hindu Law, and consequently the devolution of property of a Sudra who purported to renounce the world and become an ascetic would be governed by the ordinary law of inheritance.
Asceticism in India, perhaps more than in any other country, has been under the definite and strong sanction of religion.
In the doctrine of the four asramas, asceticism was made an integral part of the orthodox Hindu life, and it became the duty of every Hindu, as advanced age overtook him homeless and a wanderer to chasten himself with austerities.
Formally this was to be done for the sake of detaching himself from earthly ties, and of realizing union with Brahman.
And a religious motive was thus supplied for that which in itself was a welcome release from responsibility, care, and the minute requirements of an elaborate social code.
In due course, with the advancement of knowledge, the shackles of the caste system were broken through and the privileges and powers of the ascetic life were extended to Sudras.
682 Hindu asceticism represented, further, a revolt from, or at least a protest against, the tyranny of caste.
In its origin probably remote from Brahmanism, and conveying the ordinary idea that bodily pain was profitable for the advancement and purification of the spirit, the ascetic life became, in association with Hinduism and under the prescriptive sanction of Hindu law itself, a refuge from the burden of caste rules and ostracisms.(1) In Encyclopaedia of Religion and Ethics, Ed.
by James Hastings, Vol.
II, p. 91, it is observed: ".
In the first instance apparently, the right and privilege of asceticism, according to Hindu custom or law, belonged to Brahmans alone; it was then extended to all the twice born, and finally all restrictions were removed, and admission into the ranks of the ascetics was accorded to men of every position and degree.
" This is based on the following passage from the Ramayana, Uttara Kanda, 74.9ff., quoted in J. Muir 's Original Sanskrit Text, i.119f: "Formerly in the krta age Brahmans alone practised tapas; none who was not a Brahman did so in that enlightened age. then came the treta age,. in which the Ksatriyas were born, distinguished still by their former tapas . .
Those Brahmanas and Ksatriyas who lived in the treta practised tapas, and the rest of mankind obedience. .
In the dvapara age tapas entered into the Vaisyas.
Thus in the course of three ages it entered into three castes; and in the three ages righteousness (dharma) was established in three castes.
But the Sudra does not attain to righteousness through the (three) ages. such observance will belong to the future race of Sudras in the kali age, but is unrighteous in the extreme if practised by that caste in the dvapara." (Manu: i. 86) It is, therefore, evident that with reluctance the right to ascetic life was extended to Sudras and in due recognition of their status, they were treated as Hindu sanyasis.
At the present time, there is no distinction or barrier; any one may become an ascetic, and the vows are not necessarily lifelong.
Some sects, however, still restrict membership to Brahmanas, or at least to men of the three higher castes.
The principle laid down by the Madras High Court in Dharmapuram vs Virapandiyan (supra) and the Calcutta High Court in 683 Harish Chandra vs Atir Mahamed (supra) regulating the mode of devolution of property of a Sudras who becomes an ascetic is, however, not applicable to after acquired property of a Hindu sanyasi.
As has been said above, when a layman becomes an ascetic, his connection with his natural family and existing property rights are extinguished.
If he acquires any property subsequent to his becoming an ascetic, such property passes on his death not to his natural but to his spiritual heirs.
It would be convenient next to deal with the question, firstly, as to whether in the 'Sant Mat ' Sampradaya which being a sect of the Dasnamis, a Sudra cannot enter the order of a yati or a sanyasi; and secondly, whether performance of Atma Sradh and the recitation of Pravesh Mantra are ceremonies essential for the initiation of a chela in the 'Sant Mat ' fraternity.
That depends on whether the matter falls to be governed by the Smritis or is regulated by the custom or usage of the 'Sant Mat ' Sampradaya which was one of the Dasnami sects.
About the eighth century A.D., Sankaracharya, the greatest Hindu scholar and philosopher of modern India, defeated the Buddhists in argument and re established Hinduism as the dominant religion of India.
Sankara was an ascetic and founded schools of ascetics.
Hindu scholars and philosophers like Mandana Misra, attempted to prove against him that such ascetism was against the law of the Hindus.
But all opposition was overborne by the commanding influence of Sankara, who established four maths or seats of religion at four ends of India the Sringeri Math on the Sringeri Hills in the south, the Sharda Math at Dwarka in the west, the Jyotir Math at Badrikashram in the north, and the Govardhan Math at Puri in the east and Mandana himself became a Sanyasi disciple under the name of Sureswara.
The monks ordained by Sankara and his disciples were called Sanyasis.
Each of the maths has a sanyasi at its head two bears the title of Sankaracharya in general.
Sankara is said to have four principal disciples who were all Brahmans, from whom the ten divisions of the Order hence named the 'ten named ' or 'Dasnami Dandis ' originated.
These are: Tirtha, 'shrine '; Ashrama, 'order '; Vana, 'wood '; Aranya, 'forest ', 'desert ', Saraswati and Bharti, 'the goddesses of learning and speech '; Puri, 'city '; Giri and Parvata, 'a hill '; and Sagra, 'the ocean '.
The orthodox Hindu recognises no other sanyasis.(1) Kabir and Nanka also established monasteries on the lines of Sankara.
Chaitanya, the pure, the subtle mystic of Naidia, the greatest exponent and exam 684 ple of Bhakti, originally belonged to one of Sankara 's orders, namely Bharati, though he violently repudiated Sankara 's pantheism, and his followers founded the class of ascetics known as Byragis, who too have their establishments.
But it is the schools of Sanyasis founded by Sankara that are now predominant and are the wealthiest, and it is of them that we should speak first.
Sankara founded his monastic system on the lines of the Buddhistic Sangharamas, which were found existing at the time.
The rules of the Hindu and the Buddhistic institutions, so far as the internal management was concerned, were very similar.
The Sangharama had a superior under whose management the establishment was and so had all the Maths of Sankara, the superiors of which were called Mahants and Acharyas, etc.
The superior of a Math had the control of all the property, for he was the Guru whose power no one could question, and the nomination of his successor ordinarily lay with him.
As a rule, the best and most erudite among the disciples, upon whom the choice of the congregation would naturally fall, was nominated and there was rarely any contention.
In course of time, however, as the wealth of the Maths increased and worldliness and all the vices of an idle luxurious life took the place of stern austerity and scholarship above that of all Buddhists and other schismatics, by which Sankara intended the Sanyasis, specially, the superiors, should be distinguished, worldly ideas became the ruling ideas of the establishments.
In imitation of the Maths of Sankara, the followers of Ramanuja also founded Maths reaching the Vishishtadwaita system in various parts of India.
The followers of Madhvacharya, the chief exponent of the Dwaita system, also founded Maths, the chief among whom are the well known eight Maths at Udipi.
Similarly, there are Maths of the followers of Ramanund and Nimbacharya among the orthodox and of Nanak and Kabir among schismatics.
There are also many Maths founded by lesser teachers.
All the strictly orthodox Maths are Maths of the three regenerate classes.
But the followers of Chaitanya in Bengal and of a teacher named Shankara in Assam have Maths or Akharas in which Sudras are admitted.
It is, however, only in Madras that the Shaivas have Sudra Maths.
The Tantras allow Sudras to become Sanyasis and probably, these are based on the Tantras.
The Sudra Maths of Dharmapuram and Tiruvaduthorai are the chief among the Sudra Maths of the Saiva Siddhantam School: Sammantha Pandara vs Sellappa Chetti,(1) G. section Pandara Sannadhi vs Kandaswami Tam 685 biran(1), Vidyapurna Tirthaswami vs Vidhyanidhi Tirthaswami(2), and Kailasam Pillai vs Nataraja Thambiran(2).
The most respectable members of this Order of Hindu ascetics known as Saiva Gosains are the spiritual descendants of Sankaracharya, the very incarnation of the strictest Brahmanism.
Saiva Gosains fell into two classes monks known as Mathadhari as contrasted with Gharbari, or laymen.
The true Dandi should, in accordance with the precepts of Manu Laws (VI.
41ff) live alone near to, but not within a city.
Of Saiva mendicants and ascetic orders, Dandis or staff bearers, occupy a place of pre eminence.
They worship Lord Siva in his form of Bhairava, the 'Terrible ' and profess to adore Nirguna and Niranjana, the deity devoid of attribute or passion.
A sub section of this Order are the Dandi Dasnamis or Dandi of ten names, so called from their assuming one of the names of Sankara 's four disciples and six of their pupils.
(4 & 5) It is customary to consider the two religious orders of Dandis and Dasnamis as forming but one division.
The classification is not, in every instance, correct but the practices of the two are, in many instances, blended and both denominations are accurately applicable to the same individual(6).
The Dandis, properly so called, are the legitimate representatives of the fourth Asrama, or mendicant life, into which the Hindu, according to the instructions of his inspired legislators, is to enter, after passing through the previous stages of student, householder and hermit.
Adopting, as a general guide, the rules laid down in the original works, the Dandi is distinguished (5 & 6) by carrying a small Dand, or wand, with several processes or projections from it, and a piece of cloth dyed with red ochre in which the Brahmanical cord is supposed to be enshrined, attached to it.
They develop within themselves a complete detachment from the things of enjoyment either of this world or the next.
Many Brahmans, even Pandits, or learned 686 Brahmans, come to them for instruction, which they impart freely, without the smallest recompense.
All classes of the community pay them the great honour, even worship them(1).
The Dandis keep themselves very distinct from the rest of the community.
They are Brahmans, and receive disciples only from the Brahmans.
They lead a very austere life.
They do not touch fire or metal, or vessels made of any sort of metal.
It is equally impossible also for them to handle money.
They shave their hair and beard.
They wear one long unsewn reddish cloth, thrown about the person.
Although they are on principle penniless, yet they do not beg.
Their dependence on the kindness and care of others is thus of the most absolute character.
Yet they are not reduced to distress or even to want; they are fed by the Brahmans, and the Gosains, another class of devotees.
They sleep on the ground, and once or twice in the day go round to collect food and alms, for which they must not ask, but contentedly receive what is given.
According to the stated rule, they must not approach a house to beg until the regular meal time is passed; what remains over is the portion of the mendicant.
A Dandi should live alone, and near to, but not within a city; but this rule is rarely observed, and in general the Dandis are found in cities collected like other mendicants in maths.
The Dandi has no particular time or mode of worship, but spends his time in meditation, or in practices corresponding to those of Yoga, and in the study of the Vedanta works, especially according to the precepts of the great Sankaracharya.
As the preceptor was an incarnation of Lord Siva, the Dandis reverence that deity; and his incarnations, in preference to the other members of the Triad, whence they are included amongst his votarics.
Prof. Wilson in his 'Hindu Religions ' observes: "Any Hindu of the first three classes may become Sannyasi or Dandi, or in these degenerate days, a Hindu of any caste may adopt the life and emblems of this order." (Emphasis supplied) The Dasnami Dandis, who are regarded as the descendents of the original members of the fraternity, are said to refer their origin to Sankaracharya.
There are but three, and part of a fourth ascetic class, or those called Tiratha or Indra, Asrama, Saraswati and Bharati who are still 687 regarded as really Sankara 's Dandis.
The rest, i.e. the remaining six and a half of the Dasnamis are considered as having fallen from the purity of practice necessary to the Dandis, are still, in general religious characters, and are usually denominated Atits.
These are the Atits or A 'Dandis viz., the Vanas, Aranyas, Puris, Giris, Parvatas, Sagaras and half the Bharatis, reputed to have fallen to some extent from orthodoxy, but are still looked upon as religious avtars.
The main distinction between the Dandis and the Atits is that the latter does not carry the staff i.e. a trishul.
They differ from the former also in their use of clothing, money, and ornaments, their methods of preparing food, and their admission of members from any order of Hindus.
Some of them lead an ascetic life, while others mix freely in the world, carry on trade and acquire property.
Most of them are celibate, but some of them marry and are often known as samyogi or gharbari Atits.
They are often collected in maths or monasteries.
They wear ochre coloured garments and carry a rosary of rudraksa seeds sacred to Lord Siva.
Their religious theories when they have any) are based on the advaita Vedants of their founder Sankaracharya(1).
There is also a sub division of the Puri division of the Dasnarni sect.
They have tenets much in common, based on the central idea that the Supreme Deity is incomprehensible or, as they say, 'unseeable '.
They denounce idolatory.
This more or less conforms to the tenets of the 'Sant Mat ' sect.
It is proved by the evidence on record that followers of this sect treat the Guru as the incarnation of God.
They have no faith in inanimate idols installed in temples nor do they worship them in their cult.
There are no caste restrictions and anyone can be admitted into the Sant Mat fraternity.
That takes us to the next question as to whether in the absence of proof of the performance of Atma Sradh and recitation of Pravesh Mantra neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atmavivekanand could be regarded as a Hindu sanyasi.
In order to prove that a person has adopted the life of a sanyasi, it must be shown that he has actually relinquished and abandoned all worldly possessions and relinquished all desire for them or that such ceremonies are performed which indicate the severance of his natural family and his secular life.
It must also be proved, in case of orthodox sanyasis, that necessary ceremonies have been performed, such as Pindadana or Birajahoma or Projapathiyesthi without which II the renunciation will not be complete.
688 Among Dasnamis, a ceremony called the Bijja Homa i.e., the Biraja Homa has been considered essential.
The recitation of the Presha Mantram or the renunciation formula is of course indispensable and has been considered essential by the different High Courts.
According to Manu giving up of all wordly property is essential.
In Sherring 's 'Hindu Tribes and Castes ', pp.
256 67, the ceremonies prescribed for the initiation of a Dasnami sanyasi are stated thus : "The ceremony observed at the creation of a Gosain is as follows: The candidate is generally a boy, but may be an adult.
At the Shiva ratri festival (in honour of Shiva) water brought from a tank, in which an image of the god has been deposited, is applied to the head of the novitiate, which is thereupon shaved.
The guru, or spiritual guide, whispers to the disciple a mantra or sacred text.
In honour of the event all the Gosains in the neighborhood assemble together, and give their new member their blessing; and a sweetmeat called laddu, made very large is distributed amongst them.
The novitiate is now regarded as a Gosain, but he does not become a perfect one until the Vijaya Hom has been performed, at which a Gosain, famous for religion and learning gives him the original mantra of Shiva.
The ceremony generally occupies three days in Banaras.
On the first day, the Gosain is again shaved, leaving a tuft on the top of the head call d in Hindi Chundi, but in Sanskrit, Shikha.
For that day he is considered to be a Brahman, and is obliged to beg at a few houses.
On the second day, he is held to be a Bramhachari, and wears coloured garments, and also the janeo or sacred cord.
On the third day, the janeo is taken from him, and the Chundi is cut off.
The Mantra of Shiva is made known to him, and also the Rudri Gayatri (not the usual one daily pronounced by Brahmans).
He is now a full Gosain or Wan parast, is removed from other persons, and abandons the secular world.
Henceforth he is bound to observe all the tenets of the Gosains.
" In Gossain Ramdhan Puri & Ors. vs Gossain Dalmir Puri(1) Mookerjee and Carnduff JJ., observed at p. 203: "Every aspirant for entrance into the order of sanyasis has to pass through a period of probation.
Upon his first arrival at the monastery his habits and character are closely 689 watched for some days, and enquiries are made into his A caste, for the sanyasis admit into their order ordinarily members of the twice born classes and very rarely take members of the fourth class.
If the novice is approved, his head is shaved, his name is changed and upon the performance of this preliminary ceremony he is regarded as a probationer for entrance into the order.
The final ceremony, however, which is called the Biraja Homa ceremony, is not performed for many months, and sometimes for many years.
During this period of apprenticeship it is open to the chela to return to his natural family, but after the performance of the final ceremony his connection with the world is deemed to have been finally severed." In support of these observations, the learned Judges relied on the note of Warden on the customs of Gossains printed as an appendix to steel`s `Law and Custom of Hindu castes '.
As regards Swami Sarupanand, the learned Munsif rightly observes that 'it would be unjust to place an unreasonable burden on the plaintiff for leading direct evidence of his initiation, as Swami Sarupanand came to Varanasi from distant land and long ago.
The truth has to be discerned out of circumstantial evidence and other materiaI on record. ' That evidence clearly shows that Swami Sarupanand was acknowledged by his numerous followers to be the head of the 'Sant Mat ' fraternity.
That Swami Sarupanand paid the debt of nature in 1936 at Meerut and that his Smadhi is situate there is not disputed.
The oral evidence lead by the plaintiff in proof of the fact that after the death of Swami, his Bhandara took place at Meerut as well as at Gar vaghat is irrebuttable.
It is common knowledge that sanyasis are not cremated but are buried, or their bodies consigned to some river, and that after their demise a Bhandara takes place.
Defendants Nos. 1 to 4 admitted in their written statement that Swami Sarupanand was a 'Paramhans ' and that a Bhandara had taken place after his death.
The prefixes 'Swami ' and 'Paramhans ' are used for sanyasis and not for men of the world.
In the case of Swami Atmavivekanand there is overwhelming evidence in proof of the fact that the requisite ceremonies of Birajahoma or Prajapathiyesthi were performed.
Swami Vivekasukhanand, who was initiated as a chela along with Swami Atmavivekanand and others speaks of the performance of BriJahoma and Prajapathiyesthi at the time of their taking sanyas and states: "I attend satsang.
I know Swami Sarupa Nandji.
He was a Sanyasi.
I am in Sanyas Ashram.
I became Sanyasi 690 about 28 29 years ago.
Four other persons had also taken Sanyas on one and the same day.
I had taken Sanyas.
Their names are Swami Atma Vivekanandji, Swami Aju niya Nandaji, Swami Abheda Nandji and Swami Purna Shabda Nandji.
Swami Atma Viveka Nandji had also taken Sanyas on that very day.
Praja Prashit. and Virja Hom Ceremonies were performed at the time of my taking sanyas.
Our heads were shaven from before that.
our Gurudeo had taken the choote.
The sacred threads were burnt in the fire.
Our white clothes were removed, and in its place we were directed to put on the clothes of the ochre colour.
Guru Maharaj had whispered the Guru Mantra into our ears.
Hom (Samigri) were sent from the Mandleshwar of Benaras, and Birja Hom was got per formed with it.
We were at that time relieved off, from all the bondages of Grahast Ashram.
These very cere monies were performed at the time, when Swami Atma Viveka Nandji took the Sanyas." (Emphasis supplied) It is necessary to mention that though this witness was examined at length, there is no question put as to the performance of Atma Sradh.
This is somewhat significant because this question was put to only one of the plaintiff 's witnesses, Mahesh Dutt Shukla, PW 13 and he replied that according to the tenets of the 'Sant Mat ' it is not necessary to perform Atma Sradh for becoming a sanyasi.
The evidence of the plaintiff 's witnesses show that the Biraja Homa ceremony is of great importance, and if the Biraja Homa was performed by Swami Atmavivekanand at the time of his initiation, it is not at all probable that Swami Sarupanand and Swami Atmavivekanand, who were men of great ability and circumspection, should have performed Biraja Homa ceremony and omitted the essential details, especially the performance of the Sradh of one 's self, that is, Atma Sradh by Swami Atmavivekanand.
If the Prajapathiyesthi or Biraja Homa ceremonies were performed, then it must necessarily give rise to the irresistible inference that Swami Atmavivekanand must have performed his Atma Sradh before he was initiated as a chela.
We are clearly of the opinion that the appellant Sri Krishna Singh, impleaded as defendant No. 5, was precluded from contending that his father Baikunth Singh, who on his initiation by Swami Sarupanand was baptised as Swami Atmavivekanand, was not a Hindu sanyasi.
On May 29, 1949 he along with his brother brought a suit for partition, being suit No. 389 of 1949 in the Court of Judicial officer, 691 Chandauli, against the other members of their family.
It was alleged in the plaint: "That the father of the plaintiffs has been a plan of religious bent of mind.
For that reason he having left the property of his share in the spurdgi and possession of his sons, plaintiffs Nos. 2 and 3, more than twenty years ago, left residing here and went away.
Thereafter he became a sanyasi.
" Since then, plaintiffs Nos. 1, 2 and 3 have been in possession and occupation of the same as of right and also by way of inheritance. "That on account of the renunciation made by the father of the plaintiffs, the plaintiffs have become the principal tenant according to law and they have been in possession and occupation of their share up to this day." (Emphasis supplied) In the aforesaid suit, the appellant Sri Krishna Singh appeared as D, PW 1 and in his deposition, Ext.
101, he stated on oath .
"The land in dispute is under my tenancy.
The name of my father stands entered in our share.
My father died two months ago.
After his becoming a Sadhu he adopted the name of Atmavivekanand.
He has taken sanyas.
He used to live at Gadwadhar Bangla Kuti." (Emphasis supplied) In para 6 of his written statement, the appellant while denying that Swami Sarupanand founded any math at Garwaghat averred: "Sri Swami Swarupa Nandji was the Guru of Sri Baikunth Singh, alias Sri Swami Atma Viveka Nandji, hence having regard to his old age and also with a view of honouring him, his name has been entered in gift deed, dated 8 3 1935.
In fact on the basis of the aforesaid deed of gift, Sri Baikunth Singh alias Sri Swami Atma Viveka Nandji acquired the property and has been in exclusive possession thereof.
" In para 7 he states: "Sri Baikunth Singh, alias Sri Swami Atma Viveka Nandji was a Grahast.
He was Chhattri Hindu by caste.
He never took Sanyas nor did he denounce the world.
The real fact is that when Sri Swarupa Nandji, who was the resident of Punjab, arrived at the house of Sri Baikunth Singh, aforesaid, situate in Mauza Khuruhja Pargana Majhuwar, 692 District Banaras, Sri Baikunth Singh was impressed by him, and under his influence became religious minded.
He called himself as Swami Atma Viveka Nandji.
He believed only in the worship and Bhakte of his Guru.
He considered his Guru as God.
He used to impart this very teaching to his disciples, and devotees.
He never renounced the Grahast Ashram.
No body ever gave him Chadar Mahanthi.
He never became the Mahanth of any Math.
Sri Sarupa Nandji was also not the Dasnami.
He never took Sanyas.
" That appears to be a case set up to defeat the plaintiff 's claim.
When he was confronted with his admission in the plaint filed in the suit for partition, he disavowed knowledge of the fact of his father Baikunth Singh having become a sanyasi.
This was nothing but a time serving statement.
In Chandra Kunwar vs Chaudhri Narpat Singh,(1) the Judicial Committee of the Privy Council observed: "The proof of this admission shifts the burden, because, as against the party making it, as Baron Parke says in Slatterie vs Pooley: "What a party himself admits to be true may reasonably be presumed to be so." No doubt, in case such as this, where the defendant is not party to the deeds and there is therefore no estoppel, the party making the admission may give evidence to rebut this presumption but unless and until that is satisfactorily done, the fact admitted must be taken to be established." It follows that admission of the fact that his father Baikunth Singh had become a sanyasi, shifted the burden on the appellant to disprove that he was Hindu sanyasi.
There is direct oral evidence of the plaintiff Harsewanand and of his witnesses PWs 2 to 5, 7 to 10, 14 and particularly that of Swami Viveksukhanand taken on commission, about the plaintiff 's initiation into the ascetic order.
All these witnesses have amply proved that the particular ceremonies including Prajapathiyesthi and Biraja Homa required in the 'Sant Mat ' fraternity were performed when the plain tiff was made a sanyasi.
It is amply proved by PWs 1 to 10 and 13 to 15 that Swami Atmavivekanand had not only initiated him as his chela but also nominated him to be the mahant and that after his death and in accordance with his wishes, he was given Chader Mahanti on the occasion of the Bhandara of Swami Atmavivekanand.
693 The document Ext.
100, prepared by the 'Sant Mat ' fraternity on this A occasion and the photograph Ext.
121, taken lends assurance to the testimony of these witnesses that the plaintiff Harsewanand was installed as the mahant of the math in accordance with the express desire of Swami Atmavivekanand.
The learned Civil Judge in his judgment observes: 'The fact of Harsewanand being a sanyasi remains undoubted '.
His finding that he was not a Hindu sanyasi was based upon the view that under Hindu law mere 'renunciation ' of the world is not sufficient.
Hence, he holds that a Sudra who renounced the world and became sanyasi cannot be said to be a Hindu sanyasi, as according to the Hindu Sastras no Sudra can become a sanyasi.
The underlying fallacy lies in his over looking that the question had to be determined not according to the orthodox view, but according to the usage or custom of the particular sect or fraternity.
It is needless to stress that a religious denomination or institution enjoys complete autonomy in the matter of laying down the rites and ceremonies which are essential.
We must accordingly hold that the plaintiff was the validly initiated 1) chela of Swami Atmavivekanand and upon his demise was duly installed as the mahant of Garwaghat Math according to the tenets of his 'Sant Mat ' Sampradaya.
There remains the question whether due to the death of the 15 plaintiff Harsewanand during the pendency of the appeal the suit brought by him abates in its entirety.
It is argued that the original plaintiff, Mathura Ahir, having filed the suit primarily to establish his personal right to the office of mahant which entitled him to possession of the property in suit, the suit abated on his death.
The cause of action on which the suit was instituted, it is urged, was personal to the plaintiff, and in order to establish that he had been duly and properly initiated as a sanyasi and installed as a mahant, he had to plead and establish all the necessary facts regarding his capacity to become a sanyasi, his nomination by his Guru.
and his ultimate election or nomination by the 'Sant Mat ' Sampradaya.
The submission is that these were facts special to the original plaintiff, and he having died, respondent No. 1, Harshankaranand cannot claim any relie unless and until he also establishes all these facts in regard to his claim to mahantship.
The original cause of action, it is said, has vanished with the death of the plaintiff and the respondent No. 1, Harshankaranand had necessarily II to plead and establish a new set of facts.
In substance, he could not prosecute the cause of action as originally framed and he could 694 not succeed without materially altering the pleadings and substituting another cause of action, which could very well form the subject matter of a separate suit.
It is argued that the nomination of a person as a mahant invests him with a 'status ' and, therefore, capacity to succeed to the office of mahant is an incident of that status.
It is said that the claim to mahantship is, therefore, a personal right which does not survive the plaintiff; any suit claiming such a status must abate on the death of the plaintiff.
Alternatively, the submission is that if the Court came to the conclusion that the plaintiff had sued in his capacity as a de facto mahant, it is obvious that the cause of action would be personal to him and would certainly not survive the plaintiff.
In that event, the , J suit must of necessity abate as a right claimed on the basis of de facto ownership cannot survive the plaintiff.
x x x x x The question whether a suit abates in its entirety or not upon the death of the plaintiff must necessarily depend on the nature of the suit.
This is not a class of case to which the maxim, actio personalis moritur cum persona applies.
The suit that the plaintiff Harsewanand brought was for possession of the suit house which belonged to Garwaghat Math, in his capacity as the mahant.
On denial of his title, he pleaded that he was initiated as a chela by his Guru Swami Atmavivekanand, the then mahant, in 1937 and nominated to be his successor and accordingly upon his demise on August 23, 1949, had been duly installed as Mahant of the Math by the 'Sant Mat ' Sampradaya, i.e., by the Mahants and Sanyasis of the Bhesh and given Chader Mahanti according to the tenets of fraternity.
It was alleged that according to the tenets of this particular sect, anyone, including a Sudra, could be a sanyasi, and further that succession to the office of mahant was from guru to chela according to the custom or usage prevailing in the sect.
One of the issues on which the parties went on trial was whether there was in existence a math at Garwaghat, and if so, whether the house in suit was an accretion thereto.
The High Court agreeing with the learned Munsif has upheld the plaintiff 's claim.
It was held that the house in suit was acquired by Swami Atmavivekanand from out of the offerings (Bhent) made by his disciples and, therefore, was not his secular property, but was an accretion to the Garwaghat Math.
It has further been held that the plaintiff Harsewanand was the validly initiated chela of Swami Atmavivekanand and was duly installed as mahant of the math after his death, by the 'Sant Mat ' fraternity according to his wishes.
The defendants have been held to be rank trespassers.
The decree under 695 appeal crystallizes the rights of the parties.
The cause of action did A not die with the plaintiff.
In the circumstances, the respondent No. 1, Harshankaranand, who now claims to be the mahant, has the right to contest the appeal as representing the math, being the de facto mahant, for preservation of its properties.
x x x x x x According to the Hindu jurisprudence, a religious institution such as a math is treated as a juristic entity with a legal personality capable of holding and acquiring property.
It therefore, follows that the suit instituted by the mahant for the time being, on its behalf, is properly constituted and cannot abate under the provisions of order 22 of the Code of Civil Procedure, on the death of the mahant pending the decision of the suit or appeal, as the real party to the suit is the institution.
The ownership is in the institution or the idol.
From its very nature a math or an idol can act and assert its rights only through human agency known as a mahant, shebait or dharmakarta or sometimes known as trustee.
Jenkins C.J. in Babajirao vs Laxmandas(1) defines the true notion of a 'math ' in the following terms: "A math, like an idol, is in Hindu Law a judicial person capable of acquiring, holding and vindicating legal rights, though of necessity it can only act in relation to those rights through the medium of some human agency.
" It follows that merely because the mahant for the time being dies and is succeeded by another mahant, the suit does not abate.
The correctness of the decision in Ramswarup Das vs Rameshwal Das(2) is thus open to question.
It does not stand to reason that when a suit is brought for possession by a mahant of an asthal or Math.
Or by a shebait of a debottar property, and the defendant is adjudged to be a trespasser, such a suit should abate with the death of the mahant or shebait.
This would imply that after a long drawn litigation, as he re, the new mahant or shebait has to be relegated to a separate suit.
The definition of legal representative as contained in s.2(11) of the Code reads: "(11) .
"legal representative" means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued.
" 696 The general rule is that all rights of action and all demands whatsoever, existing in favour of or against a person at the time of his death survive to or against his legal representative.
In Muhammad Hussain vs Khushalo(1) Edge C.J., while delivering the judgment of the Full Bench, observed: "I have always understood the law to be that in those cases.
in which an action would abate upon the death of the plaintiff before judgment, the action would not abate if final judgment had been obtained before the death of the plaintiff, in which case the benefit of the judgment would go to his legal representative.
" That, in our opinion, lays down the correct test.
In the instant case, the appellant himself has, of course, without prejudice to his right to challenge the right of the original plaintiff, Harsewanand, to bring the suit, substituted the respondent No. 1, Harshankaranand, as his heir and legal representative, while disputing his claim that he had been appointed as the mahant, as he felt that the appeal could not proceed without substitution of his name.
In his reply, the respondent No. 1, Harshankaranand alleges that after the demise of mahant Harsewanand he was duly installed as the mahant of Garwaghat Math by the 'Sant Mat ' fraternity.
He further asserts that he was in possession and enjoyment of the math and its properties.
The fact that he is in management and control of the math properties is not in dispute.
The issue as to whether he was so installed or not or whether he has any right to the office of a mahant, cannot evidently be decided in the appeal, but nevertheless, he has a right to be substituted in place of the deceased Mahant Harsewanand as he is a legal representative within the meaning of section 2(11), as he indubitably is intermeddling with the estate.
He has, therefore, the right to come in and prosecute the appeal on behalf of the math.
In the result, the appeal must fail and is dismissed with costs.
|
Respondent Mathura Ahir alias Swami Harswanand, the Mahant of Garwaghat Math filed a suit for declaration of title to and possession of house No. C/27/33 situate in Mohalla Jagatgunj, Varanasi, for arrears of rent and mesne profits in respect thereof.
The said property was purchased by his Guru Atma Vivekanand Paramahans (ne Baikunth Singh) from out of the income of the Math i.e. the offerings (Bhent) made by the devotees.
The appellant who was impleaded as defendant 5 to avoid further litigation claimed that this property acquired by his late father Baikunth Singh alias Swami Atma Vivekanand, after he became a Guru and out of Math funds devolved upon him the natural son and disciple.
Since the claim went in favour of the respondent Mahant the appellant came in appeal by special leave to this Court.
The original plaintiff died during the pendency of the appeal.
The contentions of the appellant were: (i) the plaintiff Mathura Ahir being a Sudra could not be ordained to a religious order and become a Sanyast or yati and therefore installed a mahant of the Garwaghat Math, according to the tenets of the Sant Math Sampradaya, (ii) In the absence of proof of the performance of Atma Sradh and the recitation of Pravesh Mantram, neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atma Vivekanand could be regarded as Hindu Sanyasi; and (iii) the first respondent Harsawanand the original plaintiff having died during the pendency of the appeal, the appeal abated in its entirety.
Dismissing the appeal, the Court ^ HELD: 1.
A math is an institutional sanctum presided over by a superior who combines in himself the dual office of being the religious or spiritual head of the particular cult or religious fraternity and of the manager of the secular properties of the institution of the Math.
[671 D E] The property belonging to a Math is in fact attached to the office of the mahant, and passed by inheritance to no one who does not fill the office.
The 661 Head of a Math, as such, is not a trustee in the sense in which that term is generally understood, but in legal contemplation he has an estate for life in its permanent endowments and an absolute property in the income derived from the offerings of his followers, subject only to the burden of maintaining the institution.
[671 A B] In the instant case, the evidence on record sufficiently establishes that a Math came to be established at Garwaghat and the building known as "Bangla Kuti" and certain other buildings including the house in suit constituted the endowment of the math itself.
[671 E F] Sammantha Pandara vs Sellappa Chetti Mad. 175; Gyanasambhandan Pandara Sannadhi vs Kandaswami Tambiram Mad. 375; Vidya Purna Thirthaswami vs Vidyanidhi Thirtha Swami Mad.
435; Ram Prakash Das vs Anand Das (1915 16) 43 I.A. 73 (PC); Vidya Vanthi Thirtha vs Baluswami Iyer (1920 21) 48 I.A. 302; referred to.
The math at Garwaghat belongs to the 'Sant Mat ' Sampradaya, which is a religious order and the suit property is Math property.
Though the Math at Garwaghat established by Swami Sarupanand was of recent origin, the religious order denominated as 'Sant Math ' has had large following in Punjab and some other parts of India since more than a century.
In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order.
[672 E, 673 F G] The institution was really built up by Swami Atma Vivekanand, who was held in great veneration by the followers of the sect.
He preached the tenets of 'Sant Mat ' and had a large following.
His 'Sant Mat ' fraternity comprised of thousands of Girhastha and Virakta disciples who made large Offerings.
Such offerings in cash or kind or in the shape of immovable property which were endowed to the Math.
Swami Atma Vivekanand was the Mahant of the Garwaghat Math.
The two houses at Varanasi including the suit house were purchased by Swami Atma Vivekanand from out of the offering (Bhent) made by his disciples.
[675A D] 3.
Succession to Mahantship of a Math or religious institution is regulated by custom or usage of the particular institution, except where a rule of succession is laid down by the founder himself who created the endowment.
[675 G H] Genda Puri vs Chatar Puri, [1886] 13 I.A.100 @ 105; Sital Das vs Sant Ram, A.I.R. 1954 SC 606; Mahalinga Thambiran vs La Sri Kasivasi, ; ; followed.
The succession to the office of the Mahant according to Sant Sampradaya is by nomination, i.e. from Guru to Chela, the Guru initiates the chela after performing the necessary ceremonies.
The person initiated as a Chela adopts the life of a sanyasi and is pledged to lead a life of celibacy and religious mendicancy.
The sitting Mahant hands over the management of the Math to one of his virtuous Chelas fittest to succeed when he nominates and when he wishes to install as Mahant after him in his place.
He makes clear this desire to the members of his Sampradaya, and also authorises the nominated chela to give Bhesh Dikshwa.
After the death of the Mahant, the Bhesh and Sampradaya give Chadar Mahanti of the math to the said disciple at the time of the Bhandara.
[672 A C] 662 5.
Asceticism in India has been under the definite and strong sanction of religion.
In the doctrine of the four asramas, asceticism was made an integral part of the orthodox Hindu life, and it became the duty of every Hindu, as advanced age overtook him, homeless and a wanderer to chasten himself from earthly ties, and of realizing union with Brahman.
And a religious motive was thus supplied for that which in itself was a welcome release from responsibility, care and the minute requirements of an elaborate social code.
In due course, with the advancement of knowledge, the shackles of the caste system were broken through and the privileges and powers of the ascetic life were extended to Sudras and in due recognition of their status, they were treated as Hindu Sanyasis.
At the present time, there is no distinction or barrier; any one may become an ascetic, and the vows are not necessarily life long.
Some sects, however, still restrict membership to Brahmans, or at least to men of the three higher castes.
[681 E H, 682 G H] 6.
One who enters into a religious order severs his connection with the members of his natural family.
He is accordingly excluded from inheritance.
Entrance to a religious order is tantamount to civil death so as to cause a complete severance of his connection with his relations, as well as with his property.
Neither he nor his natural relatives can succeed to each other 's properties.
[676 A B] Any property which may be subsequently acquired by persons adopting religious orders passes to their religious relations.
The persons who are excluded on this ground came under three heads; the Vanaprastha or hermit; the Sanyasi or Yati, or ascetic and the Brahmachari or perpetual religious student.
In order to bring a person under these heads, it is necessary to show an absolute abandonment by him of all secular property, and a complete and final withdrawal from earthly affairs.
The mere fact that a person calls himself a Byragi or religious mendicant, or indeed that he is such, does not of itself disentitle him to succeed to property.
Nor does any Sudra come under this disqualification, unless by usage.
This civil death does not prevent the person who enters into an order from acquiring and holding private property which will devolve, not of course upon his natural relations, but according to special rules of inheritance.
But it would be otherwise if there is no civil death in the eye of the law, but only the holding by a man of certain religious opinions or professions.
The after acquired property passes on his death not to his natural but to his spiritual heirs.
[676 A E, 683 A B] Dharmapuram vs Vivapandiyan, Mad. 202, Harish Chandra vs Alia Mahamed, Cal. 545, explained.
The 'Sant Mat ' sampradaya is a religious denomination i.e. a sub sect of one of the Dasnami sects founded by the Great Sankracharya.
Sankara was an ascetic and founded schools of ascetics.
Sankara established four Maths or seats of religion at four ends of India the Sringeri Math on the Sringeri Hills in the South, the Sharda Math at Dwarka in the West, the Jyotir Math at Badrikashram in the North, and the Govardhan Math at Puri in the east.
The monks ordained by Sankara and his disciples were called Sanyasis.
Each Math has a sanyasi at its head who bears the title of Sankaracharya in general.
Sankara is said to have four disciples who were all brahmans, from whom the 663 ten divisions of the order hence named as the ten named or 'dasnami Dandis ' originated.
They are: Thirtha, shrine; Ashrama, order; Vana, wood; Aranya, Forest or desert; Saraswati and Bharati, the goddesses of learning and speech; Puri, City; Giri and Parvata, a hill; and Sagara, the ocean.
[683 C G] Dandis or staff bearers occupy a place of pre eminence.
They worship Lord Siva in his form Bhairava; the 'Terrible ' and profess to adhere Nirguna and Niranjana, the deity devoid of attribute or passion.
A sub section of this order are the Dandi, Dasnamis or Dandi of ten names, so called from their assuming one of the names of Sankara 's four disciples and six of their pupils.
[658 B C] The Dandis keep themselves very distinct from the rest of the community.
They are Brahmans, and receive disciples only from the Brahmans.
They lead a very austere life.
They do not touch fire or metal or vessels made of any sort of metal.
It is equally impossible also for them to handle money.
They shave their hair and beard.
They wear one long unsewn reddish cloth, thrown about the person.
[686 A B] There are but three and part of a further ascetic class, or those called Tirtha, Asrama, Saraswati and Bharati who are still really regarded as Sankara 's disciples.
The rest i.e. the remaining six and a half of the Dasnamis who are considered as having fallen from the purity of practice necessary to the Dandis, are still, in general religious characters usually denominated and are Atits.
These are the Atits or A 'Dandis viz. the Vanas, Aranytas, Puris, Giris, Parvata, Sagaras and half the Bharatia, reputed to have fallen to some extent from orthodoxy, but are still looked upon as religious avatars.
Unlike the Dandis, the Atits do not carry the shaft i.e. a Trishul.
They differ from the former also in their use of clothing money and ornaments, their methods of preparing food and their admission of members from any order of Hindus.
Some of them lead an ascetic life, while others mix freely in the world, carry on trade and acquire property.
Most of them are celibate but some of them marry and are often known as Samyogi or Gharbari Atits.
They are collected in Maths and monastries.
They wear ochre coloured garments, and carry a rosary of rudraksha seeds sacred to Lord Siva.
Their religious theories (when they have any) are based on the advaita Vedanta of their founder Sankaracharya.
[686 H, 687 A D] There is also a sub division of the Puri division of the Dasanami Sect.
They have tenets much in common, based on the central idea that the Supreme diety is incomprehensible or 'unseeable '.
They denounce idolatory.
This more or less conforms to the tenets of the 'Sant Mat ' Sect.
[678 D E] The followers of the 'Sant Mat ' treat the Guru as the incarnation of God.
They have no faith in inanimate idols installed in temples nor do they worship them in their cult.
There are no caste restrictions and any one can be admitted into the Sant Mat fraternity.
According to the custom and usage of the Sant Mat Sampradaya, the initiation of a chela by the Guru results in complete renunciation of the world and he ceases to have all connection with his previous Ashramas before becoming a Sanyasi.
For becoming a sanyasi it is not necessary that he should be of a particular Varnashram previously, i.e. even a Sudra can become a Sanyasi.
[671 G H, 672 E] 8.
Though according to the orthodox Smriti writers a Sudra cannot legitimately enter into a religious order and although the strict view does not 664 sanction or tolerate ascetic life of the Sudras, the existing practice all over India is quite contrary to such orthodox view.
In cases, therefore, where a Sudra can enter into a religious order in the same way as in the case of the twice born classes, such usage should be given effect to.
[670E F] 9.
In order to prove that a person has adopted the life of a Sanyasi, it must be shown that he has actually relinquished and abandoned all worldly possessions and relinquished all desire for them or that such ceremonies are performed which indicate the severance of his natural family and his secular life.
It must also be proved in case of orthodox sanyasis, that necessary ceremonies have been performed such as Pindadana or Birajahoma or Prajapathiyesthi without which the renunciation will not be complete.
[687 G H] Amongst Dasnamis, a ceremony called the Bijla Homa i.e. the Biraja Homa has been considered essential.
The recitation of the Pravesha Mantram or the renunciation formula is of course indispensable.
[688 A] In the instant case: (a) there is overwhelming evidence in proof of the fact that the requisite ceremonies of Biraj homa or Prajapathiyesthi were performed in case of Swami Sarupanand and Swami Atma Vivekanand.
If the Prajapathiyesthi or Biraj Homa ceremonies were performed then it must necessarily give rise to the irresistable inference that Swami Atma Vivekanand must have performed his Atma Sradh before he was initiated as a chela; (b) The appellant was precluded from contending that his father Baikunth Singh was not a Hindu Sanyasi in view of his express admission in the plaint filed in an earlier suit.
The burden of proof shifted upon him to disprove it; (c) Swami Harsewanand (Mathura Ahir) was the validly initiated chela of Swami Atma Vivekanand and upon his demise was duly installed as the Mahant of 'Garwaghat Math ' according to the tenets of 'Sant Mat ' Sampradaya.
[689 G, H, 693 C D] 10.
The question whether a suit abates in its entirety or not upon the death of the plaintiff must necessarily depend upon the nature of the suit.
This is not a class of case to which the maxim, actio personalis moritur cum persona applies.
[694 C D] 11.
According to Hindu jurisprudence, a religious institution such as a math is created as a jurisdic entity with a legal personality capable of holding and acquiring property.
It therefore follows that the suit instituted by the mahant for the time being, on its behalf, is properly constituted and cannot abate under the provisions of Order 22 of the Code of Civil Procedure on the death of the mahant pending the decision of the suit or appeal, as the real party to the institution is the institution.
The ownership is in the institution or the idol.
From its very nature a math or an idol can act and assert its rights only through human agency known as a mahant or shebait or dharmakarta or sometimes known as trustee.
It follows that merely because the mahant for the time being dies and is succeeded by another mahant, the suit does not abate.
[695 B C, E] Ram Swarup Das vs Rameshwar Das vs ILR 29 Pat.
989, over ruled.
The general rule is that all rights of action and all demands whatsoever existing in favour of or against a person at the time of his death survive to or against his legal representative within the meaning of section 2(11) of C.P.C. [699 A,F] Muhamed Hussain vs Khushalo, ILR 9 All. 131; approved.
|
Civil Appeal Nos.
626 & 629 of 1971.
From the Judgment and Order dated 5 8 1970 of the Rajasthan High Court in R.F.A. No. 31/60.
630 section T. Desai and Naunit Lal for the Appellant.
P. R. Mridul, B. P. Sharma, Krishna Bhatt and R. K. Bhatt for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
These two cross appeals by certificate arise out of a suit for possession of a house situate in Bikaner and for damages for use and occupation thereof filed in Civil Original Case No. 17 of 1957 on the file of the District Judge, Bikaner.
The plaintiffs in the suit are the appellants in Civil Appeal No. 626 of 1971 and the defendant is the appellant in Civil Appeal No. 629 of 1971.
The genealogy showing the relationship between the parties is given below: Sur Singh | | | | | Gad Singh Bharat Singh Bhim Singh Kan Singh | (Died in (P.I.) (Deft.) | Sept. 1955) | | | | | | | | Duley Dhaney Deep | Singh Singh Singh | | | Himmat Dalip Singh Singh (P.2.) (Died in Sept. 56) Gad Singh, Bharat Singh, Bhim Singh (plaintiff No. 1) and Kan Singh (defendant) are the sons of Sur Singh.
Bharat Singh died unmarried in September, 1955.
Gad Singh died thereafter leaving behind him three sons, Duley Singh, Dhaney Singh and Deep Singh.
Dalip Singh, the second son of plaintiff No.1 died in September, 1956.
Bharat Singh and the defendant were residing in the house which was the subject matter of the suit.
After the death of Bharat Singh, the plaintiffs Bhim Singh and Himmat Singh filed the suit out of which this appeal arises against Kan Singh, the defendant for recovery of possession of the suit house and other ancillary reliefs.
In the plaint, they 631 pleaded that the suit house belonged to them by virtue of a patta dated July 12, 1940 issued in their names; that the defendant who was the brother of plaintiff No. 1 and uncle of plaintiff No. 2 was living in a part of the house with their consent; that plaintiff No. 2 and his younger brother Dalip Singh were also living in the house till the year 1956; that the defendant had refused to receive a notice issued by them in the month of September, 1957 calling upon him to hand over possession of the house to the plaintiffs; that the defendant had done so on account of personal ill will and that the plaintiffs were, therefore, entitled to recover possession of the suit house and damages from the defendant.
These were briefly the allegations made in the plaint.
On the above basis, the plaintiffs prayed for a decree for the reliefs referred to above.
In the written statement, the defendant did not admit the existence of the patta on the basis of which the plaintiffs claimed title to the suit house.
He denied the allegation that the plaintiffs were the owners in possession of the suit house.
He claimed that he was the exclusive owner of the suit house, and in support of the said claim stated as follows: There was a partition amongst the sons of Sur Singh in the year 1929.
At that partition, Gad Singh and plaintiff No. 1 became separated and they were given all the family properties which were situated in their village, Roda.
As Bharat Singh and the defendant had been educated at the expense of the family, they were not given any share in the property.
Bharat Singh and he settled in Bikaner and lived together as members of joint Hindu family.
Bharat Singh died on September 2, 1955 leaving the defendant as a surviving coparcener.
On his death, the defendant became the owner of the properties of Bharat Singh 'as a member of joint Hindu family '.
He further pleaded that from the year 1928, Bharat Singh and he who were working as the Aid de Camp and Private Secretary respectively of the Maharaja of Bikaner were living in the suit house which then belonged to the Maharaja.
The defendant filed an application for purchasing the house.
The proceedings had not terminated when the defendant left the service of the Maharaja and went to Banaras for higher studies.
On his return from Banaras, he joined the service of the Maharaja in the civil department of Bikaner.
After a long time on account of the joint efforts of Bharat Singh and the defendant, the sale of the house was sanctioned.
Bharat Singh who was living jointly with him paid the consideration for the sale on November 4, 1939 'out of the joint income. ' Thus according to the defendant, Bharat Singh and he became its owners from the date of payment of the consideration.
He 632 further pleaded that 'if the patta of the property had been granted in the names of the plaintiffs due to some reasons, political and other surrounding circumstances and for the safety of the property, it cannot affect the right of the defendant '.
It was also stated that Bharat Singh and the defendant had not executed any sale deed in favour of the plaintiffs and so they could not become owners of the suit house.
In another part of the written statement, the defendant pleaded thus: "The plaintiffs have taken the entire ancestral property of the village.
Still they are harassing the defendant due to avarice.
The defendant and Thakur Bharat Singh had been doing Government service.
So there was always danger or removal or confiscation of the property.
Even if Thakur Bharat Singh might have written or given his consent for entering the names of the plaintiffs in the patta in this view, it is not binding.
The plaintiffs are at the most 'benami ' even though the patta which is not admitted might be proved.
" It is thus seen that the defendant put forward a two fold claim to the suit house one on the basis of the right of survivorship another on the basis of a joint purchase along with Bharat Singh.
Even though in one part of the written statement, he declined to admit the existence of the patta, in paragraph 13 of the written statement which is extracted above, he put forward the plea that the plaintiffs were at the most holding the property as benamdars.
He, however, did not claim that he was entitled to the property as an heir of Bharat Singh alongwith plaintiff No. 1.
and Gad Singh who would have inherited the estate of Bharat Singh on his death being his nearest heirs.
In the reply, the plaintiffs denied that the defendant was entitled to the suit house as a surviving coparcener on the death of Bharat Singh.
They, however, pleaded that plaintiff No. 1 had purchased the suit house out of his income; that Bharat Singh used to love plaintiff No. 2 'as his son ' and was thinking of adopting him but he died all of a sudden and that the defendant had not disclosed in his written statement the special political circumstances under which the names of the plaintiffs were entered in the patta.
They denied that the defendant had any interest in the suit house.
On the basis of the oral and documentary evidence produced before him, the learned District Judge who tried the suit held that Bharat Singh had secured the house from the Government of Bikaner for the plaintiffs with their money; that the patta of the house had been granted by the Patta Court in favour of the plaintiffs; that the plaintiffs were in possession of the suit house till September, 1956 and that the 633 defendant being their close relative was living in the house not on his own account but with the plaintiffs ' permission.
The learned District Judge also held that the defendant had failed to prove that the suit house had been acquired by him and Bharat Singh with their joint fund.
Accordingly he decreed the suit for possession of the house in favour of the plaintiffs and further directed that the defendant should pay damages for use and occupation at the rate of Rs. 50 per month from September 20, 1956 till the possession of the house was restored to them.
Aggrieved by the decree of the trial court, the defendant filed an appeal before the High Court of Rajasthan in Civil First Appeal No. 31 of 1960.
The High Court rejected the case of the plaintiffs that the consideration for the house had been paid by Bharat Singh out of the funds belonging to them and also the case of the defendant that the house had been purchased by Bharat Singh with the aid of joint family funds belonging to himself and the defendant.
The High Court held that the house had been purchased by Bharat Singh out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them.
It further held that the suit house belonged to Bharat Singh and on his death, Gad Singh, plaintiff No. 1 and the defendant succeeded to his estate which included the suit house in equal shares.
Accordingly in substitution of the decree passed by the trial court, the High Court made a decree for joint possession in favour of plaintiff No. 1.
The rest of the claim of the plaintiffs was rejected.
Dissatisfied with the decree of the High Court, the plaintiffs and the defendant have filed these two appeals as mentioned above.
The principal issue which arises for consideration relates to the ownership of the suit house.
It is admitted on all hands that though Bharat Singh and the defendant were living in the suit house from the year 1928, it continued to be the property of the Maharaja of Bikaner till the date on which the patta (Exh. 4) was issued by the Patta Court of Bikaner and that on the issue of the patta, the State Government ceased to be its owner.
It is also not disputed that the patta constituted the title deed in respect of the suit house and it was issued in the names of the plaintiffs on receipt of a sum of Rs. 5,000.
On January 11, 1930, the defendant had made an application, a certified copy of which is marked as Exhibit A 116 to the Revenue Minister of the State of Bikaner making enquiry about the price of the suit house on coming to know that the State Government intended to sell it.
After the above application was made, the defendant left the service of the State of Bikaner and went to Banaras for studies.
Bharat Singh who was also an employee of the State Gov 634 ernment was working as the Aid de Camp of the Maharaja in 1939.
At the request of Bharat Singh, an order was made by the Maharaja on May 4, 1939 sanctioning the sale of the suit house for a sum of Rs. 5,000.
Exhibit A 118 is the certified copy of the said order.
Exhibit A 120 is a certified copy of the order of Tehsil Malmandi showing that a sum of Rs. 5,000 had been deposited on behalf of Bharat Singh towards the price of the suit house.
It also shows that Bharat Singh was asked to intimate the name of the person in whose favour the patta should be prepared.
Presumably, the patta was issued in the names of the plaintiffs as desired by Bharat Singh and Exhibit A 121 shows that it was handed over on September 30, 1940.
The patta was produced before the trial court by the plaintiffs.
By the time the patta was issued in the names of the plaintiffs, the mother of plaintiff No. 2 had died.
He was about eight years of age in 1940 and he and his younger brother, Dalip Singh were under the protection of Bharat Singh who was a bachelor.
They were staying with him in the suit house.
The defendant also was residing in it.
The plaintiffs who claimed title to the property under the patta in the course of the trial attempted to prove that the sum of Rs. 5,000 which was paid by way of consideration for the patta by Bharat Singh came out of the jewels of the mother of plaintiff No. 2 which had come into the possession of Bharat Singh on her death.
The plaintiff No. 2 who gave evidence in the trial court stated that he had not given any money to Bharat Singh for the purchase of the house but he had come to know from his father, plaintiff No. 1 that it had been purchased with his money.
Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) to whose evidence we will make a reference in some detail at a later stage also stated that they had heard from Bharat Singh that the jewels of the mother of plaintiff No. 2 were with him suggesting that they could have been the source of the price house.
Plaintiff No. 1 who could have given evidence on the above question did not enter the witness box.
It is stated that he was a person of weak mind and after the death of Bharat Singh was behaving almost like a mad man.
The defendant stated in the course of his evidence that the mother of plaintiff No. 2 had gold jewels weighing about 3 4 tolas only.
In this state of evidence, it is difficult to hold that the plaintiffs have established that the consideration for the suit house was paid by them.
The finding of the trial court that the house had been purchased by Bharat Singh for the plaintiffs with their money cannot be upheld.
The case of the defendant that the price of the suit house was paid out of the funds belonging to him and Bharat Singh has been rejected both by the trial court and the High Court.
On going 635 through the evidence adduced by the defendant, we feel that there is no reason for us to disturb the concurrent findings arrived at by the trial court and the High Court on the above question.
We shall, therefore, proceed to decide the question of title on the basis that the consideration for the purchase of the house was paid by Bharat Singh out of his own funds.
It was contended by the learned counsel for the defendant that since the plaintiffs had failed to establish that they had contributed the price paid for the suit house, the suit should be dismissed without going into the question whether Bharat Singh had purchased the suit house with his money in the names of the plaintiffs for the benefit of plaintiff No. 2.
The plaint does not disclose the name of the person or persons who paid the sale price of the suit house.
The suit is based on the patta standing in the names of the plaintiffs.
In the written statement of the defendant, there was an allegation to the effect that even though the patta was standing in the names of the plaintiffs, they were only benamidars and the real title was with Bharat Singh and the defendant.
The particulars of the circumstances which compelled Bharat Singh or the defendant to take the patta in the names of the plaintiffs were not disclosed although it was stated that it had been done owing to some political and other surrounding circumstances and for the safety of the property.
From the evidence led by the parties, we are satisfied that they knew during the trial of the suit that the question whether the transfer effected under the patta was a benami transaction or not arose for consideration in the case.
Even in the appeal before the High Court, the main question on which arguments were addressed was whether the transaction was a benami transaction or not.
Merely because the plaintiffs attempted to prove in the trial court that the money paid for purchasing the house came out of their funds, they cannot in the circumstances of this case be prevented from claiming title to the property on the basis that even though Bharat Singh had paid the consideration therefor, plaintiff No. 2 alone was entitled to the suit house.
Reference may be made here to the decision of this Court in Bhagwati Prasad vs Shri Chandramaul(1) where the Court observed as follows: "There can be no doubt that if a party asks for a relief on a clear and specific grounds, and in the issues or at the trial, no other ground is covered either directly or by necessary implication, it would not be open to the said party to 636 attempt to sustain the same claim on a ground which is entirely new. .
But in considering the application of this doctrine to the facts of the present case, it is necessary to bear in mind the other principle that considerations of form cannot over ride the legitimate considerations of substance.
If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence.
The general rule no doubt is that the relief should be founded on pleadings made by the parties.
But where the substantial matters relating to the title of both parties to the suit are touched, though in directly or even obscurely in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case.
What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it ?" After holding that the parties to the said case were not taken by surprise, the Court granted the relief prayed for by the plaintiff on the basis that defendant was a licensee even though the plaintiff had pleaded in his plaint that the defendant was tenant.
In the above case, the Court distinguished the decision in Trojan & Co. Ltd. vs RM.
N. N. Haggappa Chettiar(1) on which much reliance was placed by the learned counsel for the defendant before us.
In the case of Trojan & Co. Ltd. (supra), this Court came to the conclusion that the alternative claim on which relief was sought was not at all within the knowledge of the parties in the course of the trial.
The case before us is not of the nature.
In Ismail Mussajee Mookerdum vs Hafiz Boo(2) the plaintiff laid claim to a property which had been transferred in her name by her mother alleging that she had paid the purchase money to her mother.
The court came to the conclusion that she had failed to prove that she had paid the consideration.
Still a decree was made in her favour holding that she had become the owner of the property by virtue of the transfer in her favour even though consideration had not been 637 paid by her since it had been established in the case that her mother intended to transfer the beneficial interest in the property in her favour.
This is borne out from the following passage at page 95: "In her evidence, which was very confused, she tried to say that she paid that purchase money to her mother.
This was clearly untrue: as both Courts have found.
The fact, therefore, remains that the properties purchased by the sale proceeds were purchased no doubt in Hafiz Boo 's name, but were purchased out of funds emanating from her mother 's estate.
This circumstance no doubt, if taken alone, affords evidence that the transaction was benami, but there is, in their Lordships ' opinion, enough in the facts of the case to negative any such inference." Moreover no plea was raised on behalf of the defendant before the High Court in this case contending that the High Court should not go into the question whether the transfer under the patta was a benami transaction or not.
We, therefore, reject the above contention and proceed to examine whether the High Court was right in arriving at the conclusion that the plaintiffs were only benamidars holding the property for the benefit of its real owner, Bharat Singh as the consideration therefor had emanated from him.
Under the English law, when real or personal property is purchased in the name of a stranger, a resulting trust will be presumed in favour of the person who is proved to have paid the purchase money in the character of the purchaser.
It is, however, open to the transferee to rebut that presumption by showing that the intention of the person who contributed the purchase money was that the transferee should himself acquire the beneficial interest in the property.
There is, however, an exception to the above rule of presumption made by the English law when the person who gets the legal title under the conveyance is either a child or the wife of the person who contributes the purchase money or his grand child, whose father is dead.
The rule applicable in such cases is known as the doctrine of advancement which requires the court to presume that the purchase is for the benefit of the person in whose favour the legal title is transferred even though the purchase money may have been contributed by the father or the husband or the grandfather, as the case may be, unless such presumption is rebutted by evidence showing that it was the intention of the person who paid the purchase money that the transferee should not become the real owner of the property in question.
The doctrine of advancement is not in vogue in India.
638 The counterpart of the English law of resulting trust referred to above is the Indian law of benami transactions.
Two kinds of benami transactions are generally recognized in India.
Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami.
In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner.
The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder.
In this case, the transferor continues to be the real owner.
The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case, there is an operative transfer from the transfer to the transferee though the transferee holds the property for the benefit of the person who has contributed the purchase money, in the latter case, there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance.
One common feature, however, in both these cases is that the real title is divorced from the ostensible title and they are vested in different persons.
The question whether a transaction is a benami transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case.
The principle underlying the former case is also statutorily recognized in section 82 of the which 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.
This view is in accord with the following observations made by this Court in Meenakshi Mills.
Madurai vs The Commissioner of Income Tax, Madras(1): "In this connection, it is necessary to note that the word 'benami ' is used to denote two classes of transactions which differ from each other in their legal character and incidents.
In one sense, it signifies a transaction which is real, as for example when A sells properties to B but the sale deed mentions X as the purchaser.
Here the sale itself is genuine, but the real purchaser is B, X being his benamidar.
This is 639 the class of transactions which is usually termed as benami.
But the word 'benami ' is also occasionally used, perhaps not quite accurately, to refer to a sham transaction, as for example, when A purports to sell his property to B without intending that his title should cease or pass to B.
The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the latter there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed.
It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the question as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid." In Mohammad Sadiq Ali Khan vs Fakhr Jahan Begum & Ors.(1) the facts were these: A Mahemmodan bought an immovable property taking the conveyance in the name of his daughter who was five years of age.
The income was credited to a separate account, but it was in part applied to purposes with which she had no concern.
Upon her marriage, the deed was sent for the inspection of her father in law.
After the death of the donor it was contended that the property was part of his estate, the purchase being benami.
The Judicial Committee of the Privy Council held that there was a valid gift to the daughter because there was proof of a bona fide intention to give, and that intention was established.
In the course of the above decision, it was observed thus: "The purchase of this property was a very natural provision by Baqar Ali for the daughter of his favourite wife, and though there may be no presumption of advancement in such cases in India, very little evidence of intention would be sufficient to turn the scale.
The sending of the deed for the inspection of the lady 's father in law, which the Chief Court held to be established, was clearly a representation that the property was hers, and their Lordships agree with the learned Judges in the conclusion to which they came.
" 640 In Manmohan Dass & Ors.
vs Mr. Ramdei & Anr.
(1) Lord Macmillian speaking for the Judicial Committee observed: In order to determine the question of the validity or invalidity of the deed of gift in question it is of assistance to consider. 'the surrounding circumstances, the position of the parties and their relation to one another, the motives which could govern their actions and their subsequent conduct. ' Dalip Singh vs Nawal Kanwar 35 I.A. 104 (P.C.) always remembering that the onus of proof rests upon the party impeaching the deed.
The principle enunciated by Lord Macmillan in the case of Manmohan Dass & Ors.
(supra) has been followed by this Court in Jayadayal Poddar (deceased) through his L. Rs. & Anr.
vs Mst.
Bibi Hazara & Ors.(2) where Sarkaria, J. observed thus: "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 state of affairs is the real state of affairs.
Though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid tests, uniformly applicable in all situations, can be laid down; yet in weighing the probabilities and for gathering 641 the relevant indicia, the courts are usually guided by these circumstances: (1) the source from which the purchase money came; (2) the nature and possesion 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 principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct etc.
Now we shall refer to the facts of the present case.
When the suit house was purchased from the Maharaja of Bikaner, Bharat Singh was a bachelor and he did not marry till his death in the year 1955.
The wife of Bhim Singh had died before 1939 leaving behind her two young children.
Plaintiff No. 2 was about eight years old in the year 1939 and his younger brother Dalip Singh was about two years old.
These two children were living with Bharat Singh.
Bhim Singh, plaintiff No. 1 was almost in indigent condition.
The defendant had by then acquired a degree in law and also had practised as a lawyer for some time.
It is stated that the defendant had again been employed in the service of the State of Bikaner.
The patta was issued in the names of plaintiffs 1 and 2 at the request of Bharat Singh.
Even though the defendant stated in the written statement that the patta had been taken in the names of the plaintiffs owing to certain political circumstances, he had not disclosed in the course of his evidence those circumstances which compelled Bharat Singh to secure the patta in the names of the plaintiffs, though at one stage, he stated that it was under his advice that Bharat Singh got the patta in the names of the plaintiffs.
Bharat 642 Singh had no motive to suppress from the knowledge of the public that he had acquired the property.
It was suggested in the course of the arguments that he had taken the patta in the names of the plaintiffs because he was in the service of the State.
We do not find any substance in this submission because the property was being purchased from the State Government itself and there was no need for him to shield his title from the knowledge of the State Government.
It appears that Bharat Singh acquired the suit house for the benefit of plaintiff No. 2 for the following circumstances: The first circumstance is that the original patta had been handed over by Bharat Singh to plaintiff No. 2 on his passing B. Sc.
Examination.
This fact is proved by the evidence of plaintiff No. 2 and it is corroborated by the fact that the patta was produced by the plaintiffs before the Court.
In the course of his evidence, the defendant no doubt stated that the patta had been stolen by plaintiff No. 2 from the suit house during the twelve days following the death of Bharat Singh when the keys of Bharat Singh 's residence had been handed over to plaintiff No. 2 by the defendant.
It is difficult to believe the above statement of the defendant because of two circumstances (i) that the defendant did not state in the written statement that the patta had been stolen by plaintiff No. 2 and (ii) that within a month or two after the death of Bharat Singh, plaintiff No. 2 wrote a letter which is marked as Exhibit A 124 to the defendant stating that the rumour which the defendant was spreading that plaintiff No. 2 had stolen some articles from the suit house was not true since whenever plaintiff No. 2 opened room or any of the almirahs of Bharat Singh in the suit house, Devi Singh the son of the defendant was keeping watch over him.
That letter has been produced by the defendant and there is no reference in it to a false rumour being spread about the theft of the patta by plaintiff No. 2.
Plaintiff No. 2 however, while asserting his claim to the suit house in the course of that letter stated that he had seen that the patta had been executed in his favour; and that the patta contained his name.
The defendant does not appear to have sent any reply to Exhibit A. 124 nor did he call upon the plaintiffs to return the patta to him.
He did not also file a complaint stating that the patta had been stolen by plaintiff No. 2.
We are of the view that there is no reason to disbelieve the evidence of plaintiff No. 2 that the patta had been handed over to him by Bharat Singh on his passing the B.Sc.
examination.
This conduct of Bharat Singh establishes that it was the intention of Bharat Singh when he secured the patta from the State Government in the names of the plaintiffs the plaintiff No. 2 whom he loved should become the owner.
It is no doubt true that the name of plaintiff No. 1 is also included in the patta.
It may have been so included by way 643 of abundant caution as plaintiff No. 2 was a minor when the patta was issued.
The above circumstance is similar to the one which persuaded their Lordships of the Privy Council in the case of Mohammad Sadiq Ali Khan (supra) to hold that the property involved in that case belonged to the person in whose favour the conveyance had been executed.
The second circumstance which supports the view that Bharat Singh intended that plaintiff No. 2 should become the owner of the suit house is proved by the declarations made by Bharat Singh regarding the title to the suit house.
Jaswant Singh (P.W. 2) was a former Prime Minister of the State of Bikaner.
His wife was a cousin of plaintiff No. 1, Bharat Singh and the defendant.
Being a close relative of Bharat Singh who was also the Aid de Camp of the Maharaja of Bikaner, he was quite intimate with Bharat Singh who used to discuss with him about his personal affairs.
P.W. 2 has stated in the course of his evidence that Bharat Singh thought it proper to purchase the house in the name of plaintiff No. 2 and that he intended to make plaintiff No. 2 his heir and successor.
He has also stated that Bharat Singh had expressed his desire to give all his property to plaintiff No. 2 by a will and that he had told Kesri Singh (P.W. 3) just a day prior to his (Bharat Singh 's) death that a will was to be executed.
This statement of Jaswant Singh (PW. 2) is corroborated by the evidence of Kesri Singh (P.W. 3) whose wife was also a cousin of Bharat Singh, plaintiff No. 1 and the defendant.
The relevant portion of the deposition of Kesri Singh (P.W. 3) reads thus: "I came from Jaipur to Bikaner by train one day before the death of Bharat Singh and when I was returning after a walk I found Bharat Singh standing at the gate of his house.
I asked Bharat Singh to accompany me to my house to have tea etc.
Bharat Singh came with me to my house.
Bharat Singh told me at my house that he was not quite all right and that he might die at any time.
He wanted to execute a will.
He further told me that his house really belonged to Himmat Singh.
It has been purchased in his name.
He wanted to give even other property to Himmat Singh.
By other property which Bharat Singh wanted to give to Himmat Singh was meant Motor car, bank balance and the presents which he had.
The house regarding which my talk took place with Bharat Singh at my house was the house in dispute.
" There is no reason to disbelieve the evidence of these two witnesses.
Their evidence is corroborated by the deposition of Dr. Himmat Singh (D.W. 6) who was the Secretary of a Club in Bikaner 644 of which Bharat Singh was a member.
He was examined by the defendant himself as his witness.
In the course of his cross examination, Dr. Himmat Singh (D.W. 6) referred to what Bharat Singh had told him a few months prior to his death.
The substance of his deposition is found in the judgment of the trial court, the relevant portion of which reads thus: "D.W. 6 Dr. Himmat Singh is the Secretary of the Sardul Club, Bikaner.
He is the Senior Eye Surgeon in the Government Hospital, Bikaner.
He has stated that Bharat Singh was the member of Sardul Club.
A sum of Rs. 425/6/ remained outstanding against him till the year 1955.
This amount was received on 28 10 1955.
He has said that he does not know who deposited this amount.
On the merits of the case, he has stated that he intimately knew Bharat Singh and members of his family.
Bhim Singh and his sons Himmat Singh and Dalip Singh used to live in this house.
Bharat Singh took this house for Bhim Singh and Himmat Singh.
Four months before his death, Bharat Singh told the witness that he had already taken the house for Bhim Singh and Himmat Singh and that whatever else would remain with him shall go to them.
Dr. Himmat Singh refutes the defendant 's stand and supports the plaintiff 's case.
" It was argued on behalf of the defendant that there is some variation between the deposition of Dr. Himmat Singh (D.W. 6) and the above passage found in the judgment of the trial court and that the evidence of D.W. 6 should not be believed as he had turned hostile.
The deposition of Dr. Himmat Singh (D.W. 6) was read out to us.
It was also brought to our notice that an application had been made by the defendant to treat D.W. 6 as hostile and that it had not been granted by the trial court.
Even though there is a slight variation between what is stated by D.W. 6 and what is contained in the judgment of the trial court with regard to certain details, we do not feel that the said variation is of any substantial nature.
The evidence of D.W. 6 suggests that Bharat Singh was of the view even during his life time that the suit house belonged to plaintiffs and not to himself.
Even though an application had been made by the defendant to treat D.W. 6 as hostile, we feel that this part of the evidence of D.W. 6 cannot be rejected on that ground since it is consistent with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3).
It is seen from the judgment of the High Court that the effect of the statement of Kesri Singh (P.W.3) in his deposition that Bharat Singh 645 had told him that the suit house was the property of plaintiff No. 2 has not been considered.
The High Court while dealing with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) laid more emphasis on those parts of their evidence where there was a reference to the alleged utilisation of the jewels or moneys belonging to the plaintiffs by Bharat Singh for the purpose of acquiring the suit house.
The High Court has also observed in the course of its judgment that neither of them had stated that Bharat Singh had told them that he was purchasing or had purchased the suit house as a gift to Bhim Singh and Himmat Singh.
The above observation does not appear to be consistent with the evidence of Kesri Singh (P.W. 3) discussed above.
It was, however, contended on behalf of the defendant that the statement made by Bharat Singh in the year 1955 could not be accepted as evidence in proof of the nature of the transaction which had taken place in the year 1940.
It was contended that the question whether a transaction was of a benami nature or not should be decided on the basis of evidence about facts which had taken place at or about the time of the transaction and not by statements made several years after the date of the transaction.
In support of the above contention, the learned counsel for the defendant relied on the decision of the House of Lords in Shephard & Anr.
vs Cartwright & Anr.(1).
The facts of that case were these: In 1929, a father, with an associate, promoted several private companies and caused a large part of the shares, for which he subscribed, to be allotted in varying proportions to his three children, one of them being then an infant.
There was no evidence as to the circumstances in which the allotments were made.
The companies were successful and in 1934 the father and his associate promoted a public company which acquired the shares of all the companies.
The children signed the requisite documents at the request of their father without understanding what they were doing.
He received a cash consideration and at various times sold, and received the proceeds of sale of, their shares in the new company.
He subsequently placed to the credit of the children respectively in separate deposit accounts the exact amount of the cash consideration for the old shares and round sums in each case equivalent to proceeds of sale of the new shares.
Later he obtained the children 's signatures to documents, of the contents of which they were ignorant, authorising him to withdraw money from these accounts and without their knowledge he drew on the accounts, which were by the end of 1936 exhausted, part of the sums withdrawn being dealt with for the benefit of the children but a large part remaining unaccounted for.
He died in 646 1949.
In the action filed against his executors, it was contended by them that the subsequent conduct of the father showed that when the shares were got allotted by him in the names of the children in 1929, he did not intend to make them the real owners of the shares and that the presumption of advancement had been rebutted.
This contention was met by the plea that the subsequent conduct of the father in dealing with the shares as if they were his own could not be relied upon either in his favour or in favour of his representatives, executors and administrators to prove that he had no intention to create any beneficial interest in his children in the shares in question when they were obtained.
On these facts, the House of Lords held that the subsequent acts and declarations of the father could not be relied upon in his favour or in favour of his executors to rebut the presumption of advancement.
Viscount Simonds in the course of his judgment observed thus: "My Lords, I do not distinguish between the purchase of shares and the acquisition of shares upon allotment, and I think that the law is clear that on the one hand where a man purchases shares and they are registered in the name of a stranger there is a resulting trust in favour of the purchaser; on the other hand, if they are registered in the name of a child or one to whom the purchaser then stood in loco parentis, there is no such resulting trust but a presumption of advancement.
Equally it is clear that the presumption may be rebutted but should not, as Lord Eldon said, give way to slight circumstances: Finch vs Finch ; It must then be asked by what evidence can the presumption be rebutted, and it would, I think, be very unfortunate if any doubt were cast (as I think it has been by certain passages in the judgments under review) upon the well settled law on this subject.
It is, I think, correctly stated in substantially the same terms in every text book that I have consulted and supported by authority extending over a long period of time.
I will take, as an example, a passage from Snell 's Equity, 24th ed., p. 153, which is as follows: "The acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the 647 declaration.
But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour.
" The above passage, we are of the view, does not really assist the defendant in this case.
What was held by the House of Lords in the case of Shephard & Anr.
(supra) was that the presumption of advancement could be displaced only by a statement or conduct anterior to or contemporaneous to the purchase nor could any conduct of the children operate against them as admissions against their interest as they acted without the knowledge of the facts.
In the instant case, we are concerned with the conduct and declarations of Bharat Singh subsequent to the transaction which were against his interest.
The evidence regarding such conduct and declarations is not being used in his favour but against the legal representative of Bharat Singh i.e. the defendant who would have become entitled to claim a share in the suit house if it had formed part of his estate.
Such conduct or declaration would be admissible even according to the above decision of the House of Lords in which the statement of law in Snell 's Equity to the effect `but subsequent declarations are admissible as evidence only against the party who made them, and not in his favour ' is quoted with approval.
The declarations made by Bharat Singh would be admissible as admissions under the provisions of the Indian Evidence Act being statements made by him against his proprietary interest under section 21 and section 32(3) of the Indian Evidence Act The defendant cannot also derive any assistance from the decision of this Court in Bibi Saddiqa Fatima vs Saiyed Mohammad Mahmood Hasan(1).
The question before the Court in the case of Bibi Siddiqa Fatima (supra) was whether a property which had been purchased by a husband in his wife 's name out of the fund belonging to a waqf of which he was a Mutawalli could be claimed by the wife as her own property.
This Court held that the wife who was the ostensible owner could not be treated as a real owner having regard to the fact that the purchase money had come out of a fund belonging to a waqf over which her husband who was the Mutawalli had no uncontrolled or absolute interest.
In reaching the above conclusion, this Court observed thus : "We may again emphasize that in a case of this nature, all the aspects of the benami law including the 648 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.
" It was next contended that the defendant had spent money on the repairs and reconstruction of the building subsequent to the date of the patta and that therefore, he must be held to have acquired some interest in it.
We have gone through the evidence bearing on the above question.
We are satisfied that the defendant has not established that he had spent any money at all for construction and repairs.
Even if he has spent some money in that way with the knowledge of the actual state of affairs, it would not in law confer on the defendant any proprietary interest in the property.
It is also significant that neither Gad Singh during his life time nor his children after his death have laid any claim to a share in the suit house which they were entitled to claim alongwith the defendant if it was in fact a part of the estate of Bharat Singh.
Their conduct also probabilities the case of the plaintiffs that Bharat Singh did not intend to retain for himself any interest in the suit house.
On the material placed before us, we are satisfied that the transaction under which the patta was obtained was not a benami transaction and that Bharat Singh had acquired the suit house with his money with the intention of constituting plaintiff No. 2 as the absolute owner thereof.
Plaintiff No. 2 is, therefore, entitled to a decree for possession of the suit house.
The trial court passed a decree directing the defendant to pay damages for use and occupation in respect of the suit house at the rate of Rs. 50/ per month from September 20, 1956 till the 649 possession of the house was delivered to the plaintiffs.
The operation of the decree of the trial court was stayed by the High Court during the pendency of the appeal before it.
In view of the decree passed by the High Court, the defendant has continued to be in possession of the suit house till now.
Nearly twenty years have elapsed from the date of the institution of the suit.
In the circumstances, we are of the view that the defendant should be directed to pay mesne profits at the rate of Rs. 50/ per month till today and that an enquiry should be made by the trial court under Order 20, Rule 12 of the Code of Civil Procedure to determine the mesne profits payable by the defendant hereafter till the date of delivery of possession.
In the result, the decree passed by the High Court is set aside and a decree is passed directing the defendant to deliver possession of the suit house to plaintiff No. 2 and to pay mesne profits to him at the rate of Rs. 50/ per month from September 20, 1956 till today and also to pay future mesne profits as per decree to be passed by the trial court under Order 20, Rule 12 of the Code of Civil Procedure.
For the foregoing reasons, Civil Appeal No. 626 of 1971 is accordingly allowed with costs throughout.
Civil Appeal No. 629 of 1971 is dismissed but without costs.
C.A. 626/71 allowed.
P.B.R. C.A. 629/71 dismissed.
|
Plaintiff No. 1 and plaintiff No. 2 were father and son while defendant was the brother of plaintiff No. 1.
The plaintiffs in their suit against the defendant claimed that the suit house in which the defendant was living, belonged to them by virtue of a patta issued in their names.
They alleged that the deceased brother of plaintiff No. 1, who remained a bachelor till his death, loved plaintiff No. 2 as his son and had thought of adopting plaintiff No. 2 but since he died all of a sudden it could not be done.
The defendant on the other hand claimed that he and his deceased brother lived as members of a joint family after the partition of their family that as a result of the joint efforts of himself and his deceased brother the Maharaja, of Bikaner sanctioned sale of the house to them, that the purchase money was paid out of their joint income but that the patta was granted in the names of the plaintiffs due to political reasons and therefore the plaintiffs were at the most benamidars.
The trial court held that the house was acquired by the deceased brother from the Government of Bikaner for the plaintiffs and the patta was granted in favour of the plaintiffs and that they were in its possession till 1956.
It rejected the defendant 's claim that it was acquired with the joint funds of himself and his deceased brother.
On appeal the High Court held that the house had been purchased by the deceased brother out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them and on his death plaintiff No. 1 and the defendant succeeded jointly to the estate as his heirs. ^ HELD: The transaction under which the patta was obtained was not a benami transaction.
The house was acquired by the deceased brother with his money and with the intention of constituting plaintiff No. 2 as the absolute owner thereof.
[648G] Where a person buys property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami.
In that case the transferee holds the property for the benefit of the person who has contributed the purchase money and he is a real owner.
The second case which is loosely termed a benami transaction is a case where a person, who is the owner of the property, executes a conveyance in favour of another without the intention of transferring the title to the property thereunder.
In this case the transferor continues to be the real owner.
The difference between the two kinds of benami transactions is that whereas in the former there is an operative transfer from the transferor to the transferee, though the transferee holds the property for the benefit of the person who has 629 contributed the purchase money, in the latter there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance.
One common feature in both cases is that the real title is divorced from the ostensible title and they are vested in different persons.
The question whether a transaction is a benami transaction or not depends upon the intention of the person who has contributed the purchase money in the former case, and upon the intention of the person who has executed the conveyance in the latter case.
The principle underlying the former case is statutorily recognized in section 82 of the Indian Trust Act, 1882.
[638B E] Meenakshi Mills, Madurai vs The Commissioner of Income Tax, Madras, ; at p. 722; Mohammad Sadiq Ali Khan vs Fakhr Jahan Begam & Ors.
59 I.A. 1; Manmohan Das & Ors.
vs Mr. Ramdai & Anr.
A.I.R. 1931 P. C. 175; Jaydayal Poddar (deceased) through his L.Rs. & Anr.
vs Mst.
Bibi Hazra & Ors.
referred to. 2.
The principles governing the determination of the question whether a transfer is a benami or not are: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was, has to be decided on the basis of the surrounding circumstances, the relationship of the parties the motives governing their action in bringing about the transaction and their subsequent conduct.
[641C E] In the instant case the deceased brother was a bachelor.
On the death of the wife of plaintiff No. 1, plaintiff No. 2 and his younger brother were staying with the deceased brother.
Plaintiff No. 1 was almost in an indigent condition while defendant practised law for some time and later entered into service.
The patta for the house was issued in the name of plaintiffs nos.
1 and 2 at the request of the deceased brother for the benefit of plaintiff No. 2 and was handed over to him after he completed his education.
This conduct of the deceased brother established that it was his intention that, when he secured the patta from the State Government in the names of plaintiffs it was his intention that plaintiff No. 2 whom he loved, should become the owner.
[641F H] 3.
The declaration made by the deceased, who had contributed the purchase money subsequent to the date of purchase to the effect that the property belonged to plaintiff No. 2 was admissible in evidence either under section 32(3) or section 21 of the Indian Evidence Act to prove his intention that he intended that plaintiff No. 2 should become its owner.
[647E] Shephard & Anr.
vs Cartwright & Anr.
; , distinguished.
|
vil Appeal Nos.
3073 16 of 1988 Etc.
From the Judgment and Order dated 8.6.1987 and 9.6.
1987 of the Andhra Pradesh High Court in W.P. Nos. 1370/87, 15090/85.34 18/ 86.
911/87, 3186/87, 3435/87, 3748/87, 4356/87, 5006/87 'and 5379 of 1987.
P.A. Choudhary, Shanti Bhushan, Badrinath, T.V.S.N. Chari, Mrs. Sunita Rao and A. Subba Rao for the Appellants.
A.S. Nambiar, T.S. Krishnamoorty, C. Sitaramayya, R.N. Keshwani, B. Kanta Rao, Ms. K. Sarda Devi, G.N. Rao and 13.
Parthasarthi, for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The question for decision in these appeals is whether payment of less salary to a senior than his junior in the same cadre having the same pay scale is violative of the Principle of "equal pay for equal work" enshrined in Article 39(d) read with Articles 14 and 16 of Constitution of India.
Though the respondents belong to different departments and service but since, the question of law is same we are disposing these appeals by a common order.
Necessary facts relating to each batch of 1004 appeals for appreciating the controversy are as under: Civil Appeal Nos. 317 30/87, 2998/87, 294 298/88, 307 to 315/88, 305/ 88 & 3 16/88.
The first batch in this bunch of appeals is concerning the employees of the High Court of Andhra Pradesh.
The main judgment under appeal relates to the cadre of Assistant Section Officers working in the High Court.
Copyists and Assistants are the two feeder cadres to the post of Assist ant Section Officer.
Prior to 1974 copyists were in the pay scale of Rs.70~130 and were entitled to additional payment at Re.7.5p.
per every 100 words they copy in excess of 42,000 words.
As a result of pay revision they were given the pay scale of Rs.250 430 w.e.f. 1.1.1974 without entitle ment of remuneration in addition to pay.
The copyists repre sented that in the revised pay scale, the additional emolu ments which were being earned by them had not been taken into account.
On the recommendation of the High Court the State Government agreed to fix the pay of the copyists in the revised pay scale by adding into their basic pay the average remuneration of Rs.83.34 and the Dearness Allowance admissible thereon.
The amount of Rs.83.34 was taken as average remuneration which each of the copyist was earning prior to 1.1.
1974 in addition to the pay.
The pre revised pay scale of Assistants was Rs.90 192 which was revised to Rs.250 430 from 1st of January, 1974.
Although the revised pay scale of copyists and assistants was identical but because of addition of Rs.83 34 in the pay fixation, the copyists started drawing more salary than the assistants.
Promotion to the cadre of Assistant Section Officers in the pay scale of Rs.340 640 is from the two cadres of copyists and assistants.
One Janikirama Rao, a copyist, was promoted to the said post in the year 1984.
On the basis of his last pay drawn as copyist his basic pay fixed as Assistant Sec tion Officer, was higher than those who were promoted to the said post from the cadre of assistants during the period 1982 84.
The pay fixation was done under Fundamental Rule 22(a)(i) of Andhra Pradesh Fundamental Rules (hereinafter called 'Fundamental Rules '.) Though junior Shri Janikirama Rao was thus drawing more salary than his seniors in the same cadre.
Those seniors filed Writ Petition 2 135/83 in the High Court of Andhra Pradesh praying that the grant of higher salary to a junior person is violative of the Princi ple of "equal pay for equal work".
The learned Single Judge allowed the writ petition and directed that the Assistant Section Officers senior to Shri Janikirama Rao be paid the same salary as he was drawing.
Writ Appeal filed by the State of Andhra Pradesh against the judgment was dismissed by the Division Bench holding that grant of 1005 higher pay packet to a junior person that the senior under any circumstances is discriminatory.
Connected writ peti tions were allowed by the High Court being covered by the judgments in Writ Petition 2 135/83 and writ appeal.
No counter was filed by State of Andhra Pradesh in these writ petitions and on the basis of the averment in the petitions that juniors were getting higher salary than the seniors, the writ petitions were allowed.
Civil appeals are directed against the orders of the High Court.
Civil Appeal Nos. 1071 73/87, 1149 1150/86.
In this batch of civil appeals Tirumala Tirupathi Devas thanam is the appellant and these appeals are directed against the High Court order.
B.V. Krishnamurthy and 62 others working as Upper Division Clerks in the Devasthanam filed Writ Petition No. 12337 of 1984 before the High Court of Andhra Pradesh praying that the Devasthanam be directed to pay salary to them at par with one D. Gopaliah, Upper Division Clerk who was junior to them.
Service particulars of Gopaliah and one of the petitioners Krishnamurthy only need mention.
Gopaliah joined as Lower Division Clerk in 1967 and was given Selection Grade in 1974.
Family Planning Incentive Increment of Rs. 11 was added to his pay in 1977.
He was promoted as Upper Division Clerk in 1979 but was reverted in 1981 as he could not pass the accounts test.
He was given further increase in pay as a result of Government Order which provided higher pay to those Lower Division Clerks who completed 15 years service as such.
In June, 1983 Gopaliah was drawing Rs.811 as his basic pay in the cadre of Lower Division Clerks.
He was again promoted as Upper Divi sion Clerk in pay scale 575 950 on 1.7.
1983 and in that cadre his basic pay was fixed at Rs.861.
On the other hand, Krishnamurthy joined as Lower Division Clerk in 1970.
He was promoted as Upper Division Clerk on 3rd of November, 1981 and Rs.615 was fixed as his basic pay in that cadre.
On 1st of July, 1983 Krishnamurthy was drawing Rs.635 as his basic pay.
It is under these circumstances that Gopaliah though junior to Krishnamurthy started drawing higher pay as Upper Division Clerk.
The writ petition was allowed by the learned Single Judge by one line order following his decision in another writ petition concerning the employees of the Andhra Pradesh State Electricity Board.
Neither the facts nor the distinctive features of the present case were noticed.
Writ Appeal No. 504 of 1985 was dismissed in limine by the Divi sion Bench of the Andhra Pradesh High Court.
In three con nected petitions payparity was sought with the same junior Gopaliah.
In the fourth petition one Gangiah was the named junior for claiming pay hike.
All these 1006 petitions were allowed following the earlier decision.
Hence these appeals.
Civil Appeal Nos. 299/88 and 300 to 30 1/88.
These appeals are directed against the judgment of the Andhra Pradesh Administrative Tribunal in Petition No. 1531 of 1985 and connected petitions.
The petitioners before the Tribunal were junior assistants working in different depart ments.
They were promoted as senior assistants on various dates between 1976 and 1978.
They opted to be absorbed as auditors in the Pay and Accounts Office, Hyderabad, where they were finally absorbed with effect from 12th of July, 1978.
One Swaminathan who was recruited as typist, was promoted as senior assistant on 11th of January 1978.
He also opted to work as auditor in the Pay and Accounts Of fice, Hyderabad.
He was finally absorbed in the said depart ment with effect from 4th of September, 1978.
The writ petitioners and Swaminathan came to the Pay and Accounts Office, Hyderabad from different departments.
Since Swamina than was absorbed as auditor in the pay and accounts depart ment later in time than the petitioners, he ranked junior to them.
But in view of his length of service and grant of selection grade, he had been drawing higher pay in his parent department.
On his joining the Pay and Accounts Office his pay was fixed on a higher basic pay as compared to the petitioners as the last pay drawn by him had to be protected under the Fundamental Rules.
Thus though he was junior to the petitioners, he started drawing higher pay than them.
The seniors raised contention before the Tribunal that on the basis of "equal pay for equal work" they were entitled to the same pay as given to their junior.
The Tribunal allowed the petitions holding that for whatever reasons a junior is paid higher pay packet than his senior the principle of "equal pay for equal work" is violated and the senior is entitled to the same pay.
Following its judg ment the Tribunal allowed two connected petitions.
Hence these appeals by the State of Andhra Pradesh.
Civil Appeal No. 3 17 of 1988.
This appeal also relates to Pay and Accounts Office.
In this case the petitioners before the Tribunal were Lower Division Clerks senior to one P. Arunachala Prasad who was initially a typist but was promoted as Lower Division Clerk subsequent to the petitioners.
Since he was drawing more pay as typist, on his promotion to the post of Lower Division Clerk his pay fixed was higher than the petitioners.
The claim 1007 of the petitioners for same pay as paid to Arunachala Prasad was allowed.
Civil Appeal Nos.
200 to 203 of 1988.
These appeals relate to Animal Husbandry Department of the Andhra Pradesh Government.
Some live stock assistants filed a petition before the Andhra Pradesh Administrative Tribunal claiming higher pay which was being drawn by their respective juniors in the same cadre.
In the reply filed on behalf of State before the Tribunal it was explained that junior live stock assistants were senior in the lower cadre but could not be promoted earlier due to their failure to undergo the prescribed training and they had earned selec tion grade on the basis of length of service.
On promotion their basic pay was fixed under Fundamental Rules which came to be higher than their seniors.
Without considering the reasons for the disparity in pay the Tribunal allowed the petitions holding that the senior must be paid the same salary as his junior, in the cadre, was drawing.
Civil Appeal Nos. 2453, 2454 and 2476 to 2479 of 1988.
These appeals concern the office of Registrar Co opera tive Societies Andhra Pradesh.
Respondents inspectors filed a petition before the Andhra Pradesh Administrative Tribunal saying that one Jagmohan was junior to them but was drawing higher salary.
The Tribunal allowed the petition in the following words: "It may be true that in certain circumstances within the framework of the rule, Shri Jagmo han came to receive higher pay than his sen iors . . what will be done in such a case is to bring the pay of the senior on par with the junior.
It is how the 'principle of equity ' in pay is to be met." Five connected petitions were also allowed by the Tribunal.
Mr. Shanti Bhushan appearing for the appellants in the first batch has argued that so long as there is rational basis for giving higher pay to a junior in the same cadre, the seniors can have no grievance.
According to him copyists and assistants being two feeder cadres to the post of As sistant Section Officer, the last pay drawn in the lower cadre has to be the basis under the Fundamental Rule for fixation of pay in the cadre of Assistant Section Officers.
Since the copyists were draw 1008 ing higher pay than the assistants, they were rightly fixed at a higher pay than the assistants who were promoted earli er.
He says pay earned by the copyists before joining as Assistant Section Officer is a legitimate incident of serv ice which entitles them higher pay than their seniors.
Mr. P.A. Choudhary appearing for some of the appellants contended that if all the considerations, factors and inci dents of service are identical then only the principle of 'equal pay for equal work ' is attracted.
But if there is a justification under the Rules or otherwise for giving a higher pay to the junior then the principle in the abstract sense is not attracted.
Mr. T.S. Krishnamoorthy, Mr. A.S. Nambiar and Mr. Kanta Rao appearing for the respondents supported the judgments under appeals and contended that grant of higher pay to a junior in the same cadre, doing same work and shouldering same responsibilities, is per se discriminatory and viola tive of the principle of equal pay for equal work.
Our attention was invited to Rule 27 of the Fundamental Rules which permits the competent authority to grant pre mature increment to a Government servant on a time scale of pay.
They further contended that juniors getting higher pay than a senior in the same cadre is an anomaly causing heart burn which can be removed by directing the authorities to fix the seniors at par with the juniors by exercising power under Rule 27 of the Fundamental Rules.
The factual basis in all these appeals is identical.
The facts clearly show that in every case the pay fixation of the junior was done under the Fundamental Rules and there were justifiable reasons for fixing the junior at a higher pay than his seniors in the cadre.
It was not disputed that the said pay fixation was in confirmity with the Fundamental Rules.
Neither before us nor before the courts below the validity of Fundamental Rules was challenged by any of the parties.
Without considering the scope of these Rules and without adverting to the reasons for fixing the juniors at a higher pay, the High Court and the Tribunal have in an omnibus manner come to the conclusion that whenever and for whatever reasons a junior is given higher pay the doctrine of 'equal pay for equal work ' is violated and the seniors are entitled to the same pay.
We do not agree with the High Court/Tribunal.
Doctrine of 'equal pay for equal work ' cannot be put in a straight jacket.
Although the doctrine finds its place in the Direc tive Principles but this Court, in 1009 various judgments, has authoritatively pronounced that fight to 'equal pay for equal work ' is an accompaniment of equali ty clause enshrined in Articles 14 and 16 of the Constitu tion of India.
Nevertheless the abstract doctrine of 'equal pay for equal work ' cannot be read in Article 14.
Reasonable classification, based on intelligible criteria having nexus with the object sought to be achieved, is permissible.
"Equal pay for equal work" does not mean that all the members of a cadre must receive the same pay packet irre spective of their seniority, source of recruitment, educa tional qualifications and various other incidents of serv ice.
When a single running pay scale is provided in a cadre the constitutional mandate of equal pay for equal work is satisfied.
Ordinarily grant of higher pay to a junior would ex facie be arbitrary but if there are justifiable grounds in doing so the seniors cannot invoke the equality doctrine.
To illustrate, when Payfixation is done under valid statuto ry rules/executive instructions, when persons recruited from different sources are given pay protection, when promotee from lower cadre or a transferee from another cadre is given pay protection, when a senior is stopped at Efficiency Bar, when advance increments are given for experience/passing a test/ acquiring higher qualifications or as incentive for efficiency; are some of the eventualities when a junior may be drawing higher pay than his seniors without violating the mandate of equal pay for equal work.
The differentia on these grounds would be based on intelligible criteria which has rational nexus with the object sought to be achieved.
We do not therefore find any good ground to sustain the judg ments of the High Court/Tribunal.
In Federation of All India Customs & Central Excise Stenographers (Recognised) and others vs The Union of India and others, JT 19, Sabyasachi Mukharji, J. considered earlier judgments of this Court on the point and observed: "Equal pay for equal work is a fundamental right.
But equal pay must depend upon the nature of the work done, it cannot be judged by the mere volume of work, there may be qualitative difference as regards reliability and responsibility.
Functions may be the same but the responsibilities make a difference.
One cannot deny that often the difference is a matter of degree and that there is an element of value judgment by those who are charged with the administration in fixing the scales of pay and other conditions of service.
So long as such value judgment is made bona 1010 fide, reasonably on an intelligible criteria which has a rationale nexus with the object of differentiation such differentiation will not amount to discrimination.
It is important to emphasise that equal pay for equal work is a concomitant of Article 14 of the Constitution.
But it follows naturally that equal pay for unequal work will be a negation of that right.
" In State of U.P. & Ors.
vs Shri J.P. Chaurasia & Ors., JT the question for consideration was as to whether it is permissible to have two pay scales in the same cadre for persons having same duties and having same respon sibilites.
Jagannatha Shetty, J. speaking for this Court observed: "It is against this background that the prin ciple of 'equal pay for equal work ' has to be construed in the first place.
Second, this principle has no mechanical application in every case of similar work.
It has to be read into article 14 of the Constitution.
Article 14 permits reasonable classification rounded on different basis.
It is now well established that the classification can be based on some qualities or characteristics of persons grouped together and not in others who are left out.
Those qualities or characteristics must, of course, have a reasonable relation to the object sought to be achieved.
In service matters, merit or experience could be the proper basis for classification to promote efficiency in administration.
He or she learns also by experience as much as by other means.
It cannot be denied that the quality of work performed by persons of longer experience is superior than the work of newcomers.
Even in Randhir Singh 's case, this principle has been recognised.
O. Chinnappa Reddy, J. observed that the classification of officers into two grades with different scales of pay based either on academic qualifications or experi ence on length of service is sustainable.
Apart from that, higher pay scale to avoid stagnation or resultant frustration for lack of promotional avenues is very common in career service.
There is selection grade for District Judges.
There is senior time scale in Indian Administrative Service.
There is super time scale in other like services.
The enti tlement to these higher pay scales depends upon seniority cum merit or merit cum seniori ty.
The differentiation so made in the same cadre will not amount to discrimination.
The classif 1011 cation based on experience is a reasonable classification.
It has a rationale nexus with the object thereof.
To hold otherwise, it would be detrimental to the interest of the service itself.
" The argument based on Rule 27 was never raised before the High Court/Tribunal.
There is neither any material on the record nor any justification before us to direct the appellant authorities to act under Rule 27 of the Fundamen tal Rules.
The respondents may if so advised approach the appropriate authorities for any such relief.
The appeals are accepted.
Judgments of the Andhra Pra desh High Court and the Andhra Pradesh Tribunal are set aside and the writ petitions/petitions/applications of the respondents before the High Court/Tribunal are dismissed.
There will be no order as to costs.
The respondents are white collared salaried persons and it may be too harsh for them to refund the salary already paid to them.
Therefore, in the interest of justice, we direct that the additional salary paid to them as a result of High Court/Tribunal judgments upto 31 3 1989 shall not be recovered from them.
Y.L. Appeals al lowed.
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The common question that arose for decision by this Court in these groups of matters is whether payment of less salary to a senior than his junior in the same cadre having the same scale of pay is violative of the principle of "equal pay for equal work" enshrined in Article 39(d) read with Article 14 and 16 of the Constitution.
The said ques tion in each group of matters arises thus: The first batch in this bunch of appeals (CAs 317 30/87 etc.) relate to the case of Assistant Section Officers of Andhra Pradesh High Court.
It may be pointed out that copy ists and Assistants are the two feeder channels to the post of assistant Section Officers.
Prior to 1974 the Copyists were in the pay scale of Rs.70 130 and were entitled to additional payment at Rs.7.5P every 100 words they copy in excess of 42,000 words.
Consequent upon pay revision, they were given the pay scale of Rs.250 430 w.e.f. 1.1.1974 with out entitlement of remuneration in addition to pay.
The Copyists represented that while revising their grade, tile additional emoluments, which they were getting prior to revision of pay, has not been taken into consideration.
On recommendation of the High Court, the State Government agreed to fix the pay of the Copyists in the revised grade by adding to their basic pay Rs.83.34P, that being the average remuneration that each Copyist was earning prior to 1.1.74 and the Dearness Allowance admissible thereon.
The pre revised scale of pay of Assistants was Rs.90 192 which was revised to Rs.250 430 from 1.1.1974.
Even though the Scale of Pay of Copyists and Assistants was the same, Copyists started drawing more salary on account of addition of Rs.83.34P aforesaid.
Consequently on promotion to the Post of Assistant Section Officer, the salaries of those 1001 promoted from the cadre of Copyists were fixed higher than those who were promoted from the cadre of Assistants.
One Janakirama Rao, a Copyist was promoted to the cadre of Assistant Section Officer in 1984.
On the basis of his last pay drawn as Copyist, his pay as Assistant Section Officer was fixed higher than those who were promoted to the said post from the cadre of Assistants during the period 1982 84, under F.R. 22(a)(i) of Andhra Pradesh Fundamental Rules.
The Seniors filed writ petitions in the High Court contending that the grant of higher pay to juniors in the same cadre is violative of the principle "Equal pay for equal work".
The High Court allowed the Writ Petitions and directed that the Assistant Section Officers seniors to Janakirama Rao be paid the same salary as he was drawing.
Division Bench held that grant of higher pay packet to junior person than his seniors under any circumstances is discriminatory.
Hence these appeals by the State of Andhra Pradesh.
Another batch of appeals is filed by Tirumala Tirupathi Devasthanam.
One B.V. Krishnamurthy and 62 others working as Upper Division Clerks in the Devasthanam had filed writ petition in the High Court praying that the Devasthanam be directed to pay salary to them at par with one D. Gopaliah, U.D.C. who was junior to them.
Particulars of D. Gopaliah and one of the petitioners may only be stated.
Gopaliah joined as Lower Division Clerk in 1967 and was given Selec tion Grade in 1974.
Family Planning incentive of Rs. 11 was added to his salary in 1977.
He was promoted as U.D.C. in 1979 but was reverted in 1981.
He was given further increase in pay as L.D.C. on completion of 15 years service, as provided in the Rules and in June 1987, he was drawing basic pay of Rs.811.
He was again promoted as U.D.C. on 1.7.1983 and in that cadre, on the basis of his pay in the lower grade, his salary as per Rules was fixed at Rs.861.
On the other hand Krishnamurthi who joined as Lower Division Clerk in 1970, and promoted as U.D.C. on 3.11.1981, his salary was fixed at Rs.615.
On 1st July 1983 Krishnamurthy was drawing Rs.635.
In these circumstances Gopaliah though junior to Krishnamurthy started drawing more salary.
Following his earlier decision, the learned Single Judge allowed the Writ Petitions filed by Krishnamurthy and others similarly placed.
Their Writ Appeals were dismissed.
Hence these appeals by Devasthanam.
The third group of appeals by the State of Andhra Pra desh (CAs 299/88 & 300 301/88) are directed against the order of the Andhra Pradesh Administrative Tribunal.
The Writ Petitioners therein were Assistants working in differ ent departments of the State.
They were all absorbed in the Pay & Accounts Office, Hyderabad w.e.f. 12th July 1002 1978.
One Swaminathan was also absorbed as Assistant in the said office w.e.f. 4th September 1978.
In view of his length of service and grant of Selection grade, he had been drawing higher salary in his parent Department.
Accordingly on his joining Pay & Accounts Office, his salary, as per Rules, was protected and he was fixed at higher basic pay than the Writ Petitioners.
The Seniors raised contention before the Tribunal on the basis of "Equal pay for equal Work".
The Tribunal allowed the Writ Petitions, holding that for whatever reason a junior is paid higher pay packet than his senior, the prin ciple of "Equal pay for equal work" is violated and the senior is entitled to the same pay.
In other cases, also, the same question junior drawing more salary than senior and the seniors claiming parity of pay is involved.
Before this Court it was contended by the appellants employers that so long as there is rational basis for giving higher pay to junior in the same cadre, the seniors can have no grievance.
The last pay drawn in the lower cadre has to be the basis for fixation of salaries under the Fundamental Rules and following that basis, the salaries have been rightly fixed.
According to some appellants if all the consideration, factors and incidents of service are identical then only the principle of "Equal pay for equal work" is attracted.
If there is justification under the Rules or otherwise for giving a higher pay to the junior then the principle in the abstract sense is not attracted.
Allowing the appeals, this Court, HELD: Doctrine of "Equal pay for equal work" cannot be put in a straight jacket.
Although the doctrine finds its place in the Directive Principles, this Court, in various judgments, has authoritatively pronounced that right to "equal pay for equal work" is an accompaniment of the equal ity Clause enshrined in Article 14 and 16 of the Constitu tion of lndia.
[1008H; 1009A] Reasonable classification, based on intelligible crite ria having nexus with the object sought to be achieved, is permissible.
[1009B] "Equal pay for equal work" does not mean that all the members of the cadre must receive the same pay packet irre spective of their 1003 seniority, source of recruitment, educational qualifications and various other incidents of service.
When a single run ning pay scale is provided for a post in a cadre, the Con stitutional mandate of equal pay for equal work is satis fied.
Ordinarily grant of higher pay to a junior would ex facie be arbitrary but if there are justifiable grounds in doing so, the seniors cannot invoke the equality doctrine.
[1009B C] The differentia on grounds such as, when persons re cruited from different services are given pay protection, when promoters from lower cadre or a transferee from another cadre is given any pay protection, when a senior is stepped at efficiency bar, when advance increments are given for experience/passing a test/acquiring higher qualifications or as incentive for efficiency, would be based on intelligible criteria which has rational nexus with the object sought to be achieved, and which does not violate the mandate of equal pay for equal work.
The orders appealed against were there fore reversed.
[1009D E]
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Civil Appeal No. 1347 of 1970.
From the Judgment and Decree dated 29 4 1969 of the Jammu and Kashmir High Court in Civil Appeal No. 67 of 1965.
G.L. Sanghi, V. K. Boone and Shri Narain for the Appellant.
Gopi Nath Runzru, K. L. Taneja and section L. Aneja for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
, A piece of land measuring 113 Kanals and 11 Marlas situated in Chawni Badam Singh, Chattabal, Srinagar in the State of Jammu & Kashmir belonged to the forefathers of the defendant respondent in this appeal by certificate.
Indisputably the res 283 pondent 's ancestor was Assamidar of the land, that is to say, he was the land holder as distinguished from land owner.
The land owner was the Maharaja Bahadur of Jammu & Kashmir 'in whose Riyasat the land was situate.
Proposals were made in the year 1893 to take this land from the ancestor of the respondent as it came under a timber depot established on adjacent Government land.
The land was taken possession of and as was the practice prevalent during the Maharaja 's time only rent was remitted and no compensation was paid for taking over the land.
The respondent 's ancestor had merely a right of possession and no proprietory right in the land.
He lost the right of possession too on the Government dispossessing him and taking possession for the purpose of the timber depot.
Sixty years later the a Respondent filed an application before the then Prime Minister of Jammu & Kashmir for payment of compensation of the land.
Inquiries were made from the various officers of the various department and eventually instead of deciding as to whether the State was liable to pay any compensation in respect of the land which had been taken over 60 years ago or not the decision taken was to start a new land acquisition proceeding under the Jammu & Kashmir State Land Acquisition Act, 1934 which is at pari materia with the Central Land Acquisition Act, 1894.
Notice under section 4 of the said Act was issued in or about the year 1955 and the Collector, Srinagar made an Award determining the compensation for the land at Rs. 32,645.62 paise.
The respondent asked for a reference and on reference being made the learned District Judge determined the compensation at Rs. 35,908.10 paise.
The State preferred an appeal.
The High Court restored the amount fixed by the Collector and knocked down the enhancement made by the District Judge.
For the first time in the High Court an application was filed under order 41 Rule 27 of the Code of Civil procedures claiming adverse possession of the land and for the taking of additional evidence.
The High Court repelled this contention.
Later a Review Petition was filed in the High Court claiming that the land had already been acquired and the entire land acquisition proceeding was without jurisdiction and a nullity.
The High Court was asked to award no compensation.
The High Court rejected this Review Petition.
Thereafter the present suit was filed saying that the defendant respondent had committed fraud and the land acquisition proceeding had been taken as a result of mistake of fact and law and that the entire proceeding was vitiated.
The suit was filed on the original side of the High Court of Jammu & Kashmir.
The learned Judge dismissed the suit.
The State, the appellant in this appeal, failed in appeal before the Letters Patent Bench of the High Court.
The matter has now come before us.
284 The findings of the learned single Judge are: "(1) That the lands in dispute were in continuous possession of the forest department since 1894 A.D. (2) That no rent or compensation was paid to the defendant or his ancestor for these lands.
(3) That the lands in dispute were recorded as "Khalsa Sarkar" which means that the proprietory interest vested in the Government.
(4) That at the time when the land acquisition proceedings were initiated, the officers concerned of the plaintiff were fully aware of the facts mentioned above.
But their attention was not specifically drawn to the council resolutions.
(5) That the forest records having been burnt in the year 1943 and after a fresh enquiry was initiated at the instance of the Advocate general, the council resolutions were traced in the Government repository at Jammu.
(6) That the old settlement file which contained the resolutions perhaps did not form part of the land acquisition file.
" In regard to finding No. 6 there was some controversy as to whether the land acquisition file contained the old resolutions or not and whether the attention of the authorities was drawn to them.
We shall assume in favour of the respondent as found by the learned Trial Judge that there was no fraud practised by him nor was there any mistake of fact on the part of the authorities concerned in starting the land acquisition proceeding.
The Appellate Bench of the High Court consisted of Mian Jalal ud Din J. and Anant Singh J.
They differed on most of the points although agreed in their conclusion that the appeal should be dismissed.
The findings of Mian Jalal ud Din J. are . (1) "That it could not be said that the authorities dealing with the acquisition proceedings were ignorant about the factual aspect of the matter that the land had been resumed in the year 1893 under council resolution and that no compensation was to be paid for this, and that its character was that of "KHALSA" and it remained in possession of the forest department for over 60 years. " (2) "In our opinion the initiation of acquisition proceedings was wholly uncalled for as there was nothing to be acquired.
Land, which was meant to be acquired, was already 285 resumed by the Government and in possession of the Forest Department right from the year 1893 A.D. under the orders of the council and was shown as Khalsa ;" (3) "It appears to be a case of gross negligence on the part of the officers of the Government dealing with the acquisition matter.
The plaintiff cannot avoid the decree on the ground that his officers have acted in gross negligence;" and (4) that the order of the High Court in appeal and in review operated as res judicata.
The plaintiff appellant was also estopped from challenging the land acquisition proceeding.
Mian Jalal ud Din J. agreed in this regard with the learned single Judge.
Anant Singh J. did not agree with the other learned Judge on the question of estoppel and res judicata but agreed with him that negligence was no ground for setting aside the Award made in the land acquisition proceeding and concurred in the dismissal of the appeal.
Even on the findings recorded by the courts below this appeal must succeed.
We shall, however, briefly refer to some facts which emerge from the council resolutions and some other documents of the years 1893 and 1894.
P.W. 5/1 is State council Resolution No. 2 dt.
7 6 1893 by which sanction was accorded to the allotment of land with existing house situated at Purani Chawni for opening a Government Timber Depot.
Eventually land in question also came under this depot.
P.W. 5/2 is State Council Resolution No. 17 dated 4 9 1893 showing that from the report of the Tehsildar it appeared that the Forest Department wanted to take possession of the land in question which was a sown land by storing timber there.
Council Resolution No. 10 dated 28 10 1893, Ext.
PW 5/3 is very important.
Now this resolution states that the land shall have to be compulsorily acquired but "as per practice in the country only the land revenue shall have to be remitted and the cultivators cannot get any compensation in cash nor can the Council sanction taking of the land on lease.
Of course there is no bar to the grant of cultivated land of the same quality to the cultivators in exchange by the Government.
" Next comes the Resolution No. 8 dated 17 2 1894, Ext.
PW 5/4 showing "(a) The Governor should give the land required by the Conservator of Forests and the land Revenue of the land which has come under the timber depot should be remitted.
" Thereafter the order recorded is "The proposal of the Settlement Commissioner is accepted.
The Revenue Department shall comply.
" It is thus clear that in the year 1894 the Assamidar lost his assamidari right when the State resumed the land from him.
There was no 286 law prevalent then that compensation was to be compulsorily given.
It depended upon the sweet will of the Riyasat to give some other land in lieu of the land acquired.
In this case also it appears only the land revenue was remitted.
And probably, as documents indicate, compensation was also paid for the standing crops in the land.
But what is clear to us with certainty is that no right was left in the land holder in respect of which he could acquire a better right on the basis of the report of the Glancy Commission in 1932 as has been remarked by the learned Trial Judge.
Whatever right was possessed by the respondent 's ancestor was dead and gone in the Year 1894.
P. W. 14/2 is Intikhab Jamabandi Mauza Chawni Badam Singh Tehsil.
In the remarks column the note made runs thus: "By order of Durbar No. 2381 dated 5th Assuj '55 the total area of village has been excluded from the land revenue, and the total land of this village has come under the timber depot and therefore the total land has been recorded as Khalsa.
The original file has been returned to Durbar on 29th Assuj after necessary action.
Dated 29th Assuj '55.
" The year '55 is samvat year 1955 which will roughly correspond to 1897.
Thus there is no doubt that the land was resumed by the Durbar from the ancestor of the respondent before the end of the 19th century and it was recorded as 'Khalsa '.
The land had become the State land in the full sense of the term and belonged to the State since then.
No semblance of any right title or interest was left in the respondent 's ancestor thereafter.
Yet after 60 years the matter was re agitated by the respondent by claiming compensation in respect of the land which had been taken possession of long ago by the State.
The respondent did not claim that any right title or interest was left in him.
He merely wanted on compassionate grounds compensation for the land.
One can under stand if on compassionate grounds some compensation with reference to the year when the land was taken possession of could be determined and paid.
But that was not done.
A very queer procedure was adopted of acquiring the land under the State Land Acquisition Act afresh thus determining the compensation on the basis of the market value of the land prevailing 60 years later.
We have gone through the letter dated 17 12 1954 Ext.
P.W. 14/A written by Tehsildar; the Patwari 's Report dated 12 4 1955 Ext.
D.W.4/A; the Tehsildar 's Report dated 21 4 55 Ext.
P.W. 19/B/2; letter dated 3 5 55 Ext.
D.W.12/1 written by the Deputy Commissioner to the Commissioner; Ext.
P.W. 287 1/2 the letter dated 2 6 1955 written by the Conservator of Forests to the Chief Conservator of Forests; the office Note dated 9 6 1955 Ext.
P.W. 1/3 and Chana 's letter dated 22 6 1955, Ext.
P.W. 1/5.
On going through these documents it appears to us that under the influence of some high ups a case was made out for payment of compensation to the respondent in respect of the land acquired 60 years ago by acquiring it again which naturally led to the determination of the market value of the land in or about the year 1955.
The State Exchequer cannot be made to suffer for such wanton and illegal actions of its officers.
The land had been resumed long ago.
It belonged to the State.
The whole proceeding of land acquisition was a nullity.
The Award resulting therefrom was also ultra vires and a nullity.
It mattered little whether the proceeding was taken as a result of the fraud or mistake or otherwise.
We are accepting the findings of the courts below that the respondent had not practised and fraud nor was the land acquisition proceeding started as a result of any mistake of fact.
It was either as a result of gross negligence or a deliberate act on the part of the officials at the instance of some high ups to help the respondent.
It is well settled that there is no question of any acquisition of the State 's own land as was purported to be done in this case.
In The Government of Bombay vs Esufali Salebhai it has been observed at page 624 thus: "It is quite true that there can be no such thing as the compulsory acquisition of land, owned by and in the 'occupation and control of the Crown.
The Land Acquisition Act cannot apply to such lands, because all Crown lands being vested in the Government, they are competent and free to devote any of those lands to a public purpose.
It is a contradiction in terms to say that the Government are compulsorily acquiring that which they have already acquired otherwise, both as to title and possession.
" The same view has been taken in Mohammad Wajeeh Mirza vs Secretary of State for India in Council when at page 33 the passage from the judgment of Chandavarkar J. extracted above was quoted with approval.
In the case of The Deputy Collector, Calicut Division vs Aiyavu Pillay and others Wallis J.
Of the Madras High Court, in our opinion, correctly observed "It is, in my opinion, clear that the Act does not contemplate or provide for the acquisition of any interest which already belongs to Government in land which is being acquired 288 under the Act but only for the acquisition of such interests in the land.
as do not already belong to Government.
" Venkatarama Ayyar J. speaking for this Court in The Collector of Bombay vs Nusserwanji Rattanji Mistri & others after quoting the above passage of Wallis, J. from the Madras decision aforesaid remarked at page 1322 "With these observations, we are in entire agreement" and added "When Government possesses an interest in land which is the subject of acquisition under the Act, that interest is itself outside such acquisition, because there can be no question of Government acquiring what is its own" The Courts below have heavily relied upon the decision of the Bombay High Court in Secy.
of State vs Tayasaheb Yeshwantrao Halkar.
This decision, in our opinion, is clearly distinguishable.
Firstly the principle in the case of Marriot vs Hamoton which was applied in the Bombay case is not applicable in the present case.
In the Bombay case the money under the land acquisition Award had been paid and the suit was for its recovery back.
In that situation it was held that what was paid under the compulsion of law, namely, the land acquisition Award, cannot be recovered back.
In the instant case the money has not yet been paid.
The suit is for the cancellation of the Award which is a nullity.
The second point of distinction between the Bombay case and the present case is that in the former though the title belonged to the Government, possession was with the other side.
In the land acquisition proceeding possession was acquired on payment of compensation.
In that event it was held that money paid was not under any mistake of fact or law.
It was paid for divesting the defendant of his possession.
In the instant case neither title nor possession was with the defendant.
The entire bundle of rights in the land had vested in the State long ago and there was nothing left to be acquired.
In such a situation the High Court was wrong in following the Bombay decision and in applying its ratio to the facts of this case.
We may briefly dispose of the point of estoppel and res judicata.
We approve of the view taken by Anant Singh, J. in that regard.
We may also add that the plea taken in the appeal by filing a petition under order 41, Rule 27 or in the review matter in the High Court was beyond the scope of the appeal filed under the State Land Acquisition Act.
The scope of that appeal was the determination of the amount of compensation and not to declare the whole of the land acquisition 289 proceeding a nullity.
Whatever, therefore, was said by the High Court either in appeal on the question of adverse possession or while rejecting the review petition was outside the scope of the land acquisition appeal.
It could not operate as res judicata in the present suit.
The observations of the High Court were without jurisdiction.
Nor did arise any question of estoppel in this case because the respondent was not made to change his position by starting the land acquisition proceeding against him.
He had already lost his land.
He merely wanted compensation.
The method adopted for the payment of compensation was wholly ultra vires and without jurisdiction.
That being so no question of estoppel arose in this case.
For the reasons stated above, we allow this appeal; set aside the judgments and decrees of the High Court; decree the plaintiff 's suit; declare the land acquisition proceeding and the Award or the decree made thereunder as nullities.
Since the defendant respondent has been unnecessarily harassed in the suit by the wrong and illegal actions of the authorities of the State, we direct that the plaintiff appellant will get no costs.
On the other hand, the defendant respondent will get costs of the suit and the appeals in all the three courts, namely, the Trial Judge, the Division Bench and this Court.
N.K.A. Appeal allowed.
|
The respondent 's forefather was the landholder of a piece of land in the State.
The land was taken possession of in 1897 as the land came under a Timber depot established on land adjacent to Government land.
The practice prevalent during the Maharaja 's time was that only rent was remitted and no compensation was paid for the taking over the land.
The respondent 's ancestors had no proprietory right in the land and the right of possession was also lost on the Government dispossessing him.
Some sixty years later, the respondent filed an application before the then Prime Minister of the State for payment of compensation of the said land.
Instead of deciding as to whether the State was liable to pay compensation in respect of the land which had been taken over sixty years ago, a new land acquisition proceeding under the Jammu and Kashmir State Land Acquisition Act, 1934 was started in the year 1955 and an Award for Rs. 32,645.62 as compensation for the land was made by the Collector.
On reference the District Judge increased the amount of compensation.
On appeal by the State, the High Court restored the amount fixed by the Collector.
The respondent 's application under order 41 Rule 27 C.P.C. was dismissed by the High Court.
A review petition that the land had already been acquired and that the land acquisition proceeding was without jurisdiction and a nullity was rejected.
A suit was filed that the land acquisition proceedings had been taken as a result of taken of fact and law and that the entire proceeding was vitiated.
The suit was dismissed.
Appeal to a division Bench was also dismissed.
Allowing the appeal, ^ HELD: In 1894 the Assamidar lost his assamidari right when the State p resumed the land from him.
There was no law then that compensation was to be given.
It depended upon the sweet will of the Riyasat to give some other land in lieu of the land acquired.
Only the land revenue was remitted, and documents indicate, compensation was also paid for the standing crops in the land.
No right was left in the landholder in respect of which he could acquire a better right.
Whatever right was possessed by the respondent 's ancestor was dead and gone in the year 1894.
[285H, 286A B] 2.
The land was resumed by the Durbar from the ancestor of the respondent before the end of the 19th century and it was recorded as 'Khalsa '.
The land had become the State land in the full sense of the term and belonged to the State since then.
No semblance of any right, title or interest was left in the respondent 's ancestor thereafter.
[286D E] 3.
A queer procedure was adopted for acquiring the land under the State Land Acquisition Act afresh, thus determining the compensation on the basis of the market value of the land prevailing 60 years later.
Under the influence of 282 some high ups, a case was made out for payment of compensation to the respondent in respect of the land acquired sixty years ago by acquiring it again which led to the determination of the market value of the land in the year 1955.
[286G, 287A] 4.
The State Exchequer cannot be made to suffer for illegal actions of its officers.
The land had been resumed long ago and belonged to the State.
The whole proceeding of land acquisition was a nullity and the Award resulting therefrom was ultra vires.
It mattered little whether the proceeding was taken as a result of fraud or mistake or otherwise.
The respondent had not practised any fraud nor was the land acquisition proceeding started as a result of any mistake of fact.
It was either as a result of gross negligence or a deliberate act on the part of the officials at the instance of some high ups to help the respondent.
There is no question of any acquisition of the State 's own land as was purported to be done in this case.
[287B D] Government of Bombay vs Esufali Salebhai, I.L.R XXXIV Bombay, 618; Mohammad Wajeeh Mirza vs Secretary of State for India in Council, A.I.R. 1921 oudh, 31, The Deputy Collector Calicut Division vs Aiyavu Pillay and others, IX Indian Cases, 341; The Collector of Bombay vs Nusserwanji Rattanji Mistri & others ; referred to.
of State vs Tayasaheb Yeshwantrao Holkar, A.I.R. , & Narriot vs Hamoton distinguished.
The plea taken in the appeal by filing a petition under order 41 Rule 27 or in the review matter in the High Court was beyond the scope of the appeal filed under the State Land Acquisition Act.
The scope of that appeal was the determination of the amount of compensation and not to declare the whole of the land acquisition proceeding a nullity.
Whatever, therefore, was said by the High Court either in appeal on the question of adverse possession or while rejecting the review petition was outside the scope of the land acquisition appeal.
It could not operate as res judicata in the present suit.
The observations of the High Court were without jurisdiction.
Nor did any question of estoppel arise in this case because the respondent was not made to change his position by starting the land acquisition proceeding against him.
He had already lost his land.
He merely wanted compensation.
The method adopted for the payment of compensation was wholly ultra vires and without jurisdiction.
[288H, 289A B]
|
Civil Appeal Nos.
1841 1846 of 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.
4846, 4436, 3815, 5040, 475 and 4587/78.
AND CIVIL APPEAL No. 871 of 1978.
From the Judgment and Order dated 29 4 1977 of the Allahabad High Court in W.P. No. 1749 of 1974.
AND CIVIL APPEAL No. 1921 OF 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. No. 4566 of 1978.
AND CIVIL APPEAL No. 1960 OF 1978.
From the Judgment and Order dated 21 9 1979 of the Allahabad High Court in W.P. No.4568/78.
AND CIVIL APPEAL Nos.
2169 2173 OF 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.
4542, 5589, 5592 to 5594/78.
AND CIVIL APPEAL Nos.
2178 2187 of 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.
4921, 4625, 4449, 5002, 5003, 5007, 5068, 5069, 5284 and 4568 of 1978.
113 AND CIVIL APPEAL Nos.
2219 2226 OF 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos. 5185 and 5059 of 1978.
AND CIVIL APPEAL Nos.
2269, 2302, 2373 2375 OF 1978.
From the Judgment and Order dated 21 9 1979 of the Allahabad High Court in W.P. Nos.
5193/78, 5192, 5010, 4584 and 4583 of 1978.
AND CIVIL APPEAL Nos.
2321,2322,2356,2359,2386,2406 2408,2426 2428,2430 & 2431, 2457,2504,2507/1978 and 142,144,174,230,385,388,429,438,599,635,745,821,929 & 1007,1009/79,1149,1149A,1346,1630,1636,1638,1863,1865,1866,1 867 & 1869/79 and 2270,2272/78.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.5521, 4982, 5001,4447/78, 4454, 2311, 5134, 3826, 4409, 4020, 5144, 5728, 5002, 4455/78, 6948, 4665, 4560, 4666, 4985, 4449, 5540, 4823, 4619, 5150, 4588, 4593, 4926, 4947, 4948, 5012, 5062, 5088, 5089, 5191, 5539, 5106, 5097, 4833, 4911, 1398, 2114, 2515, 898/78, 5071, 5454, 5592, 5072, 5034, 4149, 5153, 5169, 5734/78, 4947/76, 5533/78, 3299/77, 4943, 4629/78 & 5194, 5195, 5196/79.
AND CIVIL APPEAL No. 487 of 1979.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. No. 4445 of 1978.
AND WRIT PETITION Nos. 257 & 600 of 1979.
(Under Article 32 of the Constitution).
F.S. Nariman, R. F. Nariman and P. C. Bhartari for the Appellants in CA Nos.
2260 & 2261.
section P. Gupta, H. K.Puri, V. K Bahl and Miss Madhu Moolchandani for the Appellants in CAs 1841 to 1846, 2426 to 2428, 929, 1007 to 1009, 1630, 2169 to 2172 and 1635.
V.M. Tarkunde, G. B. Pai, Mrs. Saran Mahajan, Mr. Arvind Kumar, Mrs. Lakshmi Arvind and R. K. Sinha for the Appellants in CA Nos.
2507, 2322, 2457 and 871. 114 Shanti Bhushan, section P. Gupta, H. K Puri and Miss Madhu Moolchandani for the Appellants in CA 174.
L. N. Sinha, section section Ray, Ghayyas Alam and R. K Jain for the Appellants in CA 2269, 2270 to 2272.
Shanti Bhushan, Subhash Chandra Birla and Shreepal Singh for the Appellants in 2373, 2302, 2374 and 2375.
Yogeshwar Prasad and Mrs. Rani Chabra for the Appellants in CA 599, 142 to 144, 385, 1638, 2219 to 2226, 1921, 1960, 2173, 2178, 2180 to 2187, 2179, 386 to 388, 429 to 438 and W.P. 257.
Pramod Swarup for the Appellants in CAs Nos. 230, 2359, and 2386.
P. R. Mridul and Ashok Grover for the Appellants in CAs 2406 to 2408.
Veda Vyasa, N. C. Sikri, A. K Sikri and Vijay Jaiswal for the Appellants in CA 821 & 487 and W.P. 600. O.P.Verma for the appellants in CAs 1867 and 1869.
Y.S.Chitale, Mrs. Shandhana Ramachandran and P. K Pillai for Appellant No. 1 in CA 1846, 745 and Appellant No. 2 in CA 1633 and 1634.
S.K.Jain for the Appellants in CA 187/79.
T.S.Arora for the Appellants in CA 2356/78 & 1346/79.
Y.S.Chitale, O. P. Rana and Mrs. section Ramachandran for the Appellants in CA 1866 and Appellants in CA 1865 and R.1 in CAs 142 & 143 and 144 and for the Appellants in CAs.
1631, 1632 and for appellant No. 1 in CA 1633, 1634 and Appellants in CA 1863.
S.K Dhingra for the Appellants in CA 2321/78.
J M.Khanna for the Appellants in CA 2430 & 2431.
K B.Rohtagi and Praveen Jain for the Appellants in CA 2504/78.
M.M.L.Srivastava for the Appellants in CA 1149 & 1149A. K C.Dua for the Appellants in CA 1635 & 1636.
L M.Singhvi, B.D. Madhyan, R.N. Dikshit and L.K.Pandey for the Respondents (Mandi Samiti) CA 1841 to 1846,1921,2169 to 2173,2178 to 2187,2219 to 2226, 2260,2261,2269,2302,2373 to 2375,2322,2356,2406 to 2408,2420 to 2423,2431, 2426 to 2428,2507,142 to 144,174,385 to 388,429 to 439,599,230,635,1007 & 1008, 1149, 1149A, 1630 & 1631, 1638, 5135, 1346 and 2212.
115 E.C.Aggarwala and R. Satish for RR 2 in CA 2179,2180,2222 2271,2431,2433, 2504/78 and 1869 and 143/79 and in other matters for Mandi Samiti for Muzaffarnagar and Meerut.
Ravinder Bana for RR 2 in 2457,2270 and 2272 and RR 2 and RR 3 in CA 2269 and WP No. 257/79.
M.V.Goswami for RR 1 in CA 2356.
The Judgment of the Court was delivered by UNTWALIA J.
, The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 being U.P. Act XXV of 1964, hereinafter called the Act, was passed in that year.
It led to the establishment of Market Areas, Principal Market Yards and Sub Market Yards etc.
and the levying of the fee in relation to transactions of certain commodities in the State of Uttar Pradesh.
Various Market Committees were formed known as Mandi Samitis.
In order to give effect to the working of the Act The Uttar Pradesh Krishi Utpadan Mandi Niyamavali, 1965, hereinafter called the Rules, were made by the Governor of Uttar Pradesh.
The Act has been amended several times.
But we were distressed to find that the Rules were not accordingly amended as and when required to make them uptodate in accordance with the amended Act.
Various traders carrying on business in the State of Uttar Pradesh within the jurisdiction of several Market Committees challenged the levy of fee in the High Court of Allahabad from time to time.
There were several rounds of litigation in which they by and large, failed.
Finally many Writ Petitions were dismissed by the High Court by its judgment dated September 21, 1978 on which date many writ petitions were also dismissed in limine.
Civil Appeal 1841 of 1978 and about 103 more appeals are from the said judgment and order of the High Court.
Immediately preceding the said judgment a longer and more elaborate judgment had been delivered by the High Court on April 29, 1977.
Civil Appeal 871 of 1978 and Civil Appeal 1636 of 1979 are from the said judgment.
Along with these 106 appeals, two Writ Petitions were also heard being Writ Petition No. 257 of 1979 and Writ Petition No. 600 of 1979.
Thus in all 108 matters have been heard together and are being disposed of by this judgment.
At the outset it may be mentioned that because of the litigations cropping up from time to time between the traders and the Market Committees the working of the Committees had not successfully proceeded so far, as, fees levied from time to time could not be realised in.
Sometimes illegal or unauthorised collections seem to have been 116 made.
Money justifiably realised also does not seem to have been fully utilised as it ought to have been done.
In order to enable the Market Committees in their attempt to implement the law as far as possible and to save their attempt from being thwarted by any unnecessary litigation we allowed the parties to advance a full throated argument in this Court including some of the points which were not argued in the High Court or in support of which foundations of fact were lacking.
In this judgment our endeavour will be to formulate the points of law and decide them as far as practicable so that in future the business of the Market Committees may be conducted in the light of this judgment leaving no scope for unnecessary litigation.
Of course even in our judgment at places it would be indicated, and even apart from that, some genuine and factual disputes may crop up which in the first instance may be decided by the Market Committees, preferably a Board constituted by a particular Committee for deciding such disputes and then, if necessary, by the High Court.
We do hope that no further time will be lost by the State Government in amending the Rules and making them up to date to fit in with the latest amendments in the Act.
The long title of the Act indicates that it is an Act "to provide for the regulation of sale and purchase of agricultural produce and for the establishment, superintendence, and control of markets therefor in Uttar Pradesh." From the Objects and Reasons of the enactment it would appear that this Act was passed for the development of new market areas and for efficient data, collection and processing of arrivals in the Mandis to enable the World Bank to give a substantial help for the establishment of various markets in the States of Uttar Pradesh.
In other States the Act is mainly meant to protect an agriculturist producer from being exploited when he comes to the Mandis for selling his agricultural produce.
As pointed out by the High Court certain other transactions also have been roped in the levy of the fee, in which both sides are traders and neither side is an agriculturist.
This has been done for the effective implementation of the scheme of establishment of markets mainly for the benefit of the producers.
But as pointed out recently by a Constitution Bench of this Court in the case of Kewal Krishan Puri vs State of Punjab the fee realised from the payer of the fee has, by and large, to be spent for his special benefit and for the benefit of other persons connected with the transactions of purchase and sale in the various Mandis.
The earlier cases on the point of fee have been elaborately reviewed in that judgment and certain principles have been called out which will be adverted to hereinafter.
While deciding the question of quid pro quo in 117 relation to the impugned fees the High Court had not the advantage of the judgment of this Court.
In that regard this judgment is a settler on the point and we hope that the authorities and all other concerned in the matter will be guided by and follow the said decision in the matter of levy and utilisation of the market fee collected.
We shall now at the outset refer to the relevant provisions of the Act as they stood in the year 1978 and some of the rules framed thereunder.
Wherever necessary reference will be made to the unamended provisions of the Act.
In clause (s) of s.2 of the Act "Agricultural produce" has been defined to mean: "Such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest as are specified in the Schedule, and includes admixture of two or more of such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and jaggery.
" The 'Board ' means the State Agricultural Produce Markets Board constituted under Section 26 A. Clause (e) defines "commission agent" or "Arhatiya" to mean: "person who, in the ordinary course of business, makes or offers to make, a purchase or sale of agricultural produce, on behalf of the owner or seller or purchaser of agricultural produce, for Arhat or commission.
" Under clause (k) "Market Area" means an area notified as such under Section 6, or as modified under Section 9.
Clause (o) defines "Principal Market Yard" to mean the portion of a Market Area, declared as such under Section 7.
Clause (p) must be read in full: "Producer ' means a person who, whether by himself or through hired labour, produces, rears or catches, any agricultural produce, not being a producer who also works as a trader, broker or Dalal, commission agent or Arhatiya or who is otherwise ordinarily engaged in the business of storage of agricultural produce.
Provided that if a question arises as to whether any person is a producer or not for the purposes of this Act, the decision of the Director, made after an enquiry, conducted in such manner as may be prescribed, shall be final.
" 118 Under clause (w) "Sub Market Yard" means a portion of a Market Area, declared as such under Section 7.
Clause (y) defines a "trader" to mean: "a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person, engaged in processing of agricultural produce.
" Action under s.5 was taken by the State Government declaring its intention to regulate and control sale and purchase of agricultural produce in any area and thereafter declaration of Market Area was made under s.6.
Under the present impugned notification, which was issued on April 11, 1978 making it effective from May 1, 1978, almost the whole of Uttar Pradesh has been declared to be Market Area dividing it into 250 areas and indicating in Schedule B of the notification 115 commodities in respect of which the fee could be levied by the Market Committees.
Under s.7 declarations of Principal Market Yards and Sub Market Yards have been made.
Most of such areas declared so far are the markets or the Mandis where the traders are carrying on their businesses.
It is proposed to establish Principal Market Yard and Sub Market Yards separately in every market area and a question of asking the traders to carry on their business only in such Market Yards is under consideration of the Government.
The State Government under s.8 has got the power to alter any market area and modify the list of agricultural produce.
Section 9 provides for the effects of declaration of Market Area.
Chapter III of the Act deals with the establishment, incorporation and constitution of the Market Committees.
The most important section is section 17 which provides for the powers of the Committee.
Clause (i) authorises a Committee to issue or renew licences under the Act on such terms and conditions and subject to such restrictions as may be prescribed.
Clause (iii) authorises a Committee to levy and collect (a) such fees as may be prescribed for the issue or renewal of licences, and (b) market fee at the rate and in the manner provided therein.
Clause (b) of section 17(iii) has undergone drastic changes from time to time and that enabled the appellants to advance certain serious arguments to challenge the levy of the fees especially when the Rules were not correspondingly amended.
We shall advert to this aspect of the matter later in this judgment at the appropriate place.
Section 19 provides for the Market Committee Fund and its utilisation.
Section 19 B was introduced in the Act by U.P. Act 7 of 1978 w.e.f.
29 12 1977 providing for the establishment of 'Market Development 119 Fund ' for each committee.
The rule making power of the State Government is to be found in Section 40.
From the Rules no provision is necessary to be specifically referred here except to point out that the State Government will be well advised to provide a machinery in the Rules for the adjudication of disputes which may be raised by the persons liable to pay the market fee in relation to their factum or quantum of liability.
We are not impressed with the argument advanced on behalf of the Market Committees that no such disputes actually exist or are likely to exist which require any machinery of the Market Committee for its adjudication.
At places hereinafter in this judgment we shall point out the nature of disputes which are likely to arise and which have got to be decided in the first instance by a machinery of the Market Committee such as a Board or the like.
It would be just and proper and also convenient for all concerned if the disputes are thereafter taken to any court of law.
Chapter VI of the Rules deals with levy and collection of fees.
Rule 66 dealing with the levy of market fee and Rule 68 providing for its recovery on reference to the provisions of s.17(iii) will be alluded to hereinafter to point out the chaotic conditions in which the Rules have been left inspite of the amendment in s.17(iii)(b) of the Act.
Rule 67 provides for licence fee and in none of these appeals we are concerned with the question of levy or quantum of the licence fee.
Chapter VII deals with the transaction of business in market Yards.
Several sets of arguments were advanced on behalf of the trader appellants in the various appeals by their respective learned counsel.
Three sets of arguments were advanced on behalf of the various Market Committees and a separate argument was addressed to us on behalf of the State.
In some of the appeals the State and/or the Market Committees are the appellants.
The points urged on behalf of the trader appellants, although too numerous, broadly speaking are the following: (1) Big areas consisting of towns and villages have been notified as Market Areas without rendering any service.
This is contrary to the whole object of the Act and the concept of fee.
(2) No market area or market yard has been validly created.
(3) No Mandi Samiti (Market Committee) has been validly appointed.
120 (4) No machinery has been provided in the Rules for adjudication of disputes.
(5) Fixation of minimum of 1% to be charged as market fee by all the Market Committees under s.17(iii)(b) of the Act was illegal as the requirement of and the services to be rendered by the various Market Committees could not be on the same footing.
(6) There was no application of mind in issuing the notification dated 11 4 1978 whereby 250 market areas were notified and 115 items of agricultural produce were specified.
(7) There could not be any multi point levy of any market fee either in the same market area or in different market areas.
(8) The retrospective operation of the law brought about in s.17(iii)(b) by U.P. Act 7 of 1978 w.e.f. 12.6.1973 is bad.
(9) No market fee could be levied on goods not produced within the limits of a particular market area and if produced outside and brought in such area.
(10) No market fee could be levied both on paddy and rice.
The rice millers have been illegally asked to pay market fee on their sale of rice.
Similarly no market fee was payable on Ghee either by the producer trader of Ghee or by its purchaser.
(11) Fee could be charged on sale of animals but could not be charged on hides and skins as was being illegally done.
(12) Fee could be charged on wood or timber but could not be charged either on furniture manufactured from such wood or timber or on Catechu (Katha).
(13) Wood cut and brought from the jungle by a manufacturer of paper such as Star Paper Mills, Saharanpur could not be subjected to levy of fee.
(14) Some of the items mentioned in the notification are Kirana goods brought from outside the market area or even from other States for sale in different Mandi.
They cannot be subjected to the levy of market fee.
(15) No market fee could be charged on tobacco or Tendu leaves nor on bidis.
121 (16) No fee could be charged in a municipal area as no market committee can be constituted there nor in a Nyaya Panchayat.
(17) No market fee could be charged on rab salawat and rab galawat.
(18) No market fee can be charged if only goods are brought in a market area and despatched outside it without there taking place any transactions of purchase and sale in respect of these goods.
(19) Any goods sold under any controlled legislation such as rice etc.
cannot attract the levy of fee as there is no freedom to make any sale in respect of such commodity.
(20) If no licence is issued or taken under s.9(1) of the Act then there is no liability to pay a market fee.
(21) No market fee can be levied on transactions of matchboxes, soyabin products, articles sold by Kisan Products Ltd. and Pan (betel leaves).
(22) No market fee can be charged from vendors of fruits and vegetables through their Commission Agents.
(23) Fee can be charged only on those transactions in which the seller is producer and not on any other transaction.
(24) Market fee can be charged only on those transactions in which the seller is the purchaser of agricultural produce and not on any other transaction.
Points 1 to 4 These four points are taken up together as there is no substance in any of them.
Declaration of big areas as Market Areas does not offend any provision of law.
Any area big or small including towns and villages can be declared as Market Area under s.6 of the Act.
As explained in the case of Kewal Krishan Puri (supra) the whole of the market area is not meant where the traders or the licensees can be allowed to set up and carry on their business.
The traders are required to take out licences under s.9(2) read with s.11 of the Act, for such place which is either a Principal Market Yard or a Sub Market Yard or at any specified place in the Market Area.
No body can be permitted to carry on his business anywhere in the Market Area as the Market Committee will not be able to control and levy fee throughout the Market Area.
The question of rendering service and its co 122 relation to the charging of fee has been elaborately discussed in the said decision and the following principles have been culled out: "(1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose.
(2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce.
(3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefit must be conferred on them which have a direct, close and reasonable co relation between the licensees and the transactions.
(4) That while conferring some special benefits on the licensee it is permissible to render such service in the market which may be in the general interest of all concerned with the transactions taking place in the market.
(5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefitting the traders also.
Such an indirect and remote benefit to the traders is in no sense a special benefit to them.
(6) That the element of quid pro quo may not be possible or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee.
(7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two thirds or three fourths, must be shown 123 with reasonable certainty as being spent for rendering services of the kind mentioned above.
" As already stated, Market Yards also have been established while issuing notifications under s.7.
By and large, the Mandis where the traders are carrying on their business for the time being have been declared as Market Yards.
When the Market Committees are able to construct their own Market Yards, as in some places they have been able to do, then a question will arise whether a trader can be forced to go to that place only for carrying on his business in agricultural produce or he can be permitted to carry on his business in his old place.
For the time being this question is left open.
Market Committees have not been constituted yet in accordance with the provisions contained in s.13 of the Act.
They have been constituted temporarily under Uttar Pradesh Krishi Utpadan Mandi Samitis (Alpakalik Vyawastha) Adhiniyam, 1972 which Act was a temporary Act and has been extended from year to year.
But it is high time that Market Committees should be constituted in a regular manner on a permanent basis in accordance with the provisions contained in Chapter III of the Act.
But the levy and collection of fee by the temporary Market Committees is not illegal as argued on behalf of the appellants.
A machinery for adjudication of disputes is necessary to be provided under the Rules for the proper functioning of the Market Committees.
We have already observed and expressed our hope for bringing into existence such machinery in one form or the other.
But it is not correct to say that in absence of such a machinery no market fee can be levied or collected.
If a dispute arises then in the first instance the Market Committee itself or any Sub Committee appointed by it can give its finding which will be subject to challenge in any court of law when steps are taken for enforcement of the provisions for realisation of the market fee.
Point No. 5 Under clause (b) of s.17(iii) of the Act a minimum and maximum limit of market fee chargeable has been fixed by the legislature.
The minimum is 1% and the maximum is 1 1/2 of the price of the agricultural produce sold.
The fixing of the minimum of 1% fee by itself is not illegal but it would be subject to the rendering of adequate services as explained by this Court in Kewal Krishan Puri 's case.
The facts placed before the High Court as also before us were too meagre to indicate that services to the extent of the fee levied at 1% are not being rendered.
In Puri 's case we upheld the levy of market fee at 2% on the value of the goods sold.
But there we found that the 124 Market Committees were rendering greater services than are being rendered by the Market Committees of Uttar Pradesh.
Yet charging of 1% fee as is being charged throughout the State of Uttar Pradesh by all the Market Committees is not illegal and does not go beyond the quid pro quo theory discussed in Puri 's case.
Point No. 6 It is difficult to understand the significance of this point.
The notification dated 11 4 1978 indicates that in the various Districts, the number of which is about 55, 250 Market Committees have been constituted and about 115 items have been selected in respect of which market fee has been directed to be levied.
None of the items so specified is such that it cannot be covered by the Schedule which is a part of the Act.
The definition of agricultural produce is very wide.
It is not confined to items of agricultural produce only but includes items of produce of horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest.
Such items are specified in the Act which is undoubtedly a part of the Act.
That being so challenge to the notification dated 11 4 1978 on the ground that it was issued without any application of mind is devoid of any substance and must be rejected.
Point No. 7 It is clear and it was expressly conceded to on behalf of the Market Committees and the State that there cannot be any multi point levy of market fee in the same market area.
The reason is obvious.
Section 17(iii)(b), as amended by U.P. Act 7 of 1978 reads as follows: "market fee, which shall be payable on transactions of sale specified agricultural produce in the market area at such rates, being not less than one percentum and not more than one and half percentum of the price of the agricultural produce so sold, as the State Government may specify by notification, and such fee shall be realised in the following manner (1) if the produce is sold through a commission agent, the commission agent may realise the market fee from the purchaser and shall be liable to pay the same to the Committee; (2) if the produce is purchased directly by a trader from a producer the trader shall be liable to pay the market fee to the Committee; 125 (3) if the produce is purchased by a trader from another trader, the trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the Committee; and (4) in any other case of sale of such produce, the purchaser shall be liable to pay the market fee to the Committee.
" All the four clauses of clause (b) are mutually exclusive.
If the produce is purchased from a producer directly the trader shall be liable to pay the market fee to the Committee in accordance with sub clause (2).
But if the trader sells the same produce or any product of the same produce to another trader neither the seller trader nor the purchaser trader can be made to pay the market fee under sub clause (3).
So far the position was not disputed by the Market Committees, rather it was conceded, and in our opinion, rightly.
But some difficulty arises in regard to the products of the agricultural produce which has been subjected to the levy of market fee.
This will be relevant when we come to consider the various agricultural produce in respect of which challenge was made on the ground that it amounts to multi point levy.
At this stage we may explain our view point by taking a few examples from the Schedule appended to the Act.
Wheat, an agricultural produce, is mentioned under the heading 'Cereals '.
Suppose the transaction of wheat, namely, wheat purchased from a producer by a trader has been subjected to levy of market fee under s.17(iii) (b)(2) no further levy of market fee in the same market area could be made, not even on wheat flour if flour were to be included in the Schedule.
The better example can be found in the items under the heading 'Animal Husbandry Products ' wherein in the Schedule milk and Ghee both are mentioned.
Milk, of course, is not mentioned in the notification dated 11 4 1978.
But if it would have been mentioned then only the transaction of milk in a particular market area could be subjected to levy of fee and Ghee manufactured from milk could not be so subjected.
But since milk is not mentioned in the notification the transaction of Ghee can be subjected to the levy of fee in accordance with the principle to be discussed hereinafter.
The greater difficulty arises with respect to paddy and rice as both of them are mentioned in the Schedule as well as in the notification.
We shall show hereinafter that in a particular market area market fee can not be levied both in relation to the transaction of purchase and sale of paddy and the rice produced from the same paddy.
Fee can be charged only on one transaction.
This finds support from the unamended Rules as they are, wherein is to be found sub r.(2) of Rule 66.
But we find nothing in the provisions of the Act or the Rules to 126 warrant the taking of the view that in another market area the Market Committee of that area cannot levy fee on a fresh transaction of sale and purchase taking place in that area.
Supposing the Wheat is purchased in market area X by a trader from a producer, fee will be chargeable under s.17(iii)(b)(2).
If the same Wheat is taken to another market area say Y and another transaction of sale and purchase takes place there between a trader and a trader the market fee will be leviable under sub clause (3).
It is also not correct to say that the agricultural produce must have been produced in the market area in which the first levy is made.
It might have been produced in another market area or even outside the State of Uttar Pradesh but if a transaction of sale and purchase takes place of an agricultural produce as defined in the Act and covered by the notification within a particular market area then fee can be charged in relation to the said transaction.
Point No. 8 In order to appreciate the implication of this point we have first to read and compare the provisions of s.17(iii)(b) of the Act as they stood before 1973, between 1973 and 1978 and after the amendment by Act 7 of 1978.
The provision as enacted in U.P. Act XXV of 1964 read as follows: "17.
A Committee shall, for the purposes of this Act, have the power to: (iii) levy and collect: (b) market fees on transactions of sale or purchase of specified agricultural produce in the Principal Market Yard and Sub Market Yards from such persons and at such rates as may be prescribed, but not exceeding one half percentum of the price of the specified agricultural produce sold or purchased therein;" The Rules which were framed in 1965 prescribed the rates of and the liability of the persons to pay the market fee.
The relevant provision of Rules 66 and 68 are quoted below: "66.
Market fee Section 17(iii) (1) The Market Committee shall have the power to levy and collect fees on the specified agricultural produce brought and sold in the Market Yards at such rates as may be specified in the byelaws but not exceeding one half of one percentum of the price of the specified agricultural produce: Provided that the market fee shall be payable by the seller.
127 68.
"Recovery of fees Section 17(iii) (1) The market fee on specified agricultural produce shall be payable as soon as such produce is sold in the Principal Market Yard or Sub Market Yards in accordance with the terms of and conditions specified in the bye laws.
(2) The market fee shall be realized from the seller in the following manner: (i) If the specified agricultural produce is sold through the Commission agent or directly to the trader, the Commission agent or the trader, as the case may be, shall charge market fee from the seller in sale voucher in Form No. VI and deposit the amount of market fee so realised with the Market Committee in accordance with the directions of the Committee issued in this behalf.
(ii) If the specified agricultural produce is sold directly by the seller to the consumer, the market fee shall be realised by the servant of the Market Committee authorized by it in this behalf.
(3) The licence fee shall be paid along with the application for licence: Provided that in case the Market Committee refuses to issue a licence, the fee deposited by the applicant shall be refunded to him.
(4) The payment of market fee and licence fee shall be made to the Committee in cash.
" It would thus be seen that before 1973, reading the provisions of the Act and the Rules, market fee was to be charged at such rates as specified in the bye laws of a particular Market Committee.
But it could not exceed 1/2 percentum of the price of the agricultural produce.
We were informed at the Bar that almost every Market Committee had levied fees @ 1/2%.
The liability to pay the fee was of the seller of the agricultural produce.
Market fee was liable to be paid under Rule 68(2)(ii) even if the specified agricultural produce was sold directly by the seller to the consumer.
This provision has been superseded now by an amendment in the Act brought about by U.P. Act 19 of 1979, whereby a proviso to the following effect has been added to section 17(iii)(b): "Provided that no market fee shall be levied or collected on the retail sale of any specified agricultural produce where such sale is made to the consumer.
" 128 Clause (b) of section 17(iii) was amended by U.P. Act 13 of 1973 as re enacted by U.P. Act 20 of 1974.
The said clause stood as follows after the said amendment: "(b) market fees, which shall be payable by purchasers, on transactions of sale of specified agricultural produce in the Principal Market Yard or a Sub Market Yard at such rates, being not less than one percentum and not more than one and a half percentum of the price of the agricultural produce so sold, as the State Government may specify by notification in the Gazette;" It would be noticed that by the said amendment in clause (b) the minimum rate fixed was 1 percentum and the maximum 1 1/2 percentum and the liability to pay the fee became that of the purchaser instead of the seller as prescribed earlier by the Rules.
Yet the Rules continued as they were.
Nonetheless it is plain that after the amendment in the Statute, Rules could apply only mutatis mutandis and wherever there was a conflict between the Rules and the Statute the latter had to prevail.
In passing, reference may be made to the substitution of the words market area in place of the words "Principal Market Yard or the Sub Market Yards" occurring in clause (b) by U.P. Act 6 of 1977 w.e.f. 20 12 1976.
We have already adverted to this aspect of the matter and pointed out that transactions cannot take place in whole of the market area and although theortically fee is chargeable in the whole of the area now but actually the Rules and especially the Explanation to Rule 66 indicate that the transactions do take place in the Principal Market Yard or Market Yards or some specified place or places in a particular market area.
Then came the amended section 17(iii)(b) of U.P. Act 7 of 1978, which had already been extracted above and it was made retrospective w.e.f. 12 6 1973.
Under the present provision a liability to pay the fee is under four mutually exclusive clauses.
The Rules which were framed in 1965 namely Rules 66 and 68 are so very different from the present provision of law that we had to express our distress in the beginning of this judgment for the failure of the Government to amend the Rules and bring it in conformity with the amended provisions of the Statute from time to time.
Any way, the Rules will apply as far as possible so long they do not come in conflict with the Statute and even without the aid of the Rules the provision in section 17(iii)(b) as it stands after the amendment brought about by U.P. Act 7 of 1978 is workable and can be given effect to.
The 129 State legislature was competent to make retrospective amendment vide B. Banerjee vs Anita Pan and M/s. section K.G. Sugar Ltd. vs State of Bihar and Ors.
It has also been pointed out in H. H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore at pages 324 25 that retrospective imposition of a fee is valid.
Of course, this cannot be a rule of universal application.
In a given case and in a given situation the retrospective operation may be hit by Article 19.
But in the present case we are inclined to take the view that the retrospectivity of the law as such is not bad and the only safeguard which we want to point out is this.
If market fee has been realised by any Market Committee in respect of transactions of sale of agricultural produce taking place between 12 6 1973 and coming into force of U.P. Act 7 of 1978, in accordance with the law as it prevailed then, no market fee under the amended law can be realised again.
But if in respect of any transactions aforesaid market fee has not yet been realised then it can be realised in accordance with the amended provision of the law.
The only hardship will be to persons covered by sub clauses (1) and (3) wherein a provision has been made to pass on the burden of fee to others.
In the case of sub clause (1) the commission agent can realise the market fee from the purchaser and the seller trader under sub clause (3) can realise it from the purchaser.
If market fees are realised from such persons in accordance with the amended provision of the law then in turn they may be able to realise it from persons on whom they could pass on the burden.
We are not disposed to hold the law bad only on that account.
Point No. 9 We have already alluded to this aspect of the matter earlier in our judgment and taken the view that market fee could be levied on transactions of goods not produced within the limits of a particular market area by the Market Committee of that area even though the goods are produced outside the State of Uttar Pradesh or outside the market area of that particular Market Committee provided the transactions take place within the limits of that Market area.
On the other hand we find no provision in the Act or the Rules to limit the operation of the law in a particular market area only in respect of the agricultural produce produced in that area.
Point No. 10 Apropos this point attention is first to be focussed on the definition of the word 'producer ' in clause (p) and 'trader ' in clause (y) of 130 section 2 of the Act which have already been quoted.
A producer who produces agricultural produce generally does not indulge in trading activities so as to become a trader within the meaning of clause (y).
He is covered by clause (p) only.
If a person is simply a trader indulging in trading activities he is covered by the definition in clause (y).
We have coined the expression producer trader for a person who is both a producer of agricultural produce and himself trades in it.
For the purposes of the Act he ceases to be a producer and becomes a trader only as the definition indicates.
While discussing the question of levy of market fee on paddy and rice this aspect of the matter is important and therefore we thought it appropriate to highlight it at this stage.
By and large in the notification dated April 11,1978 there is hardly any duplication of any item of agricultural produce.
As for example, under Group D Animal Husbandry Products, milk has been omitted although it is to be found in the Schedule appended to the Act.
From milk can be prepared Ghee or Khoya and items 1 and 2 in Group D are the said articles.
Hides and Skins can be had from the animals, so wool is obtained from the sheep.
But in case of paddy and rice mentioned as items 3 and 4 in Group A I "Cereals", there is a duplication as rice is obtained from paddy.
We would, therefore, like to clarify the position of law in this regard.
If paddy is purchased in a particular market area by a rice miller and the same paddy is converted into rice and sold then the rice miller will be liable to pay market fee on his purchase of paddy from the agriculturist producer under subclause (2) of section 17(iii)(b).
He cannot be asked to pay market fee over again under sub clause (3) in relation to the transaction of rice.
Nor will it be open to the Market Committee to choose between either of the two in the example just given.
Market fee has to be levied and collected in relation to the transaction of paddy alone.
Otherwise, there will be a risk of violation of Article 14 if it is left to the sweet will of the Market Committee in the case of some rice millers to charge market fee on the transaction of paddy and in case of others to charge it when the sale of rice takes place.
If, however, paddy is brought by the rice miller from another market area, then the Market Committee of the area where paddy is converted into rice and sold will be entitled to charge market fee on the transaction of sale in accordance with sub clause (3).
We now take the example of a producer trader who is an agriculturist and produces paddy in his own field but owns a rice mill also in the same market area.
He mills the paddy grown by him into rice and sells it as such.
It is plain that in his case no market fee can be charged on paddy because there is no transaction of sale and purchase of paddy and market fee can be charged only on the sale of rice by him in accordance with sub clause (3) and he will be entitled to 131 pass on the burden to his purchaser.
Disputes of facts were raised before us as to whether paddy had been subjected to the charge of market fee or not and whether the same paddy has been milled into rice.
We did not enter into this disputed question of fact, and as observed above, after clarifying the law we direct the Market Committees to levy market fee in the light of this Judgment.
It will be open to any trader to go to the High Court again, if necessary, for the redress of his grievance in connection with a disputed question which may arise even after our Judgment.
In relation to the transactions of Ghee we had two types of dealers before us (1) a dealer who purchases milk or cream from the villagers and others and manufactures Ghee in his plant and (2) a dealer who purchases such Ghee from the manufacturer of Ghee and sells it to another trader in the same market area.
The first dealer will be liable to pay market fee because he is the producer of Ghee within the meaning of the Act and at the same time a trader in Ghee also.
When he sells Ghee to another dealer in Ghee who is simply a dealer then under sub clause (3) of section 17(iii)(b) the manufacturing dealer will be liable to pay market fee to the Market Committee on the transaction of Ghee.
But he will be entitled to pass on the burden to his purchaser.
Apropos the Market Committee, however, the liability will be of the manufacturing dealer.
If milk, butter or cream would have been included in the notification then the charging of fee in relation to the first transaction of sale and purchase of such commodities would have been attracted in the light of the principle of law we have enunciated above with reference to paddy and rice.
But in the case of Group D such commodities are not mentioned in the notification.
Point No. 11 An attempt was made on behalf of the Hides and Skins dealers to show that hides and skins cannot be an agricultural produce within the meaning of the Act.
They are obtained from the carcass of an animal and not from a living animal.
Argument stressed was that under group G in the Schedule appended to the Act Animal Husbandry Products only can come.
Item 11 Hides and Skins, item 12 bones, item 13 meat etc.
are not products of Animal Husbandry.
Some authoritative books were cited before us on "Words and Phrases" to show the meaning of 'Animal ', 'Husbandry ' and 'Animal Husbandry '.
Animal Husbandry means that branch of agriculture which is concerned with farm animals especially as regards breeding, care and production.
We are not impressed by this argument.
The definition clause (a) of section 2 uses the expression 'animal husbandry ' by way of a descriptive one without strictly confining to the products of animal husbandry 132 as the addition of the words "specified in the schedule" indicates.
In the schedule under the group 'husbandry products ' are mentioned all these items.
We may also add that one may breed and rear animals in a farm for the purpose of obtaining hides and skins after they are butchered.
Market fee is, therefore, leviable on the transactions of hides and skins as no market fee can be charged on transactions of sale and purchase of animals in a market area in the State of Uttar Pradesh, the same having not been included in the notification.
Had it been included in the notification, then no market fee could be charged in the same market area on hides and skins.
It could only be charged in relation to the transaction of purchase and sale of animals.
Point No. 12 For discussing this point we have to refer to group E of the notification dated 11 4 1978 which deals with forest products.
The items mentioned in the said group are (1) Gum, (2) Wood, (3) Tendu leaves, (4) Catechu and (5) Lac.
Market fee can be charged on purchase of wood by a trader from a producer.
No fee can be charged on the sale of furniture manufactured by the purchaser of wood.
It was also conceded on behalf of the Market Committees that market fee was not being charged on the sale of furniture.
If it has been so charged it will be refunded.
Furniture is not an item mentioned in the group of forest products.
Therefore, this question does not present any difficulty at all.
Difficulty cropped up in relation to the charging of market fee apropos the transaction of Catechu.
According to the Market Committees Catechu is a product from timber or trees like Gum or Lac.
It trickles down from the trees.
On the other hand, according to the Catechu dealers by processing of Khar trees Catechu is produced.
We leave this question of fact to be decided by the Market Committees concerned in the first instance and then by a court of law.
If Catechu is a product of Khar trees by some processing as prima facie it appears to us to be so, then it is plain that market fee can be charged only on the purchase of Khar wood and not on the sale of Catechu.
Point No. 13 This item presented some difficulty in solution.
A licence is granted to a Paper Mill and to other kinds of dealers for cutting wood from the jungle and bringing it to their factories for manufacture of various articles such as paper etc.
It was argued that there was no transaction of sale and purchase involved in the above operation.
Moreover the wood is cut from the jungle area which although has been roped in the market area but no service is rendered in that jungle area by any Market 133 Committee.
In our opinion in the licence is involved sale of wood and a right to go to that land to cut that wood.
The wood may be used by the manufacturer for manufacturing furniture or may be used in the manufacture of paper or any other commodity.
That is immaterial.
The owner of the jungle wherefrom the wood is cut and brought will be a producer within the meaning of the Act and the licensee producer of that wood would be a purchaser of an agricultural produce within the meaning of sub clause (2) of section 17(iii)(b) of the Act liable to pay market fee.
It matters little what use is made of the wood by him.
The question of quid pro quo and service cannot be decided by a dichotomy of service to every payer of fee as held by this Court in Kewal Krishan Puri 's case.
The matter has to be judged in a broad sense and not in the sense of rendering service to every individual payer of the fee.
Point No. 14 This point also presented some difficulty.
But on a parity of reasoning mentioned so far in connection with the other items, we have got to hold that such Kirana goods as are included in the notification brought from outside a particular market area or even from outside the State of Uttar Pradesh are chargeable to market fee when their sale takes place in a particular market area.
In group A VI Spices are mentioned including certain Kirana items such as Ripe Chillies, Sonf, turmeric etc.
They are sold by the Kirana dealers.
Sometimes they purchase them from the agriculturists in the same market area.
In relation to those transactions they will be liable to pay market fee under sub clause (2) of section 17(iii)(b).
More often than not such articles are brought from outside and sold by the Kirana merchants.
If they are sold to consumers, no market fee can be levied in view of the proviso added in the year 1979.
If they are sold in wholesale, then the transaction can be subjected to the levy of market fee because in a particular market area they enter into the first transaction of sale in respect of the specified agricultural produce.
Point No. 15 Market fee can be charged on transaction of tobacco as it is included in group A V of the notification.
As in the case of other items so in this case also the fee will be leviable if tobacco is purchased in the same market area from an agriculturist in accordance with sub clause (2).
Otherwise it would be leviable under sub clause (3).
Similar is the position in regard to tendu leaves which is mentioned in group E. Bidi cannot be treated as an agricultural produce as it is not an admixture of tobacco and tendu leaves within the meaning of section 2(a) of the Act.
It was conceded on behalf of the Market Committees that no market fee was being charged on the transactions of Bidi.
But 134 if a Bidi manufacturer purchases tobacco and tendu leaves in the market area and uses them in the manufacture of Bidi, he will be liable to pay market fee in relation to the transaction of tobacco and tendu leaves.
Point No. 16 This point has been stated merely to be rejected.
There is no substance in this point.
Our attention was drawn to some provisions in the municipal Acts and the Zila Parishad Acts to show that no market committee could be constituted in a municipal area or a Nyaya Panchayat.
We do not consider it necessary to deal with this point in any detail.
We merely reject it as being devoid of any substance.
Point No. 17 Gur, rab, shakkar, khandsari and jaggery are expressly included in the definition of agricultural produce given in clause (a) of section 2 of the Act.
We are here concerned with the question as to whether rab galawat and rab salawat are rab within the meaning of section 2(a) or are bye products of molasses received at the time of manufacture of khandsari.
According to the case of some of the appellants who deal in these commodities they are the bye products and market fee has already been charged on rab and therefore the fee cannot be charged again on rab galawat and rab salawat.
Disputes of facts were raised in this connection before us on behalf of the Market Committees.
On the materials placed before us it was clear to us that rab galawat and rab salawat cannot be subjected to a separate charge of market fee apart from the transaction of rab.
Market fee can be levied on the first transaction of rab taking place in any market area in accordance with any of the sub clauses of section 17 (iii) (b), as it may be applicable.
It cannot be again charged on the second transaction of rab galawat or rab salawat even assuming that it is rab.
But on the materials placed before us it appeared to us that rab galawat and rab salawat are not rab in the original form but they are obtained at one stage or the other in the process of manufacture of khandsari.
Any way the question of fact may be decided as we have indicated in respect of the other items in the first instance by the Market Committee and thereafter by the High Court, if necessary, in a fresh writ petition.
It will bear repetition to say that the only transaction which can be subjected to levy of market fee in a particular market area is the first transaction of rab and no other transaction of rab galawat and rab salawat.
Point No. 18 This point urged on behalf of the appellants is well founded and must be accepted as correct.
On the very wordings of clause (b) of 135 section 17(iii) market fee is payable on transactions of sale of specified agricultural produce in the market area and if no transaction of sale takes place in a particular market area no fee can be charged by the Market Committee of that area.
If goods are merely brought in any market area and are despatched outside it without any transaction of sale taking place therein, then no market fee can be charged.
If the bringing of the goods in a particular market area and their despatch therefrom are as a result of transactions of purchase and sale taking place outside the market area, it is plain that no fee can be levied.
Point No. 19 This point has no substance and has got to be rejected.
As held in Vishnu Agencies (Pvt.) Ltd. etc.
vs Commercial Tax Officer & Ors. etc.
on a review of earlier decisions even if a commodity is sold pursuant to the controlled regulations still some small area is left to make it a transaction of sale.
It may well be that no freedom is left to the parties in a large area of the transaction yet it is a transaction of sale.
Point No.20 This point also must be rejected.
A pure and simple producer as defined in clause (p) of section 2 is not required to take any licence for selling his agricultural produce nor is he required to pay market fee under any of the sub clauses of section 17(iii)(b).
But if he is a producer trader in the sense we have explained above, then he will be required to take out a licence in accordance with section 9(2) of the Act and no body can be permitted to carry on any trade in agricultural produce in the market area without a valid licence.
Merely for his lapse of not taking out a licence he cannot escape the liability to pay the market fee.
Market fee will still be chargeable from the trader, as, in section 17(iii)(b) it is not stated that market fee can be charged only from the licensees.
The proviso to clause (p) of section 2 will be attracted only if a question arises as to whether any person is a producer or not for the purposes of the Act and in that event the decision of the Director made after an inquiry conducted in the manner prescribed by the rules shall be final.
The proviso has nothing to do with a case of a producer trader.
If a question arises whether a person is merely a producer or producer trader the Director will have no power to decide this question.
Such a question will have to be decided by the Market Committee itself which will be subject to the final decision of a court of law.
136 In support of the argument reliance was placed upon the decision of this Court in Raunaq Ram Tara Chand & Ors. etc.
vs The State of Punjab & Ors.
But that case is distinguishable because of the language of rules 29 and 31 of the Punjab Agricultural Produce Market Rules framed in accordance with the Punjab Agricultural Produce Markets Act, 1961.
Both the rules aforesaid clearly stated that the fee could be charged from the licensees only.
Not only that even the charging section 23 of the Act itself stated: "a Committee may, subject to such rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on the agricultural produce brought or sold by licensees in the notified market area at a rate not exceeding rupee one fifty paise for every one hundred rupees, provided. "On the other hand in section 17 (iii) (b) of the U.P. Act and Rules 66 and 68 of the Rules charging of market fee in terms is not found to be chargeable from the licensees only.
The traders cannot escape their liability to pay the fee on account of their default of taking out licences.
Point No. 21 This point is also well founded and must be accepted as correct.
Market fee can be charged only on the transactions of purchase of wood and if a manufacturer of match sticks purchases wood from the producer for the purposes of manufacturing the sticks he will be required to pay market fee on such purchase of wood only and not on the sale of match sticks or match boxes.
Similarly market fee will be leviable on the transaction of purchase of soyabin and not on transaction of sale of soyabin products.
Exactly the same will be the position with regard to the articles sold by Kisan Products Ltd. and the sale of Pan. Agricultural produce purchased by the dealers will be chargeable to market fee and not the sale of the products after one kind of processing or the other.
Point No. 22 Under this head the submission on behalf of the fruit and vegetable merchants was that they bring their products to the market and sell them in wholesale through their commission agents.
No market fee, therefore, should be charged from them.
In our opinion the argument so placed on behalf of the merchants is misconceived.
Under sub clause (1) of section 17(iii)(b) of the Act when fruits and vegetables are sold through a commission agent by the producer then the Commission agent is liable to pay the market fee and he can realise it from the purchaser of fruits and vegetables.
The burden does not fall on the producer.
The liability in the first instance is of the commission, agent and finally of the purchaser of the articles.
137 Point No. 23 Point No. 24 Reliance was placed upon a decision of the Mysore High Court (now Karnataka) in the case of K. N. Marudaradhya vs The Mysore State but the view taken by the Mysore High Court was dissented from by the Patna High Court in the case of Mangalchand Ramchandra and others etc.
vs State of Bihar.
One of us (Untwalia J,) delivering the judgment of the Patna High Court stated at page 1053 thus: "At this stage I would discuss a Bench decision of the Mysore High Court on which great reliance was placed on behalf of the petitioners in support of their contention that no fee can be levied on transaction of buying and selling between a dealer and a dealer even though such transactions take place within the market area or the market proper.
The decision of the Mysore High Court is in the case of K. N. Marudaradhya vs The Mysore State A.I.R. At page 126 (column 2) from paragraph 33 starts the discussion on the point at issue.
To the extent the decision goes to hold that the purchase in respect of which the fee could be levied or collected is the earliest purchase, that is to say, the fee can be levied only on one purchase and not on subsequent purchases, with respect I am inclined to agree with that view expressed in paragraphs 33 to 38.
But while discussing the point, Iyer J., has confined this earliest purchase of the agricultural produce belonging to the producer only.
There does not seem to be a pointed discussion of the question whether the first purchase from a dealer could be subjected to levy or not.
But by necessary implication, as I read the judgment, it seems, their Lordships of the Mysore High Court took the view that such a deal cannot be subjected to the levy of fee.
With great respect, in that regard, I strike my note of dissent from the view expressed by the Mysore High Court.
Firstly, merely because the object of the legislation is the protection of the agriculturist, the plain meaning of the section cannot be cut down.
Secondly, they have relied upon the practice prevailing around the area under different State statutes as mentioned in paragraph 36.
If I may say with respect, law could not be so 138 decided on the basis of any practice.
Of course, the interpretation given to the Statute can be supported by reference to practice.
Thirdly, I am inclined to think that the Supreme Court decision in the case of Krishna Coconut Company does not lend support to the limited view expressed by the Mysore High Court.
We approve of the Patna view and in the set up of the U.P. Act after an elaborate discussion we have pointed out as to in what kind of transaction who is liable to pay the market fee.
In the U.P. Act even traders under certain circumstances have been made liable to pay such fees.
Similarly the argument that market fee can be charged only on those transactions in which the seller is the producer of agricultural produce and not on any other transaction is also devoid of any substance.
Conclusions For the reasons stated above, we hold that market fee should be regularised and be charged in the light of this Judgment.
If anything has been realised from the traders or any other person which goes contrary to this Judgment the same should be refunded by the Market Committee concerned within six months from today.
This may not be treated as a precedent for all cases of this type.
The form of the order in relation to the refund of the market fee may vary from case to case depending upon the facts and circumstances of each case.
Market fee due from the traders in the light of this judgement should also be charged and paid within a period of six months from today.
If there is any disputed question of fact to be decided by the Market Committee then it should be decided as quickly as possible leaving the person concerned to agitate the matter in a court of law, preferably in the High Court, within a short time thereafter.
The High Court will proceed to decide the matter in the light of our Judgment.
We do hope that services are being rendered and will continue to be rendered by the various Market Committees in the light of the Judgment of this Court in Kewal Krishan Puri 's case.
If in regard to any particular Market Committee it is found that services are not being rendered or in future lapses are made then it will be open to the payers of fees to re agitate the matter in the High Court in the light of that judgment.
For the reasons stated above the appeals and writ petitions are partly allowed and partly dismissed in the manner indicated above.
There will be no order as to costs in any of them.
N.V.K. Appeals and petitions partly allowed.
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The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (U.P. Act XXV of 1964) provides for the regulation of sale and purchase of agricultural produce and for the establishment superintendence and control of markets in Uttar Pradesh.
The enactment was passed for the development of new market areas and for efficient data collection and processing of arrivals in the Mandies to enable the World Bank to give a substantial help for the establishment of various markets in the State of Uttar Pradesh.
It led to the establishment of Market Areas, Principal Market Yards and Sub Market Yards and levying of the fee in relation to transactions of certain commodities in the State of Uttar Pradesh.
Various Market Committees were formed known as Mandi Samitis.
In order to give effect to the working of the Act the Uttar Pradesh Krishi Utpadan Mandi Niyamawalli 1965, being Rules under the Act were made by the Governor.
The Act was amended several times but the Rules were not accordingly amended as and when required to make them uptodate in accordance with the amended Act.
"Agricultural Produce" has been defined in clause (a) of section 2 of the Act to mean: "Such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest as are specified in the Schedule, and includes a mixture of two or more of such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and jaggery." while Clause (e) defines "commission agent" or "Arhatiya" to mean: "a person who, in the ordinary course of business, makes or offers to make, a purchase or sale of agricultural produce, on behalf of the owner or seller or purchaser of agricultural produce, for Arhat or commission".
105 under clause (p), ""producer" means a person who, whether by himself or through hired labour, produces, rears or catches, any agricultural produce, not being a producer who also works as a trader, broker or Dalal, commission agent or Arhatiya or who is otherwise ordinarily engaged in the business of storage of agricultural produce".
Cause (y) defines a "trader" to mean: "a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person, engaged in processing of agricultural produce.
" Under Clause (k), 'Market Area ' means an area notified as such under Section 6, or as modified under Section 8, while 'Principal Market Yard ' has been defined under clause (o) to mean, the portion of a Market Area, declared as such under Section 7, and 'Sub Market Yard ' under clause (w) means a portion of a Market Area, declared as such under Section 7.
The State Government under section 8 has got the power to alter any market area and modify the list of agricultural produce.
Section 9 provides for the effect of declaration of Market Area.
Chapter III of the Act deals with the establishment, incorporation and constitution of the Market Committees, section 17 provides for the power of the Committee.
Clause (i) authorises a Committee to issue or renew licences under the Act on such terms and conditions and subject to such restrictions as may be prescribed.
Clause (iii) authorises a Committee to levy and collect (a) such Fees as may be prescribed for the issue or renewal of licences, and (b) market fee at the rate and in the manner provided therein.
[Though clause (b) of section 17 (iii) had undergone drastic changes from time to time, the Rules were not correspondingly amended.] Section 19 provides for the Market Committee Fund and its utilisation.
Section 19 B was introduced in the Act by U.P. Act 7 of 1978 w.e.f.
29 12 1977 providing for the establishment of 'Market Development Fund ' for each committee.
The Rule making power of the State Government is in Section 40.
Rule 66 deals with the levy of market fee, Rule 68 provides for its recovery and Rule 67 provides for licence fee.
By a State Government notification, which was issued on April 11, 1978 making it effective from May 1, 1978, almost the whole of Uttar Pradesh had been declared to be a Market Area, dividing it into 250 areas and indicating in Schedule 8 of the Notification 115 commodities in respect of which the fee could be levied by the Market Committees.
Declaration of Principal Market Yards and Sub Market Yards under Section 7 had also been made.
Various traders carrying on business in the State of Uttar Pradesh within the jurisdiction of several Market Committees challenged the levy of fee in the High Court from time to time.
There were several rounds of litigation and the writ petitions were dismissed.
On account of the litigations between the traders and the Market Committees, the working of the Committees had not successfully proceeded, as fees levied from time to time could not be 106 realised in full.
Sometimes illegal or unauthorised collections have been made.
Money justifiably realised also had not been fully utilised as it ought to have been done.
In the appeals and writ petitions to this court it was contended on behalf of the appellants and petitioners that: 1.
Big areas consisting of towns and villages have been notified as Market Areas without rendering any service, which is contrary to the whole object of the Act and the concept of fee.
No market area or market yard had been validly created.
No Mandi Samiti (Market Committee) had been validly appointed.
No machinery had been provided in the Rules for adjudication of disputes.
Fixation of minimum of 1% to be charged as market fee by all the Market Committees under section 17(iii)(b) of the Act was illegal as the requirement of and the services to be rendered by the various Market Committees could not be on the same footing.
There was no application of mind in issuing the notification dated 11 4 1978 whereby 250 market areas were notified and 115 items of agricultural produce were specified.
There could not be any multi point levy of any market fee either in the same market area or in different market areas.
The retrospective operation of the law brought about in section 17(iii)(b) by U.P. Act 7 of 1978 w.e.f. 12 6 1973 was bad.
No market fee could be levied on goods not produced within the limits of a particular market area and if produced outside and brought in such area.
No market fee could be levied both on paddy and rice.
The rice millers had been illegally asked to pay market fee on their sale of rice.
Similarly no market fee was payable on Ghee either by the producer trader of Ghee or by its purchaser.
Fee could be charged on sale of animals but could not be charged on hides and skins as was being illegally done.
Fee could be charged on wood or timber but could not be charged either on furniture manufactured from such wood or timber or on Catechu (Katha).
Wood cut and brought from the jungle by a manufacturer or paper could not be subjected to levy of fee.
Some of the items mentioned in the notification are Kirana goods brought from outside the market area or even from other States for sale in different Mandis, and cannot be subjected to the levy of market fee.
No market fee could be charged on tobacco or tendu leaves nor on bidis.
No market fee could be charged on rab salawat and rab galawat.
107 17.
No market fee can be charged if only goods are brought in a market area and despatched outside it without there taking place any transaction of purchase and sale in respect of these goods.
If no licence is issued or taken under section 9(1) of the Act then there is no liability to pay a market fee.
No market fee can be levied on transactions of match boxes, soyabin products.
No market fee can be charged from the vendors of fruits and vegetables through their Commission Agents.
Fee can be charged only on those transactions in which the seller is producer and not on any other transaction, and market fee can be charged only on those transactions in which the seller is the purchaser of agricultural produce and not on any other transaction.
^ HELD: 1.
Declaration of big areas as Market Areas does not offend any provision of law.
Any area big or small including towns and villages can be declared as Market Area under section 6 of the Act.
[121 F] 2.
The traders are required to take out licences under s.9(2) read with s.11 of the Act, for such place which is either a principal Market Yard or a sub Market Yard or at any specified place in the Market Area.
No body can be permitted to carry on his business anywhere in the Market Areas as the Market Committee will not be able to control and levy fee throughout the Market Area.
[121 G H] 3.
(i) Market Committees have not yet been constituted in accordance with the provisions contained in section 13 of the Act.
They have been constituted temporarily under Uttar Pradesh Krishi Utpadan Mandi Samitis (Alpakalik Vyawastha) Adhiniyam, 1972 which was a temporary Act, extended from year to year.
It is high time that Market Committees should be constituted in a regular manner on a permanent basis in accordance with the provisions contained in Chapter III of the Act.
[123 C] (ii) The levy and collection of fee by the temporary Market Committees is not illegal as argued on behalf of the appellants.
[123 D] Kewal Krishan Puri vs State of Punjab [1979] 3 S.C.R. 1217, referred to.
A machinery for adjudication of disputes is necessary to be provided under the Rules for the proper functioning of the Market Committees.
[123 E] 5(i) Under clause (b) of section 17(iii) of the Act a minimum and maximum limit of market fee chargeable has been fixed by the legislature.
The minimum is 1% and the maximum is 1 1/2% of the price of the agricultural produce sold.
The fixing of the minimum of 1% fee by itself is not illegal but it would be subject to the rendering of adequate services.
[123 G] (ii) The charging of 1% fee throughout the State of Uttar Pradesh by all the market Committees is not illegal and does not go beyond the quid pro quo theory discussed in Puri 's case.
[124 A] 108 6.
The notification dated 11 4 1978 indicates that in the various Districts, which number about 55, 250 Market Committees have been constituted and about 115 items have been selected in respect of which market fee has been directed to be levied.
None of the items so specified is such that it cannot be covered by the Schedule which is a part of the Act.
The definition of 'agricultural produce ' is very wide, and it is not confined to items of agricultural produce ' only but includes items of produce of horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest.
[124 C] 7(i) All the four clauses of clause (b) of section 17(iii) are mutually exclusive.
If the produce is purchased from a producer directly the trader shall be liable to pay the market fee to the Committee in accordance with sub clause (2).
But if the trader sells the same produce or any product of the same produce to another trader neither the seller trader nor the purchaser trader can be made to pay the market fee under sub clause (3).
[125 C] (ii) In a particular market area market fee cannot be levied both in relation to the transaction of purchase and sale of paddy and the rice produced from the same paddy.
Fee can be charged only on one transaction.
This finds support from the unamended Rules as they are, wherein is to be found sub r.
(2) of Rule 66.
There is nothing in the provisions of the Act or the Rules to warrant the view that in another market area the Market Committee of that area cannot levy fee on a fresh transaction of sale and purchase taking place in that area.
[125 H 126 A] 8(i) Before 1973, reading the provisions of the Act and the Rules, market fee was to be charged at such rates as specified in the bye laws of a particular Market Committee.
But it could not exceed 1/2 percentum of the price of the agricultural produce.
The liability to pay the fee was of the seller of the agricultural produce.
Market fee was liable to be paid under Rule 68(2) (ii) even if the specified agricultural produces was sold directly by the seller to the consumer.
This provision has now been superseded by an amendment in the Act brought about by U.P. Act 19 of 1979.
[127 F G] (ii) After the amendment in the Statute, Rules could apply only mutatis mutandis and wherever there was a conflict between the Rules and the Statute the latter had o prevail.
[128 D] (iii) The State Legislatures are competent to make retrospective amendment and retrospective imposition of a fee is valid.
However, in a given case and in a given situation the retrospective operation may be hit by Article 19.
[129 A B] B. Banerjee vs Anita Pan ; , M/s. section K. G. Sugar Ltd. vs State of Bihar & Ors.
[1975] 1 S.C.R. 312 and H. H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore [1963] Suppl.
2 S.C.R. 302 referred to.
(iv) The Rules which were framed in 1965 namely Rules 66 and 68 are very different from the present provision of law.
The Government has failed to amend the Rules and bringing it in confirmity with the amended provisions of the Statute from time to time.
The Rules will apply as far as possible so long they do not come in conflict with the Statute and even 109 without the aid of the Rules the provision in section 17(iii) (b) as it stands after the amendment brought about by U.P. Act 7 of 1978 is workable and can be given effect to.
[128 G H] In the present case the retrospectivity of the law as such is not bad and the only safeguard will be that if market fee has been realised by any Market Committee in respect of transactions of sale of agricultural produce taking place between 12 6 1973 and the coming into force of U.P. Act 7 of 1978, in accordance with law as it prevailed then, no market fee under the amended law can be realized again.
But if in respect of any transactions aforesaid market fee had not yet been realised then it can be realised in accordance with the amended provision of the law.
[129 C] 9.
No provision in the Act or the Rules limit the operation of the law in a particular market area only in respect of the agricultural produce produced in that area.
[129 G] 10(i) A producer who produces agricultural produce generally does not indulge in trading activities so as to become a trader within the meaning of clause (y).
He is covered by clause (p) only.
If a person is simply a trader indulging in trading activities he is covered by the definition in clause (y).
The expression producer trader has been coined for a person who is both a producer of agricultural produce and himself trades in it.
For the purposes of the Act he ceases to be a producer and becomes a trader only as the definition indicates.
[130 A B] (ii) If paddy is purchased in a particular market area by a rice miller and the same paddy is converted into rice and then sold the rice miller will be liable to pay market fee on his purchase of paddy from the agriculturist producer under sub clause (2) of section 17 (iii) (b).
He cannot be asked to pay market fee over again under sub clause (3) in relation to the transaction of rice.
[130 E] (iii) Market fee has to be levied and collected in relation to the transaction of paddy alone.
Otherwise there will be a risk of violation of Article 14 if it is left to the Market Committee in the case of some rice millers to charge market fee on the transaction of paddy and in the case of others to charge it when the sale of the rice takes place.
If, however, paddy is brought by the rice miller from another market area, then the Market Committee of the area where paddy is converted into rice and sold will be entitled to charge market fee on the transaction and sale in accordance with sub clause (3).
[130 F G] (iv) In transactions of Ghee, a dealer who purchases milk or cream from the villagers and others and manufactures Ghee in his plant will be liable to pay market fee because he is the producer of Ghee within the meaning of the Act and at the same time a trader in Ghee also.
When he sells Ghee to another dealer in Ghee who is simply a dealer then under sub clause (3) of Section 17(iii)(b), the manufacturing dealer will be liable to pay market fee to the Market Committee or the transaction of Ghee, but he will be entitled to pass on the burden to his purchaser.
[131 C D] 11.
The definition clause (a) of section 2 uses the expression 'animal husbandry 's by way of a descriptive one without strictly confining to the pro 110 products of animal husbandry as the additions, of the words 'specified in the schedule ' indicates.
In the schedule under the group 'husbandry products ' are mentioned item 11 hides and skins, item 12 bones, item 13 meat etc.
Market fee is, therefore, leviable on the transactions of hides and skins as no market fee can be charged on transactions of sale and purchase of animals in a market area in the State of Uttar Pradesh the same having not been included in the notification.
Had it been included in the notification, then no market fee could be charged in the same market area on hides and skins.
It could only be charged in relation to the transaction of purchase and sale of animals.
[131 H, G; 132 B C] 12.
Group E of the notification dated 11 4 1978 deals with forest products.
The items mentioned therein are (1) Gum, (2) Wood, (3) Tendu leaves, (4) Catechu, and (5) Lac.
Market fee can be charged on purchase of wood by a trader from a producer.
No fee can be charged on the sale of furniture manufactured by the purchaser of wood.
According to the Market Committees Catechu is a product from timber or trees like Gum or Lac, which trickles down from the trees, while, according to the Catechu dealers by processing of Khar trees Catechu is produced.
This question of fact is left to be decided by the Market Committees concerned in the first instance and then by a court of law.
If Catechu is a product of Khar trees by some processing as prima facie it appears to be so, it is plain that market fee can be charged only on the purchase of Khar wood and not on the sale of Catechu.
[D, F] 13.
The owner of the jungle wherefrom the wood is cut and brought will be a producer within the meaning of the Act and the licensee producer of that wood would be a purchaser of an agricultural produce within the meaning of sub clause (2) of section 17(iii) (b) of the Act liable to pay market fee.
It matters little what use is made of the wood by him.
The question of quid pro quo and service cannot be decided by a dichotomy of service to every payer of fee as held in Kewal Krishan Puri 's case.
The matter has to be judged in a broad sense and not in the sense of rendering service to every individual payer of the fee.
[133 B C] 14.
In group A VI Spices are mentioned including certain Kirana items such as Ripe Chillies, Sonf, turmeric etc.
They are sold by the Kirana dealers.
Sometimes they purchase them from the agriculturists in the same market area.
In relation to those transactions they will be liable to pay market fee under sub clause (2) of section 17(iii) (b).
More often than not such articles are brought from outside and sold by the Kirana merchants.
If they are sold to consumers, no market fee can be levied in view of the proviso added in the year 1979.
If they are sold in wholesale, then the transaction can be subjected to the levy of market fee because in a particular market area they enter into the first transaction of sale in respect of the specified agricultural produce.
[133 E F] 15.
Market fee can be charged on transaction of tobacco as it is included in group A V of the notification.
Similar is the position in regard to tendu leaves which is mentioned in group E. Bidi cannot be treated as an agricultural produce as it is not an admixture of tobacco and tendu leaves within the meaning of section 2(a) of the Act.
But if a Bidi manufacturer purchases tobacco and tendu leaves in the market area and uses them in the manufac 111 ture of bidi, he will be liable to pay market fee in relation to the transaction of tobacco and tendu leaves.
[133 G 134 A] 16.
Market fee can be levied on the first transaction of rab taking place in any market area in accordance with any of the sub clause of section 17(iii)(b), as may be applicable.
It cannot be again charged on the second transaction of rab galawat or rab salawat even assuming that it is rab.
[134 F] 17.
If goods are merely brought in any market area and are despatched outside it without any transaction of sale taking place therein, then no market fee can be charged.
If the bringing of the goods in a particular market area and their despatch therefrom are as a result of transactions of purchase and sale taking place outside the market area, it is plain that no fee can be levied.
[135 B] 18(i) Producer as defined in clause (p) of section 2 is not required to take any licence for selling his agricultural produce nor is he required to pay market fee under any of the sub clauses of section 17(iii) (b).
But if he is a producer trader in the sense explained above, then he will be required to take out a licence in accordance with section 9(2) of the Act and no body can be permitted to carry on any trade in agricultural produce in the market area without a valid licence.
[135 E] The proviso to clause (p) of section 2 will be attracted only if a question arises as to whether any person is a producer or not for the purposes of the Act and in that event the decision of the Director made after an inquiry conducted in the manner prescribed by the Rules shall be final.
If a question arises whether a person is merely a producer or producer trader the Director will have no power to decide this question.
Such a question will have to be decided by the Market Committee itself which will be subject to the final decision of a court of law.
[135 G H] (ii) The traders cannot escape their liability to pay the fee on account of their default of taking out licences.
[136 D] 19.
Market fee can be charged only on the transactions of purchase of wood and if a manufacturer of match sticks purchases wood from the producer for the purpose of manufacturing the sticks he will be required to pay market fee on such purchase of wood only and not on the sale of match sticks or match boxes.
Similarly market fee will be leviable on the transaction of purchase of soyabin and not on transaction of sale of soyabin products.
[136 E] 20.
Under sub clause (1) of section 17(iii)(b) of the Act when fruits and vegetables are sold through a commission agent by the producer then the commission agent is liable to pay the market fee and he can realise it from the purchaser of fruits and vegetables.
The burden does not fall on the producer.
The liability in the first instance is of the commission agent and finally of the purchaser of the articles.
[136 H] 21.
In the U.P. Act even traders under certain circumstances have been made liable to pay such fees.
The argument that market fee can be charged only on those transactions in which the seller is the producer of agricultural produce and not on any other transaction is devoid of substance.
[138 C] 112 Mangalchand Ramchandra and others etc.
vs State of Bihar approved.
If anything has been realised from the traders or any other person which goes contrary to this judgment the same should be refunded by the Market Committee concerned within six months.
The form of the order in relation to the refund of the market fee may vary from case to case depending upon the facts and circumstances of each case.
[138 D] 23.
Market fee due from the traders should be regularised and be charged in the light of this judgment, and paid within a period of six month.
If there is any disputed question of fact to be decided by the Market Committee then it should be decided as quickly as possible leaving the person concerned to agitate the matter in a court of law, preferably, in the High Court, within short time thereafter.
[138 E F]
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Appeal No. 131 of 1961.
Appeal from the judgment and decree dated September 30, 1957, of the Kerala High Court in Appeal suit No. 19 of 1956 (T).
T. N. Subramania lyer, R. Mahalingier and M.R. Krishna Pillai, for the appellant.
V. A. Seyid Muhammed for the respondent.
September 14.
The judgment of the Court was delivered by KAPUR, J.
It is not necessary for me to give the facts of this case as they are set out in detail in the 65 judgments of my learned brethern Sarkar & Hidayatullah, JJ.
In my opinion this appeal should be dismissed and my reasons are these On the findings of the High Court it appears that the Bank had agreed to allow an overdraft to defendant No. 1 for Rs. 20,000/ , that the appellant gave a surety bond for the repayment of Rs. 25,000/ and when that was pointed out to defendant No. 1, the principal debtor, lie (the latter) made the alteration in the document by reducing the figure of Rs. 25,000/ to Rs. 20,000/ The case of the appellant was not that he never stood surety for defendant No. 1 but that he stood surety for Rs. 25,000/ which was subsequently altered to Rs. 20,000/ and that any change of figure was a material alteration resulting in the avoidance of the contract, even though the alteration might have been advantageous to him, the obliger.
It was argued that howsoever innocent the obligee might be or howsoever innocent the alteration might have been made so far as it is material the non accepting obliger the appel lant in this case cannot be held liable on the obligation in the altered form because he never made be consented to such an obligation and he can not be held liable on the obligation in the original form because the obligation was never assented to by the creditor respondent Bank.
Now an unauthorised material alteration avoids a contract so that if a promisee after a written contract has been executed materially alters it without the consent of the promisor whether by adding anything to the contract or striking out any part of it or otherwise the contract is avoided as against the person who was otherwise liable upon it (Halsbury 's laws of England, 3rd Edn., Vol. 8, para 301, p. 176).
It may also be taken to be the law that even if the alteration is made by a stranger without the knowledge of the promisee the other party is discharged if the contract is in possession of the promisee or his agent.
But if the contract is altered 66 by a stranger when the contract was not in the custody of the promisee the promisor is not discharged.
(Halsbury 's Laws of England, 3rd Edn., Vol. 8, para 301, p. '176).
There is also a further qualification and that is that if a guarantor entrusts a, letter of guarantee to the principal borrower and the principal borrower makes an alteration without the assent of the appellant then the Guarantor is liable because it is due to the act of the guarantor that the letter of guarantee remains with the principal debtor, in this case defendant No. 1, and what the principal debtor did will estop the guarantor from pleading want of authority (Williston on Contract, Vol.
para 1914, P.5354).
Thus the position in the present case comes to this.
The appellant agreed to stand surety for an overdraft allowed by the respondent Bank to the principal debtor, Shankaran.
The Bank required a guarantee in the form which was handed over to the principal debtor, Shankaran.
Shankaran got it filled by the appellant for a sum of Rs. 25,000/ .
The Bank did not accept the guarantee up to that limit but wanted the figure to be corrected i.e. by insertion of Rs. 20 000/ .
The document was there upon handed back to the principal debtor who, it is stated, altered the document.
At that stage the principal debtor was acting for and on behalf of the appellant because it was at his instance that the appellant was standing surety and the appellant handed over the deed of guarantee to the principal debtor for the pur poses of being given to the balik, the respondent.
In these circumstances the avoidance of contract by material alteration is in applicable because the document was not altered while in possession of the promisee or its agent but was altered by the principal debtor who was at the time acting as the agent of the guarantor, the appellant.
In these circumstances the plea of material alternation is of no avail to the appellant and the 67 appeal must therefore fail and is dismissed but no order as to costs.
SARKAR, J.
This appeal arises out of a suit filed by the respondent Bank against the appellant as the guarantor and one Sankaran as the principal debtor, to recover moneys advanced to the latter on an overdraft account.
The suit was decreed against Sankaran by the trial Court and he never, appealed from that decree.
We will, therefore, be concerned in this appeal only with the claim against the appellant.
The suit against the appellant was based on a letter of guarantee dated May 24, 1947.
It was stated in the plaint that by this letter of guarantee the appellant had undertaken to repay to the Bank the balance due on the overdraft account opened in favour of Sankaran, up to a maximum of Rs. 20,0001/ which was also the maximum amount for which the overdraft had been arranged.
The appellant 's defence to the suit was that he had agreed to guarantee the liability of Sankaran on the overdraft up to Rs. 5,000/ and had signed the letter guaranteeing thereby repayment up to that sum but the letter had been altered .without his consent by substituting Rs. 20,000/ for Rs. 5,000/ .
The appellant contended in the courts below that as this was a material alteration of the instrument of ' guarantee.
he was absolved of ill liability on it.
The trial court found, that the amount guaranteed had originally been mentioned in the letter as Rs. 25,000/ and this had been altered without the consent of the appellant to Rs. 20,000/ .
It observed that as it was not disputed that the alteration was material, the suit against the appellant had to be dismissed and passed a decree accordingly, obviously in the view that the alteration had avoided the instrument.
The respondent Bank then appealed to the High Court of Kerala, the High Court agreed with the trip 68 court that the letter of guarantee originally mentioned Rs. 25,000/ and this figure was later altered to Rs.20,000/ without the consent of the appellant.
It .added that probably the alteration had been made by the principal debtor, Sankaran.
It however held that the appellant had mentioned Rs. 25,000/ in the place of Rs. 20,000/ in the letter probably by a mistake and that the alteration had been made in order to carry out the common intention of Sankaran, the appellant and the Bank that for the overdraft accommodation of Rs. 20,000/ allowed to Sankaran the appellant would give a letter of guarantee to the Bank.
In this view of the matter the High Court, relying on the principle contained in section 87 of the , passed a decree against the appellant.
The appellant has come up to this Court in appeal against the judgment of the High Court.
Unfortunately, the Bank, for reasons unknown to us, has not appeared in this appeal.
Dr. Seiyid Muhammed argued the case for the Bank at our request and has rendered us great assistance.
Now, the provision of the on which the High Court relied in terms applies to a negotiable instrument which a letter of guarantee is not.
The principle of that provision may however be of wider application.
That principle has been formulated in Halsbury 's Laws of England, 3rd edn., vol.
11, p. 370, in the following words : "An alteration made in a deed, after its execution, in some particular which is not material does not in any way affect the validity of the deed;. . .
It appears that an alteration is not material . . . 'Which carries out the intention of the parties already apparent on the face of the deed.
It is now well settled that, this principle applies to instruments under hand also : see ibid 69 p. 380, f. n. (c) and Master vs Miller, (1791) 4.
Term Rep. 320.
The question then is, was the alteration in the letter of guarantee of the kind contemplated by this principle.
The learned judges of the High Court thought it was and so held that the letter of guarantee as altered could be enforced.
I am unable to accede to that view.
It seems to me that the intention to carry out which an alteration is permissible under the rule on which the High Court has relied, is the intention with which the instrument was executed.
That is why in formulating the rule it has been stated in Halsbury 's Laws of England that the intention has to be "already apparent on the face of the deed".
I need only refer to the observation of Le Blanc, J., in Knill vs Williams(1) in support of this proposition, "If I had thought that there was any evidence on which the jury might have found that the words afterwards added had been originally intended to have have been inserted, and were omitted by mistake, I 'Should certainly have left it to them so to find; the case of Kershaw vs Cox(2) being then fresh in my mind; but.
according to my recollection of the evidence, it was impossible for them to draw that conclusion from it.
The opinion which I delivered in Karshaw vs Cox can only be supported on the ground that the alteration there made in the bill the day after it was negotiated was merely the correction of a mistake made by the drawer of it, in having omitted the words, 'or order ', which it was intended at the time should be inserted.
" The two cases on which the learned judges of the High Court relied are also cases where the mistake was in writing the instrument.
In Lachmi Rai vs Srideo Rai(3) it was found that "the omission regarding the payment of interest was accidental" and in Ananda Mohan Saha vs Ananda Chandra Naha(4) where (1) ; (1809) 10 East. 931; (2) 3 Esp.
N. Cas. 246.
(3) A. I. R. 1939 All.
(4) (1916) 1.
L. R. 70 the instrument originally provided for interest on 'a loan of Rs. 200/ at Rs. 1/ per mensem and had been altered by the addition of the words "per cent", ' it was said "that it was the intention of the parties, as ' it seems to me to be obvious upon reading the document, that interest was to be paid at the rate of 'one rupee per cent.
per mensem".
It seems to me that if it were not so and the intention contemplated in the rule could be gathered from a pre existing agreement alone without caring to find out the intention with which the instrument was executed, then there would be no justification for the rule.
It would then warrant the alteration of an instrument intentionally written in variance with the pre existing agreement which a person was in law free to do, by the other party to it.
That would amount to making a new contract out of a written instrument by unilateral action and in disregard of the intention of the writer.
For such a position our laws make no provision.
It may be that a person who writes a document in terms which deliberately depart from the agreement pursuant to which it is written, may be liable on that agreement but he cannot be made liable on the document as altered by the other party to the agreement alone even though such alteration makes the document consonant with the agreement.
Now there is absolutely no evidence in this case that in writing the letter of guarantee the appellant had intended to mention the maximum amount of guarantee as Rs. 20,400/ and had by mistake written Rs. 25,000/ instead.
In holding that there was such a mistake, the High Court proceeded purely on the basis of conjecture which is evident from the language used by it.
It said, "probably defendent 2" (the appellant) "made a mistake in Ext.
C" (the letter of guarantee).
There was not the slightest warranty for; this conjecture.
In fact the evidence indicates that Rs. 25,000/ had been mentioned intentionally in the letter of guarantee.
That evidence was given by the 71 Banks agents too.
, He said that the overdraft arrangement commenced on February 24, 1947, when Sankaran executed a promissory note for Rs. 20,O00/ in favour of the Bank.
At that time the appellant was not available to sign the letter of guarantee.
The letter was typed by the Bank with blank spaces left for entries to be made by the guarantor regarding the maximum limit of the account, the rate of interest, and the date.
Sankaran brought this letter back to the Bank in May 1947.
At that time the space for the amount of the limit was filled up with the figure Rs.25,000/ .
Sankaran said that he required Rs.25,000/ and would renew the promissory note for that amount.
The Bank was not prepared to advance to him more than Rs. 20,000/ and so the letter of guarantee was returned to Sankaran who then took it away and brought it back some time later with the amount of the maximum limit corrected to Rs. 20,000/ .
This is all the evidence on the question.
I think it right to point out here that the Bank 's agent did not speak to any oral agreement with the appellant, nor indeed to any interview with him concerning the overdraft arrangement or the guarantee.
The appellant in his written statement no doubt admitted that he had agreed to guarantee the due repayment of the overdraft up to Rs. 5,000/ .
He did not however say that the agreement was verbal but mentioned the letter of guarantee.
The appellant 's admission can of course be taken against him but it must be taken as made and not a part of it only.
Again, no verbal agreement concerning the guarantee had been pleaded anywhere by the Bank, not even in the application that it filed in answer to the.
written statement of the appellant alleging that the letter of guarantee, having been materially altered no suit lay on it.
, Lastly, I have to observe that the trial court did not find,that any such oral agreement had been made.
If there ' had been any agreement, the letter of guarantee as typed.
out would have contained no blanks.
72 In these circumstances it is impossible to hold that there was any prior agreement about the guarantee or its limit, between the appellant and the Bank, and if there was not, the High Court 's view that in the letter of guarantee Rs. 25,000/ had been mentioned by mistake, would lose its foundation.
But even assuming a preexisting verbal agreement and in this case the agreement, if any, could only be verbal the fact that Sankaran made a request that the amount of the overdraft should be increased to Rs. 25,000/ would rather indicate that the letter of guarantee had intentionally stated Rs. 25,000/ as the amount of guarantee and this figure had not been written by any mistake.
It would be impossible to hold on this evidence that there had been any mistake in writing the letter of guarantee.
The evidence does not prove any pre existing agreement and tends to prove that there ha been no mistake in writing the letter of guarantee even if there was an agreement.
Therefore it seems to me that the High Court was in error in thinking that the alteration in this case had been made to carry out the intention of the parties.
The principle underlying section 87 of the has no application to the facts of this case.
Dr. Seiyid Muhammed, however, put the matter from another point of veiw.
He said that in order that an alteration in an instrument made without a party 's knowledge might be avoided against him that alteration had to be material and in support of it he referred us to a passage in Halsbury 's Laws of England 3rd Ed., vol.
11, p. 380.
He then said that no alteration could be material unless it was to the prejudice of a party.
He pointed out that the alteration in the present case had reduced the limit of the appellant 's liability from Rs. 25,000/ to Rs. 20,000/ and it was not therefore a material alteration.
Hence he contended that the letter of guarantee had not been avoided by the alteration.
I do not think that this contention assists the Bank at all.
I will assume that an alteration in an 73 instrument which is not to the prejudice of a party to it is not a material alteration and does not release him from his liability under the instrument.
This rule however does not make the instrument as altered binding on that party.
If it did, that would amount to changing by unilateral action the terms of a contract made by common consent or to changing the terms of an offer made by one without his consent.
As I have earlier said, none of these things can be done under our law.
I may add that I have not been able to find any authority laying down that in such a case the altered instrument would be binding.
All that we would get in this case if Dr. Seiyid Muhammed is right, is that the alteration might be ignored and, the instrument in its original form might be considered as existing unaffected by the alteration.
In the present case, therefore, we would have a letter of guarantee written by the appellant undertaking to repay the balance due by Sankaran on the overdraft account up to a limit of Rs. 25,000/ .
What then ? The suit is not on a contract to guarantee up to Rs. 25,000/ .
Indeed according to the Bank 's pleading and evidence there never was any agreement for such a guarantee between it and the appellant.
The letter, therefore cannot be considered as evidence of such a contract.
Further the evidence to which I have already referred proves that as an offer, the letter was not accepted by the Bank.
In fact the letter in its original form is of no assistance to the Bank at all in this case, it neither proves a guarantee for Rs. 25,000/ nor for Rs. 20,000/ .
But it is said that the letter contained an enforceable contract as it was supported by consideration which had already moved from the Bank, namely, the advance made to Sankaran before the date of the letter and the promise to make further advances.
Then it is said that inadequacy of consideration does not avoid a contract as stated in Explanation 2 of section 25 of the Contract Act, 1872, and therefore the Bank 's undertaking 74 to advance upto Rs. 20,000/ could support the appellant 's promise to guarantee up to Rs. 25,000/ .
But it is not the Bank 's case that there was such a contract of guarantee.
Its case was that the contract of guarantee was for Rs. 20,000/ .
That contract is not supported by the letter on which alone the suit is based.
If there was no contract as stated in the letter then.
no question of consideration to support it can possibly arise.
Therefore, it seems to me that the.
contention that the alteration was immaterial and did not affect the instrument so far as the appellant is concerned is to no purpose in the present case.
The position may then be thus stated.
We have, a suit against the appellant based on a written contract to guarantee repayment of Sankaran 's dues to the Bank up to Rs. 20,060/ .
There is no evidence of, any verbal contract of guarantee.
The appellant ' wrote a letter guaranteeing repayment of those dues up to Rs. 251000/ .
Sankaran also signed this letter but that signature is of no consequence to the question of guarantee which alone arises in this appeal for Sankaran could not guarantee his own debit and his signature would therefore only be evidence of his liability for the amount advanced to him by way of overdraft.
Such liability, however, he had already undertaken by executing a promissory note for Rs. 20,000/ in favour of the Bank.
His signature on the letter of guarantee therefore made no difference in the legal relations that have to be considered in this appeal.
Returning now to the letter of guarantee Written by the appellant, the Bank refused to accept that letter and, therefore, on the Bank 's own case no contract on its terms was ever made.
That letter was altered without the consent of the appellant probably by Sankaran by substituting Rs. 20,000/ for Rs. 25,600/ .
If the alteration was without the appellant 's consent, it could not have been authorised by him; if it had been, consent would be implied.
There is further neither evidence, nor pleading nor 75 finding of any such authority.
The altered document is not binding on tile appellant, for the alteration had not been made to carry out the intention of the: parties in the alteration is ignored, then the document creates no liability in the appellant, for the Bank refused to accept a guarantee on the terms Contained in the document before it was altered.
Further, the contract sued upon is different from the contract which might, have been made by the document as it stood before the alteration.
The unaltered document cannot establish the contract sued upon.
The conclusion to which I arrive then is that the suit against the appellant as framed must fail.
I would, therefore, allow the appeal with costs here and below and dismiss the suit against the appellant.
HIDAYATULLAH,J. I have had the advantage of ' reading the judgment prepared by my brother Sarkar.
In my opinion, and I say it with great respect, this appeal must fail.
I shall give my reasons briefly.
The facts of the case are simple.
The suit, out of which this appeal arises, was filed by the Thomco 's Bank Ltd, Trivandrum, (to be called in this judgment the 'Bank ') against V. Sankaran (the principal Debtor) and N. section Anirudhan (the surety and appellant before us).
The suit was based against V. Sankaran on a promissory note executed by him in favour of the Bank on February 24, 1947, (Exhibit B) and against the present appellant on a letter of guarantee dated May 24, 1947.
In so far as Sankaran has not appealed against the decree passed against him we need not mention the facts leading up to the promissory note which was prior in time.
Anirudhan in defending himself stated that the letter of guarantee was for Rs. 5,000 and that it had been altered without his knowledge and consent in a sum of Rs. 20,000/ .
The letter of guarantee is Exhibit C and the original does show two corrections in the figures as well as the written words mentioning the amount.
Figure "5" in the amount of Rs. 25,000/ in figures appears to have been 76 altered to "O"; and in the words "Rupees twenty five thousand" the word "five" has been struck out.
The appellant 's case that 5,000 in figures was altered to 20,000/ by the addition of the figure "2" and the alteration of the figure "5" into "O" and the corresponding change in the words by the addition of the words "twenty" and the scoring out of word "five" has not been believed.
Thus the case made out by Anirudhan has not been accepted.
The correction.
however, is patent and the question that has arisen in this case is whether by the alteration of the letter of guarantee the surety is discharged.
The finding of the High Court is that there was no prior oral agreement between the Bank and Anirudhan.
This letter, as is obvious from the dates, was give after the loan had already been made.
The contention of the Bank was that when Sankaran brought this letter and asked for additional loan of Rs. 5,000 the Bank refused to advance any further amount and declined to accept this letter of guarantee for Rs. 25,000 lest the Bank might be compelled to loan a further sum of Rs. 5,000.
Sankaran then took back the letter and after some time brought it back with the figure "5" changed into "O" and the word "five" scored out.
These corrections were not initialled either by Sankaran or by Anirudhan.
The Bank, however, accepted this letter and kept it and sued Anirudhan upon it.
The question is whether Anirudhan 's liability is discharged by the alteration in the document which alteration is not proved to have been made either by him or with his knowledge or consent.
It is conceded and indeed it is the law that only a material alteration makes a document void.
It is also the law that if the custodian of the document makes or allows an alteration to be made while the document is in his custody he cannot sue upon it because it is his duty to preserve the document in the state in which he got it.
In the present case, the 77 document was not altered by, Bank nor with the Bank 's consent or connivance while the document was in.
its custody.
The document was apparently altered either by Anirudhan or by Sankaran or by both.
If it was altered by Anirudhan, or by him and Sankaran together, the document still remains the document of Anirudhan and the suit of the Bank based upon it is competent against him.
If it was altered by Sankaran the question is whether the alteration was a material alteration to make it void against Anirudhan.
The High Court is of the opinion that it was not material.
I am inclined to accept the conclusion of the High Court.
Anirudhan by the letter to the Bank wished to guarantee an overdraft of Sankaran not exceeding Rs. 25,000/ .
His case that it was Rs. 5,000/ and not Rs. 25,000 has been disbelieved.
The document was originally written for an amount of Rs. 25,000/ which was reduced to Rs. 20,000/ 1 will assume, by Sankaran and the letter of guarantee was accepted by the Bank.
The question is whether by the reduction of the amount of the guarantee Anirudhan can say that the document executed by him has been materially altered and his liability is at an end.
In my judgment, in the present case it cannot be said.
The document still continues to represent what was intended by Anirudhan.
That intention was to guarantee a loan up to Rs. 25,000/ which includes the sum for Rs. 20,000/ for which the guarantee now stands.
The question is whether Anirudhan can say that this guarantee is at an end.
There are really two defences open to Anirudhan the surety.
The first is that he had offered to stand surety on certain terms and as those conditions have been altered he is discharged from any liability.
The second also depends on the alteration and it is that a document executed by him has been materially altered and is therefore void.
This is a plea of non est factum.
Both the arguments rest upon the alteration of the contract into which Anirudhan wished to enter.
A surety is considered a "favoured debtor" and his 78 liability is strictissimi juris.
Lord Westbury, L.C., in Blest vs Brown (1) stated this liability in the following words: "It must always be recollected in what manner a surety is bound.
You bind him to the letter of his engagement.
Beyond the proper inter pretation of that engagement you have no hold upon him.
He receives no benefit and no consideration.
He is bound, therefore, merely according to the proper meaning and effect of the written engagement that he has entered into.
If that written engagement is altered in a single line, no matter whether the alteration be innocently made, he has a right to say, " 'The contract is no longer that for which I engaged to be surety; you have put an end to the contract that I guaranteed, and my obligation, therefore, is at ail end.
" It is not necessary to go into the fact of that case where the surety guaranteed fulfilment of a contract for the supply of, flour to a banker who in his turn had undertaken to supply bread to Government.
The case turned upon stipulations by the Government and their breach and the decision cannot be regarded a ,direct authority, apart from the general observation, in the present case.
The statement of the law in Blest vs Brown (1) Was considered by the Court of Appeal in Holme vs Brunskill (2) in an appeal from a judgment of Denman, J. (later Lord Denman).
Cotton, L.J., stated the law in these words: "The true rule in my opinion is, that if there is any agreement between the principals with reference to the contract guaranteed, the surety ought to be consulted, and that, if he has not consented to the alteration, although in cases where it is without inquiry evident that the alteration is unsubstantial, or that it cannot be otherwise than beneficial to the surety, the surety may not be discharged; ), Yet, that if it is not self evident that (1) ; (1862) 4 De G. F. & J. 365 ; (2) 79 the alteration is unsubstantial, or one which cannot be prejudicial to the surety, the Court will not, in an action against the suerty, go into an inquiry as to the effect of the alteration. . " To this statement of the law, must be added the 'dissent of Brett, L.J., who stated that the surety in that case was not raleased observing that the doctrine of release of sureties was carried far enough and that lie would not carry it any further.
There is noticeable a difference between the strict rule stated by Lord Westbury and that stated by Cotton L. J., and the law now accepts that unsubstantial alteration which are to the benefit of the surety do not discharge the surety from the liability.
Of course, if the alteration is to the disadvantage of the surety, or its unsubstantial character is not self evident the surety can claim to be discharged.
The Court will not then inquire whether it in fact harmed the surety.
That dictum of Cotton L. J., was quoted with approval by the Judicial Committee in ward vs The National Bank of Neu Zealand.
Limited (1).
Other cases in which a similar liberal view is taken are mentioned in these two decisions.
Before I examine the position of Anirudhan with regard to the law applicable to sureties, I wish to refer to the law relating to the alteration of documents.
These two matters really go together in this case.
Here, again, the strict rule at one time was that the slightest alteration makes the document void.
The leading case for a long time was Pigot 's case (2) where Lord Coke stated the doctrine as follows: "These points were resolved: 1.
When a lawful deed is raised, whereby it becomes void, the obligor may plead non, est factum, and give the matter in evidence, because at the time of the plea pleaded, it is not his deed." "Secondly, it was resolved, that when any deed is altered in a point material, by the plaintiff himself, or by any stranger, without the privity (1) , (2) 11 Co.Rep.26 b;77E.R.177. 80 of the obligee, be it by interlineation, addition, raising, or by drawing of a pen through a line, or through the midst of any material word, that the deed thereby becomes void . so if the obligee himself alters the deed by any of the said ways, although it is in words not material, yet the deed ,is void: but if a stranger, without his privity, alters the deed by any of the said ways in any point material, it shall not avoid the deed.
" The passage is also to be found in an article "Discharge of Contracts by Alteration" by Williston in 18 Harvard Law Review, p. 105.
The strictness of this rule was tempered in subsequent cases and was departed from in Aldous vs Cornwell (1) where Lush, J. (speaking for Cockburn, C. J., Blackburn, J., and himself), after referring to numerous authorities,observed "This being the state of the authorities, we think we are not bound by the doctrine of Pigot 's case or the authority cited for it; and not being bound.
We are certainly not disposed to lay it down as a rule of law that the addition of words which cannot possible prejudice any one, destroys the validity of the note.
It seems to us repugnant to justice and common sense to hold that the maker of a promissory note is discharged from his obligation to pay it because the holder has put in writing on the note what the law would have supplied if the words had not been written.
" What is said here about an addition or alteration of a promissory note was prior to the enactment of the rule in Bills of Exchange Act in England which has altered the law with regard to negotiable instruments but the observations apply forcefully to a document of the type we have where there were.
two executants (one being the debtor and the other his surety and the debtor has not increased but reduced the amount of his own liability as well as that of his (1) 81 surety.
That immaterial alterations do not matter is borne out by the observation of Swinfen Eady, J., in Bishop of Creditor vs Bishop of Exeter (1) where Pigot 's case(2) and the earlier statement of the law in Sheppard 's Touchstone, 7th ed.
(Preston 's), p. 55.
, were not accepted.
During the course of the argument Swinfen Eady, J., referred to cases in which corrections in the testimonium of documents to accord them with existing facts were held not to be material alterations.
The question before me is whether a document jointly executed by two persons creating a liability equal for both is to be regarded as materially altered if the liability is reduced equally for both but the alteration is made only by one of them.
In my opinion, such an alteration must be regarded as unsubstantial and not otherwise than beneficial to the surety and it cannot attract the strict rule stated by Lord Coke or that stated by Lord Westbury in the cited cases.
me give an example: If A places an order with a trader for supply on credit of ten bags of wheat and B endorsed the order by writing, "I guarantee payment up to ten bags", can it be said that 'the guarantee by B is dissolved when A takes the note and finding that the tradesman has only six bags of wheat in stock, corrects his order as well as the endorsement by altering "ten ' into 'six '? In my opinion, to such a correction neither the one rule nor the other can apply.
The strict rule of law which was brought to our notice from the well known Suffell 's Case(3), where a Bank of England note was mutilated and its number destroyed, depended upon its special facts.
The number of the Bank of England note was considered its vital part and the alteration a material alteration.
Suffell 's Cage(3) was not followed by the Privy Council in a case where a bank note issued by bank which was only a contract and not currency, as in the other case, was destroyed because the owner had forgotten that the note was in the pocket of a garment and the garment had been washed.
The (1) (2) ; ; (3) 82 note was reconstructed and showed the contract but not the number.
The Privy Council held the bank liable even though the contract had been Altered by eraser (see Hong Kong and Shanghai Banking Corporation vs Lo Lee Khi(1).
These cases establish that both the limbs of the argument which Anirudhan can raise are not vali in the circumstances of this case.
In my judgment, the particular document in this, case cannot be said to have been materially altered, because.
it has not been altered in such a manner as to change its nature.
The alteration does not save the surety from liability arising under it.
The alteration was made by a co executant who reduced not only his own liability but that of the surety also.
indeed, the surety himself under stood the law to be this because he set up the case that the document originally guaranteed an overdraft of Rs. 5,000/ but was altered to guarantee an overdraft of Rs. 20,000/ .
This case has been proved false and he never set up the case that the document was void because the amount was reduced from Rs. 25,000/ to Rs. 20,000/ .
It does not lie in the mouth of Anirudhan.
to say the he meant.
to guarantee 25,000/ but.
not Rs. 20,000/ because he never went to the Bank and made this a condition of the agreement.
Now he cannot say that the document has; become void against him or that the contract which had emerged by the Bank 's acceptance of the document as altered does not bind him.
There is no need, in my opinion, to consider whether there was a prior oral agreement or not.
I agree there is no proof of such an agreement.
The letter of Anirudhan to the Bank was based on a consideration which had already moved to Sankaran and which Anirudhan wished to guarantee.
Even if treated as an offer by Anirudhan to the Bank, the Batik accepted the amended offer and Sankaran must be deemed to have had the authority to reduce the amount, (1) ; 83 though not to increase it.
The document was altered while in the possession of the very person who, as the agent of Anirudhan, brought it to the Bank on both the occasions.
Anirudhan must be deemed to have held out Sarikaran as his agent for this purpose and this creates an estoppel against Anirudhan, because the Bank believed that Sankaran had the authority.
The offer thus remains in its amended form an offer of Anirudhan to the Bank and the Bank by accepting it turned it into a contract of guarantee which was backed by the past consideration on which the offer of Anirudhan was originally based.
In my opinion, the appeal must fail.
I would, therefore, dismiss it.
By COURT : In accordance with the opinion of the majority, the appeal is dismissed.
There would be no order as to costs.
Appeal dismissed.
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The appellant agreed to stand surety for an overdraft allowed by the respondent Bank to section A blank form of guarantee was given by the Bank to S, who then had it filled up by the appellant stating the maximum amount which he guaranteed as Rs. 25000/ .
When S brought the letter of guarantee duly signed by the appellant and himself to the Bank the latter refused to accept the guarantee up to that limit as it was not prepared to give S accommodation for a larger sum than Rs. 20000/ and wanted it to be limited to Rs. 20000/ .
S then made alterations in the letter with the amount of the maximum limit corrected to Rs. 20000/ and gave it to the Bank.
In a suit instituted by the Bank against the principal debtor, S, and the appellant on the basis of the contract of guarantee for Rs. 20000/ , the appellant pleaded that as the document was altered without his knowledge or consent, he was discharged from his liability.
Held, (per Kapur and Hidayatullah, JJ., Sarkar, J., dissenting), that the appellant was not discharged from his liability under the contract of guarantee.
64 per Kapur, J. S was acting for and on behalf of the appellant since it was at his instance that the appellant was standing surety and the appellant handed over the deed of guarantee to S for the purpose of being given to the Bank.
The plea of avoidance of contract by material alteration was of no avail to the appellant because the document was not altered while in possession of the promisee but was altered by S who was at the time acting as the agent of the appellant.
per Sarkar, J. The suit against the appellant as framed must fail.
The altered document was not binding on the appellant, for the alteration had not been made to carry out the intention of the parties.
If the alteration, is ignored as immaterial, then the document creates no liability in the appellant, for the Bank refused to accept a guarantee on the terms contained in it before it was altered and therefore there was no contract made between the parties by the document.
Further, the contract sued upon is different from the contract which might have been made by acceptance of the document as it stood before the alteration.
The unaltered document cannot establish the contract sued on.
per Hidayatullah, J. The document in this case could not be said to have been materially altered because it was not al tered in such a manner as to change its nature.
The alteration was made by a co executant who reduced not only his own liability but that of the surety also.
The document was altered while in the possession of S, the very person who, as the agent of the surety, brought it to the Bank.
The surety must be deemed to have held out S as his agent for this purpose and this created an estoppel against the surety because the Bank believed that S had the authority.
Accordingly, the alteration of the document did not save the surety from liability under it.
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Civil Appeal No. 1085 of 1970.
Appeal by Special Leave from the Judgment and Order dated 17.
3. 1969 of the Delhi High Court in SAD No. 2/69.
P. R. Mridul and O. P. Sharma for the Appellant.
section K. Bisaria for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI,J.
This appeal by special leave is directed against a judgment of the Delhi Court and arises out of an application filed by Respondent No. 1 who claimed to be the tenant of the appellant, recalling the warrant of possession issued by the Controller in pursuance of a decree dated 31 7 1961 passed against the 1st respondent.
The case had a rather chequered career having passed through several phases.
To begin with the landlord appellant executed a lease in respect of the disputed premises in favour of Respondent No. 2 for three years as far back as 1.4.1942.
In 1948, a suit was brought by the appellant for eviction of the tenant for non payment of rent on the ground of conversion of the user of the premises.
The suit for possession was however dismissed but a decree dated 31.
1948 for arrears of rent was passed and it was held that Laxmi Bank was the real tenant.
Subsequently, the Bombay High Court ordered the 446 Bank to be wound up and in the winding up proceedings, the said High Court appointed an Official Liquidator who on 16.
2. 1961 sold the tenancy rights to Respondent No. 1 section N. Jain.
This sale was confirmed by the High Court on the same date and as a result there of respondent No. 1 took possession of the premises on 24.2.1961.
On 5. 4.
1961, the land lord appellant filed an application under the Delhi Rent Control Act for eviction of Laxmi Bank.
On 31. 7. 1961, a decree for eviction was passed in favour of the landlord appellant.
On 23 1 1963.
Respondent No. 1 filed a suit for a declaration that he was a tenant of the landlord appellant.
This suit was dismissed for non prosecution on 5.5.1964 and an application to set aside the ex parte decree was also dismissed and the appeal against that order also failed.
Thereafter Respondent No. 1 filed an application under section 25 of Delhi Rent Control Act (hereinafter referred to as the Act) for recalling the warrant of possession issued by the Court in pursuance of the decree dated 31.7.1961 in favour of the landlord.
The present appeal arises out of these proceedings.
The Rent Controller allowed the application and recalled the warrant of possession by its Order dated 20.
12. 1966.
The matter was then taken up by the landlord in appeal to the Rent Control Tribunal which by its Order dated 25.
1968 reversed the order of the Rent Controller and dismissed the tenant 's application.
A second appeal against the order of Tribunal was then filed by the tenant to the High Court which reversed the order of the Rent Control Tribunal and restored the order of the Rent Controller, hence this appeal by special leave.
Mr. Mridul appearing for the appellant challenged before us the findings of the High Court on point nos.
1 & 3 which are formulated at page 91 of the judgment of the Delhi High Court.
These points may be extracted thus: "(1) The application made by the appellant before the High Court under section 25 was not barred by reason of the dismissal of the appellants suit for default of appearance under Order IX Rule 9, C.P.C. (3) The transfer to the appellant by the Official Liquidator of the tenancy rights being voluntary did not come within the mischief of section 14(1)(b) of the Act.
In the first place it was argued that so far as point No. 1 is concerned, the High Court was wrong in holding that the application of Respondent No. 1 was not barred by the reason of the dismissal of the appellant 's suit for setting aside the ex parte decree by the principle of Res Judicata or Order IX Rule 9 C.P.C.
It was contended that 447 even if the previous suit filed by respondent No. 1 for declaration of his status as a tenant was dismissed for default but as the application for setting aside the decree also failed, there was an adjudication against the then plaintiff respondent No. 1 and therefore the present suit was clearly barred by the principles of Res Judicata or Order IX Rule 9.
At any rate there can be no escape from the position that the application of respondent No. 1 would be clearly barred by the principle contained in Order IX Rule 9, C.P.C.
In case of Suraj Ratan Thirani & Ors.
vs The Azamabad Tea Co. & Ors.(1) this Court held thus: "We are not however impressed by the argument that the ban imposed by O. IX, r. 9 creates merely a personal bar or estoppel against the particular plaintiff suing on the same cause of action and leaves the matter at large for those claiming under him.
Beyond the absence in O. IX, r. 9 of the words referring "to those claiming under the plaintiff" there is nothing to warrant this argument.
It has neither principle, nor logic to commend it .
The rule would obviously have no value and the bar imposed by it would be rendered meaningless if the plaintiff whose suit was dismissed for de fault had only to transfer the property to another and the latter was able to agitate rights which his vendor was precluded by law from putting forward.
" In the instant case it was appellant who brought the previous suit which resulted in a decree for eviction of the tenant on 31 7 1961 a date when the 1st respondent had already taken possession of the premises by virtue of transfer made by the Official Liquidator.
Thus the identity of the subject matter being substantially the same, this case clearly falls within the ambit of the ratio in the case supra.
On this ground alone therefore the appellant is entitled to succeed because the High Court with due respect does not appear to have properly construed the scope of Order IX Rule 9 C.P.C.
There is however nothing to show that respondent No.1 was tenant within the meaning of Rent Control Act so as to maintain an application under section 25 of the Act when in fact he was an unlawful sub lessee.
As regards point No. 3, the High Court relying on a decision of Calcutta High Court in Krishna Das Nandy vs Bidhan Chandra Roy(2) has found that as the transfer in favour of respondent No. 1 by the Official Liquidator was confirmed by the Court, the status of the tenant by respondent No. 1 was acquired by operation of law and therefore the transfer 448 was an involuntary transfer and the provisions of Rent Control Act would not be attracted.
After careful perusal of Calcutta case, in the first place it appears that the section concerned has not been extracted and we are not in a position to know what was the actual language of the section of the Bengal Act.
Secondly, in our opinion, the official liquidator had merely stepped into the shoes of Laxmi Bank which was the original tenant and even if the official liquidator had transferred the tenancy interest to respondent No. 1 under the orders of the Court, it was on behalf of the original tenant.
It was undoubtedly a voluntary sale which clearly fell within the mischief of s.14(1)(b) of the Delhi Rent Control Act.
Assuming that the sale by the official Liquidator was an involuntary sale, then it undoubtedly became an assignment as provided for by section 14(b) of Delhi Rent Control Act.
section 14(b) runs thus: "14(b) that the tenant has, on or after the 9th day of June, 1952, sublet, assigned or otherwise parted with the possession of the whole or any part of the premises with out obtaining the consent in writing of the landlord.
" The language of section 14(b) is wide enough not only to include any sub lease but even an assignment or any other mode by which possession of the tenanted premises is parted.
In view of the wide amplitude of s.14(b) we are clearly of the opinion that it does not exclude even an involuntary sale.
Fore these reasons therefore we are unable to agree with the view taken by the High Court.
The appeal is accordingly allowed, the judgment and decree of the High Court are set aside and the plaintiff 's application under section 25 of the Delhi Rent Control Act is dismissed.
Mr. Bisaria, learned counsel appearing for the respondent submitted that as the tenant has been in the premises for a period of 19 years and is conducting business therein, he may be permitted sufficient time to make alternative arrangements.
Mr. Mridul appearing for the appellant fairly conceded that he would have no objection if one year 's time is allowed to the respondent provided he gives an undertaking for handing over peaceful and vacant possession at the expiry of the time.
We therefore allow time to the respondent to vacate the premises on or before 15th April, 1981 on the condition that he files an undertaking within two weeks to the effect (1) that he shall hand over vacant and peaceful possession to the landlord on or before 15th April, 1981; (2) that he shall not induct any per son on the premises; (3) that he shall go on paying the compensation for wrongful use of premises equivalent to the rent.
449 The undertaking must be filed supported by an affidavit within two weeks from today failing which the order granting time shall stand revoked.
There will be no order as to costs.
S.R. Appeal allowed.
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The appellant landlord executed a lease in respect of the disputed premises in favour of respondent 2 for three years as far back as 1 4 1942.
In 1948, a suit was brought by the appellant for eviction of the tenant for non payment of rent on the ground of conversion of the user of the premises.
The suit for possession was however dismissed but a decree dated 31 11 1948 for arrears of rent was passed and it was held that Laxmi Bank was the real tenant.
Subsequently, the Bombay High Court ordered the Bank to be wound up and in the winding up proceedings, the High Court appointed an Official Liquidator who on 16 2 1961 sold the tenancy rights to respondent No. 1.
The sale was confirmed by the High Court on the same date and as a result thereof respondent No. 1 took possession the premises on 24 2 1961.
On 5 1 1961, the landlord appellant filed an application under the Delhi Rent Control Act for eviction of Laxmi Bank.
On 31 7 1961, a decree for eviction was passed in favour of the appellant.
On 22 1 1963, respondent No. 1 filed a suit for declaration that he was a tenant of the landlord appellant.
The suit was dismissed for non prosecution on 5 5 1964 and an application to set aside the ex parte order was also dismissed and the appeal against that order also failed.
Thereafter respondent No. 1 filed an application under Section 25 of the Delhi Rent Control Act for recalling the warrant of possession issued by the Court in pursuance of the decree dated 31 7 1961 in favour of the appellant.
The Rent Controller allowed it on 20 12 1966.
An appeal to the Rent Controller Tribunal was ordered by order dated 25 11 1968 in favour of the appellant.
A second appeal filed by respondent No. 1 to the High Court was allowed in his favour and the Rent Controller 's order allowing recalling of the warrant of possession was restored.
Hence the appeal by special leave by the landlord.
Allowing the appeal, the Court ^ HELD: 1.
The application of respondent No. 1 under Section 25 of the Delhi Rent Control Act is clearly barred by the principle contained in order IX Rule 9 Civil Procedure Code.
It was the appellant who brought the previous suit which resulted in a decree for eviction of the tenant on 31 7 1961 a date when the Ist respondent had already taken possession of the premises by virtue of transfer made by the Official Liquidator.
There is nothing to show that respondent No. 1 was a tenant within the meaning of Delhi Rent Control 445 Act so as to maintain an application under section 25 of the Act, when in fact he was an unlawful sub lessee.
[447A, E, F G] Suraj Ratan Thirani and Ors.
vs Azamabad Tea Co. and Ors. ; ; applied.
The language of section 14(b) of the Delhi Rent Control Act is wide enough not only to include any sub lease but even an assignment or any other mode by which possession of the tenanted premises is parted.
In view of the wide amplitude of section 14 (b), it does not exclude even in involuntary sale.
[448D E] In the instant case, the official Liquidator had merely stepped into the shoes of Laxmi Bank which was the original tenant and even if the official liquidator had transferred the tenancy interest to respondent No. 1 under the order of the Court, it was on behalf of the original tenant.
It was undoubtedly a voluntary sale which clearly fell within the mischief of section 14 (1) (b) of the Delhi Rent Control Act.
Assuming that the sale by the Official Liquidator was an involuntary sale, then it undoubtedly became an assignment as provided for by section 14 (b) of Delhi Rent Control Act.
[448A C] Krishna Das Nandy vs Bidhan Chandra Roy, A.I.R. 1959 Cal.
181 Overruled.
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Civil Appeal Nos.
1237 1238/1970.
From the Judgment and Order dated 15 12 1969 of the Punjab and Haryana High Court in Civil Writ Appeal Nos.
444/68 and 2975/67.
Hardayal Hardy, Mahinder Narain and Rameshwar Nath for the Appellants in both the Appeals.
section M. Ashri and M. N. Shroff for the Respondents in both the Appeals.
The Judgment of the Court was delivered by KAILASAM, J.
These two appeals are by certificate granted by the Punjab and Haryana High Court at Chandigarh in C. W. No.444/1968 and C. W. No. 2975 of 1967 respectively.
The petitions were disposed of by a full Bench of the High Court on 15 12 1969.
The appellants who were the petitioners before the High Court prayed for a writ of certiorari or mandamus or any other appropriate writ for quashing the resolution No. 6 dated 21st July, 1965 of the Municipality and letter of the Government of Haryana to the President of the Municipal Committee Bahadurgarh dated 30 10 1967.
The facts of the case briefly are as follows: The Municipal Committee of Bahadurgarh, Respondent No. 2, established Mandi Fateh in Bahadurgarh Town, with a view to improve trade in the area.
The Municipal Committee decided that the purchasers of the plots for sale in the Mandi would not be required 696 to pay octroi duty on goods imported within the said Mandi.
In pursuance of this decision, resolution No. 8 dated 20 12 1916 was passed by the Municipality.
Handbills were issued for the sale of the plots on the basis of the resolution and it was proclaimed that Fateh Mandi would remain exempt from payment of octroi.
Subsequently by resolution No. 4 dated 20 5 1917, the Municipal Committee decided that the term No. 14 to the conditions of sale, namely, that the plots would not be required to pay octroi, be amended to the effect that the Mandi shall remain immune from payment of Octroi Duty for ever.
When the resolution was received by the Commissioner of Ambala, in paragraph 3 of his letter dated 26 6 1917 marked as Annexure A in the writ petition, he noted: "I note that by its resolution No. 4 of 20 5 1917, the Municipal Committee has undertaken that Octroi shall never be imposed in the Mandi.
This is ultra vires, the Municipal Committee cannot make such an undertaking and this should be explained to the purchasers of sites before they begin building so that if they wish they may withdraw from the purchase".
Of course, it is unlikely that Octroi will be imposed." On receipt of this letter, the President of the Municipal Committee made representations that if octroi duty was to be levied, there will be no purchasers for the plots and the entire scheme will fall through.
On receipt of this representation on 20 9 1917 (Annexure B), the Commissioner revised his view and stated that he was cancelling para 3 of his letter dated 26 6 1917, that is to say, "that in deference to the strong views of the Municipal Committee and to your own opinion that the market will collapse if I insist upon it, I withdraw my objection to the undertaking made by the Municipal Committee that Octroi will not be imposed on the market.
As soon as the market is established it will be necessary to consider what form of taxation is best to cover the market share of Municipal expenses".
The Municipal Committee on 10 3 1919 imposed house tax of Rs. 3 14 6 per cent per annum on the shopkeepers to cover the expenditure of the market.
This state of affairs continued till 4 9 1953 when the Municipal Committee by notification No. 9697 C 53/63830 dated 4 9 1953 included Fateh Mandi, Bahadurgarh, within the Octroi limits.
The Examiner of Local Funds pointed out that the Municipal Committee is under obligation to charge octroi on goods imported into Fateh Mandi.
The President of the Municipal Committee made a representation to the Deputy Commissioner on 24 2 1954.
The Municipal Committee again passed another resolution No. 1 dated 2 3 1954 that the 697 Fateh Mandi will remain free from octroi duty according to the terms of the proclamation of the sale relating to the sale of plots.
The matter was referred to the Punjab State which after thoroughly examining the whole matter, confirmed Resolution No. 1 passed by the Municipal Committee on 2 3 1954.
Subsequently, the Municipal Committee changed its mind and by its resolution dated 8 5 1954, resolved that octroi duty should also be levied on the goods imported into Fateh Mandi.
But this resolution was annulled by the Punjab Government under section 236 of the Punjab Municipal Act.
The Examiner of Local Funds Accounts in the meantime insisted on the levy of octroi duty on the goods imported into Fateh Mandi and the Punjab Government after discussing the issue on 9 4 1956 informed the President of the Municipal Committee that the Government 's action in confirming the resolution No. 1 of 2 3 1954 of the Municipal Committee, Bahadurgarh exempting goods imported into Fateh Mandi from levy of octroi duty under section 70(2) (c) of the Municipal Act, 1911, is quite in order and that no separate notification to this effect was necessary under the rules.
Again on 21 7 1965, the Municipal Committee Bahadurgarh resolved that the Government be requested to cancel Resolution No. 1 dated 2 3 1954.
The State of Haryana Respondent No. 1 which came into existence on 1 11 1964 under the Punjab Reorganisation Act, by its memo dated 13 10 1967 approved the resolution No. 6 dated 21 7 1965 of Municipal Committee and cancelled the Municipal Resolution No. 1 of 2 3 1954.
As a result of the decision of the Government, the Municipal Committee started charging octroi duty on the goods imported into the Mandi.
On these facts, the petitioners submitted that the resolution No. 6 of the Municipal Committee dated 21 7 1965 (Annexure G) and the approval granted by the Haryana State as per its order dated 30 10 1967 (Ann.
H) are illegal and ultra vires and without jurisdiction.
A Full Bench of the High Court rejected the petition mainly on three grounds, Firstly, it found that the State Government is entitled under section 62 A of Punjab Act, 48/1953 to direct the Municipal Committee to impose octroi duty and as such even if the municipality is found to have erred in imposing the Octroi Duty, the legislative powers of the State cannot be questioned.
Secondly, it found, that it was not within the competence of the Municipality to grant any exemption from payment of octroi duty and this act is ultra vires of its powers and cannot be enforced.
Thirdly, it found that the Court cannot go into the question as to whether the petitioners ' plea based on equity that the Municipality is bound, cannot be gone into for want of adequate facts.
698 Dealing with the first contention, relating to the legislative powers of the State, it will be seen that Punjab Act 48/1953, introduced s.62A which runs as follows: "62 A. (1) The State Government may, by special or general order notified in the official Gazette, require a Committee to impose any tax mentioned in S.61, not already imposed at such rate and within such period as may be specified in the notification and the Committee shall thereupon act accordingly.
(2) The State Government may require a Committee to modify the rate of any tax already imposed and thereon the committee shall modify the tax as required within such period as the State Government may direct.
(3) If the Committee fails to carry out any order passed under Sub section (1) or (2) the State Government, may by a suitable order notified in the official gazette, impose or modify the tax.
The order so passed shall operate as if it were a resolution duly passed by the Committee and as if the proposal was sanctioned in accordance with the procedure contained in S.62.
" It is admitted that the State Government is empowered under section 62A to require the Municipal Committee to impose octroi Duty and under sub section
(3) if the Committee fails to carry out the order of the Government, the State Government may impose octroi Duty.
Under section 70(2) (c), a Municipal Committee by a resolution passed at a special meeting and confirmed by the State Government may exempt in whole or in part from the payment of any such tax any person or class of persons or any property or description of property.
In exercise of these powers, the State Government had by its order dated 4 5 1954 confirmed resolution No. 1 passed by the Municipal Committee in its special meeting held on 2 3 1954 regarding the exemption of goods imported into Fateh Mandi from levy of Octroi Duty.
Subsequently, in reply to the objection raised by the Examiner of Local Funds, the Government pointed out by its letter dated 9 4 1956 (Ann. F) that the Government 's action confirming the resolution No. 1 dated 2 3 1954 of the Municipal Committee exempting Goods imported into Fateh Mandi, under section 70(2) (c) of the Punjab Municipal Act, 1911, is quite in order.
By the impugned order dated 20 10 1967 the Government approved the resolution No. 6 of the Municipal Committee dated 21 7 1965 and permitted the Municipality to levy the Octroi Duty.
The action taken by the State Government is strictly in conformity with the powers conferred on it under section 70(2) (c) of the 699 Act.
It exempted the petitioners from payment of Octroi Duty for a particular period and ultimately withdrew the exemption.
The action of the Government cannot be questioned as it is in exercise of its statutory functions.
The plea of estoppel is not available against the State in the exercise of its legislative or statutory functions.
The Government have powers to direct the Municipality to collect the Octroi Tax if the Municipality fails to take action by itself under section 60(A) (3).
Further, even on facts, this plea is not available as against the Government as it is not the case of the petitioners that they acted on the representation of the Government.
We, therefore, agree with the view of the Full Bench that the plea of estoppel is not available against the Government for questioning the validity of the impugned Government order.
The second contention is that the Municipality is estopped from levying or recommending the levy of the tax to the Government as in the proclamation of sale it was notified that no Octroi Duty will be levied and it was only in pursuance of such representation, the petitioners purchased the property.
We feel this plea should also fail, because the Municipal Committee had no authority to exempt the Fateh Market from the levy of Octroi Duty.
If the Municipal Committee had passed a resolution or issued a notification that no Octroi Duty will be levied, it will be ultra vires of the powers of the Municipal Committee.
When a public authority acts beyond the scope of its authority the plea of estoppel is not available to prevent the authority from acting according to law.
It is in public interest that no such plea should be allowed.
The third contention that was raised by the learned counsel for the appellants before the High Court and reiterated before us, is that the Municipality and its successors are bound by the doctrine of promissory estoppel and as such are estopped from levying the Octroi Duty.
The High Court rejected the plea on the following grounds: 1.
The Petitioners are not the original purchasers of the plots in Fateh Mandi.
They are either descendants of or transferees from the original purchasers of the plots.
No sale deed was executed by the Municipal Committee in favour of the original purchasers undertaking that no octroi duty will be levied.
No allegation has been made that the original purchasers would not have purchased the plots, if condition No. 14 about immunity from payment of Octroi had not been there.
The learned counsel by reference to the names of the list of the purchasers was able to satisfy us that some of the appellants are the 700 original purchasers and as such the first objection raised before the High Court is not sustainable.
Again, regarding the third objection, that there is no allegation that the original purchasers would not have purchased the plots if condition 14 about immunity from payment of Octroi had not been there, it was submitted as erroneous as in the affidavit filed in support of the writ petition, the petitioners had pleaded in paragraph 2 that on the faith of the representation, the petitioners purchased the plots and constructed establishments.
The learned counsel is, therefore, right in his submission that the third objection raised before the High Court is without substance.
But the High Court was right in pointing out that none of the sale deeds executed by the Municipal Committee in favour of the purchasers was produced before the Court.
These circumstances would show that the contract between the parties have not been proved to have been reduced in writing and executed in the manner prescribed under section 47 of the Act.
Strictly, therefore, under the terms of the Municipal Act, the appellants are not entitled to any enforceable legal right.
But it was submitted that even though the contract had not been executed in due form, the appellants would be entitled to relief under, the doctrine of promissory estoppel.
The question that arises for consideration in these cases is whether the proclamation of sale which notified that there would be no octroi levy in the market relying on which statement the petitioners bid at the auction, would estop the Municipality by operation of the doctrine of promissory estoppel from recommending to the Government and the Government levying octroi duty under section 61 of the Punjab Municipal Act.
To answer this question it is necessary to examine at some length the rights and liabilities of the State under a contract entered into by it with third parties and in transactions carried on by it in exercise of its executive and statutory functions.
article 299 (1) of the Constitution of India provides that all contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.
This Article in the Constitution corresponds to section 175(3) of the Government of India Act, 1935.
In cases, that arose out of section 175(3) of the Government of India Act, 1935, this Court starting from Seth Bikhraj Jaipuria vs Union of India, has 701 repeatedly held that the provision is mandatory and not directory, that the provision is enacted as a matter of public policy, that the State should not be saddled with liability for unauthorised contracts and that the provision is enacted in the public interest.
In Mulamchand vs State of M. P., the earlier decisions of this Court were relied on and it was held that the reasons for enacting the provision is not for the sake of some form but for safeguarding the Government against unauthorised contracts.
The provisions are embodied on the ground of public policy on the ground of protection of general public and these formalities cannot be waived or dispensed with.
The Court clearly observed that if the plea of the respondent regarding estoppel or ratification is admitted that would mean, in effect, the repeal of an important constitutional provision intended for the protection of the general public.
That is why the plea of estoppel or ratification cannot be permitted in such a case." (emphasis Ours) It was contended before this Court in Karamshi Jethabhai Somayya vs State of Bombay, that in an agreement entered into under the Act by statutory authority in pursuance of a statutory power, that consequences provided under the statute would follow and would not fall within the ambit of section 175(3) of the Government of India Act.
This Court after examining the terms of the contract found that it did not fall within the provisions of the Act and, found it unnecessary to deal with the contention.
The scope of the doctrine of equitable estoppel arose for consideration before this Court in Collector of Bombay vs Municipal Corporation of the City of Bombay and Ors.
In 1865, the Government of Bombay called upon the predecessor in title of the Corporation of Bombay to remove some markets from a certain site and vacate it, and on the application of the then Municipal Commissioner the Government passed a resolution approving and authorising the grant of another site to the Municipality.
The resolution stated further that "the Government do not consider that any rent should be charged to the Municipality as the markets will be, like other public buildings, for the benefit of the whole community".
The Corporation gave up the sites on which the old markets were situated and spent a sum of over 17 lacs in erecting and maintaining markets on the new site.
In 1940, the Collector of Bombay, overruling the objection of the Corporation, assessed the new site under S.8 of the Bombay City Land Revenue Act to land revenue rising from Rs. 7,500/ to Rs. 30,000/ 702 in 50 years.
The Corporation sued for a declaration that the order of assessment was ultra vires and that it was entitled to hold the land for ever without payment of assessment.
The Supreme Court held by a majority of four Judges to one that the Government was not entitled to assess land revenue for the land in question.
Three of the Judges who were parties to the majority judgment found that the Corporation had taken possession of the land in terms of the Government resolution and continued in such possession openly, uninterruptedly and as of right for over 70 years and acquired limited title it had been prescribing for during the period, that is to say, the right to hold the land in perpetuity free of rent, but only for the purpose of a market and for no other purposes.
The right acquired included as part of it an immunity from payment of rent which constituted a right in limitation of the Government 's right to assess in excess of the specific limit established and preserved by the Government Resolution within the meaning of S.8 of the Bombay City Land Revenue Act.
Before the Court there was considerable discussion as to the scope and effect of the principle of equity enunciated in Ramsden vs Dyson, as to whether such principle should be extended to the facts of the case and as to whether the facts of the case attract the application of the equity established in Ramsden vs Dyson or attract the equity established in Maddison vs Alderson, and Walsh vs Lonsdale, and finally as to whether the decision of the Privy Council in Ariff vs Jadunath the equity in Ramsden vs Dyson can prevail against the requirement of formalities laid down in the Victorian Statute referred to above any more than the equity in Maddison vs Alderson can do against the requirements of the Transfer of Property Act.
The majority of the judges did not express any opinion on this question but decided the appeal on a narrower and shorter ground stated above.
One of the judges, Chandrasekhara Aiyar, J. constituting the majority expressed his view thus: "Whether it is the equity recognised in Ramsden 's case, or it is some other form of equity, is not of much importance.
Courts must do justice by the promotion of honesty and good faith so far as it lies in their power.
As pointed out by Jenkins C. J. in Dadoba Janardhan 's case a different conclusion would be opposed to what is reasonable, to what is probable and what is fair.
" The other judges of the Court who spoke for the Court refrained from going into this question.
The view of Chandrasekhara Aiyer, J. 703 being the view of one of the judges of the majority, cannot be taken as the view of the Court.
Patanjali Sastri, J. as he then was dissented with the majority and stated: "The principle of Ramsden vs Dyson cannot prevail against statutory requirements regarding disposition of property or making of contract by Government * * *The right to levy land revenue is no part of the Government 's right to property but a prerogative of the Crown and adverse possession of the land could not destroy the Crown 's prerogative to impose assessment on the land.
" A Bench of four judges of this Court in a decision Excise Commissioner.
U. P. Allahabad vs Ram Kumar, after examining the case law on the subject observed that "it is now well settled by a catena of decisions that there can be no question of estoppel against the Government in exercise of its legislative, sovereign or executive powers.
" The earlier decisions of this Court in M. Ramanathan Pillai vs State of Kerala, and State of Kerala and Anr.
vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. were followed.
It may, therefore, be stated that the view of this Court has been that the principle of estoppel is not available against the Government in exercise of legislative, sovereign or executive power.
On behalf of the petitioners, it was submitted that a liberal view was taken by this Court in the decision Union of India vs M/s. Indo Afghan Agencies Ltd. which recognised the principle of promissory estoppel and held that whether the agreement is executive or administrative in character, the courts have power in appropriate cases to compel performance of the obligations imposed by the schemes upon the departmental authorities.
At this decision is relied on as the sheet anchor of the doctrine of promissory estoppel, the facts of the case and the decision rendered therein, have to be examined carefully.
Indo Afghan Agencies Ltd. the respondents before this Court exported woollen goods to Afghanistan and were issued an Import Entitlement Certificate by the Textile Commissions not for the full F. O. B. value of the goods exported, but for a reduced amount.
By virtue of the powers conferred under S.3 of the Imports and Exports (Control) Act, 1947, the Central Government issued the Imports (Control) Order, 1955 setting out the policy governing the grant of import and export licence.
During the relevant period, it provided for the grant to an exporter, certificates to import raw materials of a 704 total amount equal to 100% of the F. O. B. value of his exports.
Cl.10 of the Scheme provided that the Textile Commissioner could grant an import certificate for a lesser amount if he is satisfied after holding an enquiry that the declared value of the goods is higher than the real value of the goods.
It was contended, amongst other grounds, that the Government on grounds of executive necessity was the sole judge of the validity of its action in matters relating to import and export policy, because the policy depended upon the economic climate and other related matters and had to be in its very nature flexible with power in the Government to modify or adjust it as the altered circumstances necessitate.
It was pleaded that if the Government was held bound by every representation made by it regarding its intentions, it would amount to holding the Government as being bound by contractual obligations even though no formal contract in the manner required by article 299 of the Constitution was executed.
Regarding the objection on the ground of contravention of article 299 of the Constitution, the Court held that the respondents were not seeking to enforce any contractual right but were seeking to enforce compliance of the obligation which is laid upon the Textile Commissioner by the terms of the Scheme and the claim of the respondents was founded upon the equity which arose in their favour as a result of the representation made on behalf of the Government in the Export Promotion Scheme.
(emphasis supplied).
It may be noted that no finding was recorded by the Textile Commissioner, that there was any infringement which entitled him to reduce the quota under Cl.
10 of the scheme.
The facts of the case disclose that the defence of the executive necessity was not relied upon in the affidavit filed on behalf of the Union of India.
It was also not pleaded that the representation in the Scheme was subject to an implied term that the Union of India will not be bound to grant the import certificate for the full value of the goods if they deem it inexpedient to grant the certificate.
The Court after referring to earlier decisions of this Court accepted the view expressed in those decisions that reduction in the amount of import certificate may be justified on the ground of misconduct of the exporters in relation to goods exported or on such considerations as the difficult foreign exchange position or other matters which have a bearing on the general interest of the State (emphasis supplied).
Summing up the law laid down by the earlier cases, the Court found that in each of the three cases this Court held that it was competent to grant relief in appropriate cases, if, contrary to the Scheme, the authority declined to grant a licence or import certificate or the authority acted arbitrarily and that the Union of India and its Officers are not entitled at their mere whim to ignore the promises made by the Government (emphasis 705 supplied).
It rejected the plea on behalf of the Government that the Textile Commissioner is the sole judge of the quantum of the import licence to be granted to an exporter and that the Courts were powerless to grant relief if the promised import licence is not given to an exporter who has acted in his prejudice relying upon the representation.
The decision is, therefore, an authority for the proposition that in the absence of a plea of executive necessity, the Court in appropriate cases is entitled to compel performance of the obligations imposed by the Scheme on the departmental authority.
The right of the Government on relevant considerations such as difficult foreign exchange position or other matters which have a bearing on the general interest of the State, to reduce the amount of import certificate was recognised.
But the authorities have to act according to the terms of the scheme and not arbitrarily or at their mere whim to ignore the promises made by the Government (emphasis supplied).
On the facts of the case, the Court gave relief as the authorities declined to act according to the terms of the Scheme and acted arbitrarily and at their mere whim ignoring the promises made by the Government.
The question as to the applicability of the doctrine of promissory estoppel against the legislative or executive acts of the Government did not strictly arise in the case.
The decision was thus generally understood as stated above is seen from the view expressed by Mr. H.M. Seervai on Constitution of India, 2nd Edn.
I, paragraph 11 at para 146 B, p. 433: "The authorities considered by the Supreme Court, and the conclusions drawn from them, by Shah, J. in the present case, merely affirm the proposition that the Government could not go back upon promises made in the exercise of discretionary power as embodied in a scheme, merely on a whim (emphasis by Mr. Seervai) x x x x x X A promissory estoppel cannot stand on a higher footing than a contract entered into between a citizen or subject and a public authority and it is settled by numerous decisions that no public authority entrusted with discretionary power to be exercised for the public can bind itself by a contract not to exercise that discretion when the public good demands its exercise".
It is only in public interest that it is recognised that an authority acting on behalf of the Government or by virtue of statutory powers cannot exceed his authority.
Rule of ultra vires will become applicable when he exceeds his authority and the Government would not be bound by such action.
Any person who enters into an arrangement 706 with the Government has to ascertain and satisfy himself that the authority who purports to act for the Government, acts within the scope of his authority and cannot urge that the Government is in the position of any other litigant liable to be charged with liability.
In refuting the contention that the contract is unenforceable on the ground that there had been no strict compliance of the requirement of article 299 of the Constitution, the Court observed that the respondents were not seeking to enforce any contractual rights but were seeking to enforce compliance with the obligation which was laid upon the Textile Commissioner by the terms of the Scheme.
Thus, the relief that was granted by the Court was by enforcing the compliance of the obligation which was laid upon the Textile Commissioner by the terms of the Scheme.
The Court proceeded to state that the claim of the respondents is appropriately founded upon the equity (emphasis ours) which arises in their favour as a result of the representation made on behalf of the Union of India in the Export Promotion Scheme, and the action taken by the respondents acting upon that representation under the belief that the Government would carry out the representation made by it.
Thus the equity which the Court was enforcing was to direct compliance of the obligation which is laid upon the Textile Commissioner by the terms of the scheme.
The equity cannot be understood as barring the authority from modifying the scheme on special considerations such as difficult foreign exchange position or other matters which have a bearing on the general interest of the State (vide p. 380).
The purport of the judgment is made clear by its own observation: "Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot be some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen.
" The observations of the Court that the claim of the respondents is properly founded on the equity should be understood on the facts and findings of the Court in the case.
The Court relying on the observations of Chief Justice Jenkins, observed that even though the case does not fall within the terms of S.115 of the Evidence Act, it is still open to a party who has acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though the promise is not recorded in the from of a formal contract as required by the Constitution.
The Court 707 would be bound when the officer made the promise within the scope of his authority and failed to act upon it at his mere whim and acted arbitrarily on some undefined and undisclosed grounds of necessity.
Before proceeding further with the case, we will refer briefly to the purport of the doctrine of promissory estoppel.
The doctrine of promissory estoppel burst into sudden blaze in 1946 when Denning.
J. sitting in the Court of Kings Bench delivered the judgment in Central London Property Trust Ltd. vs High Trees House Ltd. which has now become famous as the High Trees Case.
The facts of the case are: During the war many people left London owing to bombing.
Flats were empty.
In one block, where the flats were let on 99 years leases at $ 2,500/ a year, the landlord agreed to reduce it by half and to accept $ 1,250/ a year.
When the bombing was over, and the tenants came back, the landlord sought to recover the full rent at $ 2,500/ a year.
Denning, J. held that the landlord could not recover the full amount for the time when the flats were empty.
The lease was a lease under seal which according to English Common Law, could not be varied by an agreement by parole, but only by deed.
The learned judge invoked equity to his aid and said that if there has been a variation of a deed by simple contract the courts may give effect to it.
The counsel for the lessee pleaded that the lessor had agreed though without consideration to accept the rent at a reduced rate, and set up a plea of estoppel by way of defence to the claim for arrears of rental calculated at the full rate.
Faced with Foakes vs Beer, if the defence was raised as a matter of contract and Jorden vs Money, if it was raised as estoppel.
Denning.
J. held that the estoppel sustained although based on an assurance as to the future, because the promisor intended to be legally bound and intended his promise to be acted upon, with the result that it was so acted upon.
In Jordan vs Money (supra), the House of Lords held that a promise to pay a smaller sum of money in discharge of larger amount which was due, was void since such a promise was without consideration.
Denning, J. relying on Fenner vs Blake, Re: Wickhem William Porter & Co. Ltd. and Buttery vs Pickard observed that they were cases of estoppel in the strict sense.
They are really promises promises intended to be binding intended to be acted upon, and in fact acted on and in the circumstances the plaintiff company will be bound by the arrangement in its letter.
Though the observations of 708 Denning, J. in High Trees case were in the nature of obiter dicta, the decision became the starting point of the several shades of opinion regarding the scope of promissory estoppel.
It is unnecessary for our purpose to go into the development of law of promissory estoppel starting from High Trees case.
It is sufficient to state that since the High Trees decision was rendered, many elaborations and glosses have appeared in the reports.
Turner in his book Estoppel by Representation, has a separate chapter dealing with promissory estoppel.
The doctrine, as observed by the author at the conclusion of the chapter, "burst out into sudden blaze in 1946 has ever since continued to smoulder, and that its original author has constantly maintained his interest in its further development, now in this direction, now in that".
But there has been high places counselling conservatism *** Lord Hailsham of St. Marylebone, has expressed his views in Woodhouse Ltd. vs Nigerian Produce Ltd. as follows: "I desire to add that the time may soon come when the whole sequence of cases based on promissory estoppel since the war *** systematically explored".
This subject though interesting may not be relevant in administering Indian Law.
section 63 of the Contract Act provides that when a creditor accepts a lesser sum in satisfaction of the whole debt, the whole debt become discharged.
This provision is a wide departure from the English Law and the discussion about Jordan vs Money wherein it was held that a promise to accept a smaller sum is devoid of consideration, becomes pointless.
So also the doctrine of estoppel referred to in the High Trees case is, to some extent taken care of by Ss. 65 and 70 of the Indian contract Act.
S.65 provides that when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it, to the person from whom he received it.
Under section 70 of the Contract Act, an obligation is cast on the person enjoying benefit of a non gratuitous act to compensate the person who lawfully performed the act.
As to whether the provisions of section 65 and 70 of the Indian Contract Act, are applicable to contract which is not according to section 175 of the Government of India Act and article 299 of the Constitution of India, there is a difference of opinion.
Sir Maurice Gwyer expressed his view that when a contract is void, recourse to S.70 cannot be had.
Later, the Supreme Court held in State of West Bengal vs B. K. Mondal & Sons, that S.70 was applicable to such a case.
This decision was 709 followed in New Marine Coal Co. Ltd. vs Union, and in later cases by the Supreme Court.
In discussing the scope of the doctrine of promissory estoppel, and its applicability against the Government and Government Officers in their dealings with the subject, Lord Denning J. in Robertson vs Minister of Pensions observed : "The Crown cannot escape by saying that estoppels do not bind the Crown for that doctrine has long been exploded.
Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action.
That doctrine was propounded by Rowlett J., in Redariaktiebolaget Amphtrite vs The King but it was unnecessary for the decision because the statement there was not a promise which was intended to be binding but only an expression of intention.
Rowlett, J., seems have been influenced by the cases on the right of the Crown dismiss its servants at pleasure, but those cases must now all be read in the light of the judgment of Lord Atkin in Reilly vs The King (1954) A. C. 176, 179) *** In my opinion the defence of executive necessity is of limited scope.
It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract." Lord Denning was dealing with a case of a serving army officer who wrote to the War Office regarding a disability and received a reply that his disability had been accepted as attributable to "military service".
Relying on that assurance, he forbore to obtain an independent medical opinion.
The Minister of Pensions took the view that appellant 's disability could not be attributed to war services.
Lord Denning held that between the subjects such an assurance would be enforceable because it was intended to be binding, intended to be acted upon, and it was in fact acted upon; and the assurance was also binding on the Crown because no term could be implied that the Crown was at liberty to revoke it.
The decision in Robertson 's case is quoted with approval in the Indo Afghan case but before we revert to the Indo Afghan case, we will follow the course which Robertson 's case took.
The correctness of the case came up for consideration before the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. The appeal was preferred to the 710 House of Lords from the Court of Appeal against the judgment of Bucknil, Singhleton and Denning, L.JJ.
In his judgment in the Court of Appeal, Denning L. JJ.
pressed the principle in the following terms: "Whenever Government Officers, in their dealings with a subject, take on themselves to assume authority in a matter with which he is concerned, the subject is entitled to rely on their having the authority which they assume.
He does not know and cannot be expected to know the limits of their authority, and he ought not to suffer if they exceed it.
That was the principle which I applied to Robertson vs Minister of Pensions, and it is applicable in this case also.
" Commenting on the view taken by Denning, L. J. Lord Simonds observed : "My Lords, I know of no such principle in our law nor was any authority for it cited.
The illegality of act is the same whether or not the actor has been misled by an assumption of authority on the part of a government officer however high or low in the hierarchy.
*** The question is whether the character of an act done in face of statutory prohibition is affected by the fact that it has been induced by a misleading assumption of authority.
In my opinion, the answer is clearly "no".
Such an answer may make more difficult the task of the citizen who is anxious to walk in the narrow way, but that does not justify a different answer being given.
" Lord Normand referred to the principle laid down by Denning L. J. and observed : "As I understand this statement, the respondents were in the opinion of the learned Lord Justice, entitled to say that the Crown was barred by representations made by Mr. Thompson and acted on by them from alleging against them a breach of the statutory order, and further that the respondents were equally entitled to say in a question with the appellant that there had been no breach.
But it is certain that neither a Minister nor any subordinate officer of the Crown can by any conduct or representation bar the crown enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of the contract.
" The view expressed by the House of Lords and the Privy Council has been followed in English cases.
711 The Privy Council in Antonio Buttigieg vs Captain Stephen H. Cross and Ors, has ruled that it is not competent for the Government to fetter its future executive action, which must necessarily be determined by the needs of the community when the question arises, that it cannot by contract hamper its freedom of action in matters which concern the welfare of the State.
The competent Military Authority approached the appellant for opening a club for officers serving in his Majesty 's forces.
The appellant stated his willingness to take on lease certain premises and asked the Military authorities to procure him a licence to continue the club after the termination of the war.
The military authorities failed to obtain a licence and the appellant was informed of their inability to obtain the licence and an officer on behalf of the military authorities stated that the appellant should have a guarantee seeing that the war was not likely to come to an end quickly and that the club would be kept open throughout the war.
The rules for the conduct of the club were drawn up and were approved by the Military Authorities.
Rule 18 provided that the club should endure during the time when the said hostilities existed.
The club was placed out of bounds for service members by order of the Military Authorities because the club was being mismanaged by the sale of liquor long after permitted hours.
As the club was a purely Service Club, it was subsequently wound up.
The appellant complained of the loss to which he had been put by placing the club out of bounds and sought to hold the Military Authorities responsible for such loss.
The Court of Appeal while giving judgment in favour of the Military Authorities observed : "It is a settled principle and it has been constantly held by this Court and in local case law, that those two functions of the civil or the military Government are totally distinct.
The Military Authorities could not have renounced those rights, in as much as it would have been immoral and against every fundamental principle of Constitutional Law if the Authorities, in order to open a club, which is a purely administrative act were to sacrifice interests which are far more important and therefore of a much higher order, whether political, moral or affecting public order.
Consequently when, within the administrative sphere, the Government enters into a contract with a private individual, the Government is bound to respect that contract, but it does not thereby deprive itself of its political power to issue orders that may become necessary by reason of public order, jure imperii even though, in consequence of such orders, the contract itself becomes impossible of fulfilment.
" 712 During the arguments before the Privy Council, it was conceded on behalf of the appellant taking into consideration the decision in Adams vs London Improved Motor Coach Builders and Redariaktiebolaget Amphtrite vs The King, that it was not open to the Crown to bind itself not to close the club if that course became necessary in the public interest and the order placing the club out of bounds was justified in the circumstances which existed.
Having thus observed the Privy Council quoted the following passage from the Judgment of Rowlatt, J. in Rederiaktiebolaget Amphtrite case that "it is not competent for the Government to fetter its future executive action, which must necessarily be determined by the needs of the community when the question arises.
It cannot by contract hamper the freedom of action in matters which concern the welfare of the State" and stated that these words appear to their Lordships to cover that aspect of the present case.
While House of Lords in Howell 's case disagreed with the observations of Lord Denning J. in Robertson 's case, the Privy Council approved the law laid down by Rowlatt, J. in Rederiaktiebolaget Amphtrite case which was dissented to by Denning, J. in Roberston 's case.
It may be noted that in Indo Afghan case, the Court quoted the passage from Denning 's judgment which did not approve the view of Rowlatt, J. The Privy Council approved the view taken by Rowlatt, J. in Rederiaktiabolaget Amphtrita case.
In William Cory & Son Ltd. vs London Corporation, London Corporation acting as sanitary authority under the Public Health (London) Act, 1936 made a contract with the claimants, barge and lighter owners, for the removal of refuse from a wharf in the City of Horn church, Essex, where it was to be dumped.
In April, 1948, the Corporation acting as port health authority for the Port of London, sealed by laws concerning the disposal of refuse in the area of the port one of which relating to co amings and coverings of barges, was far more onerous on the claimants than the requirements in the contract of 1936.
It was provided that this by law was not to come into effect until November 1, 1950.
It was contended by the claimants that by the provisions of the contract of 1936, there was an implied or an express term that the corporation should not impose more onerous burden on the claimants as to the coamings and coverings of their barges than those contained in the contract of 1936.
The plea of the claimants was rejected and the Court held relying on a decision in York Corporation vs Henry Leethem & Sons Ltd. that the Corporation being under a 713 duty under the Act of 1936, expressed in imperative language, to make by laws for the disposal of refuse within the area of the port, the term for which the claimants contended, whether express or implied was ultra vires the corporation.
In York Corporation vs Henry Leetham & Sons (supra), the Corporation made two contracts with the defendants to which they agreed to accept, in consideration of the right to navigate the Oues, a regular annual payment of $ 600/ per annum, in place of the authorised tolls.
It was held that the contracts were ultra vires and void because under them the corporation had disabled itself whatever emergency might arise, from exercising its statutory powers to increase tolls as from time to time might be necessary.
The decision was based on the incapacity of a body charged with statutory powers for public purpose to divest itself of such powers or to fetter itself in the use of such powers.
In Commissioner of Crown Lands vs Page, in 1945, the Minister of Works, acting on behalf of the Crown and in exercise of powers conferred by the Defence (General) Regulations, 1939 requisitioned premises which had been demised in 1937 by the Commissioners of Crown Lands for a term of 25 years.
The premises were derequisitioned on September 5, 1945 until July 5, 1955 and the landlord brought proceedings claiming arrears of rent.
The lessee alleged that she had been evicted by the requisitioning and that, accordingly, payment of rent has been suspended.
It was conceded that the Crown was one and indivisible as lessor and requisitioning authority.
It was held that since the entry was by the Crown in the proper exercise of its executive authority, it did not amount to an eviction and rent, accordingly, continued to be payable.
The view expressed by Lord Denning, J. in Robertson vs Minister of Pensions (supra) that in the present day age no distinction should be drawn as to the legal effect of its or their actions between the Crown and the ordinary subjects, so that the effect of a representation made by the Crown could no longer be qualified so as to be subject to the future exercise by the Crown of its Executive authority, was relied on.
Lord Evershet M. R. while observing that the facts of the case were different held that the general proposition laid down by Denning L. J. was not accepted by the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. (supra).
Devlin, J. stated the principle in the following terms : "When the Crown, or any other person, is entrusted, whether by virtue of the prerogative or by statute, with discretionary powers to be exercised for the public good, it does not when making a private contract in general terms, undertake (and 714 it may be that it could not even with the use of specific language validly undertake) to fetter itself in the use of those powers, and in the exercise of the discretion.
" Referring to the view of Denning, L. J. in Robertson vs Minister of Pension (supra), the learned Judge observed : "The observations of Denning, L. J. in Robertson vs Minister of Pensions on the doctrine of `executive necessity ', were I think, directed to a case of that sort.
Here we are dealing with an act done for a general executive purpose, and not done for the purpose of achieving a particular result under the contract in question.
" In Southend on Sea Corporation vs Hodgson (Wickford) Ltd. a company wished to establish a builder 's yard and found suitable premises.
They wrote to the borough engineer, a Chief Official employed by the local planning authority asking for a lease of the premises for 20 years for the purpose of establishing a builders yard.
The engineer replied that the premises had an existing user right as a builders ' yard and that no planning permission was, therefore, necessary.
Relying on the borough engineer 's letter, the company bought the premises and started to use them as builder 's yard.
They would not have done so if, as a consequence of the letter, they had not thought that no further planning permission was required.
Later, the local planning authority notified the company that a considerable amount of evidence had been presented to them showing that the premises had not been used as a builder 's yard and had no existing user as such; that they had decided that the premises could not be used without planning permission.
The Court on the above facts held that assuming that the statement that the premises had an existing user right as a builder 's yard was a pure representation of fact, estoppel could not operate to hinder or prevent the exercise by the local planning authority of their statutory discretion under section 23 of the Act in deciding whether to serve an enforcement notice, since this discretion was intended to be exercised for the benefit of the public or section thereof.
The decisions of the English Courts referred to above clearly indicate that the English Courts did not accept the view of Denning, J. in Robertson vs Minister of Pensions (supra).
The house of Lords in Howell vs Falmouth Boat Construction Co. Ltd. disagreed with the view of Lord Denning, J holding that there could not be an estoppel against express provisions of the law nor could the State by its action waive its rights to exercise powers entrusted to it for the public good.
The 715 Privy Council in Antonio Buttigieg 's case approved the view of Rowlatt.
J. in Raderiaktiabolaget Amphtrits 's case with which Denning, J. did not agree.
We may now revert back to Indo Afghan Agencies case.
The Court after quoting a passage from Rowlatt, J. in Rederiakiabolaget Amphtrte vs The King (supra) agreed that the view expressed by Anson 's English Law of Contract 22nd Ed.
p. 174 that the observation is clearly very wide and it is difficult to determine its proper scope.
The Court quoted the passage of Denning, J. at p. 231 wherein the learned Judge expressed the disagreement with the view of Rowlatt, J : "The Crown cannot escape by saying that estoppel do not bind the Crown for that doctrine has long been exploded.
Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action.
The doctrine was propounded by Rowlatt, J. in Rederiaktiebolaget Amphitrite vs The King but it was unnecessary for the decision because the statement there was not a promise which was intended to be binding but only an expression of intention.
Rowlatt, J., seems to have been influenced by the cases on the right of the Crown to dismiss its servants at pleasure, but those cases must now all be read in the light of the judgment of Lord Atkin in Reilly vs The King , 179).
In my opinion the defence of executive necessity is of limited scope.
It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract." After quoting the above passage, the Court summarised the facts and decision rendered by Denning, J.
The decision of the House of Lords in Howell 's case or that of the Privy Council was not brought to the notice of the Court.
The law laid down by the House of Lords in Howell 's case has been accepted as correct by this Court in recent decision of this Court by a Bench of four Judges in Excise Commissioner, U. P. Allahabad vs Ram Kumar.
The respondents before this Court were the highest bidders in an auction for exclusive manufacture and selling of liquor in the State of U. P. Before holding the auction, the rates of excise duty and prices of different varieties of country liquor and also the conditions of licence were announced.
No announcement was made as to whether the exemption from sales tax in respect of sale of country liquor granted by the notification dated 6 4 1959 was or was not likely 716 to be withdrawn.
On the day following the day when the licences were granted, the Government of U. P. issued a notification under section 3A and 4 of U. P. Sales Tax Act, 1948 superseding the earlier notification exempting the payment of sales tax and imposing sales tax on the turnover in respect of country liquor at the rate of 10 paise per rupee.
The respondents challenged the validity of the notification issued under the Sales Tax Act on the ground that the State Government did not announce at the time of the earlier auction that the earlier notification was likely to be withdrawn.
This Court on a consideration of the question whether the State Government is estopped from levying the Sales Tax, after referring to the earlier decisions of this Court held that the State Government is not estopped or precluded from subjecting the sales of liquor to tax if it felt impelled to do so in the interest of revenue of the State.
The Court followed two earlier decisions of this Court viz. M. Ramanathan Pillai vs State of Kerala (supra) and State of Kerala vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. (supra).
In Ramanathan Pillai 's case, Ray, Chief Justice while dealing with the question whether the Government has a right to abolish a post in the service, observed that the power to create or abolish a post is not related to the doctrine of pleasure.
It is a matter of governmental policy.
Every sovereign Government has this power in the interest and necessity or internal administration.
The creation or abolition of a post is dictated by policy decision, exigencies of circumstances and administrative necessity.
The creation, the continuance and the abolition of post are all decided by the Government in the interest of administration and general public.
The learned Chief Justice after quoting a passage in American Jurisprudence 2d.
at p. 783, paragraph 123, observed that the estoppel alleged by the appellant Ramanathan Pillai was on the ground that he entered into an agreement and thereby changed his position to his detriment.
The High Court rightly held that the Courts exclude the operation of the doctrine of estoppel, when it is found that the authority against whom estoppel is pleaded has owed a duty to the public against whom the estoppel cannot fairly operate.
In State of Kerala vs Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. (supra), Palekar, J. who delivered the opinion with which Krishna Iyer, J. and Bhagwati, J. agreed, rejected the contention that an agreement entered into by the Government with the parties, excluded the legislation on the subject.
The plea of equitable estoppel was put forward on the ground that the company established itself in Kerala for the production of rayon cloth pulp on an understanding that the Government would bind itself to supply the raw material.
Later Government was unable to supply the raw material and by an 717 agreement undertook not to legislate for the acquisition of private forests for a period of 60 years if the company purchased forest lands for the purpose of its supply of raw materials.
Accordingly, the company purchased 30,000/ acres of private forests from the Nilabhuri Kovila Kanna Estate for Rs. 75 lacs and, therefore, it was argued that the agreement would operate as equitable estoppel against the State.
This Court agreed with the High Court that the surrender by the Government of its legislative powers to be used for public good cannot avail the company or operate against the Government as equitable estoppel.
In Assistant Custodian of E. P. and Ors.
vs Brij Kishore Agarwala, it was pleaded that the first respondent made an enquiry from the Assistant Custodian whether the property was evacuee property and was told that it was not.
As the first respondent acted on this representation, it was pleaded that the Assistant Custodian was estopped from contending that the property was evacuee property.
Thus, dismissing this plea, the Court observed : "We do not consider that the fact that the 1st respondent had made an enquiry from the Assistant Custodian whether the property in question was an evacuee property and was told that it would not make any difference to the question." Reliance was placed on the observations of Denning L. J. in Robertson vs Minister of Pensions (supra), holding that the letter by the war office which assured that the appellant 's disability had been accepted as attributable to the military service, was binding on the Crown and through the Crown the Minister of Pensions.
The Court pointed out that the decision in Robertson vs Minister of Pensions had been disapproved by the House of Lords in Howell 's case.
After referring to the passage from the judgment of Lord Denning, Lord Simonds and Lord Normand which have been extracted earlier, this Court expressed its opinion that the view taken by the House of Lords it correct and not that is taken by Lord Denning.
In Excise Commissioner U. P., Allahabad vs Ram Kumar (supra), the Court after consideration of the case law on the subject, held that it was settled by a catena of cases that there could be no question of estoppel against the legislative and sovereign functions.
A passage in American Jurisprudence 2d.
at page 783 paragraph 123 was extracted by Ray C. J. in Ramanathan Pillai 's case and Jaswant 718 Singh J. in Excise Commissioner 's case.
The passage at p. 123 is as follows : "Generally, a State is not subject to an estoppel to the same extent as an individual or a private corporation.
Otherwise, it might be rendered helpless to assert its powers in Government.
Therefore, as a general rule the doctrine of estoppel will not be applied against the State in its Governmental, Public or sovereign capacity.
An exception however arises in the application of estoppel to the State where it is necessary to prevent fraud or manifest injustice.
" But the learned Judges did not include the last sentence : "An exception however arises in the application of estoppel to the State where it is necessary to prevent fraud or manifest injustice.
" In Bihar Eastern Gangetic Fisherman Co operative Society Ltd., vs Sipahi Singh & Ors.
this Court held that the respondent could not invoke the doctrine of promissory estoppel because he was unable to show that relying on the representation of the Government, he had altered his position to his prejudice.
The Court accepted the view of this Court expressed in Ram Kumar 's case and held that there cannot be any estoppel against the Government in the exercise of its sovereign, legislative or executive functions.
The leading case of the Supreme Court of the United States cited and relied upon in Ram Kumar 's case (supra), is Federal Crop Insurance Corporation vs Marril, in which the United States Supreme Court observed as follows : "It is too late in the day to urge that the Government is just another private litigant, for the purposes of charging it with liability, whenever it takes over a business theretofore conducted by private enterprises or engages in competition with private ventures * * * Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority * * * And this is so even though, as here, the agent himself may have been unaware of the limitations upon his authority* * * `Men must turn square corners when they deal with the Government ' does not reflect a callous outlook.
It merely 719 expresses the duty of all courts to observe the conditions defined by congress for charging the public treasury".
The Court also relied on the views of the text book writer Melville M. Bigelow and concluded that the plea of estoppel does not operate against the Government or its assignees.
The extract from the American Jurisprudence which summarises the American Law, and the decision in Federal Crop Insurance Corporation case, make it clear that the plea of estoppel is not available against the Government and its legislative or executive functions except for preventing fraud or manifest injustice.
It was submitted that the cases cited above cannot be relied on as an authority for the proposition that the doctrine of promissory estoppel is not applicable against the Government in the exercise of its legislative and statutory functions as they were in the nature of obiter dicta and that on the facts the present case could be distinguished.
The Indo Afghan Agencies, Century Spinning and Manufacturing Co. and Turner Morisson Co. Ltd. vs Hungerford Investment Trust Ltd., were strongly relied on.
We have pointed out that all that the Indo Afghan Agencies case laid down was, that a public authority acting on behalf of the Government cannot on its own whim and in an arbitrary manner seek to alter the conditions accepted by him to the prejudice of the other side.
The decision in terms accepts the view expressed in earlier cases that after taking into consideration the exigencies and change of circumstances, the authority can modify the conditions in exercise of his powers as a public authority.
In Century Spinning and Manufacturing Co. Ltd. and Anr.
vs The Ulhasnagar Municipal Council and Anr.
, the facts of the case is set out in the head note and may be briefly stated.
The State of Maharashtra on the representation made by certain manufacturers proclaimed the exclusion of the Industrial Area from the Municipal Jurisdiction.
The Municipality made representations to the State requesting that the proclamation be withdrawn, agreeing to exempt the factories in the industrial area from payment of octroi from the date of levy.
The State acceded to the request of the Municipality.
The appellants expanded their activities relying on the Municipality 's assurance.
The Maharashtra Municipalities Act was enacted and the municipality took over the administration.
Thereafter, the Municipality sought to levy octroi duty on the appellant amounting to about Rs. 15 lacs per 720 annum.
The High Court dismissed the petition in limini filed by the Industrialists against the levy of octroi.
In an appeal to this Court it was held that the High Court had not given any reason for dismissing the petition in limini and that on a consideration of the averments in the petition and the materials placed before the High Court, the appellants were entitled to have its grievance heard against the action of the Municipality which was prima facie unjust.
In remanding the matter to the High Court, this Court observed : "A representation that something will be done in future may involve an existing intention to act in future in the manner represented.
If the representation is acted upon by another person it may, unless the statute governing the person making the representation provides otherwise, result in an agreement enforceable at law; if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an enquiry against him to compel performance of the obligation arising out of his representation".
In dealing with the question as to how far the public bodies are bound by representation made by them on which other persons have altered their position to their prejudice, the Court held that the obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promise; when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute, the obligation may be if the contract be not in that form be enforced against it in appropriate case in equity.
The Court read the decision in Union of India and Ors.
vs Indo Afghan Agencies (supra) as holding that the Government is not exempt from the equity arising out of the acts done by citizens to their prejudices, relying upon the representations as to its future conduct made by the Government.
This observation will have to be read alongwith the conditions that were laid down in the Indo Afghan case and cannot be read as holding that the rule of estoppel will be applicable against the Government in the exercise of its legislative and statutory powers.
The Court quoted the following passage from Denning J. : "Crown cannot escape by saying that estoppel do not bind the Crown for that doctrine has long been exploded.
Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action".
721 and observed that the Court in Indo Afghan case held that it was applicable to India.
It may be noted that apart from not noticing Howell 's case, the Court in Indo Afghan case did not say that the law as extracted from Denning J 'section judgment was applicable to India.
The Court after considering the Indo Afghan case and Howell 's case, expressed thus : "If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted.
A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representation made by it relying upon which a citizen has altered his position to his prejudice".
The third decision on which reliance was placed, for the proposition that doctrine of promissory estoppel is applicable against the State acting in exercise of its legislative or executive function is Turner Morrison and Co. Ltd. vs Hungerford Investment Trust Ltd. (supra).
The case related to the payment of tax due from Hungerford by Turner Morrison.
The Court observed that if for any reason Turner Morrison had not undertaken any responsibility to discharge the liability of Hungerford, the latter could have taken recourse to voluntary liquidation.
Hence there could be no doubt that acting on the basis of the representation made by Turner Morrison, Hungerford placed itself in a disadvantageous position.
Hungerford raised the plea that the resolution was of the company, afforded a good basis for raising a plea of promissory estoppel.
This plea was accepted by the Court relying on the observations of Denning J. in High Trees case (supra).
The later decision of the House of Lords in Howell 's case which disapproved Lord Denning 's judgment was not brought to its notice.
The scope of the plea of doctrine of promissory estoppel against the Government may be summed up as follows : (1) The plea of promissory estoppel is not available against the exercise of the legislative functions of the State.
(2) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law.
(3) When the officer of the Government acts outside the scope of his authority, the plea of promissory estoppel is not available.
The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officers.
(4) When the officer acts within the scope of his authority under a scheme and enters into an agreement and makes a representation 722 and a person acting on that representation puts himself in a disadvantageous position, the Court is entitled to require the officer to act according to the scheme and the agreement or representation.
The Officer cannot arbitrarily act on his mere whim and ignore his promise on some undefined and undisclosed grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representation and put himself in a disadvantageous position.
(5) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as difficult foreign exchange position or other matters which have a bearing on general interest of the State.
Before we conclude, we would refer to a recent decision of this Court in M/s. Moti Lal Padampat Sugar Mills Co. (P.) Ltd. vs State of Uttar Pradesh and Ors.
It has been held that there can be no promissory estoppel against the exercise of legislative power and the legislature cannot be precluded from exercising its legislative functions by resort to the doctrine of promissory estoppel.
It has also held that when the Government owes a duty to the public to act differently, promissory estoppel could not be invoked to prevent the Government from doing so.
The doctrine cannot be invoked for preventing the Government from acting in discharge of its duty under the law.
The Government would not be bound by the acts of its officers and agents, who act beyond the scope of their authority.
A person dealing with an agent of the Government must be held to have noticed all the limitations of his authority.
With respect, we are in complete agreement with the law as stated above but we find the judgment is not in accordance with the view consistently taken by this Court in some respects.
We have read the Judgment of Bhagwati, J. with considerable care and attention which it deserves.
Firstly, with great respect we are unable to construe the decision in Union of India & Ors.
vs M/s. Indo Afghan Agencies Ltd. case in the manner in which it has been done.
As pointed out by us, all that the case purports to lay down is that the court can enforce an obligation incurred by an authority on which another has acted upon and put himself in a disadvantageous position, when the authority resiles arbitrarily or on mere whim or on some undefined and undisclosed grounds of necessity.
With respect, we feel we are unable to agree with the interpretation put by Bhagwati, J. Bhagwati, J. states "The defence of executive necessity was thus clearly negatived by this Court and it was pointed 723 out that it did not release the Government from its obligation to honour the promise made by it, if the citizen acting in reliance on the promise, had altered his position.
The doctrine of promissory estoppel was in such a case applicable against the Government and it could not be defeated by invoking the defence of executive necessity.
" The same view has again been reiterated at page 682 where it is stated" The law may, therefore, now be taken to be settled as a result of this decision that where the Government makes a promise knowing or intending that it would be acted on by the promises and in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution.
" These observations would be right if they are read with the qualifications, laid down in the Indo Afghan Agencies case and other cases.
The further observations of the learned Judge that: "Every one is subject to the law as fully and completely as any other and the Government is no exception.
It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned, the former is equally bound as the latter." Again "but if the Government makes such a promise and the promises acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual do not appear to convey the true effect of the decision.
" The decision of this Court in Century Spinning and Manufacturing Co. Ltd. and Anr.
vs The Ulhashagar Municipal Council and Anr.
(supra) was understood by Justice Bhagwati as refusing to make a distinction between the private individual and public body so far as the doctrine of promissory estoppel is concerned.
These observations would be correct only if they are read with the exceptions recognised by Justice Bhagwati himself elsewhere in his judgment along with other restrictions imposed by Judgments of this Court.
We find ourselves unable to ignore the three decisions of this Court, two by Constitution Benches M. Ramanatha Pillai vs The State of Kerala and Anr.
(supra) and State of Kerala and Anr.
vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. etc.
(supra) and the third by a Bench of four Judges of this Court in Excise Commissioner, U. P. Allahabad vs Ram Kumar (Supra) on the ground that the observations are in the nature of obiter dicta and that it cannot be insisted as intend 724 ng to have laid down any proposition of law different from that enunciated in the Indo Afghan Agencies case.
It was not necessary for this Court in the cases referred to above to refer to Union of India and Ors.
vs M/s. Indo Afghan Agencies Ltd., or if properly understood it only held that the authority cannot go back on the agreement arbitrarily or on its mere whim.
We feel we are bound to follow the decisions of the three Benches of this Court which in our respectful opinion have correctly stated the law.
We are also unable to read the case of the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. (supra) as not having overruled the view of Denning, J and as not having expressed its disapproval of the doctrine of promissory estoppel against the Crown nor overruled the view taken by Denning, J in Robertson vs Minister of Pensions that "the Crown cannot escape the obligation under the doctrine of promissory estoppel.
" We find ourselves unable to share the view of the learned Judge that the Constitution Bench of this Court in Ramanathan Pillai 's case (supra) heavily relied upon the quotation from the American jurisprudence para 123 p. 873 Vol. 28.
Again we feel to remark that "unfortunately this quotation was incomplete and had overlooked perhaps inadvertently" is unjustified (emphasis supplied).
We feel we are in duty bound to express our reservations regarding the "activist" jurisprudence and the wide implications thereof which the learned Judge has propounded in his judgment.
The first part of the judgment relates to the development of law relating to promissory estoppel in England following the High Trees case.
As pointed out by us earlier the doctrine of promissory estoppel is not very helpful as we are governed by the various provisions of the Indian Contract Act Sections 65 and 70 provide for certain reliefs in void contracts and in unenforceable contracts where a person relying on a representation has acted upon it and put himself in a disadvantageous position.
Apart from the case in Robertson vs Minister of Pensions, the House of Lords in Howell 's case and the Privy Council in Antonio Buttigieg 's case and the other English Authorities do not agree with the view that the plea of promissory estoppel is available against the Government.
Further we have to bear in mind that the Indian Constitution as a matter of high policy in public interest, has enacted Article 299 so as to save the Government liability arising out of unathorised acts of its officers and contracts not duly executed.
The learned Judge has considered at some length the doctrine of consideration and how it has thwarted the full development of the new equitable principle of promissory estoppel.
After discussing the American Law on the subject, he has observed that the leading text book 725 writers view with disfavour the importance given to "consideration".
The learned Judge proceeds to observe that : "having regard to the general opprobrium to which the doctrine of consideration has been subjected to by eminent jurists, we need not be unduly anxious to project this doctrine against assault of erosion nor allow it to dwarf or stultify the full development of the equity of promissory estoppel or inhibit or curtail its operational efficacy as a justice device for preventing injustice.
" Here again we have to bear in mind that the Indian Contract Act regulates the right of parties, and expressly insists on the necessity for lawful consideration which cannot be dispensed with by invoking some equitable doctrine.
Section 10 of the Contract Act provides : "All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.
" It will be seen that for a contract to be valid, it should be for a lawful consideration.
Section 25 of the Contract Act provides that an agreement made without consideration is void unless it satisfies one of the conditions mentioned in this section.
The learned Judge has held that if the Government is to resist its liability it will have to disclose to the Court what are the facts and circumstances on account of which the Government claims to be exempted from the liability and it would be for the Court to decide whether these facts and circumstances are such as to render it inequitable to enforce the liability against the Government.
This statement will have to be read with the exceptions stated by the Learned Judge himself and those recognised by the decisions of this Court.
In C. Sankaranarayanan vs State of Kerala it was held that the power of the Government under Article 309 to make rules regulating the conditions of service of Government employees or of teachers of aided schools cannot in any way be effected by any agreement.
Rule of estoppel against Government cannot be invoked in such cases.
In Narendra Chand Hem Ram and Ors.
vs Lt. Governor Administrator Union Territory, Himachal Pradesh and Ors., this Court has laid down that the power to impose tax is undoubtedly a legislative power and that no Court can issue mandate to a legislature to enact a particular law and similarly no Court can direct a subordinate legislative body to enact or not to enact a law which it may be competent to enact.
Again in State of Tamil 726 Nadu and Ors.
vs section K. Krishnamurthi etc.
this Court held that the policy of State to nationalise text books cannot be challenged by the publishers on the ground that the rules were in derogation of their rights.
It was held that the rules were in the nature of Departmental instructions and do not confer any right on the publishers nor are they designed to safeguard the interest of publishers and that the policy of nationalisation was conceived in public interest and as the Government is at liberty to change the text books and delete from and add to the list of approved text books and the publishers can have no grievance.
In M/s. Andhra Industrial Works vs Chief Controller of Imports and Ors., a four judges Bench of this Court held that an applicant for a permit under Import Trade Policy has no absolute right to the grant of import licence and that the applicant cannot complain that the existing instructions or orders made in pursuance of the Import and Export Control Act place "unreasonable restrictions" on the petitioners ' right to carry on trade or business.
These restrictions obviously have been imposed in the interests of the general public and national economy and with the development of imports, regulating foreign exchange have necessarily to be appropriately controlled and regulated.
Professor section A. De Smith in his Judicial Review on Administrative Action, 3rd Edn.
p. 279 sums up the position thus: "Contracts and Covenants entered into by the Crown are not to be construed as being subject to implied terms that would exclude the exercise of general discretionary powers for the public good: On the contrary they are to be construed as incorporating an implied term that such powers remain exercisable.
This is broadly true of other public authorities also.
But the status and functions of the Crown in this regard are of a higher order.
The Crown cannot be allowed to tie its hands completely by prior undertakings is as clear as the proposition that the Courts cannot allow the Crown to evade compliance with ostensibly binding obligations whenever it thinks fit: If a public authority lawfully repudiates or departs from the terms of a binding contract in order to exercise its overriding discretionary powers, or if it is held never to have been bound in law by an ostensibly binding contract because the undertakings would improperly fetter its general discretionary powers, the other party to the agreement has no right whatsoever to damages or compensation under the general law, no matter how serious the damages that party may have suffered." Professor H. W. R. Wade in Administrative Law Fourth Edn.
329 330 has pointed out that the doctrine of estoppel cannot be allowed to impede the proper exercise 727 of public and statutory functions by the State and public authorities.
In Public Law the most obvious limitation on the doctrine of estoppel is that it cannot be invoked so as to give an authority powers which it does not in law possess.
In other words, no estoppel can legitimate action which is ultra vires.
As has been amply illustrated the Court is normally extremely careful to prevent any legal doctrine from impeding the exercise of statutory discretion in the public interest.
On a consideration of the decisions of this Court it is clear that there can be no promissory estoppel against the exercise of legislative power of the State.
So also the doctrine cannot be invoked for preventing the Government from acting in discharge of its duty under the law.
The Government would not be bound by the act of its officers and agents who act beyond the scope of their authority and a person dealing with the agent of the Government must be held to have notice of the limitations of his authority.
The Court can enforce compliance by a public authority of the obligation laid on him if he arbitrarily or on his mere whim ignores the promises made by him on behalf of the Government.
It would be open to the authority to plead and prove that there were special considerations which necessitated his not being able to comply with his obligations in public interest.
In a fervent plea for the doctrine to speak in all its activist magnitude the learned Judge observes "that is no reason why this new principle, which is a child of equity brought into the world with a view to promoting honesty and good faith and bringing law closer to justice should be held in fetters and not allowed to operate in all the activist magnitude, so that it may fulfil the purpose for which it was conceived and born".
It is no doubt desirable that in a civilised society man 's word should be as good as his bond and his fellow men should be able to rely on his promise.
It may be an improvement if a cause of action would be based on a mere promise without consideration.
The law should as far as possible accord with the moral values of the society, and efforts should be made to bring the law in conformity with the moral values.
What are the moral values of the Society ? This is a very complex question because the concept of moral values amongst different persons and classes of persons is not always the same.
The concept of moral values is not static one.
It differs from time to time and from society to society.
It is hazardous for a Court to attempt to enforce what according to it is the moral value.
As pointed out by Roscoe Pound: "It leads to an attempt to enforce overhigh ethical standards and to make legal duties out of moral duties which are not sufficiently, tangible to be made effective by the machinery of the legal order.
A more serious difficulty is that the attempt to identify 728 law and morals gives too wide a scope to judicial discretion".
The question is how should it be brought about.
The learned Judge says that it should be the constant endeavour of the Courts and the legislature to close the gap between the law and morality and bring about as near an approximation between the two as possible.
Lord Denning might have exhorted the Judges not to be timorous sours but to be bold spirits, ready to allow a new cause of action if justice so requires.
These are lofty ideals which one should steadfastly pursue.
But before embarking on this mission, it is necessary for the Court to understand clearly its limitations.
The powers of the Court to legislate is strictly limited.
"Judges ought to remember that their office is jus dicere and not jus dare to interpret law, and not to make law or give law." Chandrachud, C. J. Speaking for a Constitution Bench in Shri Gurbaksh Singh Sibbia etc.
vs State of Punjab, has clearly pointed out the limited powers of the Courts to make laws in construing the provisions of the statutes.
The Learned Chief Justice has observed: "The true question is whether by a process of construction, the amplitude of judicial discretion which is given to the High Court and the Court of Session, to impose such conditions as they may think fit while granting anticipatory bail, should be cut down by reading into the statute conditions which are not to be found therein *** Our answer, clearly and emphatically is in the negative.
" Again the Learned Chief Justice warned "Judges have to decide cases as they come before them, mindful of the need to keep passions and prejudices out of their decisions.
And it will be strange if, by employing judicial artifices and techniques, we cut down the discretion so wisely conferred upon the Courts, by devising a formula which will confine the power to grant anticipatory bail within a strait jacket.
" "Therefore, even if we were to frame a 'code for the grant of anticipatory bail ', which really is the business of the legislature, it can at best furnish broad guide lines and cannot compel blind adherence".
The Courts by its very nature are most ill suited to undertake the task of legislating.
There is no machinery for the Court to ascertain the conditions of the people and their requirements and to make laws that would be most appropriate.
Further two Judges may think that a particular law would be desirable to meet the requirements whereas another two Judges may most profoundly differ from the conclusions arrived at by two Judges.
Conscious of these handicaps, the law requires that even an amendment of the Supreme Court Rules which 729 govern the procedure to be adopted by it for regulating its work, can only be effected by the whole Court sitting and deciding.
The result is that so far as the recommendation of the Municipal Committee to the Government to levy octroi duty, is concerned though it is contrary to the representation it made to the buyers of the sites in the Mundi, the Municipality is not estopped as the representation made by it was beyond the scope of its authority.
The levy of tax being for a public purpose i.e. for augmenting the revenues of the Municipality as laid down in Ram Kumar 's case, the plea of estoppel is not available.
The order of the Government directing the levy of octroi in pursuance of the resolution of the Municipality cannot also be challenged as it is in the exercise of its statutory duty.
The result is both the appeals fail and are dismissed with costs of one set to be borne equally by the two appellants.
section R. Appeals dismissed.
|
The Municipal Committee of Bahadurgarh, respondent No. 2 established Mandi Fateh in Bahadurgarh Town with a view to improve trade in the area.
The Municipal Committee decided that the purchasers of the plots for sale in the Mandi would not be required to pay octroi duty on goods imported within the said Mandi.
A resolution (No. 8) dated 20 12 1916 was passed by the Municipality to this effect.
Hand bills were issued for the sale of the plots on the basis of the resolution and it was proclaimed that Fateh Mandi would remain exempt from payment of octroi.
Subsequently by resolution No. 4 dated 20 5 1917, the Municipal Committee decided that the term No. 14 to the conditions of sale, namely, that the purchasers of plots would not be required to pay octroi, be amended to the effect that the Mandi shall remain immune from payment of octroi duty for ever.
When the resolution was received by the Commissioner of Ambala, in paragraph 3 of his letter dated 26 6 1917, he minuted that the undertaking by the Municipal Commissioner never to impose octroi duty in the Mandi was ultra vires and therefore the purchasers of the plots should be informed so that they may withdraw from the purchases.
On receipt of this letter the President of the Municipal Committee made representations that if octroi duty was to be levied, there would be no purchasers for the plots and the entire scheme would fall through.
On this, the Commissioner revised his earlier view and withdrew his objection by further observing that "as soon as the market is established it will be necessary to consider what form of taxation is best to cover the market share of municipal expenses".
The Municipal Committee on 10 3 1919 imposed house tax of Rs. 3 14 6 per cent per annum on the shopkeepers to cover the expenditure of the market.
This state of affairs continued till 4 9 1953 when the Municipal Committee by notification No. 9697 C 53/63830 dated 4 9 1953 included Fateh Mandi, Bahadurgarh, within the octroi limits.
The Examiner of Local Funds pointed out that the Municipal Committee is under obligation to charge octroi on goods imported into Fateh Mandi.
The President of the Municipal Committee made a representation to the Deputy Commissioner on 24 2 1954.
The Municipal Committee again passed another resolution No. 1 dated 2 3 1954 that the Fateh Mandi will remain free from octroi duty according to the terms of the proclamation of the sale relating to the sale of plots.
The matter was referred to Punjab State which after thoroughly examining the whole matter, confirmed Resolution No. 1 passed by the Municipal Committee on 2 3 1954, Subse 690 quently, the Municipal Committee changed its mind and by its resolution dated 8 5 1954, resolved that octroi duty should also be levied on the goods imported into Fateh Mandi.
But this resolution was annulled by the Punjab Government under section 236 of the Punjab Municipal Act.
The Examiner of Local Funds Accounts in the meantime insisted on the levy of octroi duty on the goods imported into Fateh Mandi and the Punjab Government after discussing the issue on 9 4 1956 informed the President of the Municipal Committee that the Government 's action in confirming the resolution No. 1 of 2 3 1954 of the Municipal Committee, Bahadurgarh exempting goods imported into Fateh Mandi from levy of octroi duty under section 70(2)(c) of the Municipal Act, 1911, is quite in order and that no separate notification to this effect was necessary under the rules.
Again on 21 7 1965, the Municipal Committee Bahadurgarh resolved that the Government be requested to cancel Resolution No. 1 dated 2 3 1954.
The State of Haryana Respondent No. 1 which came into existence on 1 11 64 under the Punjab Reorganisation Act, by its memo dated 13 10 1967 approved the resolution No. 6 dated 21 7 65 of the Municipal Committee and cancelled the Municipal Resolution No. 1 of 2 3 1964.
As a result of the decision of the Government, the Municipal Committee started charging octroi duty on the goods imported into the Mandi.
On these facts, the petitioners submitted that the resolution No. 6 of the Municipal Committee dated 21 7 1965 (Annexure 6) and approval granted by the Haryana State as per its order dated 30 10 1967 (Ann.
H) were illegal and ultra vires and without jurisdiction.
A Full Bench of the High Court rejected the petition mainly on three grounds.
Firstly, it found that the State Government is entitled under section 62 A of Punjab Act, 48/1953 to direct the Municipal Committee to impose octroi duty and as such even if the municipality is found to have erred in imposing the Octroi Duty, the legislative powers of the State cannot be questioned.
Secondly, it found, that it was not within the competence of the Municipality to grant any exemption from payment of octroi duty and this act was ultra vires of its powers and cannot be enforced.
Thirdly, it found that the Court cannot go into the question as to whether the petitioners ' plea based on equity that the Municipality is bound, cannot be gone into far want of adequate facts.
The High Court however granted certificates to the appellants.
Dismissing the appeal, the Court ^ HELD: 1.
Under section 62 A of the Punjab Municipal Act.
1911 as amended by Punjab Act 43/1958 the State Government is empowered to impose octroi duty and under sub clause (b) if the committee fails to carry cut the order of the Government, the State Government may impose octroi Duty.
Under section 70(2)(c), a Municipal Committee by a resolution passed at a special meeting and confirmed by the State Government may exempt in whole or in part from payment of any such tax any person or class of persons or any property or description of property.
In exercise of those powers, the State Government had by its order dated 4 5 1954 confirmed resolution No. 1 passed by the Municipal Committee in its special meeting held on 2 3 1954 regarding the exemption of goods imported into Fateh Mandi from levy of octroi Duty.
Subsequently, in reply to the objection raised by the Examiner of Local Funds, the Government pointed out by its letter dated 9 4 1956 (Ann. F) that the Government 's action confirming the resolution No. 1 dated 2 3 1954 of the Municipal Committee exempting Goods imported into Fateh Mandi, under section 70(2)(c) of 691 the Punjab Municipal Act, 1911, was quite in order.
By the impugned order dated 20 10 1967 the Government approved the resolution No. 6 of the Municipal Committee dated 21 7 1965 and permitted the Municipality to levy the octroi Duty.
Therefore, the action taken by the State Government is strictly in conformity with the powers conferred on it under section 70(2)(c) of the Act.
It exempted the petitioners from payment of octroi Duty for a particular period and ultimately withdrew the exemption.
The action of the Government cannot be questioned as it is in exercise of its statutory functions.
The plea of estoppel is not available against the State in the exercise of its legislative or statutory functions.
The Government have power to direct the Municipality to collect the octroi Tax if the Municipality fails to take action by itself under section 60(A) (3).
Further, even on facts, this plea is not available as against the Government as it is not the case of the petitioners that they acted on the representation of the Government.
[698 E H, 699 A C] 2.
The Municipality is not estopped from levying or recommending the levy of the tax to the Government even though in the proclamation of sale it was notified that no octroi duty would be levied and it was only in pursuance of such representation the appellants purchased the property because the Municipal Committee had no authority to exempt the Fateh Market from the levy of Octroi duty.
If the Municipal Committee had passed a resolution or issued a notification that no octroi duty will be levied, it will be ultra vires of the powers of the Municipal Committee.
When a public authority acts beyond the scope of its authority the plea of estoppel is not available to prevent the authority from acting according to law.
It is in public interest that no such plea should be allowed.
Further, in the instant case, the appellants are not entitled to any enforceable legal right under the terms of the Municipal Act, since non production of any sale deed executed by the Municipal Committee in favour of the purchasers raises the only presumption that the contract between the parties have not been proved to have been reduced in writing and executed in the manner prescribed under section 47 of the Municipality Act, 1911 (Act 3 of 1911).
[699 C E 700 B D] 3.
Article 299(1) of the Constitution of India corresponding to Section 175 (3) of the Government of India Act, 1935 provides that all contracts made in the exercise of executive powers of the Union or of a State shall be expressed to be made by the President or by the Governor of the State, as the case may be, and all such contracts and assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.
The provisions of this Article is mandatory and not directory, is enacted as a matter of public policy that the State should not be saddled with liability for unauthorised contracts and is enacted in the public interest.
The provisions are embodied on the ground of public policy on the ground of protection of general public.
[700 F H, 701 A B] Seth Bhikraj Jaipuria vs Union of India, ; ; Mulam Chand vs State of M.P., Karamshi Jethabhiai Samrayya vs State of Bombay, ; ; referred to.
The scope of the plea of doctrine of promissory estoppel against the Government is as follows: (a) The plea of promissory estoppel is not available against the exercise of the legislative or executive functions of the State.
There could not be estoppel 692 against express provisions of the law nor could the State by its action waive its rights to exercise powers entrusted to it for the public good.
[721 F] Antonio Buttigieg vs Captain Stephen H. Cross and ors.
AIR 1907 PC; Adants vs London Improved Motor Coach Builders, [821] 1 K.B. 495, York Corporation vs Henry Leethan and Sons Ltd., ; William Cory and Sons Ltd. vs London Corporation, ; Howell vs Falmouth Boat Construction Co. Ltd., ; Commissioner of Crown Lands vs Page, ; South end on Sea Corporation vs Hodgson (Wickrord) Ltd., ; Federal Insurance Corpn.
vs Marril, 382 U.S. 380; quoted with approval.
Robertson vs Minister of Pensions, dissented from.
Assistant Custodian of E.P. and ors.
vs Brij Kishore Agarwala, ; ; Bihar Eastern Gangetic Fishermen Cooperative Society vs Sipahi Singh & ors. ; ; applied.
Union of India vs Indo Afghan Agencies, ; ; Century Spinning & Manufacturing Co. Ltd. and Anr.
vs Ulhas Nagar Municipal Council and anr., [1970] 3 SCR 854; Turner Morrison Co. Ltd. vs Hungerford Investment Trust Ltd., ; ; explained and distinguished.
Collector of Bombay vs Municipal Corporation of the City of Bombay and ors.
,[1952] SCR p. 43; Excise Commr.
U.P., Allahabad vs Ram Kumar, [1976] Supp.
SCR 532; M. Ramanatha Pillai vs State of Kerala, ; ; State of Kerala and Anr.
vs The Gwalior Manufacturing (Wvg.) Co. Ltd.; , ; followed.
(b) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law.
[721 G] (c) When an officer of the Government acts outside the scope of his authority, the plea of promissory estoppel is not available.
The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officers.
[721 G H] (d) When the officer acts within the scope of his authority under a scheme and enters into an agreement and makes a representation and a person acting on that representation puts himself in a disadvantageous position, the Courts is entitled to require the officer to act according to the scheme and the agreement or representation.
The officer cannot arbitrarily act on his mere whim and ignore his promise on some undefined and undisclosed grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representation and put himself in a disadvantageous position.
[721 G H, 722 A B] Union of India vs Indo Afghan Agencies Ltd., ; ; discussed and followed.
(e) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as difficult foreign exchange position or other matters which have a bearing on general interest of the State.
[722 B C] Union of India vs M/s Indo Afghan Agencies Ltd., ; applied.
693 5.
It is only in public interest that it is recognised that an authority acting on behalf of the Government or by virtue of statutory powers cannot exceed his authority.
Rule of ultra vires will become applicable when he exceeds his authority and the Government would not be bound by such action.
Any person who enters into an arrangement with the Government has to ascertain and satisfy himself that the authority who purports to act for the Government, acts within the scope of his authority and cannot urge that the Government is in the position of any other litigant liable to be charged with liability.
[705 G H, 706 A] 6.
The doctrine of estoppel which burst out into sudden blaze in 1946 and ever since continuing to smoulder due to the consistent maintenance of the original author 's interest in its further development, now in this direction and now in that, though interesting is not relevant in administering Indian Law.
Section 63 of the Contract Act which provides that when a creditor accepts a lesser sum in satisfaction of the whole debt, the whole debt becomes discharged is a wide departure from the English law as laid down in Jordan vs Monye.
The doctrine of estoppel referred to in High Trees case is to some extent taken care of by section 65 and 70 of the Indian Contract.
Section 65 provides that when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it, to the person from whom he received it.
Under section 70 of the Contract Act.
an obligation is cast on the person enjoying benefit of a non gratutious act to compensate the person who lawfully performed the Act.
[707 A, 708 B, D F] Foakes vs Beer, ; ; Jordan vs Money, [1854] 5 H.L. Cas 185; Fenner vs Blake, ; Woodhouse Ltd. vs Nigerian Produce Ltd., , In Re. Wickham William Porter and Co. Ltd., [1937] 2 All.
E.R. 361; Central London Property Trust Ltd. vs High Trees House Ltd., ; referred to.
The provisions of Section 70 of the Indian Contract Act are applicable to contract which is not according to Section 175 of the Government of India Act and Article 299 of the Constitution of India.
[708 G H] State of West Bengal vs B. K. Mondal and Ors., [1962 Supp.
SCR p. 876; New Marine Coal Co. Ltd. vs Union of India.
; ; referred to.
All that the Indo Afghan Agencies case laid down was that a public authority acting on behalf of the Government cannot on its own whim and in an arbitrary manner seek to alter the conditions accepted by him to the prejudice of the other side.
The decision in terms accepts that after taking into consideration the exigencies and change of circumstances the authority can modify the conditions in exercise of his powers as a public policy.
Apart from not noticing Howell 's case, the Court in Indo Afghan 's case did not say that the law as extracted from the judgment in Robertson 's case by Denning J. was applicable to India.
[719 D E, 721 A] 9.
The Judgment in M/s Motilal Padampat Sugar Mills Co. (P) Ltd. vs State of Uttar Pradesh, [1979] 2 SCR p. 641 is not in accordance with the view consistently taken by the Supreme Court in following respects : [722 F] (i) The decision in the case of Union of Indian vs M/s Indo Afghan Agencies Ltd., ; cannot be constructed in the manner in which it was 694 done.
All that the Indo Afghan case purports to lay down is that the Court can enforce an obligation incurred by an authority on which another has acted upon and put himself in a disadvantageous position, when the authority resiles arbitrarily or on mere whim or on some undefined and undisclosed grounds of necessity.
[722 F G] (ii) The decision of this Court in Century Spinning and Manufacturing Co. Ltd and Anr.
vs The Ulhasnagar Municipal Council and Anr., [1970] 3 SCR 854 was understood as refusing to make a distinction between the private individual and public body so far as the doctrine of promissory estoppel is concerned.
[723 F] (iii) The three decisions of this Court, two by Constitution Benches M. Ramanatha Pillai vs State of Kerala, State of Kerala vs The Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd. and the third by a Bench of four judges in Excise Commissioner, U.P. Allahabad vs Ram Kumar cannot be ignored on the ground that the observations are in the nature of obiter dicta and that it cannot be insisted as intending to have laid down any proposition of law different from that enunciated in the Indo Afghan Agencies case.
It was not necessary for this Court in the three cases to refer to Union of India & others vs Indo Afghan Agencies.
If properly understood it only held that the authority cannot go back on the agreement arbitrarily or on its own whim.
[723 H, 724 A B] (iv) The case of the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. cannot be read as not having overruled the view of Denning J. and as not having expressed its disapproval of the doctrine of promissory estoppel against the crown in Robertson vs Minister of Pensions.
[724 B C] (v) The Indian Constitution as a matter of high policy in public interest has enacted Article 299 so as to save the Government from liability arising out of unauthorised acts of its officers and contracts not duly executed.
Sections 65 and 70 of the Indian Contract Act provide for certain reliefs in void contracts and in unenforceable contracts where a person relying on a representation has acted upon it and put himself in a disadvantageous position.
The activist jurisprudence and the wide implications thereof, propounded in the Motilal Padampat, Sugar case doubted.
[724 E, F, G] (vii) The Indian Contract Act regulates the right of parties and expressly insists on the necessity for lawful consideration which cannot be dispensed with by invoking some new equitable doctrine.
Under Section 10 of the Contract Act, for a contract to be valid, it should be for a lawful consideration and Section 25 of the Contract Act provides that an agreement made without consideration is void unless it satisfies one of the conditions mentioned in that section.
[725 B C, D] (viii) Sankaranarayan vs State of Kerala, ; ; Narendra Chand Hem Ram and Ors.
vs Lt. Governor Administration, Union Territory of Himachal Pradesh, ; ; State of Tamil Nadu and Ors. etc.
vs section K. Krishnamurthi etc.
; , ; and M/s Andhra Industrial Works vs Chief Controller of Imports and Ors., ; indicate that the Rule of estoppel against Government cannot be invoked against the Government.
What are the moral values of the society is a complex question because the concept of moral values amongst different persons and classes of persons is not always the same.
Being not a state one, it differs from time to time and from society to society.
It is hazardous for a Court to attempt to enforce what according to it is the moral value.
Before embarking on the mission of "closing the gap between the law and morality and bring about as near an approximation between the two as possible", it is necessary for the Court to understand clearly its limitations.
The powers of the Court to legislate is strictly limited.
"Judges ought to remember that their office is jus dicere and not jus dare to interpret the law, and not to make law or give law".
[727 F, G, 728 A C] The courts by its very nature are most ill suited to undertake the task of legislating.
There is no machinery for the Court to ascertain the condition of the people and their requirements and to make laws that would be most appropriate.
Further two judges may think that a particular law would, be desirable to meet the requirements whereas another two judges may most profoundly differ from the conclusions arrived at by two judges.
[728 G H, 729 A] Shri Gurbaksh Singh Sibbia etc.
vs State of U.P., [1908] 3 SCR p. 383 followed.
|
Civil Appeal Nos.
2361 2364 of 1972.
Appeals by special leave from the Judgment and Order dated 17 5 72 of the Allahabad High Court in Sales Tax Ref.
Nos. 693 to 696/70.
section C. Manchanda, Shiv Pujan Singh and M. V. Goswami for the Appellant.
(In all the appeals) V. section Desai and Rameshwar Nath for the Respondent.
The following Judgments were delivered: UNTWALIA, J. The Commissioner of Sales Tax, Lucknow has filed these four appeals by special leave against the judgment of the Allahabad High Court given in four sales tax references under the U.P. Sales Tax Act, 1948, hereinafter referred to as the Act.
595 The assessee respondent owns some tea gardens in the State of U.P.
The tea leaves grown by the respondent in his gardens are sold in the market after being processed and packed.
The stand taken on his behalf before the taxing authorities was that the tea leaves sold by the respondent are agricultural produce grown by himself and, therefore, the sales were not exigible to sales tax.
The contention of the assessee was not accepted and the final Revising Authority made four references in respect of the four periods to the High Court on the following question of law: "Whether on the facts and circumstances of this case the article ceased to be an agricultural produce and whether the tea produced by the assessee would be exigible to sales tax?" The High Court has answered the reference in favour of the assessee and against the revenue.
Hence these appeals by the department.
Under section 3, the charging section, of the Act it was the turn over for each assessment year determined in accordance with the various provisions of the Act and the Rules framed thereunder, which was chargeable to sales tax.
The definition of 'turnover ' given in section 2(i) of the Act at the relevant time stood as follows: " "Turnover" means the aggregate amount for which goods are supplied or distributed by way of sale(or are sold), or the aggregate amount for which goods are bought, whichever is greater by a dealer, either directly or through another, on his account or on account of others, whether for cash or deferred payment or other valuable consideration: Provided that the proceeds of the sale by a person of agricultural or horticultural produce, grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, or poultry or dairy products from fowls or animals kept by him shall be excluded from his turnover.
" The above proviso was meant to exempt an agriculturist or a horticulturist from the charge of sales tax in respect of his agricultural or horticultural produce grown by himself in his land in which he has an interest of the kind mentioned in the proviso.
The short question which falls for our determination, therefore, is whether the assessee 's transactions of sale came within the ambit of the proviso.
Indisputably and undoubtedly the assessee was an agriculturist, the 596 tea leaves grown by him in his land were agricultural produce, and he had sold them after processing and packing.
In other words the assessee made them marketable and fit for consumption by the consumers and then sold them.
If the tea leaves so sold substantially retained the character of being an agricultural produce, it is plain that the assessee 's sales will not be exigible to sales tax.
If, on the other hand, the leaves had undergone such vital changes by processing that they lost their character of being an agricultural produce and became a different commodity then the sales made by assessee were exigible to sales tax.
The High Court has extracted the primary findings of fact recorded by the Revising Authority in its revisional order.
As is well known tea leaves are plucked from tea plants as green tea leaves.
The tea leaves so plucked are not fit for consumption and are not sold in the open market.
They are often purchased by big tea concerns from the owners of the gardens and after processing and packing them they (the concerns) sell them in the market.
Since in their cases the proviso will not apply the sales will be exigible to sales tax.
But when the producer himself does the same or similar kind of job, then the question arises whether it can be justifiably said that he also cannot take advantage of the proviso? The primary facts as extracted by the High Court from the order of the Revising Authority are the following: (1) "The tea leaves were first of all subjected to withering in shadow in rooms on a wooden floor for about 14 hours." (2) "then they were crushed by hand or foot and were then roasted for about 15 minutes." (3) "Later they were roasted on mats for about 15 minutes." (4) And then they were "covered by wet sheets for generating fermentation.
During this process the colour of leaves was changed from green to yellowish." (5) "the leaves were then subjected to grading with sieves of various sizes.
Fanning machines are also used in completing the grading process." (6) "The produce was then finally roasted with charcoal for obtaining suitable flavour and colour.
" 597 (7) "It is this final product which was eventually sold by the assessees.
" The question for consideration is whether on the findings aforesaid it can be justifiably held in law that the leaves lost their character of being an agricultural produce and became something different.
It should be remembered that almost every kind of agricultural produce has to undergo some kind of processing or treatment by the agriculturist himself in his farm or elsewhere in order to bring them to a condition of non perishability and to make them transportable and marketable.
Some minimal process is necessary to be applied to many varieties of agricultural produce.
As for example, when wheat stalks are cut from the farm, threshing and winnowing have to be done.
The product so obtained has to be dried for a few days.
The husk and dust have to be separated.
Thereafter packing the wheat in bags or other containers it is taken to the markets for sale.
One can never suggest that such a wheat product becomes a commodity different from the one which was produced in the process of agriculture.
To pursue that example further, if the agriculturist who produces the wheat has a flour mill and crushes the wheat produced by him in that mill and then if the flour so produced is sold by him one can never reasonably suggest that the flour sold by him is an agricultural produce, because in that event, the manufacturing process goes beyond the limit of making the agricultural produce fit for marketing as such and turns it into a different commodity altogether i.e. flour.
But there may be some other kinds of agricultural produce which required some more processing to make it marketable.
In the case of such a commodity what one has to judge is to find out whether in relation to that agricultural produce the process applied was minimal or was it so cumbersome and long drawn that either in common parlance, or in the market, or even otherwise, any body would not treat the produce as an agricultural produce.
The mere fact that in the case of a particular product the process is a bit longer or even a bit complicated will not rob the produce of its character of being an agricultural produce.
Largely the inference to be drawn from the primary facts of processing, one may say, will be an inference of fact.
But it is not wholly so.
In a given case it will be a mixed question of fact and law.
If wrong tests are applied in drawing the inference that the agricultural produce has lost its character of being so, then it will be a question of law and the High Court will have jurisdiction in an appropriate reference, as in the present case it had, to decide whether the case came under the proviso to section 2(i) of the Act.
598 Unlike many agricultural products tea leaves are not marketable in the market fresh from the tea gardens.
No body eats tea leaves.
It is meant to be boiled for extracting juice out of it to make tea liquor.
Tea leaves are, therefore, only fit for marketing when by a minimal process they are made fit for human consumption.
Of course, the processing may stop at a particular point in order to produce inferior quality of tea and a bit more may be necessary to be done in order to make it a bit superior.
But that by itself will not substantially change the character of the tea leaves, still they will be known as tea leaves and sold as such in the market.
In my opinion all the six processes enumerated above from the primary findings of fact recorded in the order of the Revising Authority were necessary for the purpose of saving the tea leaves from perishing, making them fit for transporting and marketing them.
The process applied was minimal.
Withering, crushing and roasting the tea leaves will be surely necessary for preserving them.
The process of fermentation or final roasting with charcoal for obtaining suitable flavour or colour and also the process of grading them with seives were all within the region of minimal process and at no point of time it crossed that limit and robbed the tea leaves, the agricultural produce, of their character of being and continuing as such substantially.
In my opinion, therefore, the view expressed by the High Court is quite justified and sustainable in law.
In Volume 21 of Encyclopaedia Britannica (1968 edition) under the head 'Tea ' are dealt with at page 739 the processes of cultivation and manufacture of tea.
Under the sub head 'Cultivation ' it is found stated: "Tea leaves are plucked either by hand or with special shears.
In the tropical areas of southern India, Ceylon, and Indonesia, harvest continues throughout the year, but in the subtropical regions of northern India and China and in Japan and Formosa, the harvests are seasonal.
The flavour and quality of the tea leaves vary with the climate, soil, age of the leaf, time of harvest (even from season to season), and method of preparation.
" Then comes the sub head 'Manufacture ' which enumerates the categories of three classes of teas and then it is mentioned: "Most stages of processing are generally common to the three types, of tea.
First, the fresh leaves, are withered by exposure to the sun or by heating in trays until pliable (usually 18 24 hours).
Next the leaves are rolled by hand 599 or machine in order to break the leaf cells and liberate the juices and enzymes.
This rolling process may last up to three hours.
Finally, the leaves are completely dried either by further exposure to the sun, over fires, or in a current of hot air, usually for 30 40 minutes.
" In making black tea, the leaves, after being rolled, are fermented in baskets or on glass shelves or cement floors under damp cloths.
"The process of fermentation, or oxidation, reduces the astringency of the leaf and changes its colour and flavour.
" About green leaves it is mentioned "Green tea is made by steaming without fermentation in a perforated cylinder or boiler, thus retaining some of the green colour.
The leaves are lightly rolled before drying.
" It would thus be seen that the tea leaves as plucked have got to pass through stages of processing of one kind or the other in order to make them fit for human consumption, as in the case of paddy and many other commodities dehusking in the case of former and some other kind of process in regard to the latter has got to be done in order to make them marketable and fit for consumption.
There are two decisions of the Madras High Court in The State of Madras vs R. Saravana Pillai(1) and N. Deviah Gowder vs Commercial Tax Officer, Coimbatore(2) where a similar question arose with respect to arecanuts.
At page 544 of the first case which was followed in the second occurs a passage which may be usefully quoted here: "As we have pointed out, it was common ground that there is no market in Coimbatore or elsewhere for arecanuts as they are when plucked from the trees, and it should be remembered they are gathered when they are still unripe.
The proviso to section 2(i) of the Act is obviously conceived in the interests of agriculturists.
It excludes from any tax liability under the Act sale of agricultural and horticultural produce, the primary condition to be satisfied being that it must be produce of the land which either belongs to the seller or of the land in which he has an interest as specified by section 2(i).
To restrict that concession to sale of arecanuts, for instance, only if those arecanuts are sold in the state in which they are immediately on being gathered from the trees, would render the statutory exclusion meaningless.
" I approve of this decision.
600 There are two decisions of the Bombay High Court given in relation to the question of sugarcane being converted into jaggery.
They are: R. B. N. section Borawake vs The State of Bombay(1) and Commissioner of Income Tax, Poona vs H.G. Date.(2) In the former case it was observed at page 11: "It is true that gur cannot be regarded as an agricultural produce grown on land.
But if gur is prepared out of the agricultural produce which is grown on land, in the absence of any indication to the contrary suggesting that the agricultural produce must be sold in the form in which it is grown, we will be justified in holding that an agriculturist who is exclusively selling agricultural produce grown on the land either in the form in which it is grown or in the form in which it is converted for the purpose of transportation or preventing deterioration is within the exception provided by section 2(6).
In the present case, with a view to prevent deterioration and for the purpose of facilitating transportation the assessee converted the sugar cane grown by him into gur and sold it.
" It appears to me that this case has gone a bit too far and on an appropriate occasion it may require further consideration.
Nonetheless, in the instant case one can safely conclude, as I have done, that with a view to prevent deterioration and for the purpose of facilitating transport and making it marketable the assessee himself did some processing to the plucked tea leaves and hence the High Court was right in holding that such sales were not exigible to sales tax.
Similar or identical principles have been applied by other High Courts also in respect of different commodities such as rubber, sole crepe, casuarina, pig bristles etc.
The cases are Deputy Commissioner of Agricultural Income Tax and Sales Tax, South Zone vs Sherneilly Rubber & Cardamom Estates Ltd. & Others(3).
Deputy Commissioner of Agricultural Income Tax and Sales Tax, Quilon vs Travancore Rubber and Tea Co., Ltd.;(4) Commissioner of Income Tax vs Woodland Estates Ltd.;(5) Rayavarapu Mrityanjaya Rao vs 601 The State of Andhra Pradesh(1) and Commissioner of Sales Tax, U.P., Lucknow vs Harbilas Rai and Sons.
(2) Broadly speaking these cases have been decided on application of the correct principles of law.
Reliance on behalf of the Revenue was placed upon a few cases.
None of them supports the department 's contention.
I may notice only two or three of them.
In Killing Valley Tea Company, Ltd. vs Secretary to State(3) the question for consideration related to the tax liability of the Killing Valley Tea Company under the Income Tax Act, 1918.
If the whole of its income was derived from agriculture, the assessee was not liable to pay income tax.
If, however, the activities of the Company, which produced income were attributable partly to agriculture and partly to its manufacturing activities, then the whole of the amount could not have been taxed under the Income Tax Act.
The stand of the Company was "the actual leaf of the tea plant, without the addition thereto of the processes above described, is of no value as a market commodity.
" On behalf of the Revenue it was contended "that the manufacturing processes carried out in a modern tea factory, with scientific appliances and up to date machinery, are different from those ordinarily employed by a cultivator to render the produce raised by him fit to be taken to market.
" The High Court held "that the process in its entirety cannot be appropriately described as agriculture.
The earlier part of the operation when the tea bush is planted and the young green leaf is selected and plucked may well be deemed to be agriculture.
But the latter part of the process is really manufacture of tea, and cannot, without violence to language, be described as agriculture.
The green leaf is not marketable commodity for immediate use as an article of food, but it is a marketable commodity to be manufactured by people who possess the requisite machinery into tea fit for human consumption.
" After referring to some authoritative books on Tea, the view expressed by the High Court was "that the entire process is a combination of agriculture and manufacture." Hence only a part of the income was held to be taxable.
In the instant case the problem is quite distinct and different.
Here we are concerned with the question whether the commodity which the assessee sold as tea was his agricultural produce or not.
He had not sold his tea leaves from his gardens to any manufacturing tea 602 company.
He had himself applied some indigenous and crude manufacturing process in order to enable him to sell his tea in the market.
In such a situation I have no difficulty in holding that the sale was of his agricultural produce.
In The State of Madras vs Swasthik Tobacco Factory(1) the question before this Court was whether the respondent firm which purchased raw tobacco and converted it by a manufacturing process into chewing tobacco and sold it in small paper packets was entitled to deduction of excise duty paid by it on the raw tobacco from the gross turnover of sales of chewing tobacco under rule 5(1)(i) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939.
It would be found mentioned at page 318: "Both the advocates argued, on the basis of the factual position, that the packets of chewing tobacco were goods different from tobacco from which the said goods were manufactured.
" On that footing, by interpretation of the rule it was held that only excise duty paid on the goods sold by the assessee is deductible from the gross turnover, and not the excise duty paid on raw tobacco.
This case was followed by the Supreme Court in The State of Madras vs Bell Mark Tobacco Co.(2) In the instant case I have held that the commodity which was sold was not different from the commodity which was produced in agriculture.
The view expressed by the Allahabad High Court in the judgment under appeal which is reported in D. section Bist & Sons, Nainital vs Commissioner of Sales Tax, U.P.(3) is on the lines of the preponderance of views expressed by different High Courts in relation to different commodities.
I approve of the case and dismiss these appeals with costs hearing fee one set only.
PATHAK, J. I agree that the appeals should be dismissed.
But I should like to say a few words in regard to Killing Valley Tea Company, Ltd. vs Secretary to State.(4) That was a case where the Killing Valley Tea Company, Ltd. had a tea plantation and after selecting and plucking the young green leaf from the tea bush by hand it was put through a process of drying and rolling.
The Income Tax Department alleged that the process actually applied to the dry leaf was a manufacturing process carried out in a modern tea factory with scientific appliances and the latest machinery.
The 603 Calcutta High Court, on a consideration of the respective cases of the parties, observed that the entire process could not be described as agriculture, and that the process applied to the tea leaf after it had been plucked was a manufacturing process.
It observed that the green tea leaf was a marketable commodity to be manufactured by people who possessed the requisite machinery into tea fit for human consumption.
It was of the opinion that while the process of selecting and plucking the tea leaf from the tea shrubs could be deemed to be agriculture, the subsequent process which included drying and rolling of the leaf was a manufacturing process.
The High Court drew a distinction between the two processes for the purpose of apportioning the income between agricultural income and non agricultural income.
The question before us is whether after the tea leaf had been put through the process of withering, crushing, roasting and fermentation it continued to be agricultural produce.
If the Calcutta High Court can be said to have laid down that as a result of those processes the tea leaf ceased to be agricultural produce, I am unable to agree with it.
To my mind, the tea leaf remained what it always was.
It was tea leaf when selected and plucked.
and it continued to be tea leaf when after the process of withering, crushing and roasting it was sold in the market.
The process applied was intended to bring out its potential qualities of flavour and colour.
The potential inhered in the tea leaf from the outset when still a leaf on the tea bush.
The potential surfaced in the tea leaf when the mechanical processes of withering, crushing and roasting, fermenting by covering with wet sheets and roasting again were applied.
The tea leaf was made fit for human consumption by subjecting it to those processes.
At no stage.
did it change its essential substance.
It remained a tea leaf throughout.
In its basic nature, it continued to be agricultural produce.
The appeals fail and are dismissed with costs.
Costs are awarded as one set only.
P.B.R. Appeals dismissed.
|
The proviso to section 2(i) of the U.P. Sales Tax Act, 1948 excludes from the term "turnover" proceeds of sale of agricultural or horticultural produce grown by a person on any land in which he has interest.
The assessee, who was an agriculturist, owned tea gardens in the State.
After being plucked from tea shrubs tea leaves are withered in shade in rooms, crushed by hand or foot, roasted for 15 minutes, then covered by wet sheets for the purpose of generating fermentation, graded and finally roasted again with charcoal for obtaining flavour and colour.
The final product is sold in the market.
Before the Sales Tax Authorities the assessee contended that tea leaves sold by him were agricultural produce grown by him on his own land and that, therefore, the sale of tea effected by him was exempt from sales tax under the proviso to section 2(i) of the Act.
The Sales Tax Authorities rejected the assessee 's contention.
The High Court answered the reference in favour of the assessee and against the revenue.
Dismissing the appeal, ^ HELD: (per Untwalia J.): The High Court was right in holding that sales of tea leaves were not exigible to sales tax.
The commodity which was sold was not different from the commodity which was produced in agriculture and, therefore, the proviso to section 2(i) is attracted.
Almost every kind of agricultural produce has to undergo some kind of processing or treatment by the agriculturist himself either on the farm or elsewhere in order to make it non perishable, transportable and marketable.
Some minimal process is necessary to be applied to many varieties of agricultural produce.
The test in these cases is to see whether in relation to that agricultural produce the process applied was minimal or was so cumbersome and long drawn out that either in common parlance or in the market or even otherwise no one would treat the produce as an agricultural produce.
The mere fact that in the case of a particular product the process is a bit longer or even a bit complicated would not rob the produce of its character of being an agricultural produce.
[597 B C; F G] 2.
All the processes enumerated by the Revising Authority were necessary for the purpose of saving the tea leaves from perishing, making them fit for transporting and marketing.
The processes applied were all within the region of minimal processes and at no point of time they crossed that limit and robbed the leaves of their character of being and continuing to be agricultural produce.
[598 C E] 594 Vol.
21 Encyclopaedia Britannica (1968 edition), referred to.
The State of Madras vs Swasthik Tobacco Factory 17 S.T.C., 316, The State of Madras vs Bell Mark Tobacco Co. 19 S.T.C., 129 referred to.
The State of Madras vs R. Saravana Pillai 7 S.T.C., 541, Deputy Commissioner of Agricultural Income Tax and Sales Tax, Sough Zone vs Sherneilly Rubber & Cardamom Estates Ltd. & others.
12 S.T.C. 519, Commissioner of Income Tax vs Woodland Estates Ltd. Rayavarapu Mrityanjaya Rao vs The State of Andhra Pradesh 20 S.T.C., 417, Commissioner of Sales Tax, U.P., Lucknow vs Harbilas Rai and Sons, 21 S.T.C., 17 approved.
Killing Valley Tea Company Ltd. vs Secretary to State A.I.R. 1921 Calcutta, 40 distinguished.
(Pathak, J. concurring).
In Killing Valley Tea Co. Ltd. vs Secretary to State A.I.R. 1921 Calcutta, 40 the Calcutta High Court was of opinion that while process of selecting and plucking tea leaves from the tea shrubs could be deemed to be agriculture, the subsequent process which included drying and rolling of the leaf was a manufacturing process.
If the Calcutta High Court could be said to have laid down that as a result of those processes the tea leaf ceased to be agricultural produce, it is not correct.
The tea leaf remained what it always was.
It was tea leaf when selected and plucked and it continued to be tea leaf when after the process of withering, crushing and roasting, it was sold in the market.
The process applied was intended to bring out its potential qualities of flavour and colour.
The potential inhered in the tea leaf from the outset when still a leaf on the tea bush.
The potential surfaced in the tea leaf when the mechanical processes of withering, crushing and roasting, fermenting by covering with wet sheets and roasting again were applied.
At no stag, did it change its essential substance.
It remained tea leaf throughout.
In its basic nature it continued to be agricultural produce.
[603 B C]
|
Civil Appeals Nos. 2224, 2225 and 2226 of 1979.
Appeals by Special Leave from the Judgment and Order dated 22 5 1979 of the Delhi High Court in Civil Writ Nos. 111, 551 and 284 of 1979.
V.M. Tarkunde, A. K. Sen, G. L. Sanghi, B. P. Maheshwari and section K. Bhattacharya for the Appellants in C.A.s. 2224, 2225, 2226/79.
P. R. Mridul, Vimal Shanker, K. R. R. Pillai, P. N. Wadhera and Aruneshwar Gupta for Respondent No. 1 in CA 2224/79.
D. D. Chawla, Vineet Kumar and R. section Sihota for Respondent Nos.
1 3 in CA 2225/79.
B. D. Sharma and Aloka Bhattacharya for Respondent No. 1 in CA 2226/79.
950 The Judgment of the Court was delivered by UNTWALIA J.
These three appeals by the Bar Council of Delhi and the Bar Council of India are from the common judgment of the Delhi High Court allowing three writ petitions filed by the first respondent in each appeal and others seeking the setting aside of the election of the Bar Council of Delhi held in the year 1978.
As the points involved in them are identical they are all being disposed of by this common judgment.
We shall proceed to state the facts from the records of Civil Appeal No. 2224 of 1979 in which respondent No. 1 is Shri Surjeet Singh Bhangul.
He was a voter as also a candidate for the election wherein he lost.
In the writ petition giving rise to Civil Appeal 2225 of 1979 there were three petitioners two were candidates but Shri D. R. Thakur was an advocate whose name was not included in the electoral roll although his name occurs in the State roll of Advocates.
Shri A. section Randhawa, respondent No. 1 in Civil Appeal 2226 of 1979 was a person whose name occurred both in the State roll of Advocates as also in the electoral roll.
But he was not a candidate.
Surjeet Singh was an advocate who was a member of the Delhi Bar Council before the impugned election.
A proviso was added to Rule 3(j) of the Bar Council of Delhi Election Rules, 1968 in the year 1978.
In accordance with that proviso a copy of the declaration form was sent on 14th June, 1978 to the advocates whose names found place in the State roll of Advocates asking them to return the declaration form duly filled up and signed within the specified period.
A publication to this effect was also made in some newspapers viz. Hindustan Times, Indian Express, Statesman etc.
The last extended date for the submission of the declaration forms was 14th September 1978 and the electoral roll was finally published on the 16th September 1978 excluding the names of about 2,000 advocates who had failed to submit such declaration forms.
On the basis of the electoral roll so prepared, according to the programme of election, the election of members to the Bar Council of Delhi was held on the 17th November 1978.
The total number of advocates on the Advocates roll was 5,000 and odd out of which the names of about 3,000 and odd only were included in the electoral roll in accordance with the proviso to Rule 3(j) of the Election Rules of the Bar Council of Delhi.
The results of the election were declared on the 19th November, 1978.
The names of the 15 persons who were declared elected were published in the Gazette on the 22nd November, 1978.
Thereafter on the 24th of January 1979 the writ petition was filed in the High Court challenging the whole election by attacking the validity of the proviso to Rule 3(j).
951 Apart from the successful candidates the writ petitions were mainly and vigorously contested by the two Bar Councils, namely, the Bar Council of Delhi and the Bar Council of India.
The latter seems to have taken keen interest in the matter of contesting the writ petitions because the impugned proviso to Rule 3(j) was introduced in the Election Rules with the approval of the Bar Council of India in accordance with the requirement of sub section
(3) of Section 15 of the .
The High Court has taken the view: (1) "Lastly, the irresistible conclusion, therefore, is that so far as the qualifications to be possessed by and the conditions to be satisfied by an advocate before being brought on the Electoral Roll are concerned only the Bar Council of India has the competence to make the rules under Section 3 (4) and Section 49 (1) (a) and the State Bar Council has no power at all to make a rule on this subject." (2) The plea of estoppel raised against Surjeet Singh was rejected.
(3) "Rank injustice has been done to the petitioner because more than 2,000 advocates were wrongfully disqualified from being brought on the Electoral Roll.
This has materially affected the result of the election." (4) "For the reasons stated above, we hold that Rule 3(j) of the Bar Council of Delhi Election Rules, 1968, is in excess of the rules making power of the Bar Council of Delhi.
Since the action taken by the Bar Council of Delhi to disqualify more than 2,000 advocates because of their non compliance with the proviso to Rule 3(j) has resulted in great prejudice to the petitioner who can justly claim that the bringing on the Electoral Roll of more than 2000 advocates would have made a considerable difference to his own election and to the election as a whole, we are constrained to set aside the election to the Bar Council of Delhi held on 17th November 1978.
" M/s V. M. Tarkunde, A. K. Sen and G. L. Sanghi appearing for the appellants, broadly speaking, made the following submissions: (1) That the impugned proviso of Delhi Bar Council Election Rules was valid as it was within the competence of the Delhi Bar Council to add such a proviso in the Rules under its rule making power with the approval of the Bar Council of India.
In any event the ap 952 proval had the effect of making it a rule made by the Bar Council of India.
(2) The electoral roll prepared by the Bar Council of Delhi could not be challenged in a writ petition.
The preparation of the electoral roll is final and any wrong exclusion or inclusion of name from or in the electoral roll is beyond the pale of challenge in a writ petition.
(3) That it was not shown that the result of the election has been materially affected due to the non inclusion of the names of about 2,000 advocates from the electoral roll.
There was neither any pleading to this effect nor was any material placed before the High Court in support of this assertion.
(4) That Surjeet Singh and others like him who had taken part in the election and were defeated were estopped from challenging the election as they could not approbate and reprobate at the same time.
They were guilty of laches also as they could have challenged in the High Court the validity of the impugned proviso before the election was actually held.
(5) That there is a specific remedy provided in the Delhi Bar Council Election Rules for challenging any election to the Bar Council and hence in view of the adequate remedy being available the election could not be challenged by a writ petition.
M/s. P. R. Mridul and F. section Nariman appearing for the contesting respondents combated all the submissions made on behalf of the appellants and supported the judgment of the High Court.
We find no substance in any of the points urged on behalf of the appellants.
We are, by and large, in agreement with the decision of the High Court on each and every point.
We proceed to briefly state our reasons for the same.
Section 4 of the provides for persons who may be admitted as advocates on a State roll.
Clause (e) of sub section
(1) says that the person must fulfil such other conditions as may be specified in the rules made by the State Bar Council under Chapter III of the Act which concerns the admission and enrollment of advocates.
Under the Rules so framed a person desirous of being enrolled as an advocate has to apply in the prescribed form furnishing all the details of his qualifications to be enrolled as an advocate.
In item 3 of the application the applicant declares "I declare that upon admission I pro 953 pose to practise within the State of Delhi.
" At the end of the application form certain undertakings are given by the applicant.
Clause (c) of the undertaking runs thus: "I hereby declare and undertake that (iv) I intend to practise ordinarily and regularly within the jurisdiction of the Bar Council of Delhi.
(v) I shall inform the Bar Council of any change of address of my residence or place of practice for the proper maintenance of the roll and voters ' list." According to the case of the Delhi Bar Council many advocates after having been enrolled and put on the State roll of advocates of Delhi break the said undertaking.
They do not ordinarily and regularly practise within the jurisdiction of the Bar Council of Delhi nor do they inform any change of address for the proper maintenance of the roll and the voters ' list.
It is a pertinent matter no doubt.
It is the duty of the Bar Council to obtain information as to whether any person put on the roll of State advocates ceased ordinarily and regularly to practise within the jurisdiction of the Bar Council of Delhi, if so, to take steps for removal of his name from the State rolls.
That would automatically, as we shall presently show, debar the person concerned to be put on the electoral roll.
But no provision in the or any rule was brought to our notice enabling the Delhi Bar Council to remove the name of a person from the State roll if he has broken the undertaking aforesaid.
Section 26A of the merely says "A State Bar Council may remove from the State roll the name of any advocate who is dead or from whom a request has been received to that effect.
" In para 2 of the affidavit of Shri D. Gupta, Advocate it is stated: "It is the experience of this Council that most of the advocates who are elevated to the Bench or those who join subordinate judiciary or family or other business or employment, seldom care to notify this Council to get their licence revoked or suspended, nor do the advocates shifting their place of practice from Delhi to elsewhere, care to notify this Council in that respect, although the undertakings at internal page 8 of the Enrollment form of this Council obliges them to do so.
" It may be so but the lacunae in this regard have got to be removed by amending the or by properly framing the rules in that 954 respect.
We are definitely of the opinion that so long the existing rules framed by the Bar Council of India remained in vogue all persons whose names are on the State roll are entitled proprio vigore to be put on the electoral roll.
Rule 1 occurring in Chapter I of of the Bar Council of India Rules says: "1.
Every advocate whose name is on the Electoral Roll of the State Council shall be entitled to vote at an election.
" Rule 2 provides: "2.
Subject to the provisions of Rule 3, the name of every advocate entered in the State Roll shall be entered in the electoral roll of the State Council.
" Exceptions to Rule 2 are to be found embodied in Rule 3 which runs thus: "3.
The name of an advocate appearing in the State Roll shall not be entered in the Electoral Roll, if on information obtained by the State Council: (a) his name has any time been removed; (b) he has been suspended from practice, provided that this disqualification shall operate only for a period of five years from the date of the expiry of the period of suspension; (c) he is an undischarged insolvent; (d) he has been found guilty of an election offence in regard to an election to the State Council by an Election Tribunal, provided however that such disqualification shall not operate beyond the election next following after such finding has been made; (e) he is convicted by a competent court for an offence involving moral turpitude, provided that this disqualification shall cease to have effect after a period of two years has elapsed since his release; (f) he is in full time service or is in such part time business or other vocation not permitted in the case of practising advocates by the rules either of the State Council concerned or of the Council; (g) he has intimated voluntary suspension of practice and has not given intimation of resumption of practice.
" None of the clauses in Rule 3 covers a clause of the kind found in the proviso to Rule 3(j) of the Delhi Bar Council Election Rules.
955 Rule 3 of Delhi Bar Council Election Rules is headed 'Interpretation".
Clause (j) of the said Rules says: ""Electoral Roll" means and includes the roll containing the names of the advocates prepared in accordance with the rules of the Bar Council of India in Part III, Chapter I." The impugned proviso added to clause (j) in the year 1978 runs thus: "Provided that the Electoral Roll shall not include the name of such advocate who fails to file in the office of the Bar Council, on or before such date (not being earlier than 30 days of the date of notification) as may be notified by the Bar Council in such manner as may be considered proper by it from time to time, or within 45 days of the putting up of the preliminary Electoral Roll under Rule 4(1) of Chapter I of Part III of the Bar Council of India Rules, a declaration containing the name, address and number of the advocate on the State Roll and to the effect that: (a) He is an advocate ordinarily practising in the Union Territory of Delhi and that his principal place of practice is within Union Territory of Delhi; (b) He is not an undischarged insolvent; (c) He has never been convicted by any court for an offence involving moral turpitude; or A period of two years has elapsed since his release after being convicted of an offence involving moral turpitude; (In case of conviction particulars of such conviction should be given) (d) He is not in full time service or business or in any such part time business or other vocation as is not permitted in the case of practising advocates by the rules of the Bar Council; and (e) He has not been suspended from practice; and on the failure to file the declaration or on filing of incomplete or incorrect declaration in any respect, it shall be presumed that the name of such advocate is not to be entered on the Electoral Roll in accordance with Rule 3 of Chapter I of Part III of the Bar Council of India Rules.
" 956 In these appeals we are not concerned with the propriety or legality of asking such a declaration from a person belonging to the noble profession.
We shall proceed on the assumption that such an information could be asked for from a person concerned whose name is on the State roll of Advocates.
On the furnishing of such information the name of the advocate concerned could not be included in the electoral roll only if on the basis of that information one or more clauses of Rule 3 of the Bar Council of India Rules to be found in Part III, Chapter I could come into play, not otherwise.
In these appeals we are not concerned with any such case.
The controversy here centres round the fact that under the impugned proviso mere failure to file the required declaration disqualified the advocate concerned from being put on the electoral roll thus depriving him of his right to vote or to stand as a candidate.
The crux of the matter in these appeals is as to whether such a proviso was valid or ultra vires.
In order to determine the point at issue we shall now read some relevant provisions of the .
Section 3 provides for the constitution of the State Bar Council, sub section
(4) of which says: "(4) An advocate shall be disqualified from voting at an election under sub section (2) or for being chosen as, and for being, a member of a State Bar, Council, unless he possesses such qualifications or satisfies such conditions as may be prescribed in this behalf by the Bar Council of India, and subject to any such rules that may be made, an electoral roll shall be prepared and revised from time to time by each State Bar Council.
" On a plain reading of this sub section it is manifest that under the Act the qualifications and conditions entitling an advocate to vote at an election or for being chosen as a member of the State Bar Council has to be prescribed by the Bar Council of India.
The State Bar Council has no such power.
The power of the State Bar Council is merely to prepare and revise from time to time the electoral roll subject to the rules made by the Bar Council of India concerning the qualifications and conditions aforesaid.
This interpretation of Section 3(4) of the Act finds ample support from the very special and specific provision contained in section 49(1)(a) providing for the general power of the Bar Council of India in these terms: "49.
(1) The Bar Council of India may make rules for discharging its functions under this Act, and, in particular, such rules may prescribe 957 (a) the conditions subject to which an advocate may be entitled to vote at an election to the State Bar Council including the qualifications or disqualifications of voters, and the manner in which an electoral roll of voters may be prepared and revised by a State Bar Council;" Great reliance was placed on behalf of the appellants on the concurrent power of the State Bar Council and the Bar Council of India engrafted in section 15 of the .
It is true that the power to make rules conferred by section 15 is both for the Bar Council of India as also for the Bar Council of a State.
But no provision of section 15 can override the specific provision made in section 3(4) and section 49(1)(a) of the Act.
Sub section (1) of section 15 says "A Bar Council may make rules to carry out the purposes of this Chapter" which means Chapter II including section 3.
But the power to prescribe qualifications and conditions entitling an advocate to vote at an election being that of the Bar Council of India section 15(1) cannot be interpreted to confer power on the State Bar Council to make rules regarding the qualifications and conditions aforesaid.
The relevant words of sub section 2(a) of section 15 are the following: "In particular, and without prejudice to the generality of the foregoing power, such rules may provide for : (a) . . the preparation and revision of electoral rolls and the manner in which the results of election shall be published.
" The State Bar Council can frame rules for the preparation and revision of electoral rolls under section 15(2)(a).
That would be in conformity with the latter part of sub section (4) of section 3 also.
But in the garb of making a rule for the preparation and revision of the electoral rolls it cannot prescribe disqualifications, qualifications or conditions subject to which an advocate whose name occurs in the State roll can find place in the electoral roll resulting in his deprivation of his right to vote at the election.
In the instant case under the impugned proviso failure on the part of an advocate to submit the required declaration within the specified time entitles the State Bar Council to exclude his name from the electoral roll.
Such a thing was squarely covered by the exclusive power conferred on the Bar Council of India under sections 3(4) and 49(1)(a) of the .
The State Bar Council had no such power.
958 Sub section
(3) of section 15 says: "No rules made under this section by a State Bar Council shall have effect unless they have been approved by the Bar Council of India.
" Introduction of the impugned proviso in Rule 3(j) of the Delhi Bar Council Election Rules was approved by Resolution No. 18 of 1978 passed by the Bar Council of India.
Any rule made by the State Bar Council cannot have effect unless it is approved by the Bar Council of India.
But the approval of the Bar Council of India can make the rule made by the State Bar Council valid and effective only if the rule made is within the competence of the State Bar Council, otherwise not.
Mere approval by the Bar Council of India to a rule ultra vires the State Bar Council cannot make the rule valid.
Nor has it the effect of a rule made by the Bar Council of India.
Making a rule by the Bar Council of India and giving approval to a rule made by the State Bar Council are two distinct and different things.
One cannot take the place of the other.
We, therefore, hold that the impugned proviso to Rule 3(j) of the Delhi Bar Council Election Rules is ultra vires and invalid and the electoral roll prepared by the Delhi Bar Council on the basis of the same resulting in the exclusion of the names of about 2,000 advocates from the said roll was not valid in law.
We are further of the opinion that the whole election was invalid on that account and it could be challenged as such in a writ petition.
It was not a case of challenging the preparation of the electoral roll on the factual basis of wrong exclusion of a few names.
For the said purpose Rule 4 occurring in Chapter I of the Bar Council of India Rules could come into play.
But here, because of the invalidity of the Rules itself, the preparation of the electoral roll was completely vitiated a matter which cannot be put within the narrow limit of the said rule.
The illegal preparation of the electoral roll by the Delhi Bar Council on the basis of the invalid proviso to Rule 3(j) goes to the very root of the matter and no election held on the basis of such an infirmity can be upheld.
There is no question of the result being materially affected in such a case.
The contesting respondents could not be defeated in their writ petitions on the ground of estoppel or the principle that one cannot approbate and reprobate or that they were guilty of laches.
In the first instance some of the contesting respondents were merely voters.
Even Shri Surjeet Singh in his writ petition claimed to be both a candidate and a voter.
As a voter he could challenge the election even 959 assuming that as a candidate after being unsuccessful he was estopped from doing so.
But to be precise, we are of the opinion that merely because he took part in the election by standing as a candidate or by exercise of his right of franchise he cannot be estopped from challenging the whole election when the election was glaringly illegal and void on the basis of the obnoxious proviso.
There is no question of approbation and reprobation at the same time in such a case.
A voter could come to the High Court even earlier before the election was held.
But merely because he came to challenge the election after it was held it cannot be said that he was guilty of any laches and must be non suited only on that account.
There is no substance in the last submission made on behalf of the appellants.
The manner of resolving disputes as to the validity of election is provided for in Rule 34 of the Delhi Bar Council Election Rules.
This is not an appropriate and adequate alternative remedy to defeat the writ petitioner on that account.
Firstly, no clause of Rule 34 covers the challenging of the election on the ground it has been done in this case.
Secondly, the Election Tribunal will not be competent to declare any provision of the Election Rules ultra vires and invalid.
Our attention was specifically drawn to clause (8) of Rule 34 which says: "No petition shall lie on the ground that any nomination paper was wrongly rejected or the name of any voter was wrongly included in or omitted from the electoral roll or any error or irregularity which is not of a substantial character.
" As we have said above, it is not a case where the name of any voter was wrongly omitted from the electoral roll but it is a case where the preparation of the whole electoral roll was null and void because of the invalidity of the impugned proviso.
We now proceed to refer to some relevant decisions of the High Courts and of this Court cited at the Bar in support of some of the points discussed above.
Mudholkar J., delivering the leading and the majority judgment of a Full Bench of the Nagpur High Court in Kanglu Baula Kotwal & another vs Chief Executive Officer, Janpad Sabha, Durg and others, rejected the plea of estoppel to challenge the election at page 58, para 25 in these terms: "As regards the petitioners who were also candidates at the elections but were defeated, the learned counsel said that 960 those who took their chances at the elections and failed should not now be allowed to challenge elections of their opponents on the ground that the electoral rolls were defective.
The plea is in substance one of estoppel.
There can be no question of any estoppel, because it cannot be said that the position of the other side has in any way altered by reason of something done or not done by the petitioners.
" We are of the view that neither the principle of estoppel nor the principle of approbation and reprobation can be pressed into services in this case.
In Chief Commissioner, Ajmer vs Radhey Shyam Dani the respondent before the Supreme Court had filed a writ petition in the Court of Chief Commissioner of Ajmer challenging the validity of the notification directing the holding of the election of the Ajmer Municipality and the electoral roll.
This challenge was made before the election was held.
Since the electoral roll prepared was found to be invalid as it was prepared in accordance with some invalid rules, a Constitution Bench of this Court upheld the decision of the Chief Commissioner.
At page 75, Bhagwati J., speaking for the Court said: "It is of the essence of these elections that proper electoral rolls should be maintained and in order that a proper electoral roll should be maintained it is necessary that after the preparation of the electoral roll opportunity should be given to the parties concerned to scrutinize whether the persons enrolled as electors possessed the requisite qualifications.
Opportunity should also be given for the revision of the electoral roll and for the adjudication of claims to be enrolled therein and entertaining objections to such Enrollment.
Unless this is done, the entire obligation cast upon the authorities holding the elections is not discharged and the elections held on such imperfect electoral rolls would acquire no validity and would be liable to be challenged at the instance of the parties concerned.
It was in our opinion, therefore, necessary for the Chief Commissioner to frame rules in this behalf, and in so far as the rules which were thus framed omitted these provisions they were defective." Finally at pages 76 and 77 it was said: "If Rules 7 and 9 above referred to were intended to form a complete code for the finalisation of the electoral roll 961 of the Municipality they did not serve the intended purpose and were either inconsistent with the provisions of section 30, sub section
(2), of the Regulation or were defective in so far as they failed to provide the proper procedure for taking of the steps hereinabove indicated for finalising the electoral roll of the Municipality.
If that was the true position the electoral roll of the Municipality which has been authenticated and published by the Chief Commissioner on August 8, 1955 was certainly not an electoral roll prepared in accordance with law on the basis of which the elections and poll to the Ajmer Municipal Committee could be held either on September 9, 1955, or at any time thereafter." In the instant case the electoral roll was prepared on the basis of a rule which has been found to be void and ultra vires.
That being so, even though the contesting respondents came to challenge the election after it was held, they could do so because of the gravity of the infraction of the law in the preparation of the electoral roll.
Dani 's case (supra) was followed by the Patna High Court in two decisions.
In Parmeshwar Mahaseth and others vs State of Bihar and others and Umakant Singh and others vs Binda Choudhary and others.
After quoting a passage at page 153 from Dani 's case Kanhaiya Singh J., said in Parmeshwar Mahaseth 's case at the same page in paragraph 14 thus: "It was urged by the learned Government Advocate that the election cannot be disputed except by an election petition, as laid down in R. 62 of the Election Rules.
He submitted that petitioner 9, had already filed an election petition after the presentation of this writ application.
This contention is not valid.
What is challenged here is not the election of a particular candidate, but the validity of the entire election, because of the violation of the essential provisions of the Election Rules and the Act.
I think, R. 62 provides for a case where a person challenges the election of a particular candidate.
I would overrule the objection.
" In Umakant 's case the Court quoted the passage from Dani 's case from page 461 and finally expressed the view in paragraph 12 at page 462 in these terms: "Mr. Shankar Kumar appearing for respondents 6 and 7 submitted that the election ought to have been challenged 962 by following the machinery provided in rule 148 of the rules, and this Court, in exercise of its power under Article 226 of the Constitution, should not interfere with the election when a special machinery was provided for challenging it.
I am unable to accept this argument.
It is the well settled view of the Court that if the entire election is challenged as having been held under statutes or statutory rules which are invalid or by committing illegalities which make the entire election void, it can be quashed by grant of a writ in the nature of certiorari." A Full Bench of the Punjab High Court in Dev Prakash Balmukand vs Babu Ram Rewti Mal and others had occasion to consider this question and in that connection at page 434 Dulat J., said in paragraph 15: "Everybody, of course, agrees that, if the very foundation of the election, namely, the electoral roll is illegal, no election on its basis can proceed or be allowed to stand, but that does not mean that any kind of defect in the roll, however technical in its nature, will suffice to reach such a conclusion.
" It would thus be seen that it depends upon the nature and the intensity of the error committed in the preparation of the electoral roll and its effect on the whole election for deciding the question as to whether a writ petition would be maintainable or not.
In Ramgulam Shri Baijnath Prasad vs The Collector, District Guna and others Oza J., delivering the judgment of the Division Bench stated in para 17 at page 152 thus: "It was also contended that the petition was not filed immediately, but has been filed after the elections were over.
As regards the question of estoppel we had already considered it and found that the petition under article 226 cannot be disposed on the question of estoppel.
As regards delay, it is sufficient to state that it could not be said that the petition was unduly delayed.
Apart from it, it is also clear that an election held on the basis of rolls which have not been prepared in accordance with law, the petition cannot be dismissed merely on the ground of delay.
" 963 The Madhya Pradesh High Court has taken a similar view in the case of Bhupendra Kumar Jain vs Y. section Dharmadhikari and others wherein it was held that the entire election could be challenged on the basis of certain types of illegalities committed in holding it.
Shri Bhoop Singh, an Advocate and a member of the Bar Association at Chandigarh was a candidate to the Bar Council of Punjab & Haryana.
After being unsuccessful he challenged the election by filing a writ petition in the High Court.
The full Bench of the Punjab & Haryana High Court in Bhoop Singh vs Bar Council of Punjab and Haryana through its Secretary and others dismissed the writ petition on the particular facts of that case.
Yet the view expressed at page 43 in para 9 was: "I am extremely doubtful whether the nature of the relief which the petitioner claims here, namely the setting aside of the whole of the election and the ordering of a repoll could be claimed by way of an election petition under rule 34(1).
No provision in the said rule was brought to our notice which in express terms empowers or warrants the setting aside of the whole of the election (in contradistinction to the election of individual candidates) or to direct a repoll.
In any case it is well settled that the existence of an alternative remedy is not an absolute legal bar to the issuance of a writ".
Reliance was placed for the appellants upon the decision of this Court in K. K. Shrivastava etc.
vs Bhupendra Kumar Jain and others that because of rule 34(8) of the Delhi Bar Council Election Rules the writ petitions ought to have been held to be not maintainable.
It would be noticed from the facts of that case that an election petition had already been filed.
About four months later a writ petition was also filed to challenge the election.
At page 1704, column 1 Krishna Iyer J., speaking for the Court said: "One of them which is relevant for the present case is that where there is an appropriate or equally efficacious remedy the Court should keep its hands off.
This is more particularly so where the dispute relates to an election.
Still more so where there is a statutorily prescribed remedy which almost reads in mandatory terms".
964 But he added: "While we need not in this case go to the extent of stating that if there are exceptional or extraordinary circumstances the Court should still refuse to entertain a writ petition." Finally the view expressed in K. K. Shrivastava 's case is: "There is no foundation whatever for thinking that where the challenge is to an "entire election" then the writ jurisdiction springs into action.
On the other hand the circumstances of this case convince us that exercise of the power under article 226 may be described as mis exercise.
" We may add that the view expressed by some of the High Courts in the cases referred to above that merely because the whole election has been challenged by a writ petition, the petition would be maintainable in spite of there being an alternative remedy being available, so widely put, may not be quite correct and especially after the recent amendment of article 226 of the Constitution.
If the alternative remedy fully covers the challenge to the election then that remedy and that remedy alone must be resorted to even though it involves the challenge of the election of all the successful candidates.
But if the nature and the ground of the challenge of the whole election are such that the alternative remedy is no remedy in the eye of law to cover the challenge or, in any event, is not adequate and efficacious remedy then the remedy of writ petition to challenge the whole election is still available.
In the present case we have pointed out above that the Election Tribunal would have found itself incompetent to declare the proviso to Rule 3(j) of the Delhi Bar Council Election Rules ultra vires and that being so the alternative remedy provided in Rule 34(8) was no remedy at all.
Appellants heavily relied upon an unreported decision of the Calcutta High Court in Suryya Kumar Ray vs The Bar Council of India & Ors.
The challenge to the election to the Bar Council of West Bengal was almost on grounds which are similar to those in the present case.
The Calcutta High Court upheld the validity of the Rule and the election held on the basis of electoral roll prepared in accordance with that Rule and dissented from the view of the Gujarat High Court in Harish Sambhu Prasad vs Bar Council of Gujarat.
965 The learned Judge said with reference to the decision of the Gujarat High Court thus: "It appears to me that this decision will not be of much assistance to the petitioner in the instant case in as much as the electoral rules which are before me have duly been approved by the Bar Council of India itself.
Such approval confers upon these rules the authority and sanction of the Bar Council of India and may be deemed to be the rules framed by the Bar Council of India.
" The enunciation of the law as made above, in our opinion, is not correct.
We have held to the contrary.
For the reasons stated above, we dismiss all the appeals but make no order as to costs in any of them.
S.R. Appeals dismissed.
|
In the year 1978, a proviso was added to Rule 3(j) of the Bar Council of Delhi Election Rules, 1968 with the approval of the Bar Council of India in accordance with the requirement of Sub section (3) of section 15 of the .
In accordance with that proviso a copy of the declaration form was sent on 14th June, 1978 to the Advocates whose names found place in the State roll of Advocates asking them to return the declaration form duly filled up and signed within the specified period.
A publication to this effect was also made in some newspapers viz. Hindustan Times, Indian Express, Statesman etc.
The last extended date for the submission of the declaration forms was 14th September, 1978 and the electoral roll was finally published on the 16th September, 1978 excluding the names of about 2,000 Advocates who had failed to submit such declaration forms.
On the basis of the electoral roll so prepared, elections to the Bar Council of Delhi was held on the 17th November, 1978.
The total number of advocates on the Advocates roll was 5,000 and odd out of which the names of about 3,000 and odd only were included in the electoral roll in accordance with the proviso to Rule 3(j) of the Election Rules of the Bar Council of Delhi.
The results of the election were declared on the 19th November, 1978.
The names of the 15 persons who were declared elected were published in the Gazette on the 22nd November, 1978.
Thereafter the respondents in these appeals filed writ petitions challenging the whole election by attacking the validity of the proviso to Rule 3(j).
The Delhi High Court allowed the three writ petitions taking the view, (i) so far as the qualifications to be possessed by and the conditions to be satisfied by an advocate before being brought on to the Electoral Roll was concerned only the Bar Council of India has the competence to make the rules under section 3(4) and section 49(1)(a) of the and the State Bar Council has no power at all to make a rule on this subject; (ii) the plea of estoppel against Surjeet Singh does not arise, (iii) rank injustice has been done to the petitioners because more than 2000 advocates were wrongfully disqualified being brought on the Electoral Roll.
This has materially affected the result of the elections; and (iv) Rule 3(j) of the Bar Council of Delhi Election Rules, 1968 is in excess of the rules making power of Bar Council of Delhi.
Dismissing the appeals by special leave the Court, ^ HELD: 1.
The impugned proviso to Rule 3(j) of the Delhi Bar Council of Election Rules is ultra vires and invalid and the electoral roll prepared by 947 the Delhi Bar Council on the basis of the same resulting in the exclusion of the names of about 2000 advocates from the said roll was not valid in law.
[958D E] (b) The whole election was invalid on that account and it could be challenged as such in a writ petition.
It was not a case of challenging the preparation of the electoral roll on the factual basis of wrong exclusion of a few names.
For the said purpose Rule 4 occurring in Chapter I of the Bar Council of India Rules could come into play.
But here, because of the invalidity of the Rules itself, the preparation of the electoral roll was completely vitiated a matter which cannot be put within the narrow limit of the said rule.
[958E F] However, it depends upon the nature and the intensity of the error committed in the preparation of the electoral roll and its effect on the whole election for deciding the question as to whether a writ petition would be maintainable or not.
[862E F] Chief Commissioner, Ajmer vs Radhey Shyam Dani, ; ; Parmeshwar Mahaseth and Ors.
vs State of Bihar and Ors.
, ; Umakant Singh and Ors.
vs Binda Choudhary and Ors., AIR 1965 Patna 459; Dev Prakash Balmukand vs Babu Ram Rewti Mal and Ors.
AIR 1961 Punjab 429; Ramgulam Shri Baijnath Parsad vs The Collector, District Guna and Ors., and Bhoop Singh vs Bar Council of Punjab and Haryana through its Secretary and Ors., AIR 1976 M.P. 110; referred to.
(c) The illegal preparation of the electoral roll by the Delhi Bar Council on the basis of the invalid proviso to Rule 3(j) goes to the very root of the matter and no election held on the basis of such an infirmity can be upheld.
There is no question of the result being materially affected in such a case.
[958F G] (d) The contesting respondents could not be defeated in their writ petitions on the ground of estoppel or the principle that one cannot approbate and reprobate or that they were guilty of laches.
In the first instance some of the contesting respondents were merely voters.
Even Sri Surjeet Singh in his writ petition claimed to be both a candidate and a voter.
As a voter he could challenge the election even assuming that as a candidate after being unsuccessful he was estopped from doing so.
But, merely because he took part in the election by standing as a candidate or by exercise of his right of franchise he cannot be estopped from challenging the whole election when the election was glaringly illegal and void on the basis of the obnoxious proviso.
There is no question of approbation and reprobation in such a case.
A voter could come to the High Court even earlier before the election was held.
But merely because he came to challenge the election after it was held it cannot be said that he was guilty of laches and must be non suited on that account.
[958F H, 959A B] Kanglu Beula Kotwal and Anr.
vs Chief Executive Officer, Janpad Sabha, Durga and Ors., ; distinguished.
(e) The manner of resolving disputes as to the validity of election is provided for in Rule 34 of the Delhi Bar Council Election Rules.
This is not an 948 appropriate and adequate alternative remedy to defeat the writ petitioner on that account.
Firstly, no clause of Rule 34 covers the challenging of the election on the ground that it has been done in this case.
Secondly, the Election Tribunal will not be competent to declare any provision of the Election Rules ultra vires and invalid.
It is not a case where the name of any voter was wrongly omitted from the electoral roll but it is a case where the preparation of the whole electoral roll was null and void because of the invalidity of the impugned proviso.
[959C D, E F] Ramgulam Shri Baijnath Pd.
vs The Collector, Dist.
Guna and Ors., and Bhupendra Kumar Jain vs Y. section Dharmadhikari and Ors., AIR 1976, M.P. 110; referred to.
Bhoop Singh vs Bar Council of Punjab and Haryana through its Secretary and Ors., AIR 1977 Pb. & Haryana; quoted with approval.
K. K. Srivastava etc.
vs Bhupendra Kumar Jain and Ors., AIR 1977 S.C. 1703; distinguished.
If the alternative remedy fully covers the challenge to the election then that remedy and that remedy alone must be resorted to even though it involves the challenge of the election of all the successful candidates.
But if the nature and the ground of the challenge of the whole election are such that the alternative remedy is no remedy in the eye of law to cover the challenge or, in any event, is not adequate and efficacious remedy, then the remedy of writ petition to challenge the whole election is still available.
In the present case the Election Tribunal would have found itself incompetent to declare the proviso to Rule 3(j) of the Delhi Bar Council Election Rules ultra vires and that being so the alternative remedy provided in Rule 34(8) was no remedy at all.
[964D F] Suryya Kumar Ray vs The Bar Council of India and Ors.
Matter No. 304 of 1976 decided on December 17, 1976, overruled.
Harish Sambhu Prasad vs Bar Council of Gujarat, Special Civil Application Nos. 542 and 551 of 1969; approved.
So long the existing rules framed by the Bar Council of India remained in vogue all persons whose names are on the State Roll are entitled proprio vigore to be put on the electoral roll.
Sections 24(e) (1) and 26A of the read with Rules 1, 2 and 3 of Chapter I of of the Bar Council of India Rules make this position clear.
[954A B, D H] 4.
On a plain reading of sub sections 4 of section 3 of the , it is manifest that under the Act the qualifications and conditions entitling an advocate to vote at an election or for being chosen as a member of the State Bar Council has to be prescribed by the Bar Council of India.
The State Bar Council has no such power.
The power of the State Bar Council is merely to prepare and revise from time to time the electoral roll subject to the Rules made by the Bar Council of India concerning the qualifications and conditions aforesaid.
This interpretation of Section 3(4) of the Act finds ample support from the very special and specific provision contained in section 49(1) (a) providing for the general power of the Bar Council of India.
[956F H] 949 5.
It is true that the power to make rules conferred by section 15 is both for the Bar Council of India as also for the Bar Council of a State.
But no provision of section 15 can override the specific provision made in section 3(4) and section 49(1)(a) of the Act.
Sub section (1) of section 15 says "A Bar Council may make rules to carry out the purposes of this Chapter" which means Chapter II including section 3.
But the power to prescribe qualifications and conditions entitling an advocate to vote at an election being that of the Bar Council of India section 15(1) cannot be interpreted to confer power on the State Bar Council to make rules regarding the qualifications and conditions aforesaid.
[957B D] The State Bar Council can frame rules for the preparation and revision of electoral rolls under section 15(2)(a).
That would be in conformity with the latter part of sub section (4) of section 3 also.
But in the garb of making a rule for the preparation and revision of the electoral rolls it cannot prescribe disqualifications, qualifications or conditions subject to which an advocate whose name occurs in the State roll can find place in the electoral roll resulting in his deprivation of his right to vote at the election.
In the instant case under the impugned proviso failure on the part of an advocate to submit the required declaration within the specified time entitles the State Bar Council to exclude his name from the electoral roll.
Such a thing was squarely covered by the exclusive power conferred on the Bar Council of India under sections 3(4) and 49(1)(a) of the .
The State Bar Council had no such power.
[957F H] 6.
The approval of the Bar Council of India can make the rule made by the State Bar Council valid and effective only if the rule made is within the competence of the State Bar Council otherwise not.
Mere approval by the Bar Council of India to a rule ultra vires the State Bar Council cannot make the rule valid.
Nor has it the effect of a rule made by the Bar Council of India.
Making a rule by the Bar Council of India and giving approval to a rule made by the State Bar Council are two distinct and different things.
One cannot take the place of the other.
[958B D]
|
Civil Appeal No. 2752 of 1972.
Appeal by Certificate from the Judgment and Order dated the 5th November, 1970 of the Punjab and Haryana High Court in Income Tax Reference No. 38 of 1969.
G. A. Shah & Miss A. Subhashini for the appellant.
Naunit Lal & Mr. Kailash Yasudev for respondent.
The Judgment of the Court was delivered by PATHAK, J.
Is a smuggler, who is taxed on his income from smuggling under the Income Tax Act, 1922, entitled to a deduction under Section 10(1) of the Act on account of the confiscation of currency notes employed in the smuggling activity? The respondent, Piara Singh, was apprehended in September, 1958 by the Indian Police while crossing the Indo Pakistan border into Pakistan.
A sum of Rs. 65,500/ in currency notes was recovered from his person.
On interrogation he stated that he was taking the currency notes to Pakistan to enable him to purchase gold in that country with a view to smuggling it into India.
The Collector of Central Excise and Land Customs ordered the confiscation of the currency notes.
The Income Tax Officer now took proceedings under the Indian Income Tax Act, 1922 for assessing the assessee 's income and determining his tax liability.
He came to the finding that out of Rs. 65,500/ an amount of Rs. 60,500/ constituted the income of the assessee from undisclosed sources.
An appeal by the assessee was dismissed by the Appellate Assistant Commissioner.
In second appeal before the Income Tax Appellate Tribunal the assessee represented that if he was regarded as engaged in the business of smuggling gold he was entitled to a deduction under Section 10(1) of the Income Tax Act of the entire sum of Rs. 65,500/ as a loss incurred in the business on the confiscation of the currency notes.
The Appellate Tribunal upheld the 1124 claim to deduction.
It proceeded on the basis that the assessee was carrying on a regular smuggling activity which consisted of taking currency notes out of India and exchanging them for gold in Pakistan which was later smuggled into India.
At the instance of the Revenue, a reference was made to the High Court of Punjab and Haryana on the following question: "Whether on the facts and in the circumstances of the case the loss of Rs. 65,500/ arising from the confiscation of the currency notes was an allowable deduction under section 10(1) of the Income tax Act, 1922?" The High Court answered the question in the affirmative.
And now this appeal by the Revenue.
In our Judgment, the High Court is right.
The Income Tax authorities found that the assessee was carrying on the business of smuggling They held that he was, therefore, liable to income tax on income from that business.
On the basis that such income was taxable, the question is whether the confiscation of the currency notes entitles the assessee to the deduction claimed.
The currency notes carried by the assessee across the border constituted the means for acquiring gold in Pakistan, which gold he subsequently sold in India at a profit.
The currency notes were necessary for acquiring the gold.
The carriage of currency notes across the border was an essential part of the smuggling operation.
If the activity of smuggling can be regarded as a business, those who are carrying on that business must be deemed to be aware that a necessary incident involved in the business is detection by the Custom authorities and the consequent confiscation of the currency notes.
It is an incident as predictable in the course of carrying on the activity as any other feature of it.
Having regard to the nature of the activity possible detection by the Customs authorities constitutes a normal feature integrated into all that is implied and involved in it.
The confiscation of the currency notes is a loss occasioned in pursuing the business, it is a loss in much the same way as if the currency notes had been stolen or dropped on the way while carrying on the business.
It is a loss which springs directly from the carrying on of the business and is incidental to it.
Applying the principle laid down by this Court in Badridas Daga vs Commissioner of Income tax the deduction must be allowed.
In Commissioner of Income tax, Gujarat vs S.C. Kothari this Court held that for the purpose of Section 10(1) of the Income Tax Act, 1922 a loss incurred in carrying on an illegal business must be 1125 deducted before the true figure of profits brought to tax can be computed.
Grover, J., speaking for the Court, observed: If the business is illegal, neither the profits earned nor the losses incurred would be enforceable in law.
But, that does not take the profits out of the taxing statute.
Similarly, the taint of illegality of the business cannot detract from the losses being taken into account for computation of the amount which can be subjected to tax as "profits" under Section 10(1) of the Act of 1922.
The tax collector cannot be heard to say that he will bring the gross receipts to tax.
He can only tax profits of a trade or business.
That cannot be done without deducting the losses and the legitimate expenses of the business.
" Reliance was placed by the Revenue on Haji Aziz and Abdul Shakoor Bros. vs Commissioner of Income tax, Bombay City II.
In that case, however, the assessee carried on the lawful business of importing dates from abroad and selling them in India.
The import of dates by steamer was prohibited.
Nonetheless he imported dates from Iraq by steamer, and the consignments were confiscated by the customs authorities.
But the dates were released subsequently on payment of fine.
The assessee 's claim to deduction under section 10(2) (xv) of the Income Tax Act was rejected on the ground that the amount was paid by way of penalty for a breach of the law.
An infraction of the law was not a normal incident of business carried on by the assessee, and the penalty was rightly held to fall on the assessee in some character other than that of a trader.
Reference was made by the Revenue to Soni Hinduji Kushalji & Co. vs Commissioner of Income tax, A.P.
The assessee 's claim to the deduction of the value of gold confiscated by the customs authorities was found unsustainable by the court.
The decision in that case can be explained on the ground that the assessee was carrying on a lawful business in gold, silver and jewellery and committed an infraction of the law in smuggling gold into the country.
Our attention has also been invited to J. section Parkar vs V. B. Palekar and Others where on a difference of opinion between two learned Judges of the Bombay High Court a third learned Judge agreed with the view that the value of gold confiscated by the customs authorities in smuggling operations was not entitled to deduction against the estimated and assessed income from an undisclosed source.
It was observed that the loss arose by reason of an infraction 1126 of the law and as it had not fallen on the assessee as a trader or business man a deduction could not be allowed.
Apparently, the true significance of the distinction between an infraction of the law committed in the carrying on of a lawful business and an infraction of the law committed in a business inherently unlawful and constituting a normal incident of it was not pointedly placed before the High Court in that case.
We hold that the assessee is entitled to the deduction of Rs. 65,500/ , and accordingly we affirm the view taken by the High Court on the question of law referred to it.
The appeal fails and is dismissed with costs.
S.R. Appeal dismissed.
|
The respondent Piara Singh was apprehended in September 1958 by the Indian Police while crossing the Indo Pakistan border into Pakistan.
A sum of Rs. 65,500/ in currency notes was recovered from his person.
On interrogation he stated that he was taking the currency notes to Pakistan to enable him to purchase gold in that country with a view to smuggling it into India.
The Collector of Central Excise and Land Customs ordered the confiscation of the currency notes.
In the proceedings initiated by the Income Tax Officer, he found that Rs. 60,500/ constituted the income of the assessee from undisclosed sources.
An appeal by the assessee was dismissed by the Appellate Assistant Commissioner.
In second appeal before the Income Tax Appellate Tribunal, the assessee represented that if he was regarded as engaged in the business of smuggling gold he was entitled to a deduction under section 10(1) of the Income Tax Act, 1922 of the entire sum of Rs. 65,500/ as a loss incurred in the business on the confiscation of the currency notes.
The Tribunal upheld the claim to deduction.
It proceeded on the basis that the assessee was carrying on a regular smuggling activity which consisted of taking currency notes out of India and exchanging them with gold in Pakistan which was later smuggled into India.
The High Court on a reference at the instance of the Revenue answered the reference against the Revenue.
Hence the appeal.
Allowing the appeal, the Court.
^ HELD: 1.
The assessee is entitled to the deduction of Rs. 65,500/ under section 10(1) of the Income Tax Act, 1922.
[1124 C, 1126 B] 2.
The assessee was carrying on the business of smuggling and, therefore, was liable to income tax on income from that business.
The currency notes carried by the assessee across the border was an essential part of the smuggling operation.
If the activity of smuggling can be regarded as a business, those who are carrying on that business must be deemed to be aware that a necessary incident involved in the business is detection by the Customs authorities and the consequent confiscation of the currency notes.
It is an incident as predictable in the course of carrying on the activity as any other feature of it.
Having regard to the nature of the activity possible detection by the Customs authorities constitutes a normal feature integrated into all that is implied and involved in it.
The confiscation of the currency notes is a loss occasioned in pursuing the business; it is a loss in much the same way as if the currency 1123 notes had been stolen or dropped on the way while carrying on the business.
It is a loss which springs directly from the carrying on of the business and is incidental to it.
Applying the principle laid down by this Court in Badridas Daga vs Commissioner of Income Tax the deduction must be allowed.
[1124 D E] Badridas Daga vs Commissioner of Income Tax, ; Commissioner of Income Tax, Gujarat vs section C. Kothari ; applied.
Haji Aziz and Abdul Shakoor Bros. vs Commissioner of Income Tax, Bombay City II, , Sari Hinduji Khushalji 7 Co. vs Commr.
of Income Tax, A.P. ; J. section Parkar vs V. B. Palekar and Ors.
; distinguished and explained.
|
Civil Appeal No. 2398 of 1978.
Appeal by Special Leave from the Judgment and Order dated 24 1 1978 of the Kerala High Court at Ernakulam in T.R.C. No. 2 of 1976.
M. M. Abdul Khader, V. J. Francis and M. A. Firoz for the Appellant.
section T. Desai, P. A. Francis and Mrs. section Gopalakrishnan for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
This appeal by special leave is directed against the judgment of the Kerala High Court holding that the turnover of pineapple fruit purchased for preparing pineapple slices for sale in sealed cans is not covered by s.5 A(1)(a) of the Kerala General Sales Tax Act, 1963.
The respondent, Messrs. Pio Food Packers ("the assessee"), carries on the business of manufacturing and selling canned fruit besides other products.
In its return for the year 1973 74 under the Kerala General Sales Tax Act, 1963 the assessee claimed that a turnover of Rs. 3,64,138 89 representing the purchase of pineapple fruit was not covered by section 5 A(1)(a) of the Act.
It was asserted that the pineapple was converted into pineapple slices, pineapple jam, pineapple squash and pineapple juice.
Section 5 A(1) (a) of the Act provides: "5 A. Levy of purchase tax (1) Every dealer who, in the course of his business, purchases from a registered dealer or from any other person any goods the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under section 5, and either (a) consumes such goods in the manufacture of other goods for sale or otherwise; or . . . . . . . shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax 1274 on the taxable turnover relating to such purchase for the year at the rates mentioned in section 5." The assessee maintained that by the conversion of pineapple fruit into its products no new commodity was created and it was erroneous to say that there was a consumption of pineapple fruit "in the manufacture of" those goods.
The Sales Tax Officer did not accept the contention and completed the assessment on the finding that a manufacturing process was involved and that, therefore, the case fell within section 5 A(1)(a).
In revision before the Sales Tax Appellate Tribunal, the assessee conceded that pineapple jam and pine apple squash would be covered by section 5 A(1)(a), and in regard to pineapple juice the Tribunal found that section 5 1(a) was attracted.
The only question which remained was whether the preparation of pineapple slices fell within section 5 A(1)(a).
On that question two members of the Tribunal found in favour of the assessee, and the third member found in favour of the Revenue, The Revenue then applied in revision to the High Court and the High Court has, by its judgment dated 24th January, 1978, maintained the order of the Tribunal.
It appears that the pineapple purchased by the assessee is washed and then the inedible portion, the end crown, skin and inner core are removed, thereafter the fruit is sliced and the slices are filled in cans, sugar is added as a preservative, the cans are sealed under temperature and then put in boiling water for sterilisation.
Is the pineapple fruit consumed in the manufacture of pineapple slices ? Section 5 A(1)(a) of the Kerala General Sales Tax Act envisages the consumption of a commodity in the manufacture of another commodity.
The goods purchased should be consumed, the consumption should be in the process of manufacture, and the result must be the manufacture of other goods.
There are several criteria for determining whether a commodity is consumed in the manufacture of another.
The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture.
Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass.
The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage.
With each process suffered, the original commodity experiences a change.
But it is only when the change, or a series of changes, take the commodity to the point where 1275 commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place.
Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another.
Although it has undergone a degree of processing, it must be regarded as still retaining its original identity.
A large number of cases has been placed before us by the parties, and in each of them the same principle has been applied: Does the processing of the original commodity bring into existence a commercially different and distinct article ? Some of the cases where it was held by this Court that a different commercial article had come into existence include Anwarkhan Mehboob Co. vs The State of Bombay and Others (where raw tobacco was manufactured into bidi patti), A Hajee Abdul Shukoor and Co. vs The State of Madras (raw hides and skins constituted a different commodity from dressed hides and skins with different physical properties), The State of Madras vs Swasthik Tobacco Factory (raw tobacco manufactured into chewing tobacco) and Ganesh Trading Co. Karnal vs State of Haryana and Another, (paddy dehusked into rice).
On the other side, cases where this Court has held that although the original commodity has undergone a degree of processing it has not lost its original identity include Tungabhadra Industries Ltd., Kurnool vs Commercial Tax Officer, Kurnool (where hydrogenated groundnut oil was regarded as groundnut oil) and Commissioner of Sales Tax, U.P., Lucknow vs Harbilas Rai and sons (where bristles plucked from pigs, boiled, washed with soap and other chemicals and sorted out in bundles according to their size and colour were regarded as remaining the same commercial commodity, pigs bristles).
In the present case, there is no essential difference between pineapple fruit and the canned pineapple slices.
The dealer and the consumer regard both as pineapple.
The only difference is that the sliced pineapple is a presentation of fruit in a more convenient form and by reason of being canned it is capable of storage without 1276 spoiling.
The additional sweetness in the canned pineapple arises from the sugar added as a preservative.
On a total impression, it seems to us, the pineapple slices must be held to possess the same identity as the original pineapple fruit.
While on the point, we may refer to East Texas Motor Freight Lines vs Frozen Food Express, where the U.S. Supreme Court held that dressed and frozen chicken was not a commercially distinct article from the original chicken.
It was pointed out: "Killing, dressed and freezing a chicken is certainly a change in the commodity.
But it is no more drastic a change than the change which takes place in milk from pasturising, homogenizing, adding vitamin concentrates, standardising and bottling.
" It was also observed: ". . . there is hardly less difference between cotton in the field and cotton at the gin or in the bale or between cottonseed in the field and cottonseed at the gin, than between a chicken in the pen and one that is dressed.
The ginned and baled cotton and the cottonseed, as well as the dressed chicken, have gone through a processing stage But neither has been "manufactured" in the normal sense of the word.
" Referring to Antheuser Busch Brewing Association vs United States the Court said: "Manufacture implies a change but every change is not manufacture and yet every change in an article is the result of treatment, labour and manipulation.
But something more is necessary. . . .There must be transformation; a new and different article must emerge, having a distinctive name, character or use." And further: "At some point processing and manufacturing will merge.
But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been "manufactured".
The comment applies fully in the case before us.
Although a degree of processing is involved in preparing pineapple slices from 1277 the original fruit, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter canning it on adding sugar to preserve it.
It is contended for the Revenue that pineapple slices have a higher price in the market than the original fruit and that implies that the slices constitute a different commercial commodity.
The higher price, it seems to us, is occasioned only because of the labour put into making the fruit more readily consumable and because of the can employed to contain it.
It is not as if the higher price is claimed because it is a different commercial commodity.
It is said that pineapple slices appeal to a different sector of the trade and that when a customer asks for a can of pineapple slices he has in mind something very different from fresh pineapple fruit.
Here again, the distinction in the mind of the consumer arises not from any difference in the essential identity of the two, but is derived from the mere form in which the fruit is desired.
Learned counsel for the Revenue contends that even if no manufacturing process is involved, the case still falls within section 5 A(1) (a) of the Kerala General Sales Tax Act, because the statutory provision speaks not only of goods consumed in the manufacture of other goods for sale but also goods consumed otherwise.
There is a fallacy in the submission.
The clause, truly read, speaks of goods consumed in the manufacture of other goods for sale or goods consumed in the manufacture of other goods for purposes other than sale.
In the result, we hold that when pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans there is no consumption of the original pineapple fruit for the purpose of manufacture.
The case does not fall within section 5 A(1)(a) of the Kerala General Sales Tax Act.
The High Court is right in the view taken by it.
The appeal fails and is dismissed with costs.
S.R. Appeal dismissed.
|
The respondent assessee, Pio Food Packers carries on the business of manufacturing and selling canned fruit besides other products.
The Pineapple purchased by the assessee is washed and then the inedible portion, the end crown, skin and inner core are removed, thereafter the fruit is sliced and the slices are filled in cans, sugar is added as a preservative, the cans are sealed under temperature and then put in boiling water for sterilisation.
In its return for the year 1973 74 under the Kerala General Sales Tax Act, 1963 the assessee claimed that a turnover of Rs. 3,84,138 89 representing the purchase of pineapple fruit was not covered by Section 5 A(1)(b) of the Act.
It was asserted that the pineapple was converted into pineapple slices, pineapple jam, pineapple squash and pineapple juice.
The assessee maintained that by the conversion of pineapple fruit into its products no new commodity was created and it was erroneous to say that there was a consumption of pineapple fruit "in the manufacture of" these goods.
The Sales Tax Officer did not accept the contention and completed the assessment on the finding that a manufacturing process was involved and that, therefore, the case fell within section 5 A (1) (a).
In revision before the Sales Tax Appellate Tribunal, the assessee conceded that pineapple jam and pineapple squash would be covered by section 5 A(1)(a), and in regard to pineapple juice the Tribunal found that section 5 1(a) was attracted.
The only question which remained was whether the preparation of pineapple slices fall within section 5 A(1)(a).
On that question two members of the Tribunal found in favour of the assessee, and the third member found in favour of the Revenue.
The Revenue then applied in revision to the High Court and the High Court, has by its judgment dated 24th January, 1978, maintained the order of the Tribunal.
Dismissing the appeal, by special leave, the court ^ HELD : 1.
When pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans, there is no consumption of the original pineapple fruit for the purpose of manufacture within the meaning of Section 5A(1)(a) of the Kerala General Sales Tax Act, 1963 [1277 E F] 2.
Section 5 A(1)(a) of the Kerala General Sales Tax Act envisages the consumption of a commodity in the manufacture of another commodity.
The goods purchased should be consumed, the consumption should be in the process of manufacture, and the result must be the manufacture of other goods.
1272 There are several criteria for determining whether a commodity is consumed in the manufacture of another.
The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture.
Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass.
The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage.
With each process suffered, the original commodity experience a change.
But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place.
Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another.
Although it has undergone a degree of processing, it must be regarded as still retaining its original identity.
[1274 F H, 1275 A B] In the present case, there is no essential difference between pineapple fruit and the canned pineapple slices.
The dealer and the consumer regard both as pineapple.
The only difference is that the sliced pineapple is a presentation of fruit in a more convenient form and by reason of being canned it is capable of storage without spoiling.
The additional sweetness in the canned pineapple arises from the sugar added as a preservative.
The pineapple slices continue to possess the same identity as the original pineapple fruit.
[1275 G H, 1276 A] Tunghabhadra Industries Ltd., Kurnool vs Commercial Tax Officer, Kurnool, [1960] 10 S.T.C. 827 (SC); Commissioner of Sales Tax, U.P., Lucknow vs Harbilas Rai & Sons, [1968] 21 S.T.C. 17 (SC); followed.
East Texas Motor Freight Lines vs Frozen Food Express, ; ; Anheuser Busch Brewing Association vs United States, 52 L. ed.
336 338; quoted with approval.
Anwarkhan Mahboob Co. vs The State of Bombay and Ors., [1960] 11 STC 698, A Hajee Abdul Shukoor and Co. vs The State of Madras, [1964] 15 STC 719; The State of Madras vs Swasthik Tobacco Factory, [1966] 17 STC 316 and Ganesh Trading Co. Karnal vs State of Haryana and Anr., [1973] 32 STC 623; held inapplicable.
The fact that the pineapple slices have a higher price in the market than the original fruit does not imply that the slices constitute a different commercial commodity.
The higher price, is occasioned only because of the labour put into making the fruit more readily consumable and because of the can employed to contain it.
It is not as if the higher price is claimed because it a different commercial commodity.
[1277 A B] 4.
The fact that the pineapple slices appeal to a different sector of the trade and that when a customer asks for a can of pineapple slices he has in mind something very different from fresh pineapple fruit does not give to the canned pineapple slices a separate identity either.
The distinction in the mind of the consumer arises not from any difference in the essential identity of the two, but is derived from the mere form in which the fruit is desired.
[1277 B C] 1273 5.
Clause (1) (a) of Section 5 A of the Kerala General Sales Tax Act, speaks of goods consumed in the manufacture of other goods for sale or goods consumed in the manufacture of other goods for purposes other than sale.[1277 C D]
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Civil Appeal No. 531 of 1979.
Appeal by Certificate from the Judgment and Order dated the 23 10 1969 of the Bombay High Court in S.C.A. No. 1596 of 1965.
D. V. Patel, N. N. Keshwani and R. N. Keshwani for the Appellant.
J. Sorabjee, R. Daruwala, P. G. Gokhale and J. R. Gagarat for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by the defendant tenant by certificate granted by the High Court of Judicature at Bombay against its judgment dated 21 1 69 is Special Civil Application No. 1596 of 1965 granting a decree directing that the defendant shall vacate and deliver peaceful possession not only of the land demised to him under the lease in the suit but also of the three buildings which have been constructed on the demised land.
By a lease deed dated 14th December, 1948 the plaintiff gave to the defendant on lease two plots Nos. 12 and 13 situated at Sitaladevi 1018 Temple Road, Mahim for a period of 15 years commencing from 1st December, 1948 at the yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance.
The lease deed provided that the defendant was at liberty to erect building and structures on the two plots of land.
The defendant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also on the buildings to be created by the defendant.
On the expiration of the term of 15 years or sooner termination of the lease the defendant agreed to deliver back the possession of the two plots to the plaintiff ' free of all buildings, erections and structures and levelled and put in good order and condition to the satisfaction of the plaintiff '.
Clause IV of the lease provided for determination and forfeiture of the lease in the event of the rents having been allowed to be in arrears for more than 30 days or upon breach of conditions of the lease.
The forfeiture clause also provided that upon forfeiture the plaintiff would be entitled to re enter upon not only the two plots of land but also the structures standing thereon.
The defendant defaulted not only in payment of rent but also in payment of taxes due in respect of lands and buildings which he erected.
The plaintiff filed a suit in 1951 for ejectment.
The defendant filed an application for the fixation of standard rent and the standard rent was fixed at Rs. 435/ per month from September 1, 1950.
A compromise was entered into between the parties in the suit on 5th March, 1954 by which the parties agreed on a rent of Rs. 435/ per month from September, 1950 to February, 1954.
An appeal against the fixation of standard rent of Rs. 435/ per mensem was disposed of on 28th June, 1955 whereby standard rent was fixed at Rs. 620/ per month from 1st September, 1950.
The defendant again defaulted in payment of rent and taxes.
The arrears of rent amounted to Rs. 11,472.30 and taxes to the extent of Rs. 1,12,053.60 for the period ending 30th September, 1960.
The plaintiff by a notice determined and forfeited the lease and called upon the defendant to deliver possession of the lands alongwith structures thereupon.
The notice also specified that the notice was not only a notice of forfeiture but also notice under section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the Bombay Rent Act).
On 1st December, 1961 as the defendant failed to pay the arrears of rent and the taxes, the plaintiff filed the present suit and prayed for a decree for ejectment against the defendant in respect of two plots of land and also the buildings and structures standing thereon, and claimed arrears of rent of Rs. 11,472.30 and mesne profits at the rate of Rs. 620/ 1019 per month.
The defendant filed written statement and denied the allegations made in the plaint.
The defendant in order to get the benefit of the provisions of Section 12(3) (b) of the Bombay Rents Act applied for time for making deposit of arrears of rent.
The application was taken on the 20th June, 1962 and further time was granted to enable the defendant to make the deposits.
Time was extended on several occasions and finally on 6th August, 1962, the defendant informed the court that he was not in a position to make any deposit at all.
After the issues were framed and the suit was taken up for trial, the defendant once again applied for relief under section 12(3)(b) of the Act and prayed that he may be allowed to deposit the arrears of rent and cost.
The deposit was accepted by the Court after making an endorsement, "accept without prejudice".
Subsequently, on 11th November, 1964, the trial Court passed a decree for ejectment in respect of plots and the buildings in favour of the plaintiff.
A decree was granted regarding arrears of rent and for mesne profits.
Both the plaintiff and the defendant preferred appeals and the Bench of two Judges of the Court of Small Causes by a common judgment disposed of both the appeal on 4th April, 1965.
The appellate Court held that it had no jurisdiction to give a decree for ejectment in respect of the two buildings constructed on Plot No. 12 by the defendant.
It held that clause IV of the lease which permitted forfeiture was in the nature of penalty and the defendant was entitled to be relieved from the liability to deliver possession of the buildings constructed by him upon forfeiture by the plaintiff.
It also found that the defendant was entitled to be relieved from the penalty of forfeiture of the lease under Ss. 114 and 114A of the Transfer of Property Act.
It rejected the plea of the defendant that he was always ready and willing to pay all arrears of rents and found that because of repeated defaults the defendant was not entitled for relief from ejectment under section 12(3) (b) of the Bombay Rent Act.
The plaintiff filed a revision petition against the order of the appellate Court declining to direct possession of the two buildings and the defendant/tenant filed an appeal against the order of the appellate Court directing ejectment of the defendant from the two plots of lands mentioned in the plaint.
The High Court disposed of both the revisions by the plaintiff and the appeal by the defendant by a common judgment whereby it allowed the revisions filed by the plaintiff and dismissed the appeal of the defendant and decreed the suit of the plaintiff directing the defendant to deliver peaceful possession of the land demised to him and also buildings which have been constructed by the defendant on the demised 1020 lands.
It also confirmed the decree regarding arrears of rents and mesne profits.
On behalf of the defendant it was submitted that the Court 's jurisdiction is limited only to adjudicate on leased premises under the Bombay Rent Act and therefore it had no jurisdiction to try the suit regarding possession of the structures put upon the leased lands.
It was pleaded that a relief regarding the superstructures will not be one under the provisions of the Bombay Rent Act.
It was contended that as the suit is for a composite relief namely for the possession of the leased land and for the superstructures it is beyond the jurisdiction of the court and the suit as a whole should have been dismissed.
It was submitted that in any event as clause IV in the lease deed is in the nature of penalty providing for the forfeiture of the structure which did not form part of the lease, the decree for possession of the structures is not maintainable.
In any event it was submitted that there could be no forfeiture of the structures on the ground that the municipal taxes were not paid and that the term as to payment of arrears of taxes cannot be considered as a clause in the lease deed and the defendant should be relieved against the penal clause.
Lastly, it was submitted that the Courts below were wrong in not granting relief under section 12(3) (b) of the Bombay Rent Act.
Before considering the several contentions raised by the learned counsel for the appellant it will be useful to refer to the relevant clauses of the lease deed and the relief prayed for in the plaint.
The lease deed dated 14th December, 1948 executed by the plaintiff in favour of the defendant was a lease of two plots of land, plot Nos. 12 and 13 situated at Sitladevi Temple Road, Mahim for a period of 15 years at an yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance.
Subsequently standard rent was fixed by the trial Court at Rs. 435/ which was raised by the appellate court to Rs. 620/ per mensem.
The lease permitted the defendant to erect buildings and structures in the two plots of land.
The buildings were erected in only plot No. 12 and not in plot No. 13 which remains unbuilt and vacant.
The defendant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also to the buildings to be erected by the defendant.
The defendant also undertook to deliver possession of the two plots to the plaintiff "free of all buildings, erections and structures" on the expiration of the lease.
Clause IV empowered the lessor to terminate the lease and provided that the lessor will be at liberty to re enter not only upon the two plots of the lands but also on the structures standing thereon.
In the plaint it was stated that as the defendant had failed to pay rents and taxes and 1021 committed breach of conditions the plaintiff forfeited the lease and called upon the defendant to pay arrears of rent and taxes.
The suit was based not only on the forfeiture of the lease but also for possession of the leased plots under section 12 of the Bombay Rents Act.
In paragraph 9 of the plaint it is alleged "the plaintiff say that in the event of the defendant contending that he has become a statutory tenant of the said land, after the tenancy had been duly and validly terminated, the plaintiff would submit that the defendant had failed and neglected to pay the arrears of standard rent amounting to Rs. 11,472.30 upto 31st August, 1961 and does not observe and perform condition 11(b) of his lease, and so he is not entitled to the protection of the Bombay Rent Control Act.
" In paragraphs 10 and 11 of the Plaint, it is alleged that the provisions of the Bombay Rents Act 47 of 1947 apply to the said land and the Court has jurisdiction to entertain and try the suit.
The reliefs asked for by the plaintiff in paragraph 13(a) is that the defendant may be directed to hand over peaceful possession of the lands to the plaintiff together with the buildings and structures standing thereon.
Thus it would be seen that the plaint is based on the terms of the lease deed after forfeiting the lease and for the possession of the leased lands according to the terms of the Bombay Rent Act.
The main defence which was raised by the tenant in the Courts below as well as before us is that the suit is not triable under section 28 of the Bombay Rents Act and in any event relief regarding possession of the structures would be beyond the scope of the relief contemplated in the Bombay Rent Act.
Section 28 of the Bombay Rent Act runs as follows: "28 (1).
Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for the provision, be within its jurisdiction, in Greater Bombay, the Court of Small Causes Bombay.
(a) X X X X X X X X X (b) X X X X X X X X X shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this part apply and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions 1022 and subject to the provisions of sub section (2), no other court shall have jurisdiction to entertain any such claim or question.
" The Section confers jurisdiction on the Court of Small Causes Bombay to entertain and try any suit or proceedings between a landlord and tenant relating to recovery of rents or possession of any premises to which any of the provisions of this part apply.
The jurisdiction thus conferred enables the Court to try any suit between the landlord and the tenant relating to recovery of possession of the premises.
It is admitted that the premises is the two plots of land only and not the superstructure.
The plea of the plaintiff is that the relief for recovery of possession of the plot which is the subject matter of the lease, would also include relief relating to the superstructure as being related to relief of recovery of possession of the leased premises namely the plots and land.
The submission on behalf of the plaintiff is that as the jurisdiction of Civil Courts have been specifically excluded, and the matters relating to possession of the leased premises, it would imply that not only relief of the possession of the leased lands but also matters relating to it would be beyond the jurisdiction of other courts and therefore the plaintiff has no other option than to file the suit for relief as to the structure being only ancillary and incidental to the relief of possession of the leased lands.
Before we proceed to consider this plea, we might note that Mr. Soli J. Sorabjee, learned counsel for the plaintiff submitted that though it might be open to him to contend that the reliefs relating to the structures based on the terms of the contract would also be decisive on an application made under the act as being related to the recovery of the possession of the leased premises, he would content himself with the plea that the relief as to structures is so closely and inextricably related to possession of the land that no effective relief of possession of the leased lands could be given without giving relief in respect of structures.
Relief as to structures also should inevitably follow.
If this submission is accepted it would be unnecessary for us to consider the other limb of the arguments on behalf of the appellants that the relief claimed as a result of the forfeiture is not enforceable by a Court administering Bombay Rent Act or that the plaintiff cannot enforce terms of forfeiture which did not relate to leased plots or that the defendant would be entitled to relief against forfeiture under Ss.114 and 114A of the Transfer of Property Act.
All the Courts below have found that the defendant is not entitled to any relief under section 12(3)(b) of the Act and that so far as the leased plots are concerned, the plaintiff is entitled to possession under the Bombay Rent Act.
After filing of the suit it is seen that the 1023 defendant asked for time for payment of arrears of rents and the matter came up before the Court on the 28th June, 5th July and 6th August, 1962 for payment of arrears.
On the last date the appellant 's advocate informed the Court that the appellant was not in a position to pay the arrears.
It is only two years later on 18th September, 1964 the defendant obtained Court 's permission to deposit balance of arrears of Rs. 12,800/ and deposited the amount under protest by the plaintiff.
The Trial Court after considering all the facts found that there was intention of default and neglect in payment of rent.
The conduct of the defendant was wilfully not ready and willing to pay the rent.
It again found that the payment of arrears was not made diligently and the defendant had flouted the orders of the Court to deposit the arrears of rent and the discretion cannot be exercised in his favour when he persisted in not paying the taxes for about 12 or 13 years and was constantly in arrears of rent for about 14 months at the time of the notice.
The appellate Court also came to the same conclusion holding that it is not a case where discretion of the Court under S.12 (3) (b) should be exercised in favour of the tenant.
The High Court also confirmed the findings of the Court below that the defendant was not entitled to relief under Section 12(3)(b) of the Act.
On the facts we are also in agreement with the findings of the three courts below that the persistent default of the defendant on various occasions and his clear statement that he was not in a position to pay the arrears, would exclude any relief under section 12(3) (b).
In a recent decision of this Court reported in Ganpat Ladha vs Sashikant Vishnu Shinde, it has been held that when the tenant does not fulfil the conditions as required under section 12(3)(b), he could not claim protection under section 12(3)(b).
This Court observed that it is difficult to see how judicial discretion exercisable in favour of the tenant can be found under section 12(3)(b) even where conditions laid down by it were not satisfied.
This Court overruled the decision of the case of Bombay High Court in Kalidas vs Bhavan Bhagwandas.
The conditions specified in section 12(3) (b) will have to be strictly observed by the tenant if he wants to avail himself of the benefits provided under the Section.
On the facts therefore we find that the plaintiff is entitled to a decree for possession of the two plots under the provisions of the Bombay Rent Act.
As plot No. 13 has not been built upon and is vacant there could be no difficulty in confirming the decree for possession in favour of the plaintiff regarding plot No. 13.
1024 In Importers and Manufacturers Ltd. vs Pheroze Framroze Taraporewala and Ors, this Court held that the claim for compensation was merely an incidental claim for possession under the Act.
"Section 28 had conferred jurisdiction on the Court of Small Causes not only to entertain and try any suit or proceeding between a landlord and tenant for recovery of rent or possession but also to deal with any claim or question arising out of this Act or any of its provisions and section 28 was thus wide enough to cover the question raised as between the plaintiff and the sub lessee".
It will be seen that the plea that a suit against a sub lessee is not within the jurisdiction of the Small Causes Court, was negatived by this Court and it was held that section was wide enough to cover the questions raised between the plaintiff and the sub lessee.
In Babulal Bhuramal and Anr.
vs Nandram Shivram and Ors.
related to sub lessee of the premises.
The suit was filed for ejectment of the tenant and the sub tenant in the Court of Small Causes.
The tenant and the sub tenants later filed a suit before the Bombay City Civil Court for declaration that the lessee was a tenant and was protected from eviction by the provisions of the Bombay Rents Act and that as B and C were lawful sub tenants, were also entitled to possession.
This Court agreed with the view taken by the High Court that section 28 of the Act barred the City Civil Court from entertaining the suit filed by the lessees and the sub lessees as section 28 conferred the right on the Small causes to entertain a suit between a landlord and a tenant in respect of a claim which arose out of the Act or any of its provisions.
Thus it prohibits a suit from being entertained by the City Civil Court at the instance of the tenant.
In Raizada Topandas and Anr.
vs M/s. Gorakhram Gokalchand it was held that if a suit is framed by a landlord or a tenant and relief asked for is in the nature of a claim which arises out of Act or any of the provisions then only and not otherwise will be covered by section 28 and as there were no such claim the City Civil Court has jurisdiction to entertain the suit.
The plaint in the case proceeded on the footing that during the period of agreement the appellants were mere licensees and after the expiry of the agreement they were trespassers.
As the plaint in terms negatived the relationship of the landlord and tenant, it was held that the Rent Court had no jurisdiction.
This decision cannot be of any help to the appellant.
1025 In Sushila Kashinath Dhonde and Ors.
vs Harilal Govindji Bhogani and Ors.
, this Court held that it is not necessary that there should be relationship of landlord and tenant in respect of all the matters covered by section 28(1) of the Act so as to give jurisdiction to the Court of Small Causes.
It further held that in respect of other matters dealt with sub section, it is not necessary that the relationship of landlord and tenant should exist between the parties before the Court.
The Court repelled the contention that a charge created by the deed executed between the parties did not give rise to any claims or questions arising out of the Bombay Rents Act or its provisions and held that nature of reliefs to be granted to the plaintiff are all claims or questions arising out of the Act and can be dealt with only by the special court constituted under section 28 of the Act.
No doubt, the deed of charge furnished a cause of action, but its legality, validity and binding nature and other incidental matters connected therewith are all questions arising out of the Act and the plea on behalf of the appellants that the rights of the plaintiff did not flow from the Act or any of its provisions but from the contract, could not be accepted.
The decisions referred to above will show that the plaintiff/ landlord of the land is entitled to claim the relief for possession of his land and in effect the decree for possession of the land would mean that the land should be delivered to him without the structures.
Apart from the relief under the lease deed, the plaintiff is entitled to succeed as he has established that there was default of payment under the provisions of the Bombay Rents Act.
The jurisdiction of the Small Causes Court to grant an effective decree for possession of the land cannot be denied.
Equally untenable is the contention of the respondent that as the plaintiff has sought two reliefs one under the Bombay Rent Act and another under the Contract, the entire plaint must be rejected.
As we have already observed so far as the relief of possession of the premises, i.e the land is concerned, it is exclusively within the jurisdiction of the Small Causes Court.
In asking for the relief for possession of the land, the plaintiff is entitled to incidental and consequential reliefs such as for effectively taking possession of the plot without the structures.
The prayer in the plaint asking for possession of the land including the structures would not take the suit out of the competence of the Small Causes Court.
In this view it is not necessary for us to go into the question as to whether the terms in the contract regarding the forfeiture can be enforced by the Small Causes Court.
It is sufficient for the purpose of this Suit to hold that the plaintiff is entitled to seek for 1026 possession of the land which is the premises in the suit, and in getting possession of the land he is entitled to ask for possession of the land without any superstructures.
In this connection reference may be made to the nature of the relief which the plaintiff is entitled to.
In Ramchandra Raghunath Shirgaonkar vs Vishnu Balaji Hindalakar, it was held that the ordinary rule of law is that the tenant must give up vacant possession of the land demised at the end of the term and that if he builds on the land of the tenancy he builds at his own risk.
At the end of the term he can take away his building but if he leaves it there, it becomes the landlord 's property.
The Court further held that the tenant who had been in possession of land for a large number of years and built a costly and substantial house on the land of the tenancy with the knowledge of the landlord, is entitled to some compensation In K. Arumugham Naicker and Anr.
vs Tiruvalluva Nainar Temple that after the determination of the lease, lessees were required to deliver over possession of the demised premises to the lessor and the lessees were entitled to remove the structures which they might have erected during the continuance of the tenancy.
The lessees, however, failed to remove the structures on the date of the determination of the tenancy and on the next date the premises were occupied by other lessees, it was held the lessees could remove the structures on and not after determination of the tenancy and having failed to remove the same on the determination of the tenancy they lost not only their right to remove the structures after the determination of the tenancy but also all right, title and interest in those structures In K. Arumugham Naicker and Anr.
vs Tiruvalluva Naickar Temple by its Trustee, it was held that where a court directs by a decree or order vacant possession of land, that decree could be made effective by directing its own officers to remove the super structures in the property and deliver vacant possession of the properties to the decree holder.
It is unnecessary to have any specific power in that behalf.
The power to remove the superstructures is an incidental necessary and ancillary power to the power to deliver possession of the property.
We are satisfied that the Small Causes Court had jurisdiction to entertain the suit of the plaintiff not only for possession of the land which is the premises under the Act but also for other reliefs to make the decree for possession effective.
In this connection the plaintiff is entitled to ask for relief regarding the superstructures.
This incidental or ancillary relief would not take out the suit beyond 1027 the jurisdiction of the Small Causes Court.
The plea that the composite relief had been asked for and that the entire plaint ought to be rejected is also unsustainable.
In the result, we agree with the contentions of the plaintiff that in asking for relief as to possession of the land, he is entitled to ask for the demolition of the structures and for grant of vacant possession of the plots.
So far as the plot No. 13 is concerned, there is no difficulty.
The plot is not built upon and is vacant and therefore we have no hesitation in confirming the decree for possession so far as the plot No. 13 is concerned.
Plot No. 12 has been built upon.
There are about three storeys consisting of about 72 flats, shops with carpet area of 13,000 square ft. and the cost of building with superstructures in 1949 was about Rs. 6,00,000/ .
We may in this connection note that from the date of the decree passed by the High Court on 23rd October 1969, the defendant has not paid arrears of rents or the taxes due on the buildings.
He is in law bound to pay the arrears of rent and the municipal charges which he has undertaken.
On a consideration of the facts of the case, we feel that there are no grounds for interfering with the decree passed by the High Court for possession not only of the vacant plot but also of the superstructure and mesne profits and arrears of rent.
The law provides for the tenant to remove the superstructure on the termination of the tenancy.
If it is not thus removed the tenant loses all his rights to the superstructure and the landlord becomes entitled to it.
But in a case where there is a substantial building, it is only reasonable that the court should explore the possibility of payment of some compensation to the tenant who had put up this structure.
But in this connection we are reminded that for several years neither the arrears of rent nor the taxes amounting to several lacs of rupees had been paid by the tenant.
Not only the tenant but several persons who have put up flats at their own costs may press their claim for compensation and it will be difficult to determine as to who are entitled to compensation and the proportion of the compensation to which they will be entitled to.
We enquired of the parties at the conclusion of the arguments if it was possible to come to some arrangement regarding the superstructure but to our regret the parties informed us that they could not arrive at any settlement.
In the circumstances, we have no alternative except to confirm the judgment and decree passed by the High Court.
We, therefore, dismiss the appeal, but in the special circumstances of this case we make no order as to costs in this Court.
S.R. Appeal dismissed.
|
By a lease dated 14th December 1948, the respondent plaintiff gave to the appellant defendant on lease two plots Nos. 12 and 13 situated at Sitaladevi Temple Road, Mahim for a period of 15 years commencing from 1st December 1948 at the yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance.
The lease deed provided that the appellant was at liberty to erect building and structures on the two plots of land.
The appellant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also on the buildings to be erected by the defendant.
On the expiration of the term of the lease, the appellant agreed to deliver back the possession of two plots to the respondent `free of all buildings, erections and structures and levelled and put in good order and condition to the satisfaction of the respondent '.
Clause IV of the lease provided for determination and forfeiture of the lease in the event of the rents having been allowed to be in arrears for more than 30 days or upon breach of conditions of the lease.
The forfeiture clause also provided that upon forfeiture the respondent would be entitled to re enter upon not only the two plots of land but also the structure standing thereon.
The appellant constructed on plot No. 12 a three storied building consisting of about 72 flats, shops with carpet area of 13,000 square feet and the cost of the building with superstructures in 1949 was about Rs. 6,00,000/ .
Since the appellant defaulted not only in payment of rent but also in payment of dues in respect of lands and buildings which he erected, the respondent filed a suit in 1951 for ejectment.
The appellant filed an application for the fixation of standard rent and the standard rent was fixed at Rs. 435/ per month from September 1, 1950.
A compromise was entered into between the parties in the suit on 5th March, 1954, by which they agreed on a rent of Rs. 435/ per month from September 1950 to February 1954.
An appeal against the fixation of standard rent of Rs. 435/ per month was disposed of on 28th June, 1955 whereby standard rent was refixed at Rs. 620/ p.m. from 1st September 1950.
The appellant again defaulted in payment of rent and taxes.
The arrears of rent amounted to Rs. 11,472.30 and taxes to the extent of Rs. 1,12,053.60 for the period ending 30th September 1960.
The respondent by a notice determined and forfeited the lease and called upon the appellant to deliver possession of the lands alongwith structures thereupon.
The notice also specified that the notice was not only a notice of forfeiture, but also notice under section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
On 1st 1016 December 1961, as the appellant failed to pay the arrears of rent and the taxes, the respondent filed the suit for ejectment and prayed for a decree for ejectment against the appellant in respect of two plots of land Nos. 12 and 13 and also the buildings and structures standing thereon, and claimed arrears of rent of Rs. 11,472.50 and mesne profits at the rate of Rs.620/ p.m. The appellant in order to get the benefit of section 12(3)(b) of the Rent Control Act, 1947, applied for time for making deposit of arrears of rent.
The appellant could not make the payment within the extended time allowed, but after the issues were framed and the suit was taken up for trial, he deposited the arrears of rent and cost in the Court after the Court made an endorsement "accept without prejudice".
Subsequently, on 11th November, 1964 the Trial Court passed a decree for ejectment in respect of plots and the buildings in favour of the respondent.
A decree was granted regarding arrears of rent and for mesno profits.
Both the appellant and the respondent preferred appeals and the Bench of two Judges of the Court of Small Causes by a common judgment disposed of both the appeals on 4th April 1965.
The Appellate Court held that it had no jurisdiction to give a decree for ejectment in respect of the two buildings constructed on plot No. 12 by the appellant.
It held that clause IV of the lease which permitted forfeiture was in the nature of penalty and the appellant was entitled to be relieved from the liability to deliver possession of the buildings constructed by him upon forfeiture by the respondent.
It also found that the appellant was entitled to be relieved from the penalty of forfeiture of the lease under section 114 and 114A of the Transfer of Property Act.
It rejected the plea of the appellant that he was always ready and willing to pay arrears of rents and found that because of repeated defaults the appellant was not entitled for relief from ejectment under section 12(3)(b) of the Bombay Rent Act.
The respondent filed a revision petition against the order of the appellate Court declining to direct possession of the two buildings and the appellant tenant filed an appeal against the order of appellate Court directing his ejectment from the two plots of lands Nos. 12 and 13.
The High Court disposed of both the revision petition and the cross appeal by a common judgment whereby it allowed the revision petition of the respondent/landlord and dismissed the appeal of the appellant/tenant and decreed the suit of the respondent directing the appellant to deliver peaceful possession of the land demised to him and also buildings which have been constructed by the appellant on the demised lands.
It also confirmed the decree regarding arrears of rents and mesne profits.
Hence the appeal by certificate.
Dismissing the appeal, the Court.
^ HELD: 1.
Section 28 of the Bombay Rent Act, 1947 confers jurisdiction on the Court of Small Cause.
Bombay to entertain try any suit for proceedings between a landlord and tenant relating to recovery of rents or possession of any premises to which any of the provisions of that part applied.
The Jurisdiction thus conferred enables the Court to try any Suit between the landlord and the tenant relating to recovery of possession of the premises.
[1022 A B] Importers and Manufacturers Ltd. vs Pheroze Framroze Taraporewala and Ors. ; Babulal Bhura Mal and Anr.
vs Nandram Shivram and Ors., ; ; followed.
1017 Raizada Tapen Das and Anr.
vs M/s Gorakhram Gokalchand ; ; Sushila Kashinath Dhonde and Ors.
vs Harilal Govinji Bhogani and Ors., ; explained and distinguished.
The conditions specified in section 12(3)(b) of the Bombay Rent Act, 1947 will have to be strictly observed by the tenant if he wants to avail himself of the benefits provided under the section.
In the instant case, the persistent default of the appellant tenant on various occasions and his clear statement that he was not in a position to pay the arrears would exclude any relief under section 12(3) (b) of the Act.
The respondent plaintiff would be entitled to a decree for possession of the plots under the provisions of the Bombay Rent Act and in effect the decree for possession of the land would mean that the land should be delivered to him without the structures.
[1023 D G, 1025 D E] Ganpat Lodha vs Sachikant Vishnu Shivale. ; ; applied. 3.
To contend that as the respondent plaintiff has sought two reliefs one under the Bombay Rent Act and another under the contract, the entire plaint must be rejected is wrong.
In asking for the relief for possession of the land.
the respondent plaintiff is entitled to incidental and consequential reliefs such as for effectively taking possession of the plot without the structure, that is he is entitled to ask for the demolition of the superstructure.
The prayer in the plaint asking for possession of the land including the structures would not take the suit out of the competence of the Small Causes Court.
[1025 E. F G] Ramachandra Raghunath Shirgaonkar vs Vishnu Balaji Hindalekar.
; Khimjee Thakorsee vs Pioneer Fibre Co. Ltd., AIR 1941 Bom.
337 and K Arumugham Naicker and Anr.
vs Tiruvalluva Nainar Temple by its Trustee.
AIR 1954 Mad. 985; approved.
|
Appeal No. 108/ 56.
Appeal by special leave from the Judgment and decree dated May 27, 1953, of the Punjab High Court in Regular Second Appeal No. 176 of 1949, against the judgment and decree dated December 20, 1948, of the District Judge, Ludhiana, arising out of the Judgment and decree dated February 6, 1948, of the Subordinate Judge, 11 Class, Ludhiana, in Suit No. 918 of 1946.
Gopal Singh, for the appellants.
C. B. Aggarwala and K. P. Gupta, for the respondents.
May 6.
The Judgment of the Court was delivered by DAS GUPTA, J.
The suit out of which this appeal has arisen was instituted by the respondents I and 2 Sher Singh and Labh Singh, for a declaration that a deed of gift executed by the first appellant, Jai Kaur, in respect of 8 (1 10) Bighas of land which she had inherited from her husband, Dev Singh, in favour of her two daughters, the 2nd & 3rd appellants before us, " shall be null and void against the reversionary rights of the plaintiffs ", and defendant Nos. 4 to 6 after the death of defendant No. 1 (i.e., Jai Kaur) and shall not be binding upon them.
The plaintiffs ' case was that these lands left by Dev Singh were all ancestral lands qua the plaintiffs and according to the customary law which governs the Jats belonging to Grewal got to which these parties belong daughters do not succeed to property left by sonless fathers and so the gift by Dev Singh 's widow in favour of her daughters would be null and void as against the plaintiffs and others who would be entitled on Jai Kaur 's death to succeed to the estate as reversioners.
In the alternative, the plaintiffs contended that even if the land in suit was not ancestral qua the plaintiffs then also the deed of gift would be null and void as against their reversionary interests inasmuch as even as regards nonancestral property daughters do not succeed among the Grewal Jats.
The main contention of defendants 1 to 3 (the appellants before us) was that the suit land was not ancestral qua the plaintiffs and defendants 977 Nos. 4 to 6, and that according to the customary law governing the Jats of the Grewal got, daughters exclude collaterals as regards non ancestral property and a widow is competent to make a gift of such property in favour of her daughters.
It was pleaded on behalf of the two daughters that they being preferential heirs in respect of the land in suit as against the plaintiffs, the gift is tantamount to acceleration of succession and is valid in every way.
The Trial Judge held that 2B 2B,14 B out of the land in suit was ancestral and the gift was invalid to that extent, because as regards ancestral property a daughter does not succeed in the presence of collaterals.
As regards the remainder of the suit land which he held was non ancestral, the learned Judge was of opinion that the gift was merely an acceleration of succession as under the customary law governing the parties daughters exclude collaterals as regards succession to non ancestral property.
Accordingly he gave the plaintiffs a decree as prayed for as regards 2 B 2B, 14 B out of the land in suit and dismissed it as regards the remaining portion of the land in suit.
The plaintiffs appealed to the District Judge, Ludhiana, against this decree and cross objections were filed by the defendants Nos. 1 to 3.
The Trial Court 's finding about a portion of the land being ancestral and the rest non ancestral was not disputed before the appeal court.
On the question of custom the learned District Judge agreed with the Trial Judge 's view that among the Grewal Jats of Ludhiana the daughter excluded collaterals as regards non ancestral property.
He held, therefore, agreeing with the Trial Judge that as regards the non ancestral property the deed of gift was merely an act of acceleration of succession and was, therefore, valid and binding.
The appeal was accordingly dismissed and so also were the cross objections which appear not to have been pressed.
On second appeal the learned judges of the East Punjab High Court accepted the contention urged on behalf of the plaintiffs that a special custom was proved to be in force among the Grewal Jats under which the daughter does not inherit even as regards 978 non ancestral property.
In that view they held that even as regards the non ancestral property the gift by Jai Kaur would be valid only during her lifetime, and allowed the appeal.
Against this decree of the High Court defendants Nos. 1 to 3 Jai Kaur and her two daughters, the donees have filed this appeal on the strength of special leave granted by this Court.
Two questions arise for consideration in this appeal.
The first is whether under the customary law governing the Jats of the Grewal got in Ludhiana to which the parties belong, the daughter or the collaterals are the preferential heirs as regards non ancestral property.
If the answer to this question be that daughters have preference over collaterals (the plaintiffs here), the other question which arises is whether this gift is such acceleration of succession in favour of the daughters as is permissible under the law.
On the question of custom the appellants rely on the statements in paragraph 23 of Rattigan 's Digest of Customary Law (Thirteenth Edition) that in regard to the acquired property of her father the daughter is preferred to collaterals.
It is not disputed that nonancestral property is " acquired property " within the meaning of this statement by Rattigan.
Against this the plaintiffs respondents rely on the answers to question No. 43 relating to Hindu Grewal Jats of Ludhiana as appear in the Riwaji am prepared at the revised settlement of 1882.
The question and the answer are in these words: Question: " Under what circumstances can daughters inherit ? If there are sons, widows or near collaterals, do they exclude the daughter ? If the collaterals exclude her, is there any fixed limit of relationship or degree within which such Dear kindred must stand Answer: " In our tribe the daughter does not succeed under any circumstances.
If a person dies sonless, his collaterals succeed him.
There is no fixed limit of relationship for purposes of excluding her.
979 If there are no collaterals of the deceased, the owners of the Thulla or Patti or village would be owners of his property." The authoritative value of Rattigan 's compilation of customary law is now beyond controversy, having been recognised in the judicial decisions of the Punjab courts too numerous to mention, which have also received the approval of the Judicial Committee of the Privy Council.
Therefore it is not, and cannot be disputed that under the general customary law of the Punjab daughters exclude collaterals in succession to non ancestral property.
The value of entries in the Riwaj i am has, also however, been repeatedly stressed.
That they are relevant evidence under section 35 of the Evidence Act is clear and the fact that the entries therein the the result of careful research of persons who might also be considered to have become experts in these matters, after an open and public enquiry has given them a value which should not be lightly underestimated.
There is ', therefore, an initial presumption of correctness as regards the entries in the Riwaj i am and when the custom as recorded in the Riwaj i am is in conflict with the general custom as recorded in Rattigan 's Digest or ascertained otherwise, the entries in the Riwaj i am should ordinarily prevail except that as was pointed out by the Judicial Committee of the Privy Council in a recent decision in Mt. Subhani vs Nawab (1), that where, as in the present case, the Riwaj i am affects adversely the rights of females who had no opportunity whatever of appearing before the revenue authorities, the presumption would be weak, and only a few instances would suffice to rebut it.
In the present appeal the oral.
testimony given on behalf of either party is practically valueless to show an ,, instance in favour of the custom pleaded by them.
If, therefore, the Riwaj i am does show as urged by the plaintiffs a custom of daughters being excluded by collaterals in respect of non ancestral property, it is clear that Riwaji i am would prevail.
The real controversy in this litigation is, however, on the question whether the entries in the Riwaj i am on which (1) A.I. R. 1941 (P.C.) 21.
980 the plaintiffs rely refer at all to non ancestral property or not.
This controversy has 'engaged the attention of the courts in Punjab for a number of years beginning with 1916.
In that year in Mst.
Raj Kaur vs Talok Singh (1) Sir Donald Johnstone, the Chief Justice held that the Riwaj i am as compiled, did not cover self acquired property and that where the Riwaj i am talked about succession to land without discrimination between ancestral and self acquired, the rule laid down could usually only be taken to apply to ancestral property.
A similar view was taken by Shadilal and Wil be force, JJ., in Budhi Prakash vs Chandra Bhan (2 ).
The view taken in these cases was followed by other judges of the High Court in Narain vs Mst.
Gaindo (3 ) and Fatima Bibi vs Shah Nawaz (4).
In Sham Das vs Moolu Bai (5) the learned judges (LeRossignol and Fforde, JJ.) also laid down the same principles, without any reference to the previous decisions, in these words : "It is true in the Riwaj i ain no distinction is made between ancestral and acquired property, but it is a well recognised rule that unless there are clear indications to the contrary, such an entry in a record of custom refers only to the succession to ancestral property. " After this view had been followed in several other decisions a different line was struck in Jatan vs Jiwan Singh (6).
That was a case between Grewal Jats and the contest lay between collaterals of the last male holder and his married daughter with respect to his non ancestral property.
The learned judges were of opinion that the Question No. 43 in the Riwaj i am related to both ancestral and non ancestral property and so the answer to the question recorded in Riwaj iam proved that as regards the non ancestral property also the daughter was excluded by collaterals.
In coming to this conclusion they laid stress on the fact that in two previous decisions, Ishar Kuar vs Raja Singh (7) and Pratap Singh vs Panjabu (8) the questions and answers in the Riwajiam as regards daughter 's (1) A.I.R. 1916 Lah.
(3) A.I.R 1918 Lah.
304 (5) A.I.R. 1926; Lah.
210 (7) (2) A.T.R. 19T8 Lah.
(4) A.I.R. 1921 Lah.
(6) A.I.R. 1933 Lah.
(8) 981 right to succession were interpreted as covering nonancestral property also and if it was contemplated that a daughter should succeed to self acquired property, one would have expected that fact to be mentioned in the answer.
It was in view of the conflicting views which had thus arisen on the question whether Question No. 43 in the Riwaj i ani in the absence of a clear indication to the contrary related to ancestral property only or to both ancestral and non ancestral property that a reference was made by Mr. Justice Abdur Rahman in Mt. Hurmate vs Hoshiaru 1 to a Full Bench of the High Court.
The Full Bench reviewed the numerous decisions of the Punjab courts in this matter and also took into consideration the fact that Mr. Gordon Walker who had prepared the Riwaj i am in 1882 had stated in the preface that no distinction between self acquired and inherited pro perty in land appeared to be recognised and the rules of succession, restriction on alienation, etc., applied to both alike; and after a careful consideration of all the relevant factors recorded their conclusion that " Question No. 43 of the Customary Law of Ludhiana district relates to ancestral property only and can in no circumstances be so interpreted as to cover self acquired property as well. " Mr. Justice Din Mohammad who delivered the leading judgment observed :" The raison d ' entre of those cases which lay down that the manuals of Customary Law were ordinarily concerned with ancestral property only is quite intelligible.
Collaterals are, as stated by Addison, J., in 13 Lab.
458, really speaking interested in that property only which descends from their common ancestor and this is the only basis of the agnatic theory.
What a male holder acquires himself is really no concern of theirs.
It is reasonable, therefore, to assume that when manuals of Customary Law were originally prepared and subsequently revised, the persons questioned, unless specific ally told to the contrary, could normally reply in the light of their own interest alone and that, as stated above, was confined to the ancestral property only.
The fact that on some occasions (1) A.I.R. 1944 Lah. 21, 127 982 the questioner had particularly drawn some distinction between ancestral and non ancestral property would not have put them on their guard in every case, considering their lack of education and lack of intelligence in general.
Similarly, the use of the terms " in no case " or " under no circumstances " would refer to ancestral property only and not be extended so as to cover self acquired property unless the context favoured that construction.
" One would have thought that after this pronouncement by a Full Bench of the High Court the controversy would have been set at rest for at least the Punjab courts.
Surprisingly, however, only a few years after the above pronouncement, the question was raised again before a Division Bench of the East Punjab High Court in Mohinder Singh vs Kher Singh(1).
The learned judges there chose to consider the matter afresh and in fact disregarded the pronouncement of the Full Bench in a manner which can only be said to be unceremonious.
Teja Singh, J., who delivered the leading judgment said that the Full Bench, though noticing the cases of Ishar Kaur vs Raja Singh (2) and Pratap Singh vs Panjabu (3), had not said that those cases had been wrongly decided.
It has to be noticed that the Full Bench in no uncertain terms expressed their conclusion that question No. 43 of the Customary Law of the Ludhiana district related to ancestral property only and could in no circumstances be so interpreted as to cover self acquired property as well.
In coming to that conclusion they had considered numerous decisions of the Punjab courts in support of the general proposition that unless there are clear indications to the contrary the questions relate to ancestral property, considered the cases in which a contrary view had been taken including the three cases of Jattan vs Jiwan Singh (4), Ishar Kaur vs Raja Singh (2 ) and Pratap Singh vs Panjabu (3) and gave their own reasons why the view that unless there are clear indications to the contrary the manuals of customary law should be taken to refer to ancestral property only, and after considering the (1) A.I.R. 1949.
East Punjab 328 (3) (2) (4) A.I.R. 1933 Lah.
983 question and answer in question No. 43 in the case before them as regards the Mohammadan Rajputs, recorded their final conclusion.
It is neither correct nor fair to say that the learned judges of the Full Bench did not hold Jattan 's Case, Pratap Singh 's Case and Ishar Kaur 's Case to have been wrongly decided in so far as these decisions held the question No. 43 of the Customary Law of the Ludhiana dis trict to refer both to ancestral and non ancestral property.
It is true that they did not say in so many words that these cases were wrongly decided; but when a Full Bench decides a question in a particular way every previous decision which had answered the same question in a different way cannot but he held to have been wrongly decided.
We had recently occasion to disapprove of the action of a Division Bench in another High Court in taking it upon themselves to hold that a contrary decision of another Division Bench on a question of law was erroneous and stressed the importance of the well recognised judicial practice that when a Division Bench differs from the decision of a previous decision of another Division Bench the matter should be referred to a larger Bench for final decision.
If, as we pointed out there, considerations of judicial decorum and legal propriety require that Division Benches should not themselves pronounce decisions of other Division Benches to be wrong, such considerations should stand even more firmly in the way of Division Benches disagreeing with a previous decision of the Full Bench of the same court.
In our opinion, the view taken by the Full Bench in Mt. Hurmate vs Hoshiaru (1) is consonant with reasons and consistent with probability.
The fact that the great majority of judges, who brought to bear on the question, an intimate knowledge of the ways and habits of the Punjab peasantry thought that when tribesmen were asked about succession to property, they would ordinarily think that they were being asked about succession to ancestral property, is entitled to great weight.
It cannot, we think, be seriously disputed that at least in the early years (1) A.I.R. 1944 Lah 21. 984 when the Riwaj i am was in course of preparation most of the property in the countryside was ancestral property, and " self acquisitions " were few and far between.
This fact, it is reasonable to think, had the consequence of concentrating the attention of the tribesmen on the importance of having the tribal custom correctly recorded by the Settlement Officers and their agents, as regards succession to ancestral property, and of attracting little attention, if any, to matters regarding non ancestral property.
Unless the questions put to these simple folk, were so framed as to draw pointed attention to the fact that the enquiries were in respect of non ancestral property also, they could not reasonably be expected to understand from the mere fact of user of general words in the questions that these referred to both ancestral and non ancestral property.
As Din Mohammad, J., said in his judgment in the Full Bench, even the fact that on some occasions, the questioner had drawn some distinction between ancestral and nonancestral property, could not have put them (i.e.
, the persons questioned) on their guard in every case, considering their lack of intelligence in general.
Their minds being obsessed with the idea that such enquiries would only refer to ancestral property, they would direct their answers to matters in respect of ancestral property only, and in using forceful terms like " in no case " and " under no circumstances these persons were really saying that " in no case would ancestral property devolve in a particular way and have a particular incidence; and under no " cir cumstances " would ancestral property devolve in a particular way, and have a particular incidence.
These considerations, we think, outweigh the statement made by Mr. Gordon Walker that no distinction between self acquired and inherited property in land appeared to be recognised, and the rules of succession, restriction on alienation, etc., applied to both alike.
We think, therefore,, that the view taken by the Full Bench, and the many previous cases mentioned in the judgment of the Full Bench, that questions and answers in the Riwaj i am refer ordinarily to 985 ancestral property, unless there is clear indication to the contrary, is correct.
Question No. 43 in the Ludhiana district, appears to be the same for all the tribes.
There is not the slightest indication there that the questioner wanted information about nonancestral property also.
The answer given by the Grewal Jats to this question also gives no reason to think that the persons questioned were thinking in giving the answers of both ancestral and non ancestral property.
We have, therefore, come to the conclusion that the entries in the Riwaj i am on which the plaintiffs respondents rely do not refer at all to non ancestral property, and are, therefore, not even relevant evidence to establish the existence of a custom among Grewal Jats of Ludhiana district, entitling collaterals to succession to non ancestral property, in preference to daughters.
Reliance was next placed on behalf of these respondents on the fact that the existence of such a custom was recognised in a number of judicial decisions, viz., Jattan vs Jiwan Singh (1), I shar Kaur vs Raja Singh (2) and Pratap Singh vs Panjabu (3).
If these decisions in so far as they recognised the existence of such a custom, had been solely or even mainly based on evidence, other than entries in the Riwaji i am, they might have been of some assistance.
Examination of these cases, however, shows unmistakably that they were either wholly, or mainly based on the entries in the Riwaj i am on the assumption that these entries referred to both ancestral and non ancestral property.
This assumption having been established to be baseless, these decisions are valueless, to show that the custom as alleged by the plaintiffs respondents did exist as regards non ancestral property.
Further, the oral evidence produced in the present case is wholly insufficient to prove such a custom.
It must, therefore, be held that the customary law among the Grewal Jats of Ludhiana district as regards succession to non ancestral property is the same as recorded generally for the Punjab in Paragraph 23 of Rattigan 's Digest i.e.
, the daughter is preferred to (1) A.I.R. 1933 Lah. 553.
(2) (3) 986 collaterals, and consequently, the second and the third appellants, were the next reversioners to that portion of Dev Singh 's property which has been found to be non ancestral.
This brings us to the question whether the gift of this portion, by the first appellant to these reversioners, gives them a good title, beyond the widow 's lifetime.
We have to remember in this connection that as regards the ancestral property, these daughters were not the reversioners, and the further fact that out of the ancestral property, the house was not included in the deed of gift.
The position, therefore, is that out of the property in which the first appellant held a widow 's estate, she gave by the deed of gift a portion to the reversioners as regards that portion, a portion to persons who were strangers to the reversion as regards that portion and a portion was retained by her.
The doctrine of Hindu law according to which, a limited owner can accelerate the reversion, by surrendering her interest, to the next reversioner, is based on a theory of self effacement of the limited owner.
That is why it has been laid down that in order that a surrender by a limited owner to a reversioner, may be effective, the surrender must be of the entire interest of the limited owner in the entire property.
The exception made in favour of the retention of a small portion of the property for her maintenance, does not affect the strictness of the requirement that a surren der to be effective, must be of the entire interest in the entire property: Vide Rangasami Gounden vs Nachiappa Gounden (1) and Phool Kaur vs Pem Kaur (2).) In so far as there is gift to a stranger, there is no effacement of the limited owner; nor is there any effacement in respect of the property which is retained.
We find it impossible to say, therefore, that there is such effacement of the limited owner in this case, as would accelerate the daughter 's rights by converting the future contingent right into a present vested right.
On behalf of the appellants it is argued that there is certainly a total effacement in respect of the nonancestral property, so that the right of the next reversioners the daughters in that property has (1) (1918) L.R. 46 I.A. 72.
(2) ; , 987 been accelerated.
We do not think we shall be justified in recognising this novel doctrine of the possibility of effacement of the limited owner vis a vis the next reversioner of the non ancestral property when there is no effacement vis a vis the reversioner of the ancestral property, and vice versa.
Effacement cannot be broken up into two or more parts in this manner; and however much the limited owner may wish to efface herself only vis a vis those next reversioners whom she wants to benefit, law does not recognise such " partial effacement ".
The Hindu Law doctrine of surrender does not, therefore, make the gift of the non ancestral property to the daughters valid beyond the widow 's lifetime.
It is not suggested that there is any customary law, by which such surrender can be made.
Though, therefore, we have found disagreeing with the learned judges of the High Court that tinder the customary law governing the Grewal got of Jats to which the parties belong, the daughters the second and the third appellants are preferential heirs to the non ancestral portion of the suit land, we hold that their conclusion that this deed of gift in favour of the daughters is not valid even as regards the non ancestral property, beyond the donor 's lifetime is correct and must be maintained.
As a last attempt Mr. Gopal Singh, counsel for the appellants, wanted us to hold that under section 14 of the Hindu Succession Act, which became law in 1956, either the mother or the daughters have become full owners of this property, and so the plaintiffs ' suit should be dismissed.
As the Hindu Succession Act was not on the statute book, when the written statement was filed or at any time before the suit was disposed of in the courts below, the defence under section 14 of that Act could not be thought of and was not raised.
The necessary consequence is that evidence was not adduced, with the facts material for the application of section 14 in view, by either party.
Mr. Agarwala has, on behalf of the plaintiffs respondents, contended that as the record stands the mother had ceased to be in possession and could not get the benefit of section 14 of the Hindu Succession Act, and that the 988 daughters in possession, would not become full owners under section 14.
We do not think it would be proper to consider these questions in the present suit in this haphazard manner when on the all important question of possession, the appellants themselves do not wish to say whether the mother was in possession actually or constructively, whether the daughters ' possession was merely permissive, or whether the daughters were in independent possession, on their own behalf These and other questions of fact, and the questions of law that have to be considered in deciding a claim by the first appellant or the other two appellants under section 14 of the Hindu Succession Act, should properly be considered in any suit that they may bring in future, if so advised.
We express no opinion on any of these questions.
For the reasons which have been mentioned earlier, we hold that the High Court rightly decreed the suit in favour of the plaintiffs in respect of the nonancestral property also, and dismiss the appeal.
In the circumstances of the case, we order that the parties will bear their own costs throughout.
Appeal dismissed.
|
Under the customary law prevalent amongst the Hindu Jats of Grewal got in Ludhiana, a daughter is a preferential heir to her father in respect of his self acquired property to his collaterals.
Rattigan 's Digest of Customary Law, paragraph 23, which records the correct law on the point, is not in conflict with Riwaji am, 1882, Question NO. 43, which refers only to ancestral property and not to self acquired property at all.
Mt. Hurmate vs Hoshiaru, A.I.R. 1944 Lah.
21, approved.
Mohinder Singh vs Kher Singh, A.I.R. 1949 East Punjab 328, disapproved.
Mt. Subhani vs Nawab, A.I.R. 1941 (P.C.) 21, referred to.
Case law discussed.
The doctrine of surrender in Hindu Law is based on a theory of complete self effacement by the widow in favour of the reversioner and in order that such surrender can accelerate the reversion, it must be of the entire interest in the entire property.
The law does not recognise a partial self effacement nor a division between ancestral and non ancestral property.
The exception made in respect of a small portion of the property retained for the widow 's maintenance does not detract from the rigour of the rule.
Rangaswami Gounden vs Nachiappa Gounden, (1918) L.R. 46 I.A. 72 and Phool Kaur vs Prem Kaur, ; , referred to.
Consequently, in a case where a Hindu widow of the Jat Grewal got made a gift only of the self acquired property of her husband to her daughters such gift had not the effect of a surrender in law so as to accelerate the daughters ' succession and the gift could not be valid beyond her lifetime.
|
N: Criminal Appeal No. 115 of 1975.
Appeal by Special Leave from the Judgment and order dated 10 1 1972 of the Madras High Court in Crl.
Appeal No. 64 No. 657/70.
A. V. Rangam for the Appellant.
A. T. M. Sampath for the Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
On November 1, 1969, a sample of gingelly oil was purchased by the Food Inspector, Madurai Municipality from the shop of the first respondent, who is now reported to be dead and against whom, this appeal, has, therefore, abated.
At that time respondent No. 2 was attending to the business.
After completing the necessary formalities the Food Inspector arranged to send one part of the sample to the Public Analyst at Madras for analysis.
The sample was analysed by the Public Analyst on November 11, 1969 and it was reported by him that it contained 5.1% of Free Fatty Acid as against the limit of 3.0% permissible under clause A.17.11 of Appendix B to the Prevention of Food Adulteration Rules, 1955.
In his report he also mentioned that the sample was properly sealed, it was air and moisture tight and packed in thick paper so as to be proof against light, and, the Free Fatty Acid content of the oil would, therefore, remain unchanged for several months.
On receipt of the Public Analyst 's report a complaint was filed against the two respondents for an offence under sec.
16(1) (a) and Sec.
7(i) read with sec.
2(i) (L) and Clause A.17.11 of Appendix 'B ' to the Prevention of Food Adulteration Rules.
Both the respondents denied the offence.
The 776 second respondent stated that he signed on the various documents produced by the prosecution as he was asked to do so by the Inspector.
He did not read the contents of those documents.
The brother of the second respondent was examined as a defence witness and he stated that he was in the shop when the Food Inspector came there and purchased the sample and that at the time of the sale the Food Inspector was told that the gingelly oil was not meant to be used as an article of food but was meant for "oil bath".
At the trial a request was made by the respondents that another part of the sample which had been produced by the Food Inspector in the Court might be sent to the Director, Central Food Laboratory, Calcutta, for analysis.
It was sent as desired.
The sample was analysed by the Director, Central Food Laboratory, Calcutta on February 6. 1970.
According to his report the gingelly oil contained 6.2% of Free Fatty Acid and was, therefore, adulterated.
The learned District Magistrate, Madurai acquitted both the respondents observing that the Free Fatty Acid had increased from 5.1% to 6.2% between November 11, 1969 and February 6, 1970 and it was, therefore, likely that the Free Fatty Acid content in the oil might have similarly increased between November 1, 1969 when the sample was taken and November 11, 1969, when the sample was analysed by the Public Analyst, Madras.
On that ground, the District Magistrate held that it was not possible to say that the prosecution had established that on the date when the sample was taken the Free Fatty Acid content of the oil exceeded 3%.
The State preferred an appeal to the Madras High Court against the order of acquittal.
The High Court confirmed the order of acquittal for the same reason as that given by the District Magistrate.
The State has filed this appeal after obtaining special leave of this Court under Art 136 of the Constitution.
Under Sec. 2(i)(L) (before it was amended in 1976) of the , an article of food is deemed to be adulterated "if the quality of purity of the article falls below the prescribed standard or its constituents are present in quantities which are in excess of the prescribed limits of variability".
Paragraph A.17.11 of Appendix 'B ' to the Rules made under the prescribes the standard in the case of Til oil (Gingelly or seasame oil) and to the extent relevant it reads as follows: ["A.17.11.
Til oil (Gingelly or sesame oil) means the oil expressed from clean and sound seeds of Til (Sesamum indicum), black, brown, white, or mixed.
It shall be clear, free 777 from rancidity, suspended or other foreign matter, separated water, added colouring or flavouring substances, or mineral oil.
It shall conform to the following standards: (a) Butyro rafractometer reading at 40oC . 58.0 to 61 (b) Saponification value . 188 to 193 (c) Iodine value . 105 to 115 (d) Unsaponifiable matter .
Not more than 1.5 per cent.
(e) Free fatty acid as Oleic acid.
Not more than 3.0 per cent.
(f) Bellier test(Turbidity temperature Not more than Acetic acid method).
22oC).] .]" Now, a sample of food purchased by a Food Inspector has to be divided by him into 3 parts and each part has to be marked, sealed and fastened separately.
Before the Act was amended in 1976, one part was to be delivered to the person from whom the sample was taken, another part was to be sent for analysis to the Public Analyst and the third part was to be retained with the Food Inspector to be produced by him in case legal proceedings were taken or it became necessary to send it for analysis to the Director of the Central Food Laboratory.
The Public Analyst was required to deliver a report of the result of his analysis and this report was ordinarily the foundation of the prosecution by the Food Inspector.
After the institution of the prosecution, the accused was given the right to request the Court to send the third part of the sample retained by the Food Inspector to the Director, Central Food Laboratory for a certificate.
The Director, Central Food Laboratory was required to send to the Court a certificate specifying the result of his analysis and the certificate of the Director, Central Food Laboratory, thereupon, superseded the Public Analyst 's report.
The Public Analyst 's report, if not superseded by the Certificate of the Director.
Central Food Laboratory and the Certificate of the Director, Central Food Laboratory might be used as evidence of the facts stated therein in any proceeding under the Act with this difference that the certificate of the Director, Central Food Laboratory was to be final and conclusive evidence of the facts stated therein.
In the present case the certificate of the Director showed that the sample of gingelly oil contained 6.2% of Free Fatty Acid whereas the permissible limit was 3% only.
We are not concerned with the Public Analyst 's report since that has been superseded by the certificate of the Director, Central Food Laboratory, and the latter certificate has been made conclusive evidence of the facts mentioned in it.
The sample, it must therefore be found, was adulterated.
778 The sample, as we mentioned earlier, was taken on November 1, 1969, the analysis by the Public Analyst was on November 11, 1969 and the analysis by the Director, Central Food Laboratory was on February 6, 1970.
The learned District Magistrate and the High Court thought that although the Free Fatty Acid content in that part of the sample which was sent to the Director, Central Food Laboratory was 6.2% on the date when the Director analysed the oil it could not be said to have been established that on the date when the sample was taken by the Food Inspector the Free Fatty Acid content exceeded 3%.
According to them it could well be that the Free Fatty Acid content increased due to natural causes.
We are unable to agree with the lower Courts.
There is nothing in the evidence, nor has anything been shown to us from any scientific work which would suggest that the Free Fatty Acid content would so rapidly increase in the space of about three months that what was less than 3% on November 1, 1969, when the sample was taken increased to 6.2% by February 6, 1970, when the sample was analysed by the Central Food Laboratory.
On the other hand in the New Encyclopaedia Britannica Volume 13 (pages 526 527) it is said: "Fats can be heated to between 200o and 250oC without undergoing significant changes provided contact with air or oxygen is avoided.
On exposure to air, oils and fats gradually undergo certain changes.
The drying oils absorb oxygen (dry) and polymerize readily; thin layers form a skin or protective film.
The semidrying oils absorb oxygen more slowly and are less useful as paint oils.
Still, sufficient oxygen is absorbed in time to produce distinct thickening and some film formation.
Oxidation of the drying and semidrying oils is accelerated by spreading the oil over a large surface.
On greasy cloths, for example, oxygen absorption may proceed so rapidly that spontaneous combustion ensues.
The nondrying oils, of which olive oil is typical, do not oxidize readily on exposure to air, although changes do take place gradually, including slow hydroysis (splitting to fatty acids and glycerol) and subsequent oxidation.
This slow oxidation causes a disagreeable smell and taste described by the term rancidity.
779 The chemical reactions involved in oil oxidation have been studied widely, when oils and fats are exposed to air, little change takes place for a period of time that varies from oil to oil depending upon the amount and type of unsaturation and the content of natural antioxidants.
During this so called induction period, there is virtually no change in either odour or chemistry of the oil because of the protective effect of natural antioxidants, especially tocopherol.
Gradually, the effectiveness of the anti oxidant is overcome and there is an accelerating rate of oxidation of unsaturated acids, called autoxidation.
Chemically, the first identifiable oxidation products are hydroperoxides.
These break down into a large variety of low molecular weight aldehydes, esters, alcohols, ketones, acids, and hydrocarbons, some of which possess the pungent, disagreeable odours characteristic of rancid fats.
In soyabean oil exposed to air to the point of incipient rancidity, more than 100 different oxidation products have been identified.
Natural oils such as coconut oil, with very low levels of unsaturation, are very stable to flavour deterioration, but the more highly unsaturated oils such as soyabean oil or safflower oil lose their flavour more quickly.
Sesame oil is unique in its flavour stability because of the presence of several natural antioxidants (sesamin, sesamolin, sesamol).
Synthetic antioxidants such as propyl gallate, butylated hydroxyanisole (BHA), and butylated hydroxytoluene (BHT) have been used to retard the onset of rancidity and increase the storage life of edible fats".
Gingelly (Til or seasame) oil we may mention is a semi drying oil.
From the extract from the Encyclopaedia Britannica it is only after prolonged exposure to air and light that there may be some discernible chemical changes in gingelly (til or seasame) oil.
In fact it is mentioned in the Encyclopaedia Britannica that seasame oil is unique in its flavour stability because of the presence of several natural antioxidants.
There is nothing to indicate that the samples were not packed as required by the rules.
The report of the Public Analyst mentions "The sample has been received properly sealed, to be air and moisture tight and packed in thick paper to be proof against access to light.
Under these conditions the Free Fatty Acid content of oils 780 remains unchanged for several months".
The certificate of the Director, Central Food Laboratory mentions "The seals were intact".
We are, therefore, clearly of opinion that there was no justification for the conclusion of the District Magistrate and the High Court that the Free Fatty Acid content of the oil on the date when the sample was taken might have been less than 3% and therefore, not adulterated.
We set aside the judgments of the District Magistrate and the High Court and convict the second respondent under Sec.
16(1)(a)(i) read with sec.
7(i) and 2(i) (L) of the and sentence him to pay a fine of Rs. 100 in default to undergo simple imprisonment for a period of two weeks.
We are imposing a nominal sentence having regard to the circumstance that we are interfering with a concurrent order of acquittal more than ten years after the commission of the offence.
|
Under section 2(i)(L) (before it was amended in 1976) of the , an article of food is deemed to be adulterated "if the quality of purity of the article falls below the prescribed standard or its constituents are present in quantities which are in excess of the prescribed limits of variability".
On November 1, 1969, sample of gingelly oil was purchased by the Municipal Food Inspector from the shop of the respondents.
After completing the necessary formalities, the Food Inspector arranged to send one part of the sample to the Public Analyst for analysis.
The Public Analyst analysed the sample on November 11, 1969 and reported that it contained 5.1% of Free Fatty Acid as against the permissible limit of 3%.
On receipt of the report, the respondents were prosecuted for offences under Section 16(1)(a)(i) read with Section 7(i) and 2(i)(L) of the .
At the trial, in pursuance of the respondents request, another sample was got analysed on February 6, 1970 by the Director, Central Food Laboratory.
According to his report, the gingelly oil contained 6.2% of the Free Fatty Acid and was therefore, adulterated.
The District Magistrate observing that the Free Fatty Acid had increased from 5.1% to 6.2% between November 11, 1969 and February 6, 1970 and it was therefore, likely that the Free Fatty Acid content in the oil might have similarly increased between November 1, 1969 when the sample was taken and November 11, 1969 when the sample was analysed by the Public Analyst, held that it was not possible to say that the prosecution had established that on the date when the sample was taken the Free Fatty Acid content of the oil exceed 3% and acquitted the respondents.
The order of acquittal was confirmed by the High Court.
In the appeal to this Court, it was, ^ HELD:1 (i) The judgments of the District Magistrate and the High Court are set aside.
The second respondent is convicted under Section 16(1)(a)(i) and sentenced to pay a fine.
[780C] (ii) There was no justification for the conclusion of the District Magistrate and the High Court that the Free Fatty Acid content of the oil on the date when the sample was taken might have been less than 3% and therefore not adulterated.
[780B] 775 In the instant case, the Public Analyst report had been superseded by the certificate of the Director, Central Food Laboratory, and the latter certificate had become conclusive evidence of the facts mentioned in it.
The sample, must therefore be held, to be adulterated.
There was nothing in the evidence, nor had anything been shown from any scientific work which would suggest that the Free Fatty Acid content would so rapidly increase in the space of about three months.
If it was less than 3% on November 1, 1969 when the sample was taken it could not have increased to 6.2% by February 6, 1970 when the sample was analysed by the Central Food Laboratory.
[777H, 778D] 2.
Gingelly (Til or Sesame) oil is a semi drying oil.
It is only after Prolonged exposure to air and light that there may be some discernible chemical changes in gingelly (Til or sesame) oil.
[779G] New Encyclopaedia Britannica, Vol.
13 pages 526 527 referred to.
|
Civil Appeal No. 1712 of 1973.
From the Judgment and Order dated 20 5 1971 of the Allahabad High Court in Estate Duty Reference No. 95/66 connected with Estate Duty Reference No. 78/69.
S.C. Manchanda, K.C. Dua and Miss A. Subhashini for the Appellant.
P.K. Mukherjee and Pramod Swarup for the Respondent.
The Judgement of the Court was delivered by SEN J.
This appeal on certificate under section 65(1) of the (hereinafter referred to as 'the Act ') arises from a judgment of the Allahabad High Court delivered on a case stated under section 64 of the Act by which the High Court answered two of the questions against the accountable person and in favour of the Controller of Estate Duty but the third in the negative, against the Controller of Estate Duty and in favour of the accountable person.
We are not concerned with the first two questions, but only the third, which reads: "Assuming that the shares in dispute really belonged to Sri K.M. Mitra deceased, whether those shares in the circumstances of the case constituted property which passed on the death of Sri K.M. Mitra for the purposes of section 5 of the .
" The facts giving rise to the reference are these: The late Sri K.M. Mitra died on February 11, 1957 leaving a large and extensive estate.
On his death his son Aloke Mitra, the accountable person, filed a return of estate duty valuing the estate of deceased at Rs. 3,75,235.
This included 502 shares of Rs. 100/ each in Mitra Prakashan Pvt. Ltd. and 225 shares of Rs. 100/ in Maya Press Pvt.
Ltd. held by the deceased.
The Assistant Controller of Estate Duty did not accept this part of the return and included 2002 shares in Mitra Prakashan Pvt. Ltd. and 1602 shares in Maya Press Pvt.
Ltd. standing in the name of Smt.
N. Mitra, wife of the deceased, 947 and his three sons, Aloke Mitra, Ashoke Mitra and Deepak Mitra, brother in law B.N. Ghosh and an ex employee, R.N. Misra since they were holding these shares benami.
He accordingly included the value of these shares in the principal value of the estate of the deceased.
His order was affirmed in appeal by the Central Board of Direct Taxes, that is, the Appellate Tribunal.
Under section 64(1) of the Act the Appellate Tribunal referred the question whether the shares allotted to the wife of the deceased as his nominee or as benamidar, were, as from the commencement of the held by her as a full owner thereof by virtue of provisions of section 14 of that Act.
According to the High Court, the said question did not at all arise.
On the finding that the transaction was benami and that the deceased was the real owner of the shares, the wife must be held to have no interest or title to the shares.
She was merely a benamidar or name lender.
Since she had no interest at all, the provisions of section 14 of the were not attracted as she was not possessed of any right or title.
The material facts of the case may now be stated.
The deceased carried on the business of printer and publisher under the name and style of Maya Press.
In 1953, his brother in law, B.N. Ghosh alongwith some other persons floated two companies, Mitra Prakashan Pvt. Ltd. and Maya Press Pvt. Ltd.
Under an agreement dated May 29, 1953 the deceased agreed to transfer his publishing business to Mitra Prakashan Pvt. Ltd. for a consideration of Rs. 2,07,500 and the printing business to Maya Press Pvt. Ltd. for Rs. 1,64,800.
It was agreed that the consideration would be paid by Mitra Prakashan Pvt. Ltd. in the form of cash to the extent of Rs. 7,500/ and the balance by allotting 2000 fully paid up shares of the value of Rs. 100/ each to the deceased or his nominees.
The other company, namely Maya Press Pvt.
Ltd. agreed to pay Rs. 4,800/ in cash and the balance of Rs. 1,60,000 in the form of 1600 fully paid up shares of the value of Rs. 100/ each to be allotted in the name of the deceased or his nominees.
In pursuance of this agreement, the business of Maya Press was transferred by the deceased on July 1, 1953 to the two companies.
On January 24, 1954 the deceased wrote to the two companies letters intimating that the shares be allotted to his wife Smt.
N. Mitra, three sons Aloke Mitra, Ashoke Mitra, Deepak Mitra, brother in law B.N. Ghosh and and employee, R.N. Misra.
The companies allotted the shares accordingly.
They in addition allotted two more shares to the deceased.
Thus, 502 shares were held by the deceased in his own name in Mitra Prakashan Pvt. Ltd. and 225 shares in Maya Press 948 Pvt.
Ltd. The rest were held by his wife, sons, brother in law and an ex employee.
It has been found that the total number of shares issued by the two companies was 2006 by the Mitra Prakashan Pvt. Ltd. and 1605 by Maya Press Pvt.
Ltd. Out of these 2002 and 1602 shares respectively were held by the deceased and his nominees.
The deceased by transferring his personal printing and publishing business to the two new companies had thus become through himself or his nominees practically the exclusive owner of these two companies.
It is an admitted fact that the deceased supplied the entire consideration for the purchase of these 2002 and 1602 shares and that his wife, sons, brother in law or the ex employee did not make any contribution for their acquisition.
On these facts, both the Assistant Controller of Estate Duty as well as the Appellate Tribunal held that the share scrips standing in the name of the wife of the deceased and his sons, brother in law and the ex employee really belonged to the deceased as they were mere benamidars and, therefore, included the value of the shares held by the deceased in the name of his wife and sons etc.
in the principal value of the estate passing on his death.
The true legal effect of the finding of the Appellate Tribunal is this: Smt.
N. Mitra, wife of the deceased, his three sons, brother in law and the ex employee held the shares benami for the benefit of the deceased.
They were, therefore, the benamidars of the deceased.
While upholding the order of the Assistant Controller, the Central Board of Direct Taxes observed that the mere fact that the subject matter was the shares in the two companies would not throw any more onus of proof on the Assistant Controller than would be thrown if the subject matter was some other property.
When money was paid by the deceased, it was for the accountable person to prove the gift.
The deceased had clearly mentioned in the letters dated January 24, 1954 to the two companies that the shares should be issued and allotted in the names of the persons nominated by him.
If the deceased intended to make an outright gift of these shares, he would have very well said so in the letters.
There being no presumption of advancement, the mere fact that the shares were got issued in their names without making any indication of gift, would not make the nominees recipients of any gift.
Using of names of benamidars for holding of shares in companies was as common as for any other type of property.
As regards the enjoyment of the income of these shares, it observed that there was no clear evidence to show that the money was actually used by the nominees.
It appeared that the dividends were only credited by book entry to the 949 personal accounts of the deceased, Aloke Mitra and the deceased 's wife the account of the deceased 's wife was also credited with dividends in the names of others than Aloke Mitra.
There was nothing to show that before the death of the deceased these amounts were actually withdrawn and utilised by the persons to whom they were supposed to belong.
Whatever was done after the death of the deceased may, by agreement between the heirs, have been adjusted in the allocation of other assets, and obviously could not be of any legal effect in determining the question whether the shares belonged to the deceased.
As already stated, the only question of law in the opinion of the Appellate Tribunal which could be referred under section 64(1) of the Act, was whether the shares allotted to the wife of the deceased as his nominee or as benamidar were, as from the commencement of the held by her as full owner thereof by virtue of the provisions of section 14 of that Act.
But it declined to make a reference on the other questions, holding that the finding that the shares were held by the deceased in the name of his wife and sons etc.
benami, was a finding of fact and it did not give rise to any question of law.
The accountable person being dissatisfied moved the High Court under section 64(3) and it directed the Tribunal to draw up a supplementary statement of the case and refer two other questions of law said to arise from its order.
When the reference came up before the High Court, it declined to answer questions other than those which were questions of law.
It refused to be drawn into the question of benami, which was purely one of fact, and not one of mixed law and fact and, therefore, following the decision of this Court in Shree Meenakshi Mills Ltd. vs C.I.T. held that the finding was not open to review under section 64(1) of the Act.
In answering the reference in the negative and against the Controller of Estate Duty, and in favour of the accountable person, the High Court merely observed 'As at present advised ' and preferred to follow the two decisions of the Andhra Pradesh High Court in Smt.
Shantabai Jadhav vs Controller of Estate Duty and Smt.
Denabai Bomab Shah vs Controller of Estate Duty taking a view to the contrary.
There is no discussion in the judgment at all and it seems that its attention was not drawn to section 5(1) of the Act.
Following the view in Smt.
Shantabai Jadhav 's case and Smt.
Denabai Bomab Shah 's case the High Court observed that since the shares 950 stood in the name of the wife and sons etc.
benami for the deceased, the deceased had no power to transfer since he had not obtained a release from the benamidars or a declaration from an appropriate court.
On this wrongful assumption, the High Court held that the deceased remained incompetent to transfer the shares till his death, and so, the property in them would not be deemed to pass upon his death by reason of section 6 and, therefore, they were not includible in the estate of the deceased under section 5(1) of the Act.
In Controller of Estate Duty, U.P. vs T.N. Kochhar the High Court following the judgment under appeal, observed: "It is well settled that the property which stands benami in the name of another is one in respect of which the beneficial owner has no competency to dispose of.
Before he can dispose of such a property he has to acquire a declaration from the appropriate court of law releasing the property in his favour.
" The High Court seems to assume that there is some interrelation between sections 5 and 6.
It has held that though the shares in question really belonged to the deceased, they would not, on the facts and in the circumstances of the case, constitute property which 'passed ' on the death of the deceased for the purpose of section 5(1) of the Act since the shares stood in the name of wife and sons etc.
benami for the deceased, but he had only beneficial interest therein inasmuch as the deceased was at the time of his death not competent to dispose of the shares and they could not be 'deemed to pass ' under section 6 of the Act.
The main question involved in the appeal is whether in the case of a benami transaction, the value of the property held by a benamidar passes upon the death of the real owner and is includible in the estate of the deceased under section 5 of the Act, or being so held by the benamidar, it cannot be deemed to pass on his death because of section 6 of the Act and, therefore, the value of such property cannot be included in the principal value of the estate of the deceased.
That depends upon the precise effect of section 5(1) and section 6 and their relation ship to one another namely, whether the chargeability of estate duty under section 5(1) of the Act, is limited and controlled by section 6.
The imposes a tax upon the principal value of all properties, settled or not settled, passing on death or deemed to pass on death.
Estate duty is chargeable at percentage rates rising with the value of the estate on all property passing on 951 death, including property of which the deceased was competent to dispose and gifts made within limited period before death.
Primary liability falls on the deceased 's estate.
The charging section is sub section
(1) of section 5 which provides that in case of a person dying after the commencement of the Act, estate duty is leviable on the capital value of all property, settled or not settled which 'passes ' on death at the rates fixed in accordance with section 35.
That is followed by a group of sections, sections 6 to 15, which relate to the levy of estate duty on properties which by the Act are 'deemed to pass ' on death.
For the avoidance of doubt, it is provided by sub section
(3) of section 3 that references in the Act to property passing on death of a person shall be construed as including references to property deemed to pass on the death of such person.
The expression 'property passing on death ' is defined in section 2(16) to include property passing immediately on death.
In general, the word 'passes ' may be taken as meaning 'changing hands on death ' regardless of its destination.
Section 6 of the Act, upon which the controversy turns, provides: "6.
Property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death.
" By no rule of construction can the operation of sub section (1) of section 5 of the Act be curtailed by the operation of section 6.
It is in addition to or supplemental of, the provisions of sub section (1) of section 5, which is the charging section.
As a matter of construction, two views are possible.
One view is that the two sections are mutually exclusive and they have independent fields of operation.
Whenever property changes hands on death, the State is entitled to step in and take a toll of the property as it passed without regard to its destination or to the degree of relationship, if any, that may have subsisted between the deceased and the person or persons succeeding.
Section 5(1) gives effect to that principle and it imposes a duty called estate duty upon the principal value of all property, settled or not settled, which passes on death.
Section 6 does not apply to property of which the deceased was competent to dispose of and which passes on his death; it applies only to property which does not pass on his death but of which he was competent to dispose.
Sections 5(1) and 6 being mutually exclusive, the application of section 5 accordingly precludes recourse to section 6.
The other and the better view appears to be that section 5(1) alone 952 is capable of imposing a charge of duty and where both section 5(1) and section 6 apply, the property would still be dutiable under both concurrently.
Section 6 is merely subsidiary and supplementary and it declares that the expression 'property passing on the death of the deceased ' shall be 'deemed to include property which the deceased was competent to dispose of '.
When section 6 has brought property within the charge of duty 'either alone ' as in the case of competency to dispose of under section 6, which could not be supposed to 'pass on death ' or concurrently with section 5, its function is at an end.
In England, the Finance Act, 1894 (57 & 58 Vict. c. 30) imposed by section 1 estate duty 'upon the principal value ascertained as hereafter provided of all property, real or personal, settled or not settled which passed on the death ' of a person dying after the commencement of the Act.
By section 2, sub section
(1) 'property passing on the death of the deceased ' shall be deemed to include categories of properties specified therein.
The precise relationship between sections 1 and 2, before the law was amended in 1969, was a question on which judicial opinion fluctuated widely.
For over 60 years, they were regarded as mutually exclusive and having independent fields of operation; the view was that property could not be liable to duty concurrently.
In a situation where both sections 1 and 2 might apply, section 1 took priority and excluded section 2 liability.
It was laid down by the House of Lords, in a series of cases, that section 2(1) was not a definition section, explanatory of section 1, but an independent section operating outside the field of section 1: Earl Cowley vs Inland Revenue Commissioners, Attorney General vs Milne, Nevill vs Inland Revenue Commissioners.
In Earl Cowley 's case the House of Lords reversing the decision of the Court of Appeal, held that if the case fell within section 1, it went out of the purview of section 2.
Lord Macnaghten after observing that section 1 contained the pith and substance of the enactment, stated: "It is comprehensive, broad and clear. .
The first question as it seems to me the question that lies at the very threshold of our inquiry is simply this: Under which section of the Finance Act 1894 does the present case fall? Is it the ordinary and normal case of property passing on death, or is it one of those exceptional cases in which property is deemed to pass, though there is no passing of property in fact? Does it come under section 1 or under section 2?" 953 After differing from the Court of Appeal, he went on to say: "What the Act has in view for the purpose of taxation is property passing on death,.
Now, if the case falls within section 1 it cannot also come within section 2.
The two sections are mutually exclusive.
In my opinion the two sections are quite distinct, and section 2 throws no light on section 1.
But section 2 does not apply to an interest in property which passes on the death of the deceased.
That is already dealt with in the earlier section .
That is section 1.
You do not want section 2 for that.
You cannot resort to section 2.
For that would be giving the duty twice over.
The Crown cannot have it both ways.
Double duty is forbidden by the Act." (Emphasis supplied) The ratio decidendi in Earl Cowley 's case was that if a case fell within section 1 without the aid of section 2(1), one is not concerned with section 2(1).
Lord Macnaghten 's exposition of the inter relation of sections 1 and 2 in Earl Cowley 's case contained the essential characteristics of a statement of legal principle; it was expressed in very precise language, and with a confidence that excluded the possibility of any alternative view.
In Attorney General vs Milne (supra) Lord Haldane, after referring to Earl Cowley 's case, said: "Section 2 is thus not a definition section, but an independent section operating outside the field of section 1." Lord Atkinson, however, adopted Lord Haldane 's earlier view, treating section 2 as merely supplementary to section 1, and as designed to make liable to estate duty certain dispositions of property which were outside the scope and beyond the reach of section 1. "This section", he said, "is not a definition section".
He did not, however, say (and that is significant) that the two sections were mutually exclusive.
Lord Dunedin took a different view.
Having said that whether Lord Macnaghten was strictly correct or not in saying that whether the two sections were mutually exclusive or not seemed to him to matter little, he added: "It seems to me that that is as much as to say that the words, 'property passing on the death ', in the first section, are to be read as if the words, 'including the property following, 954 'that is to say ' (and then all the sub sections) had been there inserted." In Nevill vs Inland Revenue Commissioners (supra) Lord Haldane said: " 'Passes ' may be taken as meaning 'changes hands '.
The principle is contained in section 1.
Section 2 combines definitions of such property with the extension of the application of the principle laid down in section 1 to certain cases which are not in reality cases of changing hands on death at all.".
In Public Trustee vs Inland Revenue Commissioners (Re.
Arnholz) the House of Lords after a lapse of over 60 years, however, struck a discordant note.
The theory of 'mutual exclusiveness ' of sections 1 and 2 enunciated by Lord Macnaghten was not accepted.
It was held s.1 imposed the charge in general terms and s.2, by exclusion and inclusion, defined area of that charge.
No clear exposition was given or required to be given on the facts of the case of what was the precise effect of the two sections or their relationship to one another.
There followed a period of uncertainty as to the precise relationship between the two sections, although subsequent to Arnholz 's case section 1 alone was held to be still capable of imposing a charge of duty, and where both sections 1 and 2 applied, the property was held to be dutiable under both concurrently.
If the property which passed was identical with the property which would otherwise be deemed to pass, the question under which head it shall be taxed was purely academic.
Estate duty is not leviable more than once on the same death in respect of any property, even if it is chargeable under more than one head.
In Weir 's Settlement Trusts, Re.
Mc Pherson vs Inland Revenue Commissioners, the contention on behalf of the tax payer was that the decision in Public Trustee vs Inland Revenue Commissioners (Re.
Arnholz) established the complete reverse of the view expressed by Lord Macnaghten in Earl Cowley 's case, that is, established that section 2 exhaustively laid down the only circumstances in which estate duty was leviable, and that if the circumstance could not be brought within section 1, as being circumstances set out in section 2, that was the end of the matter, the phrase in section 1 'property which passes on the death ' having no content independent of section 2.
955 Russell L.J., in delivering the judgment of the Court of Appeal, resolved the doubts as to the relationship of ss.1 and 2 of the Act, and rejected the contention of the tax payer, observing: "It was certainly not decided by the majority in Arnholz 's case that, as a matter of construction, the entire content of 'property. which passes on death ' in section 1 was to be found in s.2.
" As regards the relationship of sections 1 and 2, he stated: "Our view of the relationship of the two sections is as follows.
It is section 1 that imposes the charge of estate duty on the value of property described as 'property. which passes on the death '.
Section 2(1) does not describe a different category of property, being property deemed to pass on a death.
Section 2(1) states certain situations in relation to property which involve that property in section 1 as property which passes on a death.
We see no reason to hold that section 2(1) was intended exhaustively to define and limit the situations in relation to property which thus involve that property.
The language is not apt for that purpose; and the fact that the situations envisaged embrace occasions when without guidance from section 2 (1) the property would be manifestly 'property. which passes on the death ' does not mean that they embrace all such occasions.
" The question is a difficult one on which there may well be divergence of opinion, as reflected in these English decisions which largely turn on the construction of sections 1 and 2 of the Finance Act, 1894, the provisions of which are somewhat similar to those of sections 5 and 6 of the Act.
The simultaneous existence of a right to tax under sections 1 and 2 was inconsistent with the well known statement of Lord Macnaghten in Earl Cowley 's case and could not, therefore, be sustained.
Nevertheless, the trend of judicial opinion in England rightly changed, as we think that Lord Macnaghten 's opinion ought not to be regarded as subject to such refinement.
The Andhra Pradesh High Court in Smt.
Shantabai Jadhav 's case (supra) held that notwithstanding the fact that the property was purchased in the name of the wife, and had been included by 956 the deceased as his own property in the wealth tax returns filed by him, it could not be held to be the property of the deceased, for the purpose of its inclusion in the estate of the deceased.
It was observed: "Even assuming that the money for the purchase was found by her husband, it does not mean that he had beneficial interest in the property.
Normally, a husband takes a sale in the name of his wife either to make a provision for her or to screen the property from creditors, i.e., to keep it beyond the reach of the creditors.
Whatever may be the motive, so long as the deed stands in the name of another person, it could not be said that it was competent for the deceased to dispose of the property.
Section 6 of the enacts that property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death.
It is thus manifest from the section that Estate duty could be levied in respect of the properties which could be disposed of by the deceased at the time of his death.
" Repelling the contention that the wife could not have alienated the properties by herself and that any disposition by her would not pass the title to such purchaser, having regard to the fact that it was open to the husband to impeach the sale sometime later, on the ground that the beneficial interest always vested in him, consideration having been paid by him, the Court relied upon the provisions of section 41 of the Transfer of Property Act and further observed: "Be that as it may, so long as the documents stand in the name of his wife, he could not dispose of the property.
It is true that it was open to him to have obtained the declaration that he was the beneficial owner thereof notwithstanding the fact that his wife was the ostensible owner.
But, so long as the husband does not have any recourse to these proceedings for obtaining such a relief, he could not have been in a position to dispose of the property standing in the name of the third person as his own.
This proposition was not contested on behalf of the Central Board of Revenue.
" In Smt.
Denaabi Boman Shah 's case (supra) following its earlier decision in Smt.
Shantabai Jadhav 's case while dealing with a similar benami transaction, the High Court held that the value of property held by a benamidar could not be included in the value of the property left by the deceased. 957 In Controller of Estate Duty vs M. L. Manchanda, the Punjab and Haryana High Court following these decisions had held that property which stood in the name of wife and of which the husband was the real owner, was upon the wife 's death chargeable to estate duty under section 5(1) of the Act, observing: "Irrespective of the fact that the husband was the true owner of the property, there was nothing to prevent the wife a minute before her death to transfer the property.
The legal title against the entire world excepting the true owner, vested in her and she had thus the right to dispose of that right, and once that right is conceded, the property shall be deemed to pass on her death and would, therefore, be liable to the levy of estate duty under section 5 of the Act.
" In delivering the judgment of the Full Bench in O. section Chawla vs Controller of Estate Duty, Dwivedi J. observes: "The scheme of the Act is two fold.
Firstly, there are properties which pass on the death of a person.
Section 5(1) imposes duty on their value.
Secondly, there are properties in which the deceased had an interest or power of appointment and which really do not pass on his death.
The scheme of the Act is to impose duty on the value of such properties also.
In the second class will fall provisions like sections 6, 7, 8, 9 and 10.
The Act creates a fiction of law to declare that the properties mentioned in those sections will be deemed to pass on the death of a person, though they do not 'pass ' in fact.
" This two fold scheme is made plain by the definition in section 2(16) and section 3(3).
Section 2(16) defines the phrase 'property passing on death '.
Section 3(3) declares that references in the Act to 'property passing on the death ' of a person shall be construed as including references to 'property deemed to pass on the death ' of such person.
The statement of objects and reasons of the Bill which ripened into the Act also emphasises the two fold scheme.
It states that the 'object of the Bill is to impose an estate duty on property passing or deemed to pass on the death of a person '.
The object of section 6 is to catch properties in the set of section 5(1) which do not really pass on the death of a person.
For instance, property comprised in a revocable gift is property which the donor is competent to dispose of whether the gift is 958 revoked or not and will be covered by section 6.
Similarly, property in respect of which the deceased had the power of appointment will also fall within section 6.
" We are in agreement with the observations made by the learned Judge on the relative scope of section 5 and section 6 of the Act, which bring out the true legislative intent.
In applying the Act to any particular transaction, regard must be had to its substance, that is, its true legal effect, rather to the form in which it is carried out.
On the facts found, it has been established beyond doubt that the deceased was the real owner of the shares.
The ownership which the deceased had in the shares passed on his death and must be brought to charge under sub section
(1) of section 5.
All that has been said above is sufficient to dispose of the appeal.
It, however, becomes necessary to deal with the law relating to benami transactions as there is some misconception as to the nature of the rights of a benamidar.
What follows is purely elementary.
The law in this matter is not in doubt and is authoritatively stated by a long line of decisions of the Privy Council starting from the well known case of Gopeekrist Gosain vs Gungapersaud Gosain to Sura Lakshmiah Chetty vs Kothandarama Pillai and of this Court in Shree Meenakshi Mills Ltd. vs C.I.T. As observed by Knight Bruce L.J. in Gopeekrist Gosain 's case, the doctrine of advancement is not applicable in India, so as to raise the question of a resulting trust.
When a property is purchased by a husband in the name of his wife, or by a father in the name of his son, it must be presumed that they are benamidars, and if they claim it as their own by alleging that the husband or the father intended to make a gift of the property to them, the onus rests upon them to establish such a gift.
In Sura Lakshmiah Chetty 's case, the law was stated with clarity by Sir John Edge in these words: "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.
" 959 It is but axiomatic that a benami transaction does not vest any title in the benamidar but vests it in the real owner.
When the benamidar is in possession of the property standing in his name, he is in a sense the trustee for the real owner; he is only a name lender or an alias for the real owner.
In Petheperumal Chetty vs Muniandy Servai, the Judicial Committee quoted with approval the following passage from Mayne 's Hindu Law 7th ed., para 446: "Where a transaction is once made out to be a mere benami, it is evident that the benamidar absolutely disappears from the title.
His name is simply an alias for that of the person beneficially interested.
" The cardinal distinction between a trustee known to English law and a benamidar lies in the fact that a trustee is the legal owner of the property standing in his name and cestui que trust is only a beneficial owner, whereas in the case of a benami transaction the real owner has got the legal title though the property is in the name of the benamidar.
It is well settled that the real owner can deal with the property without reference to the latter.
In Gur Narayan vs Sheo Lal Singh, the Judicial Committee referred to the judgment of Sir George Farwell in Mst.
Bilas Kunwar vs Dasraj Ranjit Singh, where it was observed that a benami transaction had a curious resemblance to the doctrine of English law that the trust of the legal estate results to the man who pays the purchase money, and went on to say: ". the benamidar has no beneficial interest in the property or business that stands in his name; he represents, in fact, the real owner, and so far as their relative legal position is concerned he is a mere trustee for him.
" In Guran Ditta vs Ram Ditta the Judicial Committee reiterated the principle laid down in Gopeekrist Gosain 's case and observed that in case of a benami transaction, there is a resulting trust in favour of the person providing the purchase money.
A benamidar has no interest at all in the property standing in his name.
Where the transaction is once made out to be benami, the Court must give effect to the real and not to the nominal title subject to certain exceptions.
In Mulla 's Hindu Law, 14th edn.
, p. 638, four exceptions to the normal rule are brought out.
But these exceptions are not material in this case.
One of the exceptions 960 enumerated therein is that where a benamidar sells, mortgages or otherwise transfers for value property held by him without the knowledge of the real owner, the real owner is not entitled to have the transfer set aside unless the transferee had notice, actual or constructive that the transferor was merely a benamidar.
The principle is embodied in section 41 of the Transfer of Property Act.
The section makes an exception to the rule that a person cannot confer a better title than he has.
The section is based on the well known passage from the judgment of the Judicial Committee in Ramcoomar Koondoo vs Macqueen: "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 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 other throw 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." A benamidar is an ostensible owner and if a person purchases from a benamidar, the real owner cannot recover unless he shows that the purchaser had actual or constructive notice of the real title.
But from this it does not follow that the benamidar has real title to the property, he is merely an ostensible owner thereof.
The law is succinctly stated by Mayne in his Treatise on Hindu Law, 11th edn., at p. 953, in the following terms: "A benami transaction is one where one buys property in the name of another or gratuitously transfers his property to another, without indicating an intention to benefit the other.
The benamidar, therefore, has no beneficial interest in the property or business that stands in his name; he represents in fact the real owner and so far as their relative legal position is concerned, he is a mere trustee for him.
In other words, a benami purchase or conveyance leads to a resulting trust in India, just as a purchase or transfer under similar circumstances leads to a resulting trust in England.
The general rule and principle of the Indian law as to resulting trusts differs but little if at all, from the general rule of English law upon the same subject.
" 961 (See also : Shree Meenakshi Mills Ltd. vs C.I.T. per Venkatarama Ayyar J., and Thakur Bhim Singh vs Thakur Kan Singh ; Per Venkataramiah J.] In the light of these settled principles the liability to pay estate duty under section 5 (1) of the Act arises upon the death of the real owner and not of the benamidar, who is merely an ostensible owner.
The test lies in whether upon the death of the benamidar, there would be incidence of liability to estate duty.
If the view of the High Court were to be accepted, the estate left by the deceased would escape the duty altogether.
We do not see how section 6 of the Act comes into play at all in this case.
In view of the finding that the shares were purchased by the deceased benami in the name of his wife and sons etc.
, the real ownership of the property was vested in the deceased was entitled to deal with the same as if it were his own and the benamidars held it in trust under section 82 of the Trusts Act, 1882 for the benefit of the deceased.
The benamidars, subject to the equities flowing from section 41 of the Transfer of Property Act, could not deal with the shares in any way.
Accordingly, the estate belonged to the deceased who died possessed of the same, and under section 5(1) of the Act the entire value of the shares was includible in the principle value of the estate of the deceased on his death.
For these reasons, the judgment of the High Court is set aside and the question is answered in the affirmative and in favour of the Controller of Estate Duty.
There shall be no order as to costs.
N.V.K. Appeal allowed.
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One M carried on the business of printer and publisher.
In 1953 his brother in law alongwith some other persons floated two companies a publishing firm and a printing press.
Under an agreement dated May 29, 1953 M agreed to transfer his business to the newly floated companies, and on January 24, 1954 he wrote letters intimating that the shares in the companies be allotted to his wife, his 3 sons, his brother in law and an ex employee.
The companies allotted the shares accordingly.
502 shares were allotted to M in his own name in the publishing firm and 225 shares in the printing press.
Of the remaining, 2002 shares in the publishing firm and 1602 shares in the printing press were allotted to M and his nominees.
M died on February 11, 1957.
On his death the respondent, the accountable person filed a return of estate duty in which he included the value of the 502 shares in the publishing firm and 225 shares in the printing press.
The Assistant Controller of Estate Duty did not accept this part of the return and included the 2002 shares in the publishing firm and 1602 shares in the printing press standing in the name of the wife of the deceased, his 3 sons, brother in law and the ex employee, since they were holding these shares benami, and included the value of these shares in the principal value of the estate of the deceased.
In appeal, the Central Board of Direct Taxes, the Appellate Tribunal affirmed this order.
It observed that the mere fact that the subject matter was the shares in the two companies would not throw any more onus of proof on the Assistant Controller than would be thrown if the subject matter was some other property.
When money was paid by the deceased, it was for the accountable person to prove the gift.
The deceased had clearly mentioned in his letters dated January 24, 1954 to the two companies that the shares should be issued and allotted in the names of the persons nominated by him.
If the deceased intended to make an outright gift of the shares, he would have very 944 well said so in the letters.
There being no presumption of advancement, the mere fact that the shares were got issued in their names without making any indication of gift, would not make the nominees recipients of any gift.
The High Court answered the reference against the appellant and in favour of the accountable person.
Following the decisions of the Andhra Pradesh High Court in Shantabai Jadhav vs Controller of Estate Duty and Smt.
Denabai Bomab Shah vs Controller of Estate Duty (1964) 51 ITR (ED) 1 it observed that since the shares stood in the name of the wife and sons etc., benami for the deceased, the deceased had no power to transfer since he had not obtained a release from the benamidars or a declaration from an appropriate court.
As the deceased, remained incompetent to transfer the shares till his death, the property in them would not be deemed to pass upon his death by reason of section 6 and therefore, they would not be included in the estate of the deceased under section 5(1) of the Act.
Allowing the appeal, to this Court ^ HELD: 1.
The liability to pay estate duty under section 5(1) of the Act arises upon the death of the real owner and not of the benamidar, who is merely an ostensible owner.
The test lies in whether upon the death of the benamidar, there would be incidence of liability to estate duty.
[961B] 2.
The finding being that the shares were purchased by the deceased benami in the name of his wife and sons, the real ownership of the property was vested in the deceased who was entitled to deal with the same as if it were his own and the benamidars held it in trust under section 82 of the Trust Act, 1882 for the benefit of the deceased.
The estate, therefore, belonged to the deceased who died possessed of the same and under section 5(1) of the Act the entire value of the shares was includible in the principal value of the estate of the deceased on his death.
[961C E] 3.
(i) The imposes a tax upon the principal value of all properties, settled or not settled passing on death or deemed to pass on death.
Estate duty is chargeable at percentage rates rising with the value of the estate on all property passing on death, including property of which the deceased was competent to dispose and gifts made within limited period before death.
Primary liability falls on the deceased 's estate.
[950H; 951A] (ii) The scheme of the Act is two fold.
Firstly there are properties which pass on the death of a person.
Section 5(1) imposes duty on their value.
Secondly, there are properties in which the deceased had an interest or power of appointment and which really do not pass on his death.
The scheme of the Act is to impose duty on the value of such properties also.
In the second class will fall provisions like sections 6, 7, 8, 9 and 10.
The Act creates a fiction of law to declare that the properties mentioned in those sections will be deemed to pass on the death of a person, though they do not 'pass ' in fact.
[957D E] (iii) The object of section 6 is to catch properties in the net of section 5(1) which do not really pass on the death of a person.
For instance, property comprised in a revocable gifts is property which the donor is competent to dispose of whether the gifts is revoked or not and will be covered by section 6.
Similarly property in respect of which the deceased had the power of appointment will also fall within section 6.
[957H; 958A] O.S. Chawla vs Controller of Estate Duty (1973) 90 ITR approved.
945 4.
In applying the Act to any particular transaction, regard must be had to its substance, that is, its true legal effect, rather to the form in which it is carried out.
[958B] 5.
By no rule of construction can the operation of sub section (1) of section 5 of the Act be curtailed by the operation of section 6.
It is in addition to or supplemental of the provisions of sub section (1) of section 5, which is the charging section.
[951E] In the instant case, it has been established that the deceased was the real owner of the shares.
The ownership which the deceased had in the shares passed on his death and must be brought to charge under sub section (1) of section 5.
[958C] Smt.
Denabai Bomab Shah vs Controller of Estate Duty and Smt.
Shantabai Jadhav vs Controller of Estate Duty (1964) 51 ITR (ED) 1 disapproved.
(i) The provisions of sections 5 and 6 of the Act are somewhat similar to those of sections 1 and 2 of the Finance Act, 1894 in England.
[955F] (ii) The precise relationship between sections 1 and 2, before the law was amended in 1969, was a question on which judicial opinion fluctuated widely.
For over sixty years they were regarded as mutually exclusive and having in dependent fields of operation, the view was that property could not be liable to duty concurrently.
In a situation where both sections 1 and 2 might apply, section 1 took priority and excluded liability.
[952D E] Earl Cowley vs Inland Revenue Commissioners, L.R. , Attorney General vs Milne, L.R. [1914] A.C. 765, Nevill vs Inland Revenue Commissioners, LR [1924] A.C. 385 referred to.
(iii) In Public Trustee vs Inland Revenue Commissioners (Re Ambody) LR the House of Lords struck the discordant note, holding that section 1 imposed the charge in general terms and section 2 by exclusion and inclusion, defined area of that charge.
In Weir 's Settlement Trusts, Re Mc Pherson vs Inland Revenue Commissioners LR [1971] Ch.D. 145 the Court of Appeal resolved the doubts as to the relationship of these two sections.
[954C; G, 955A] 7.
When a property is purchased by a husband in the name of his wife or by a father in the name of his son, it must be presumed that they are benamidars, and if they claim it as their own by alleging that the husband or the father intended to make a gift of the property to them, the onus rests upon them to establish such a gift.
When the benamidar is in possession of the property, standing in his name, he is in a sense the trustee for the real owner; he is only a name lender or an alias for the real owner.
[1958F; 959A] Gopeekrist Gosain vs Gungapersaud Gosain (1854) 6 MIA 53, Sura Lakshmiah Chetty vs Kothandarama Pillai L.R. [1924 25] 52 IA 286, Shree Meenakshi Mills Ltd. C.I.T. referred to.
946 8.
A benamidar has no interest at all in the property standing in his name A benamidar is an ostensible owner and if a person purchases from a benamidar, the real owner cannot recover unless he shows that the purchaser had actual or constructive notice of the real title.
But from this it does not follow that the benamidar has real title to the property, he is merely an ostensible owner thereof.
[960E] Mayne Hindu Law 11th Edn.
p. 953 referred to.
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Special Leave Petition No. 1262 of 1980.
From the Judgment and Order dated 19 2 1979 of the Allahabad High Court in C.M.W.P. No. 184 of 1975.
section N. Kaicker, Mrs. section Markendeya and section Markendeya for the Petitioners.
The Order of the Court was delivered by KRISHNA IYER, J. An order draped in relative brevity is sufficient since we are refusing leave to appeal although the issue raised is vires of a provision.
After due fulfillment of the obligation for oral hearing, we have considered the impact of two earlier decisions cited by Shri Kaicker sup 1025 posedly striking a note contrary to the judgment under attack but feel free why, bound to dismiss the petition for special leave not merely because the High Court is right but because justice to the travelling public a lost cause on our made roads conscientises to that course.
Tersely put, the petitioner is the grantee of permits to ply minibuses as contract carriages and in the grant a condition has been fastened that the vehicle shall not be more than seven years old.
Condition No. 18, relating to Mini Buses Contract Carriage permits, and the source of power, section 51 (2) (x) read thus: That the vehicle covered by the permit shall be not more than four years old counted from the date of registration at any time during the validity of the permit.
51(2) The Regional Transport Authority, if it decides to grant a contract carriage permit, may, subject to any rules that may be made under this Act, attach to the permit any one or more of the following conditions, namely: (x) any other conditions which may be prescribed.
Section 51(2) (x) any other. 'Four years ' have been relaxed to seven years since September 23, 1978, the beneficiaries being the bus owners and the potential victims being the unknown casualties who have no 'poor lobby ' power.
The State must remember that it has responsibilities not merely to mini bus owners, but also to avoid the daily tragedies on the Indian high ways under the lethal wheels of these whirling carriages.
Section 51 (2) of the , is geared to public safety, not private profit and casts a solemn duty not to be deterred by any pressure except the pressure of social justice to Indian lives moving in buses, walking on roads or even standing on margins.
If the top killer road accident is to be awarded death sentence, section 51 and like provisions must receive severe enforcement.
In this spirit although backtracking from 4 year old models to 7 year old models the state imposed condition 18.
This was challenged artfully but unsuccessfully before the High Court and is attacked before us as ultra vires section 51(2) of the Act.
We will examine briefly the submission to reach the conclusion that mere lexical legalism cannot sterilise the sensible humanism writ large on section 51(2) (x).
If Indian life is not ultra vires Indian law every condition to save life and limb is intra vires such salvationary provision.
This perspective of social justice simplifies the problem and upholds the High Court.
Section 51(2) (x) authorises the impost of any condition, of course, having a nexus with the statutory purpose.
It is undeniable that human safety is one such purpose.
The State 's neglect in this area of policing 1026 public transport is deplorable but when it does act by prescribing a condition the court cannot be persuaded into little legalism and harmful negativism.
The short question is whether the prescription that the bus shall be at a seven year old model one is relevant to the condition of the vehicle and its passengers ' comparative safety and comfort on our chaotic highways.
Obviously, it is.
The older the model, the less the chances of the latest safety measures being built into the vehicle.
Every new model incorporates new devices to reduce danger and promote comfort.
Every new model assures its age to be young, fresh and strong, less likely to suffer sudden failures and breakages, less susceptible to wear and tear and moral fatigue leading to unexpected collapse.
When we buy a car or any other machine why do we look for the latest model ? Vintage vehicles are good for centenarian display of curios and cannot but be mobile menaces on our notoriously neglected highways.
We have no hesitation to hold, from the point of view of the human rights of road users, that the condition regarding the model of the permitted bus is within jurisdiction, and not to prescribe such safety clauses is abdication of statutory duty.
Two decisions Masi Ullah vs State Tribunal Appellate(1) and In re: Ramesh Chandra Tewari etc.(2) were cited as striking a contrary note.
The first deals with section 48(3) of the Act and prescription of the model or year of the make was held ultra vires because, lexically read, it was held that the expression specified description in section 48(3) did not cover, according to dictionaries, the year of manufacture of the vehicle.
We extract Black 's Law Dictionary on 'description ' to show how the model of a vehicle is obviously a facet of its description. 'Description ' means: (3) A delineation or account of a particular subject by the recital of its characteristic accidents and qualities.
So, dictionary versus dictionary leaves the matter at large, apart from the plain function of the court to gather the meaning, not under the dictatorship of dictionaries but guided by the statutory purpose without being deflected by logamachic exercises, the mischief to be countered and the public interest to be advanced.
We are clear that a later model is a better safeguard and, more relevantly to the point, the year of the make and the particulars of the model are part of the description.
1027 The unreported ruling in Civil Writ No. 7317 of 1975 interprets section 38 of the Act and the non issuance of the fitness certificate because the model was not recent enough.
May be the vehicle, regardless of the year of its make, may be fit and the refusal to certify fitness merely because it is old may not always be right.
But we see no conflict between a vehicle being fit to ride and the condition, as an additional requirement and safety factor, in the shape of the year of the model.
This is an extra measure, a further insurance against machine failure and cannot contradict the 'fitness ' provision.
More reasons are, superogatory, less discussion will leave the law obscure.
We hold the ration of the impugned ruling to be right and refuse leave to appeal.
S.R. Petition dismissed.
|
Dismissing the special leave petition, the Court ^ HELD: 1.
Mere lexical legalism cannot sterilise the sensible humanism writ large on section 51(2)(x).
If Indian life is not ultra vires Indian law every condition to save life and limb is intra vires such salvationary provision.
[1025G] 2.
Section 51(2) of the , is geared to public safety, not private profit and casts a solemn duty not to be deterred by any pressure except the pressure of social justice to Indian lives moving in buses, walking on roads or even standing on margins.
If the top killer road accident is to be awarded death sentence, section 51 and like provisions must receive severe enforcement.
In this spirit although backtracking from 4 year old models to 7 year old models the state imposed condition 18.
Section 51(2) (x) authorises the impost of "any condition" of course having a nexus with the statutory purpose.
Human safety is one such purpose.
[1025D F, H] 3.
From the point of view of the human rights of road users, the condition regarding the model of the permitted bus is within jurisdiction and not to prescribed such safety clauses is abdication of statutory duty.
There is no conflict between a vehicle being fit to ride and the condition as an additional requirement and safety factor in the shape of the year and the model.
This is an extra measure, a further insurance against machine failure and cannot contradict the 'fitness ' provision.
[1126D, 1027A B]
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N: Criminal Appeal No. 499 of 1976.
Appeal by Special Leave from the Judgment and Order dated 22 7 1975 of the Punjab & Haryana High Court in Criminal Appeal No. 166/75 and Murder Reference No. 10/75.
O.P. Sharma and M. section Dhillon for the Appellant.
R.K. Jain for Respondents Nos. 1 and 3 to 6.
R.K. Kohli and R. C. Kohli for the complainant.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal by the State of Punjab is directed against a judgment, dated July 22, 1975, of the High Court of Punjab and Haryana, whereby the appeal of the respondents (hereinafter referred to as the accused) was accepted and they were acquitted of the double murder charge against them.
The prosecution story narrated by Resham Singh (P.W. 2), who claims to be an eyewitness of the occurrence, runs as follows.
Resham Singh (P.W.2) used to live with his brother in law, Hazara Singh deceased, in a hamlet in the fields outside the habitation of village Cheema.
One Ajit Singh of village Dhual was murdered, and Wassan Singh accused and his party men were tried therefor.
At the trial, Hazara Singh deceased appeared as an eyewitness of that murder.
The trial court convicted Wasson Singh and his companions in that case.
They went in appeal to the High Court.
Pending the appeal the High Court enlarged Wasson Singh accused on bail.
The occurrence now in question in the instant case took place when Wasson Singh was on bail.
The lands of Avtar Singh, Mukhtar Singh and Harbhajan Singh accused (respondents) adjoin the lands of Hazara Singh deceased.
Three or four days prior to the incident in question, the cattle of these accused persons trespassed on the land of Hazara Singh and damaged his cotton crop.
Thereupon, a sharp altercation took place 620 between Hazara Singh and Resham Singh on one side and Harbhajan Singh and Mukhthar Singh on the other.
Gajjan Singh son of Gopal Singh resident of the village interceded and pacified the parties.
Joginder Singh accused respondent is the brother of Mukhtar Singh accused respondent while Harbhajan Singh Respondent is their first cousin.
Mukhtar Singh and Harbhajan Singh accused are alleged to be partyman of Wasson Singh.
On August 4, 1973 at about 3.30 p.m., Resham Singh (P.W.2).
Resham Singh (deceased) son of another Hazara Singh and Hazara Singh deceased were proceeding by the foot path from the Bus Stand Amarkot to their hamlet.
On the way Bachan Singh, brother of Hazara Singh, met them and proceeded along with them.
When they reached near the fields of Jarmaj Singh Sarpanch of Mahmoodpura, all the six accused, namely, Wasson Singh, Baj Singh, Meja Singh, Joginder Singh, Mukhtar Singh and Harbhajan Singh emerged from the sann crop and came to the bank of the watercourse.
Baj Singh was armed with a pistol and the other five accused were armed with rifles.
Wasson Singh, Joginder Singh and Mukhtar Singh fired their rifles at Hazara Singh.
The rifle shots hit Hazara Singh on the left side of his head, and he dropped dead.
Resham Singh (P.W.2), Bachan Singh and Resham Singh deceased started running towards the ploughed fields.
Meja Singh, Harbhajan Singh and Baj Singh chased them.
Meja Singh and Harbhajan Singh encircled Resham Singh deceased and shot him dead with rifle shots.
Baj Singh chased Resham Singh (P.W. 2) and Bachan Singh (P.W. 3) and fired at them with his pistol.
When these two were running away, the other two accused also fired at them.
Resham Singh and Bachan Singh, however, succeeded in escaping unhurt.
Resham Singh (P.W. 2) immediately reached the Bus Stand Amarkot, picked up his motor cycle which was lying there at a shop and drove fast to Police Station Valtoha, where he lodged the First Information Report (exhibit PE) at 4.30 p.m.
Police Sub Inspector Bishambar Lal recorded the report of Resham Singh and sent a copy of the same as a special report to the superior officers, including the Judicial Magistrate, First Class at Patti, who received the copy of the F.I.R. at 6.30 p.m., on the same day.
While running away from the spot Resham Singh (P.W. 2) had left behind his shoe (exhibit P 1) near the scene of murders.
Sub Inspector Bashambar Lal reached the scene of occurrence at 5.30 p.m. and started investigation.
He prepared the inquest reports regarding the deaths of Hazara Singh and Resham Singh deceased persons.
He also took into possession blood stained earth 621 and other relevant articles lying near the two dead bodies.
He found two empty cartridge cases at the scene of Hazara Singh 's murder.
He took them into possession and sealed them into a parcel.
He also seized two pairs of shoes lying at the spot.
After his arrest, Mukhtar Singh accused was interrogated by the Investigating Officer on August 31, 1973.
After making a statement, Mukhtar Singh accused, in the presence of witnesses, led the police to the discovery of the rifle (exhibit P 7) and some live cartridges.
The rifle and the empty cartridges earlier found at the scene of crime were sent to the ballistic expert for examination and opinion.
After examination, the ballistic expert of the Forensic Science Laboratory, Chandigarh, reported (vide exhibit P. 9) that the 303 fired cartridge, marked C, had been fired through the 303 rifle marked `A ' by him.
But no definite opinion could be given regarding the linkage of the fired cartridge marked C, with the 303 rifle marked `A ' due to lack of sufficient individual characteristic marks on C2.
Joginder Singh accused was arrested on August 24, 1973 and Baj Singh accused on December 18, 1973.
The post mortem examination of the dead body of Resham Singh was performed by Dr. Gursharan Kaur on August 5, 1973 at 8 a.m.
The Doctor found five gun shot injuries on his body.
Two of these were wounds of entry, with everted margins on the back of the left chest.
No charring was present on any of these gun shot wounds.
The death in the opinion of the Doctor was due to shock and haemorrhage resulting from gun shot injuries on the chest which were sufficient to cause death in the ordinary course of nature.
On the same day, Dr. Gursharan Kaur conducted the autopsy on the dead body of Hazara Singh and found four fire arm injuries, two of which were wounds of entry and two were wounds of exit.
All these injuries were on the skull.
They involved fracture of the skull and damage to the brain.
These injuries had been caused with firearm and were sufficient to cause death instantaneously, in the ordinary course of nature.
At the trial, the main stay of the prosecution was the testimony of the two eye witnesses, Resham Singh (P.W.2) and Bachan Singh (P.W.3).
Examined under Section 342, Cr.
P.C., Wasson Singh accused admitted that he along with others was tried for the murder of Ajit Singh of village Dhual and Hazara Singh deceased had appeared against him as eye witness of that murder; and that he (Wasson Singh) was convicted by the Court of Session, but had been released on bail 622 pending his appeal in the High Court.
He denied the rest of the prosecution case and stated that he had been falsely implicated by the relations of Ajit Singh deceased on suspicion; and that on the day of occurrence, he was working as a Conductor on a truck at Muzaffarnagar.
The plea of Baj Singh was one of plain denial of the prosecution case.
He stated that his brothers Punjab Singh, Narinder Singh and Bagicha Singh had been prosecuted for the murder of one Puran Singh who was a relation of Bachan Singh (P.W.3); that Punjab Singh and his companions were acquitted in that case.
Baj Singh added that he used to look after the defence of the accused in Puran Singh 's murder case; and that on account of this, he had been falsely implicated.
He further stated that at the time of occurrence, he was residing in U.P. Meja Singh accused, also, denied the prosecution case.
He stated that one Balkar Singh of Village Wan had been murdered.
He (Meja Singh) used to look after the defence of Jarnail Singh (his wife 's brother, who was being tried for the murder of Balkar Singh; that on account of this, the relation of the said Balkar Singh had, in connivance with the complainant party, falsely implicated him in the instant case.
The remaining accused, also, denied the circumstances appearing in evidence against them.
The learned Additional Sessions Judge, Amritsar, who tried the case against these six accused persons, found that Wasson Singh had a strong motive to murder Hazara Singh deceased, because the latter had appeared as an eye witness against Wasson Singh in Ajit Singh 's murder case.
The trial Judge further accepted the prosecution evidence in regard to the fact that a few days before this occurrence in question, there was a: quarrel between Hazara Singh deceased and Resham Singh (P.W. 2) on one side and Mukhtar Singh, and Harbhajan Singh accused on the other, when the cattle of the accused had trespassed on the land of the deceased and damaged his cotton crop; and that on account of this ill will, Joginder Singh, Mukhtar Singh and Harbhajan Singh accused had a sufficient motive to join hands with Wasson Singh accused to murder Hazara Singh deceased.
The trial Judge further found that the prosecution had failed to establish the exact nature of the motive which might have actuated Meja Singh and Baj Singh to murder Resham Singh deceased.
The trial Judge further held that the F.I.R. which had been lodged by Resham Singh with great promptitude at Police Station Valtoha, which was about three miles from the place of occurrence, furnished valuable corroboration of the evidence of Resham Singh (P.W. 2).
623 He accepted the evidence of Resham Singh and Bachan Singh.
He further found that Sub Inspector Bishambar Lal had tried to favour Joginder Singh accused by fabricating a note in his zimini at some subsequent stage.
This note is to the effect, that Joginder Singh was, in fact, present irrigating his nearby fields and he joined the police investigation on the very day of occurrence and had remained with the police till the investigation by the Deputy Superintendent of Police.
The trial Judge disbelieved the plea of alibi set up by Meja Singh accused.
In the absence of independent evidence, the trial Judge was unable to hold from the bare testimony of Bishamber Lal, Sub Inspector, that the rifle (exhibit P 7) had been recovered from Mukhtar Singh accused.
He, however, criticised the conduct of Sub Inspector Bishamber Lal in not sending the empty cartridges found at the spot to the ballistic expert of the Forensic Laboratory, Chandigarh, with due promptitude.
In the result, the trial Judge held that Wasson Singh, Joginder Singh and Mukhtar Singh accused had fired their rifles at Hazara Singh deceased, and had caused his death.
He therefore, convicted these three accused for the substantive offence under Section 302, Penal Code.
He further held that the common object of the unlawful assembly constituted by the six accused was to murder Hazara Singh deceased.
He therefore, further convicted all the six accused under Section 302 read with Section 149, Penal Code, for the murder of Hazara Singh.
The trial Judge found that the murder of Resham Singh did not appear to have been caused in prosecution of the common object of the said unlawful assembly.
He therefore, convicted Baj Singh, Meja Singh and Harbhajan Singh accused only under Section 302 read with Section 34, Penal Code, for the murder of Resham Singh deceased and sentenced each of them to imprisonment for life and a fine of Rs. 200/ .
In respect of the murder of Hazara Singh, Wasson Singh was sentenced to death, while each of the other five accused were sentenced to imprisonment for life and a fine.
The trial Judge referred the case to the High Court for confirmation of the death sentence of Wasson Singh.
All the accused, also appealed against their conviction and sentences.
The High Court allowed the appeal, declined the reference and rejected the evidence of the eye witnesses, Resham Singh (P.W. 2) and Bachan Singh (P.W. 3), for these reasons: (i) Both these witnesses are closely related to the deceased Hazara Singh, who was the principal target of the accused.
(ii) (a) Excepting in the case of Wasson Singh who had undoubtedly a grudge against Hazara Singh deceased, it has not been 624 satisfactory established by the prosecution that the other five accused had any motive to commit the murders in question.
(b) Gajjan Singh, who is said to have interceded and pacified both the parties at the time of the alleged quarrel over cattle trespass, three or four days prior to the occurrence, between Mukhtar Singh and Harbhajan Singh on one hand and Hazara Singh deceased and Resham Singh (P.W. 2) on the other, has not been examined by the prosecution.
(c) There was no mention about this earlier incident in the statement of Bachan Singh (P.W. 3) before the police during investigation.
(iii) Both Resham Singh and Bachan Singh, P.Ws.
had earlier been involved in cases of serious crime, and Bachan Singh was admittedly registered as a bad character with the Police.
On account of their antecedents, Resham Singh and Bachan Singh do not appear to be reliable people.
(iv) The prosecution story is highly unnatural.
The presence of these two eye witnesses along with the deceased persons was unlikely.
Had these witnesses been with Hazara Singh deceased, they would have been the target of attack after Hazara Singh was killed and not Resham Singh deceased against whom the accused had no grudge.
(v) Hazara Singh deceased, Bachan Singh and Resham Singh, P.Ws.
, all admittedly reside in the hamlet of Hazara Singh deceased, and if they had to go to Amarkot for making purchases, they would have in all probability gone together.
Bachan Singh 's version, that he had gone to Amarkot to make enquiries regarding the availability of diesel and on his return journey in the way, met and joined the company of his brother Hazara Singh deceased, and his companions, was not believable, because there was no need for Bachan Singh to have gone to Amarkot for the purchase of diesel as he could have asked Hazara Singh to make the necessary enquiries.
(vi) There is a material inconsistency in the testimony of the two eye witnesses as to when Hazara Singh deceased and Resham Singh (P.W. 2) had left their behak (hamlet).
From the statement of Resham Singh (P.W. 2), it appears that from their behak they had gone to Amarkot that very day for purchasing cloth and on the return journey they met Bachan Singh.
As against this, the story told by Bachan Singh is that a day earlier Hazara Singh deceased and Resham Singh, P.W. had left their behak for some unknown destination and that a day later they had met him at the adda, after their departure from the behak the previous day.
This version completely belies the version of Resham Singh (P.W. 2) that they had left their behak 625 in order to make purchases of cloth and other articles.
(vii) Another odd feature brought out from the evidence of Resham Singh (P.W. 2) is the presence of motor cycle at Amarkot on that day.
It is surprising that he could afford to maintain a motorcycle from the meagre income that he would have got from his 5 or 6 acres of land.
His explanation as to why he left the motor cycle at Amarkot, is also not convincing.
(viii) The investigation of the case conducted by the Sub Inspector Bishamber Lal (P.W. 13) does not inspire confidence.
(a) The evidence relating to the recovery of empty cartridges (vide exhibit P.G.) and pair of shoes from the spot near the dead body of Hazara Singh, was not reliable, because P.W. 13 did not mention about the presence of these articles in the inquest report (exhibit PDZ).
(b) Though the empty (crime) cartridges recovered from the spot were sent to the ballistic expert earlier, they were returned to the Police Station on the plea that the test cartridges had not been sent along with those empties.
"Even if it was so, there was no need of sending the crime cartridges to the Police Station, as the test cartridges could be sent for through a separate letter.
In this situation, the suggestion that the crime cartridge had been later on fired through rifle (exhibit P7) when it was recovered cannot be considered improbable".
(ix) "On arrival at the scene of the incident, P.W. 13 found Joginder Singh accused at a distance of about 100 yards irrigating his field.
According to Bishamber Lal, he interrogated Joginder Singh there and then, but did not arrest him.
If Joginder Singh accused had been found near the scene of the crime within a short time, engaged in his normal activities, his participation in the crime would be highly improbable".
Learned counsel for the appellant vehemently contends that the reasoning of the High Court is manifestly unsound, if not wholly perverse.
Great emphasis has been laid on the fact that the First Information Report, in this case was lodged by Resham Singh (PW 2) with utmost promptitude, and even its copy had reached the Magistrate at about 6 or 6 30 p.m. at Patti, on the same day.
In the First Information Report, proceeds the argument, all the material facts including the names of the accused and of the witnesses have been mentioned It is submitted that since this F.I.R. was made without delay in circumstances in which the informant had no time to concoct a false story, it furnished valuable corroboration of the evidence of Resham Singh (P.W. 2), and made his evidence safe enough to be 626 accepted.
It is further maintained that in the first place, the prosecution had established that Mukhtar Singh, Harbhajan Singh and Joginder Singh had also a motive to join hands with Wasson Singh to murder Hazara Singh deceased, and that even if it was held that such motive on the part of the companions of Wasson Singh accused had not been substantiated as the High Court has held then P.Ws. 2 and 3 had also no motive or animus to falsely implicate them.
Counsel have criticised the failure of the High Court to discuss the value and effect of the F.I.R. lodged by P.W. 2.
It is emphasised that the circumstance that the F.I.R. was made without delay was a circumstance of paramount importance in evaluating Resham Singh 's evidence in particular and the prosecution evidence in general.
It is argued that the omission on the part of the High Court to deal with and discuss the F.I.R. has caused serious aberration in its approach and vitiated its appreciation of the evidence of the eye witnesses.
On the other hand, Shri R. K. Jain, learned counsel for the respondents, has submitted that since the reasons given by the High Court in support of the acquittal of the accused cannot be called perverse, this Court should not, in keeping with its practice, disturb the acquittal even if it feels inclined to hold that the view of the evidence taken by the trial court is also reasonable.
Shri Jain has further tried to support the reasoning of the High Court.
We have carefully considered the contentions canvassed on both sides.
We are also not unmindful of the fact that we are dealing with an appeal against an order of acquittal in a double murder case.
Even so, we find that the reasons given by the High Court for holding that Resham Singh (P.W. 2) was not an eye witness of these murders, are utterly unsustainable.
The mere fact that Resham Singh (P.W. 2) had succeeded in escaping unhurt, or that there are discrepancies in the statements of Resham Singh (P.W. 2) and Bachan Singh (P.W. 3), as to whether they had gone to Amarkot with Hazara Singh deceased on the very day of occurrence or a day earlier, was no ground for jumping to the conclusion that P.W. 2 was not in the company of the deceased or nearabout the scene of occurrence when Hazara Singh and Resham Singh were shot dead.
The occurrence took place on August 4, 1973, While Resham Singh (P.W. 2) and Bachan Singh (P.W. 3) were examined at the trial on December 27, 1974, that is to say, 17 months after the incident.
Such discrepancies in regard to collateral or subsidiary facts or matters of detail occur even in the statements of truthful witnesses, particularly when they are examined to depose to events which happened long before their examination.
Such discrepancies are 627 hardly a ground to reject the evidence of the witnesses when there is general agreement and consistency in regard to the substratum of the prosecution case.
As rightly observed by the trial court, Resham Singh (P.W.2) was never cross examined by the defence regarding his whereabouts and that of Hazara Singh deceased on the previous night.
The mere fact that P.W. 2 did not make any purchases at Amarkot could hardly be a reason to hold that his being in the company of Hazara Singh deceased at the material time, was improbable.
It is common ground that there was no love lost between Wassan Singh appellant and Hazara Singh deceased.
Wassan Singh, though convicted by the trial court for the murder of Ajit Singh, was released on bail by the High Court pending his appeal.
P.W. 3 is the brother and P.W. 2 a relation of the deceased.
All these three were living together in the same hamlet in the fields.
It is in the evidence of these witnesses that the other accused are partymen of Wasson Singh.
It is further in evidence that sometime before the occurrence both Hazara Singh and Resham Singh,(P.W. 2) were arrested and handcuffed by Darshan Singh, Police Sub Inspector on the allegation that they were indulging in smuggling and would be liquidated.
Both of them however, escaped and appeared with handcuffs on before the Deputy Home Minister and complained against the Police Sub Inspector.
Both were prosecuted for smuggling betel leaves across the border.
It was therefore, not improbable that this trio consisting of Hazara Singh deceased, P.W. 2 and P.W. 3 was, as usual, moving about or carrying on their activities together.
Moreover, the deceased Hazara Singh must have known that Wasson Singh accused who was inimically disposed towards him, was at large on bail.
This was an added reason for this troika to move about for their security, if not for anything else, in the company of each other.
Nor could P.W. Bachan Singh 's presence at the scene of crime be discounted and his evidence discarded merely on the score that there was no necessity for him to go to Amarkot for enquiring about the availability of diesel.
There is one towering circumstance which goes a long way to lend assurance to the claim of P.W. 2 that he was an eye witness of the occurrence.
It is that the F.I.R. (exhibit P.E.) was lodged by him at Police Station Valtoha, so promptly that he had practically no time to spin out a false story.
628 The learned trial Judge has accepted, and rightly so, the sworn testimony of Resham Singh (P.W. 2) and Sub Inspector Bishamber Lal (P.W. 13), who was then Station House Officer, Valtoha, to the effect, that the F.I.R. (exhibit P.E.), was recorded in the Police Station at 4.30 p.m. Police Station Valtoha is three miles from Bus Stand Amarkot.
According to Resham Singh, the occurrence took place at about 3.30 p.m. On seeing the occurrence and after eluding the pursuit, Resham Singh, as he says, ran to Adda Amarkot through the fields covering a distance of about one kilometre.
According to P.W. 2, his motor cycle was lying at a shop in Amarkot.
He picked up his motor cycle from there and drove to the Police Station, Valtoha and without loss of time lodged the first information, there.
The endorsement on exhibit PE, bears out that the copy of the First Information was in the hands of Shri K. K. Garg, Judicial Magistrate, First Class, Patti, at 6.30 p.m.
This circumstance assures the truth of the prosecution evidence on the point that the First Information Report was made by Resham Singh (P.W. 2) at the Police Station at 4.30 p.m., that is within two hours of the occurrence without undue delay.
The learned Judges of the High Court have not at all dealt with the F.I.R. or the promptitude with which it was made.
They doubted Resham Singh 's version that from Amarkot he went on his own motor cycle to Valtoha Police Station.
The argument employed by the High Court is that Resham Singh owned only four or five killas of land, and could not acquire and maintain a motor cycle from the income of his petty holding.
However, this was not the defence case.
In cross examination, the defence themselves, brought out and tried to establish that he was earning by smuggling betel or other things to Pakistan.
Thus, according to the own showing of the defence, P.W. 2 had a source of income other than his agricultural income.
It was, therefore, nothing improbable if Resham Singh owned a motor cycle.
Sub Inspector Bishamber Lal (P.W. 13) was not questioned in cross examination as to whether or not Resham Singh had come to the Police Station on a motor cycle.
He (P.W. 13) was however, questioned as to what transport he had used for going from the Police Station to the scene of murders.
The witness replied that he went on a motor cycle upto Amarkot and from there went on foot to the scene of occurrence.
Resham Singh stated that since it had recently rained, the kacha path from Amarkot to their hamlet in village Ban, had became muddy and unsafe for riding a motor cycle because of the high risk of skidding.
That was why, the witness had left the motor cycle at Adda Amarkot with a shopkeeper.
629 It may be noted that the occurrence took place on August 4, 1973 when the rainy season would be in full swing.
This explanation of Resham Singh (P.W. 2) regarding the kacha path from Amarkot to the scene of occurrence, being non motorable on the day of occurrence, receives inferential support from the fact appearing in the evidence of Bishamber Lal (P.W. 13), that he had to cover the distance from Adda Amarkot to the place of occurrence, on foot.
Thus, the reason employed by the High Court for disbelieving the version of Resham Singh (P.W. 2) regarding his owning and going on a motor cycle from Amarkot to Police Station Valtoha was manifestly unsound.
It was argued before the trial court on behalf of the accused that the occurrence might have taken place at about 2 p.m. when Resham Singh (P.W. 2) was about 400 or 500 yards away in his hamlet, and that on hearing the report of gun fire he was attracted to the scene of crime, and he having seen the dead bodies lying there, went home, took his motor cycle and then drove to the Police Station Valtoha and brought Sub Inspector Bishamber Lal to the scene of occurrence and the Sub Inspector prepared the F.I.R. at the spot after deliberation with Resham Singh and others.
This contention was rightly rejected by the trial court.
As observed earlier, since it had rained a day prior to the occurrence, the kacha path from Amarkot to the scene of occurrence and to the hamlet of the deceased must have been muddy and slippery.
Therefore, the very suggestion that from village Ban to Amarkot and thereafter to Valtoha, Resham Singh went on his motor cycle, was improbable.
Moreover, from the conduct of the Investigating Officer, Bishamber Lal, it appears that he was not favourably disposed towards the deceased and the informant.
Indeed, a suggestion was put to Bishamber Lal (P.W. 13) by the Public Prosecutor, that he has been unfair in the investigation of the case and tried to favour Joginder Singh and Meja Singh accused.
The learned trial Judge found that the investigation conducted by Sub Inspector Bishamber Lal was biased in favour of Joginder Singh and Meja Singh accused persons, and that the Sub Inspector fraudently interpolated a note in his zimini to help Joginder Singh accused.
The High Court has, also, found that this note in the zimini was a fraudulent insertion.
This being the case, Sub Inspector Bishamber Lal would be least disposed to join hands with Resham Singh informant in preparing the First Information Report, after deliberation with him (P.W.2) at the spot.
630 Dr. Gursharan Kaur (P.W. 1) who performed the post mortem examination of the dead bodies of Resham Singh and Hazara Singh on August 4, 1973 between 8 a.m. and 9 a.m. respectively, opined that the time which elapsed between these deaths and their post mortem examination was about 18 hours.
Thus, according to the Doctor 's opinion, also, the deaths took place at about 2 or 3 p.m. on August 4, 1973.
The opinion of the medical witness thus corroborated the version of Resham Singh (P.W. 2) in as much as the latter has testified that the murders took place at about 3.30 p.m.
This means, that the statement of Resham Singh (P.W. 2) in the First Information Report was made without undue delay, and, as such, furnished very valuable corroboration of his testimony at the trial, in all material particular.
If the presence of Resham Singh (P.W. 2) and Dalip Bachan Singh (P.W. 3) at the time and place of murders was probable the further question would be, how far their evidence could be safely accepted against each of the accused persons ? It is true that both these witnesses are related to the deceased, and, as such, are interested witnesses.
Their antecedents, also, are of a questionable nature.
But their antecedents or mere interestedness was not a valid ground to reject their evidence.
Persons with such antecedents are not necessarily untruthful witness.
Nor mere relationship with the deceased was a good ground for discarding their testimony, when, as we have already held, their presence at the scene of occurrence was probable.
All that was necessary was to scrutinise their evidence with more than ordinary care and circumspection with reference to the part or role assigned to each or the accused.
An effort should have been made to sift the grain from the chaff; to accept what appeared to be true and to reject the rest.
The High Court did not adopt this methodology in appreciating their evidence.
Instead, it took a short cut to disposal, and rejected their evidence whole sale against all the accused, for reasons which, as already discussed, are manifestly untenable.
Keeping the principle enunciated above, we have scrutinised the entire material on record with particular focus on the evidence of P.W.2 and P.W.3, against each of the accused.
Excepting the immaterial discrepancies considered earlier, the evidence of P.W. 2 and P.W. 3 was consistent, and their presence as already mentioned, at the time and place of murders was probable.
Even so, as a matter of abundant caution, it will be safe to act on their interested evidence 631 to the extent to which some assurance is coming forth from surrounding circumstances or other evidence.
The story narrated by the eye witnesses, Resham Singh and Bachan Singh is that Wasson Singh, Mukhtar Singh and Joginder Singh first fired a volley of rifle shots at Hazara Singh deceased as a result of which he dropped dead at the spot.
The evidence of the Doctor who performed the autopsy on the dead body of Hazara Singh is to the effect that there were two bullet wounds of entry on the left side of the head.
These wounds were located at a distance of 2 1/2 cms.
from each other.
There were two corresponding wounds of exit.
There was no blackening or charring around these wounds of entry.
This indicates that these injuries were caused by bullets fired almost simultaneously from two separate rifles from a distance beyond 6 feet.
This means at least the rifles fired by two of the three aforesaid accused did find their mark, causing instantaneous death of the deceased.
Now, both the courts below have concurrently found that Wasson Singh had a strong motive to murder Hazara Singh deceased.
This circumstance, by itself, is sufficient to lend the necessary assurance to the evidence of Resham Singh (P.W. 2) and Bachan Singh (P.W. 3) and make it a safe basis for convicting Wasson Singh accused for the murder of Hazara Singh.
The trial court had accepted the evidence of Resham Singh (P.W.2) in regard to the quarrel over cattle trespass that took place 3 or 4 days prior to these murders between Mukhtar Singh and Harbhajan Singh accused on one side, and Hazara Singh deceased and P.W. 2 on the other.
This story finds particular mention in the F.I.R. (exhibit PE) which was lodged by P.W. 2 without undue delay.
The High Court has rejected this story about this previous quarrel on the three fold ground, namely: (a) Gajjan Singh who interceded and pacified the parties has not been examined, (b) No evidence of the extent of damage done to the crop or of any complaint made to village Panchayat has been produced, (c) Bachan Singh (P.W.3), did not mention about this earlier incident in his police statement.
In our opinion, none of these was a valid ground for rejecting the evidence of Resham Singh (P.W.2) in regard to this incident.
Resham Singh 's consistent testimony on this point corroborated by the F.I.R. (exhibit PE) was sufficient to establish this fact beyond doubt.
Thus, it was proved by the prosecution that Mukhtar Singh accused had also a motive to join Wasson Singh accused in killing Hazara Singh.
The circumstance that Mukhtar Singh had also a motive to participate in the murder of Hazar Singh deceased lends assurance to the 632 testimony of Resham Singh (P.W.2) and Bachan Singh (P.W.3), and strengthens the inference of guilt against the said accused, also.
It is in the evidence of Sub Inspector Bishamber Lal (P.W.13) that Mukhtar Singh was arrested on August 18, 1973 and on August 31, 1973 Mukhtar Singh accused, whilst under Police custody, made a disclosure statement in the presence of Ajit Singh and Sardul Singh Constables, that he had kept concealed a 303 rifle with 5 cartridges wrapped in a piece on cloth in a bundle of reeds lying inside the courtyard of his house at village Thathiwala and he could get the same discovered.
P. W. 13 recorded that statement (exhibit P 1).
Thereafter, the accused was taken to village Thathiwala where he led the Sub Inspector in the presence of Sardul Singh and Ajit Singh Constables, to that bundle and got discovered the rifle (exhibit P7) and the cartridges (exhibit P8 to 12) therefrom.
The Sub Inspector prepared the sketch of the rifle and the memo (exhibit PM) which was attested by the aforesaid Constables.
The rifle and the cartridges were sealed into parcels and were thereafter sent through Constable Ajit Singh, with seals intact, to the Police Station where they were received by the Moharrir Head Constable Natha Singh (P.W. 10).
P.W. 13 has also, stated that he had on August 4, 1973 on inspecting the scene of murders, found two empty cartridges (exhibit
P3 and exhibit P4) from near the dead body of Hazara Singh.
The witness took them into possession and sealed them into a parcel in the presence of Anokh Singh and Gajjan Singh witnesses, and prepared the memo (exhibit PG).
The parcel containing the empties was later deposited by the Sub Inspector, with seals in tact, in the Malkhana of the Police Station.
The evidence of Sub Inspector Bishamber Lal, with regard to the seizure of the empty (crime) cartridges from the scene of occurrence on August 4, was supported by Anokh Singh (P.W.4) who is an attesting witness of the memo, Ex.PG.
The witness is a resident of village Cheema.
In cross examination, he revealed that these two fired cartridges were lying at a distance of 1.5 karams (8 or 9 feet) from the dead body of Hazara Singh.
Nothing was brought out in cross examination to show that the witness was in any way interested in the prosecution or was related to the deceased or had any animus against the accused.
Thus, it has been clearly proved that two fired cartridges were picked up from the scene of crime and sealed into parcels which were later deposited with seals intact in the Police Station.
In the memo (exhibit PG), it is mentioned that these fired cartridges were of 303 bore rifle.
633 Ajit Singh Moharrir Head Constable (P.W.11) swore in his affidavit that on August 4, 1973, he received the sealed parcel of 2 empty cartridges from Sub Inspector Bishamber Lal.
The seals on the parcel remained intact so long as the parcel remained in his custody.
Then, there are the affidavits of Avtar Singh Constable (P.W. 9) and Natha Singh Moharir Head Constable showing that on September 24, 1973, the sealed parcels containing the rifle (exhibit P7) and the five live cartridges were sent through P.W. 9 to the Forensic Science Laboratory Chandigarh, who delivered the same in the said Laboratory with seals intact.
The evidence of P.W. 13 regarding the discovery of the rifle (exhibit P7) from Mukhtar Singh accused was fully corroborated by Constable Sardul Singh (P.W. 12).
His cross examination reveals that Mukhtar Singh was interrogated in the Police Station at 4 5 A.M. when he made the statement (exhibit PL), leading to the discovery of the rifle (exhibit P7).
Sub Inspector Bishamber Lal (P.W. 13) has stated that the sealed parcel containing the empty cartridges, that had been found at the scene of crime, was sent to the Forensic Science Laboratory Chandigarh at a date earlier than the one on which the parcel containing the rifle (exhibit P7) and the five live cartridges was sent to the said Laboratory, but it was returned with the objection that it should have been sent along with the test cartridges.
Consequently, this parcel containing the empties was again sent to the Forensic Laboratory along with the sealed parcel containing the rifle (exhibit P7) and the live cartridges recovered from Mukhtar Singh accused.
In the Report (exhibit PQ) of the Ballistic Expert (L. A. Kumar) which was tendered in evidence and admitted without objection, it is opined that the empty (crime) cartridge, marked C1, had been fired through the rifle (exhibit P7).
In cross examination, the defence suggested to P.W. 13, that he had purposely recalled the parcel containing the empty cartridges from the Forensic Science Laboratory for creating evidence against the accused and he did so by firing one cartridge through the rifle (exhibit P7).
The oblique suggestion was that the cartridge, marked C1 which in the opinion of the Ballistic Expert had been fired through the rifle (exhibit P7) was substituted for the original empty cartridge that had been found at the scene of murder.
The Sub Inspector emphatically denied the suggestion.
It was further suggested to P.W. 13 that the rifle (exhibit P7) had, in fact, been handed over to the Police by the relations of the deceased after procuring it from some source.
This was also stoutly denied by P.W. 13.
634 The learned trial Judge discarded this evidence relating to the discovery of the rifle (exhibit P7) at the instance of the accused, Mukhtar Singh, for the reason that Sub Inspector Bishamber Lal, for no good reason, had failed to join respectables of the locality to witness the discovery of the rifle, and that he (P.W. 13) "has tried to be a defence witness rather than the investigating officer".
The trial Judge accepted Anokh Singh 's statement regarding the recovery of the two fired cartridges from the scene of Hazara Singh 's murder on August 4, but he adversely commented on the conduct of Bishamber Lal in delaying the despatch of those crime cartridges to the Forensic Science Laboratory Chandigarh till after the recovery of the rifle.
He observed: "In all probability, Sub Inspector Bishamber Lal wanted to help the accused by creating suspicion with respect to the identity of the firing impressions" (on the empties).
For this reason, according to the trial Judge, the ballistic evidence "will not be corroborative evidence for the prosecution.
" We agree with the trial Court that the investigating officer did not deliberately join with him respectables of the locality to attest the statements (exhibit PL) made by Mukhtar Singh, and to witness the sub sequent discovery of the rifle (exhibit P7) at the instance of Mukhtar Singh.
There was substance in the observation of the trial Judge that the investigation was biased in favour of the accused.
If that was so, the failure of Bishamber Lal (P.W. 13) to join with him respectables of the locality was, by itself, no ground for ruling out the evidence of the discovery of the rifle, altogether.
The partiality of Bishamber Lal towards the defence, rather assures the genuineness of the discovery He was least disposed to 'collaborate ' or 'cooperate ' with the relations of the deceased to procure this rifle (exhibit P7) from some other source and then foist it on Mukhtar Singh.
For the same reason, it is not possible to hold that he recalled the sealed parcel containing the fired (crime) cartridges from the Laboratory at Chandigarh, for substituting a cartridge fired through the rifle (exhibit P7) or for fabricating evidence in support of the prosecution.
Moreover, the parcel containing the two empties must have been returned by the Director of the Forensic Laboratory on his own initiative and not at the instance of the Sub Inspector (P.W. 13).
The omission on the part of this investigating officer to join with him some independent persons or respectables of the locality to witness the recovery devalues that evidence but does not render it inadmissible.
Although a suggestion of "planting" the rifle, and fabricating the evidence of the empty cartridge (C1) was put to Sub Inspector Bishamber Lal in cross examination, no such allegation was 635 made, nor any such plea was set up by Mukhtar Singh accused when the evidence relating to the recovery of the two empties from the spot, the discovery of the rifle (exhibit P7) at his instance and the opinion (exhibit PQ) of the Ballistic Expert was put to this accused in his examination under Section 342, Cr.
P.C. The circumstance of the recovery of the rifle (exhibit P7) and the opinion of the Ballistic Expert that the empty cartridge (marked C1) (found on August 4, at the scene of murder) had been fired through the rifle (exhibit P7), though feeble it might be was relevant and furnished a further pointer to the participation of Mukhtar Singh in the commission of Hazara Singh 's murder by rifle fire.
In sum, sufficient assurance of the testimony of P.W. 2 and P.W. 3, was available from the circumstantial evidence discussed above, regarding the participation of Wasson Singh and Mukhtar Singh accused in the murder of Hazara Singh.
The evidence of the eyewitnesses therefore, could safely be acted upon for convicting Wasson Singh and Mukhtar Singh accused respondents for the murder of Hazara Singh.
But such assurance of the evidence of these eyewitnesses was not available against the remaining accused regarding either of the murders in question.
Joginder Singh accused admittedly was not present when the quarrel over cattle trespass took place between Hazara Singh deceased and P.W. 2 on one side, and Mukhtar Singh and Harbhajan Singh accused on the other.
It has neither been alleged nor proved that Joginder Singh had any motive of his own to murder Hazara Singh deceased.
Although, the investigation betrays a tilt in favour of the accused, and P.W. 13 made a fraudulent insertion in the zimini to help Joginder Singh accused, it cannot be said that the version of P.W. 13 to the effect that when he went to the scene of murders at 5.30 P.M., he found Joginder Singh irrigating his nearby fields at a distance of about 100 yards therefrom and he (P.W. 13) interrogated him there and then, but did not think it necessary to arrest him, is necessarily false.
The absence of motive, and the presence of Joginder Singh near the scene of crime shortly after the murders, engaged in normal agricultural activities does cast a doubt about his participation in the commission of these murders.
P.W. 2 and P.W. 3 have stated that they started running away from the spot, immediately after Hazara Singh was shot dead.
The surrounding circumstances, natural probabilities and the normal course of human conduct also suggest the same inference, that 636 immediately on seeing Hazara Singh being shot down, these witnesses who were following Hazara Singh, ran fast for their lives.
Had they tarried for a while at the scene of Hazara Singh 's murder, it would have been too late for them to escape unhurt.
In such a situation, when they were being pursued by persons armed with fire arms, they could, if at all they turned and looked behind have only a fleeting glimpse in the distance of the assailants of Resham Singh deceased.
That is why, Resham (P.W. 2) is not consistent in his statements as to which of the accused had fired at him when he was running away for his life.
Moreover, it has not been established that any of the six accused had any motive, whatever, to murder Resham Singh deceased.
For the foregoing reasons, we partly allow this appeal by the State, set aside the acquittal of Wassan Singh and Mukhtar Singh accused (respondents) and convict them under Section 302 read with Section 34, Penal Code for the murder of Hazara Singh deceased and sentence each of them to imprisonment for life.
We would, however, accord the benefit of doubt to the rest of the accused (respondents) and maintain their acquittal on all the counts.
Wasson Singh and Mukhtar Singh shall surrender to their bail bonds to serve out the sentences inflicted on them.
N.V.K. Appeal partly allowed.
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The prosecution case against the six accused (Respondents) was that prior to the incident in question, there was an altercation between the two deceased on one side and the six accused on the other over trespass of cattle of the accused persons on the land of the deceased, which damaged his cotton crop.
On the day of the incident when P.W. 2, P.W. 3 and the two deceased were going by a foot path, the six accused suddenly emerged out of a field and fired.
The two deceased fell dead, while P.W. 2 and 3 ran and escaped unhurt.
P.W. 2 reached the bus stand, picked up his motor cycle parked at a shop and drove to the nearest police station to lodge the F.I.R.
The Additional Sessions Judge found that one of the accused had a strong motive to murder one of the deceased because of an old feud and that on account of this ill will, some of the accused had a strong motive in joining hands with the others to murder the deceased, but that no motive could be established for murdering the second deceased.
He also found that the fact that the F.I.R. was lodged by P.W. 2 with the utmost promptitude furnished valuable corroboration of his evidence and also disbelieved the evidence of the police Sub Inspector (P.W. 13).
In the result he convicted all the six accused under section 302 read with section 149 I.P.C. for murder of one of the deceased and sentenced them to imprisonment.
In the case of first accused however, he was sentenced to death for the murder of one of the deceased.
All the accused appealed against their conviction and sentence to the High Court which allowed the appeal and rejected the reference.
It rejected the evidence of the eye witnesses, P.W. 2 and P.W. 3 on the ground that these witnesses were closely related to the first deceased who was the principal target of the accused and that it had not been satisfactory established by the prosecution that the other five accused had any motive to commit the murders in question.
It found that the prosecution story was highly unnatural and that the presence of the two eye witnesses alongwith the deceased persons was un 616 likely.
It further held there was material inconsistency in their testimony, as to when the first deceased and P.W. 2 had left the hamlet, and that the investigation of the case conducted by the Sub Inspector (P.W. 13) did not inspire confidence.
In the appeal by the State to this Court it was contended on behalf of the State that the reasoning of the High Court was manifestly unsound, if not wholly perverse.
The fact that the F.I.R. was lodged by P.W. 2 with utmost promptitude and all the material facts including the names of the accused and of the witnesses having been mentioned therein, indicated that there was no time to concoct a false story.
On behalf of the respondents it was submitted that the acquittal could not be disturbed, as the reasons given by the High Court could not be called perverse.
^ HELD : 1(i) The acquittal of respondent Nos. 1 and 2 are set aside and they are convicted under section 302 read with section 34 Indian Penal Code for the murder of the first deceased and sentenced to imprisonment for life.
The benefit of doubt to the rest of the accused (respondents) and their acquittal on all the counts maintained.
[636 C D] (ii) Sufficient assurance of the testimony of P.W. 2 and P.W. 3 was avail able from the circumstantial evidence regarding the participation of respondents Wasson Singh and Mukhtar Singh in the murder of deceased Hazara Singh.
The evidence of the eye witnesses therefore, could safely be acted upon for convicting these respondents for the said murder.
[635 C D] 2.
The reasons given by the High Court for holding that P.W. 2 was not an eye witness of these two murders are utterly unsustainable.
The reason that P.W. 2 had succeeded in escaping unhurt, or that there are discrepancies in the statements of P.W. 2 and P.W. 3 as to whether they had gone with the deceased on the very day of occurrence or a day earlier was no ground for the conclusion that P.W. 2 was not in the company of the deceased or near about the scene of occurrence when the two deceased were shot dead.
[626 F G] 3.
Discrepancies in regard to collateral or subsidiary facts or matters of detail occur even in the statements of truthful witnesses, particularly when they are examined to depose to events which happened long before their examination.
Such discrepancies are hardly a ground to reject the evidence of the witnesses when there is general agreement and consistency in regard to the substratum of the prosecution case.
[626H 627A] In the instant case the occurrence took place on August 4, 1973, while P.W. 2 and P.W. 3 were examined at the trial on December 27, 1974 i.e. seventeen months after the incident.
The trial court has rightly observed that P.W. 2 was never cross examined by the defence regarding his whereabouts and those of the deceased on the previous night.
The mere fact that P.W. 2 did not make any purchase at Amarkot could hardly be a reason to hold that his being in the company of the deceased at the material time was improbable.
[626G, 627B] 4.
P.W. 3 is the brother and P.W. 2 relation of the deceased.
All three were living together in the same hamlet in the fields.
It is in the evidence of 617 these witnesses that the other accused are partymen of respondent No. 1.
It is further in evidence that sometime before the occurrence both the deceased and P.W. 2 were arrested and handcuffed by a police Sub Inspector on the allegation that they were indulging in smuggling and would be liquidated.
It was, therefore, not improbable that this trio consisting of first deceased, P.W. 2 and P.W. 3 were as usual moving about or carrying on their activities together.
Moreover the deceased must have known that Respondent No. 1 who was inimically disposed towards him was at large on bail.
This was an added reason for this troika to move about for their security, if not for anything else, in the company of each other.
[627C F] 5.
(i) The High Court has not all dealt with the First Information Report or the promptitude with which it was made.
[628D] (ii) The towering circumstance which lends assurance to the claim of P.W. 2 that he was an eye witness of the occurrence is that the First Information Report was lodged by him at the Police Station so promptly that he had practically no time to spin out a false story.
The reason employed by the High Court for disbelieving the version of P.W. 2 regarding his owning and going on a motor cycle to the Police Station was manifestly unsound.
The Sub Inspector P.W. 13 was not questioned in cross examination as to whether or not P.W. 2 had come to the Police Station on a motor cycle.
He was, however, questioned as to what transport he had used for going from the Police Station to the scene of murders.
The witness replied that he went on a motor cycle upto Amarkot and from there went on foot to the scene of occurrence.
This explanation of P.W. 2 regarding the kacha path from Amarkot to the scene of occurrence, being non motorable on the day of occurrence, receives inferential support from the fact appearing in the evidence of P.W. 13 that he had to cover the distance from Adda Amarkot to the place of occurrence, on foot.
[627H, 629E, 628G 629A] 6.
The conduct of the Investigation Officer (P.W. 13) indicates that he was not favourably disposed to the deceased and P.W. 2.
A suggestion was also put to P.W. 13 by the Public Prosecutor that he had been unfair in the investigation of the case and tried to favour the 3rd and 4th respondent.
The High Court found that the note in the zimini was a fraudulent insertion.
This being the case, Sub Inspector (P.W. 13) would be least disposed to join hands with P.W. 2 informant in preparing the First Information Report, after deliberation with P.W. 2 at the spot.
[629F H] 7.
The opinion of the medical witness P.W. 1 corroborates the version of P.W. 2 in as much as the latter has testified that the murders took place at about 3.30 p.m.
This means that the statement of P.W. 2 in the F.I.R. was made without undue delay, and, as such, furnished very valuable corroboration of his testimony at the trial in all material particulars.
[630B C] 8.
(i) Both P.W. 2 and P.W. 3 are related to the deceased, and as such are interested witnesses.
Their antecedents, also, are of a questionable nature.
But their antecedents or mere interestedness was not a valid ground to reject their evidence.
All that was necessary for the Court was to scrutinise their evidence with more than ordinary care and circumspection with reference to the part or role assigned to each of the accused.
An effort should have been made to sift the grain from the chaff; to accept what appeared to be true and to reject the 618 rest.
The High Court did not adopt this methodology in appreciating their evidence.
Instead it took a shortcut to disposal and rejected their evidence whole sale against all the accused for reasons which are manifestly untenable.
[630E G] (ii) Excepting for immaterial discrepancies the evidence of P.W. 2 and P.W. 3 was consistent and their presence at the time and place of murders was probable.
Even so, as a matter of abundant caution it will be safe to act on their interested evidence to the extent to which some assurance is coming forth from surrounding circumstances or other evidence.
[630H 631A] 9.
The prosecution has proved that the respondent No. 2 had also a motive to participate in the murder of the second deceased.
This lends assurance to the testimony of P.W. 2 and P.W. 3 and strengthens the inference of guilt against the said accused also.
P.W. 2 's consistent testimony corroborated by the F.I.R. was sufficient to establish this fact beyond doubt.
[631H 632A] 10.
It had been clearly proved that two fired cartridges were picked up from the scene of crime and sealed into parcels which were later deposited with seals intact in the Police Station.
On the memo it is mentioned that these fired cartridges were of 303 bore rifle.
[632H] 11.
There was substance in the observation of the trial Judge that the investigation was biased in favour of the accused.
If that was so, the failure of P.W. 13 to join with him respectables of the locality was by itself no ground for ruling out the evidence of the discovery of the rifle, altogether.
The partiality of P.W. 13 towards the defence, rather assures the genuineness of the discovery.
He was least disposed to 'collaborate ' or cooperate with the relations of the deceased to procure this rifle from some other source and then foist it on respondent Mukhtar Singh.
The omission on the part of this Investigating Officer to join with him some independent persons or respectables of the locality to witness the recovery devalues that evidence but does not render it inadmissible.
[634D F, H] 12.
The circumstance of the recovery of the rifle (exhibit P. 7) and the opinion of the Ballistic Expert that the empty cartridge (C1) had been fired through the rifle though feeble it might be was relevant and furnished a further pointer to the participation of Mukhtar Singh in the commission of Hazara Singh 's murder by rifle fire.
[635B] 13.
Although the investigation betrays a tilt in favour of the accused, and P.W. 13 made a fraudulent insertion in the zamini to help Joginder Singh accused, it cannot be said that the version of P.W. 13, that when he went to the scene of murders at 5.30 p.m. he found Joginder Singh irrigating his nearby fields at a distance of about 100 yards therefrom and he interrogated him there and then but did not think it necessary to arrest him is necessarily false.
The absence of motive and the presence of Joginder Singh near the scene of crime shortly after the murders, engaged in normal agricultural activities does cast a doubt about his participation in the commission of these murders.
[635 F G] 14.
P.W. 2 and P.W. 3 have stated that they started running away from the spot, immediately after deceased Hazara Singh was shot dead.
The surrounding circumstances, natural probabilities and the normal course of human conduct 619 also suggest the same inference, that immediately on seeing Hazara Singh being shot down, these witnesses who were following him ran fast for their lives.
Had they tarried for a while at the scene of the murder, it would have been too late for them to escape unhurt.
In such a situation, when they were being pursued by persons armed with fire arms, they could if at all they turned and looked behind have only a fleeting glimpse in the distance of the assailants of Resham Singh deceased.
That is why P.W.2 is not consistent in his statements as to which of the accused had fired at him when he was running away for his life.
Moreover it has not been established that any of the six accused had any motive, whatever to murder Resham Singh deceased.
[635H 636C]
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N: Criminal Appeal No. 320/75.
Appeal by special leave from the Judgment and Order dated 2.4.1975 of the Punjab and Haryana High Court in Criminal Appeal No. 1044/74 and Murder Reference No. 50/74.
3 K.G. Bhagat and R.N. Poddar for the Appellant.
Mrs. Urmila Sirur for the Respondents.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
This appeal by special leave by the State of Haryana is directed against the judgment and order of the Punjab and Haryana High Court setting aside the conviction and and sentence passed by the Session Judge, Karnal.
Respondents Balkar Singh and Dalel Singh are the sons of respondent Sher Singh.
The Session Judge convicted all the three under Section 302/34 of the Penal Code, and sentenced Sher Singh to death and the other two to imprisonment for life.
On a reference by the Sessions Judge for the confirmation of the sentence of death inflicted on Sher Singh and appeal filed by the respondents the High Court set aside the order of conviction and sentence and acquitted the respondents.
The material facts may be stated thus: On 17th of October, 1973 at about 12 A.M. Mst.
Narman, widow of Danna (deceased) submitted the first information report to A.S.I. Ram Sarup (P.W. 12) at village Pai.
Her material allegations in the first information report were that the previous day, respondent Sher Singh and his two younger half brothers, namely, Danna, her husband, and Hukmi, had effected a family partition amongst themselves and they started living separately.
That day, namely 17th of October, at about 6.00 A.M. her husband, Danna, along with his brothers Hukmi and respondents Sher Singh came to their bagichi nearby from the house in order to milk cattle.
She followed them in order to fetch milk.
Respondent Sher Singh, then along with his sons Dalel, Balkar, Keni, Prem and Parwana surrounded her husband and her husband 's younger brother, Hukmi, in the courtyard.
Sher Singh had a Gandasi in his hand, Dalel a lathi shoded with iron blade, the other three had lathis in their hands.
Sher Singh dealt a Gandasa blow on the head of her husband Danna, who immediately fell down on the ground.
Dalel then dealt a blow with iron shoded lathi on the head of Hukmi who also fell down on the ground.
The other accused then inflicted blows with lathis on the persons after they had already fallen down.
Respondent Sher Singh dealt another Gandasi blow on her husband.
She has further stated in the first information report that Mst.
Danni, sister of respondent Sher Singh, was also with her and witnessed the occurrence.
They screamed seeing the assaults, whereupon they were directed on pain of death to sit in the corner of the court yard.
4 Out of fear they obliged.
Thereafter, it has further been alleged, the accused persons dragged the dead bodies to their nearby heap of cow dung cakes.
Sher Singh spread kerosene on the heap of the cakes and Dalel set fire to it lighting a match stick.
As a result, the two bodies were charred.
P.W. 12 sent the F.I.R. to the police station where the case was registered.
Police, after investigation, submitted charge sheet and arrested the accused persons.
Eventually, the accused persons were charged under Section 302/34 of the Penal Code, and tried in the court of Sessions.
The accused persons pleaded not guilty to the charges.
According to them the three brothers were joint in residence, mess and cultivation till the date of the occurrence.
The defence of respondent, Sher Singh, was that his two sons, Dalel and Balkar, and the deceased brothers Danna and Hukmi, used to sleep in the Bagichi during the night to keep watch over their cattle tethered there.
On October 16, 1973 he and his two deceased brothers were in their fields during the day and in the evening he went to their field where cotton was ripe and he remained there to keep watch over the cotton till next morning.
That field was at a distance of about 1 1/2 miles from their Bagichi.
About 1 1/2 hours after sun rise on October 17, 1973, he returned to the Bagichi where he found the heap of cow dung cakes in the enclosure of Bagichi burning.
Police then arrested him.
The defence of respondent Dalel was that two days before the date of occurrence he went to his maternal uncle, Lalji, at Narwara to borrow a tractor.
He returned home on the 17th of October, 1973 at about sun set.
He found the heap of cow dung burning and police inside the Bagichi where he was arrested by the police.
The defence of respondent Balkar was that he was a student of 9th class and on 16th of October, 1973 he had been to school to witness some sports.
He passed the following night in village, Diwali, where his sister was married.
He returned home on October 17, 1973 and when he reached the Bagichi he found the heap of cow dung burning and, he was arrested by the police there.
Thus the defence of all the respondents was alibi.
When an accused pleads alibi, the burden is on him to prove it under Section 103 of the Evidence Act which provides: "103.
The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.
5 Illustrations: (a) A prosecutes B for theft, and wishes the court to believe that B admitted the theft to C. A must prove the admission.
B wishes the court to believe that, at the time in question, he was elsewhere.
He must prove it.
" In this case defence did not adduce any evidence to prove the alibi.
On the contrary the evidence of P.W. 11, Lila, is that on 21st October, 1973, all the accused were produced by Lalji, the brother of the wife of respondent, Sher Singh in village Nand Karan Majra around 8 a.m., when they were arrested.
This was in presence of P.W. 11 and several others.
Police had been there the witness says, from October 17 to 20, 1973.
This evidence of P.W. 11 remains unrebutted.
The plea of the respondents that they had been elsewhere at the time of the occurrence and returned to the place of occurrence by themselves on October 17, when they were arrested by police, is untrue.
Let us now turn to and examine the prosecution case and see whether the prosecution has proved the guilt of the accused beyond reasonable doubt.
The death of Danna and Hukmi is not in dispute.
That the dead bodies were burnt on the cow dung heap by the side of the Bagichi is also not in dispute.
The only question for decision is whether Danna and Hukmi were murdered and their dead bodies were burnt by the respondents as alleged by the prosecution.
The prosecution relies on the following piece of evidence: (i) Motive of the murder; (ii) Direct evidence of the alleged eye witnesses, P.W. 3 and 4; (iii) Extra Judicial Confession alleged to have been made by respondent Sher Singh before P.W. 10; and (iv) Recoveries of incriminating articles on disclosure statements alleged to have been made by the respondents.
(i) Motive: P.W. 3 Mst.
Narman has deposed that two days before the day of occurrence, deceased Danna, Hukmi and respondent Sher Singh made an amicable partition of their property.
They divided their land (except Shamlat land), house, cattle, utensils and grains.
Respondent Sher Singh, however, refused to part with joint 6 cash and jewellery.
Danna refused to part with any share of the Shamlat land unless the cash and jewellery were divided.
P.W. 4 Mst.
Danni and Jhanda (P.W. 10) support, P.W. 3, It therefore, appears, that there was some sort of hitch between respondent Sher Singh on the one hand and his half brothers Danna, and Hukmi on the other.
The High Court declined to accept the evidence of P.W. 10 in as much as he had not mentioned the fact of partition in his statement before the police.
The prosecution is not bound to prove motive of any offence in a criminal case, in as much as motive is known only to the perpetrator of the crime and may not be known to others.
If the motive is proved by prosecution, the Court has to consider it and see whether it is adequate.
In the instant case the motive proved was apparently inadequate, although it might be possible.
(ii) Direct Evidence: P.W. 3 Mst.
Narman has deposed that 15 days before the date of occurrence, P.W. 4 Danni who was at her husband 's house to help her as she was expecting a child one of these days.
In fact she delivered a child 12 days after the occurrence.
She has supported the prosecution case in its entirety.
She says that in the morning about the time of sun rise on the date of occurrence, deceased Danna and Hukmi went to the Panchayat land where their cattle had been tethered in order to milk them.
She followed them to bring milk home.
Danna also accompanied her to make cow dung cakes.
At that time she found that the respondents had been standing in the Panchayat land armed with dangerous weapons.
Respondent Sher Singh gave Gandasi blow on the head of Danna who immediately fell down on the ground.
Dalel also gave a blow on the head Hukmi who also fell down.
All of them thereafter indiscriminately assaulted the two injured persons.
Both of them died as a result.
She and Danna began to scream whereupon the culprits asked her and Danna to keep quiet on pain of death and they asked them to sit on one side of the place.
Both of them out of fear did as directed.
She has further deposed that the respondents including the other miscreants dragged the two dead bodies to the nearby heap of cow dung cakes and placed the dead bodies on it.
Respondent Sher Singh then brought a tin of kerosene oil and sprinkled it on the heap of the cow dung cakes.
Respondent Dalel put fire to the cow dung cakes.
When the heap of the cow dung cakes was burning they set weeping there while the respondents were scrapping the blood stains on the earth and throwing them to the burning cow dung cakes.
After some time P.W. 10 Jhanda and 7 one Bhagtu came to the place of occurrence after the dead bodies were put to fire.
They inquired of Sher Singh as to why they were burning the cow dung cakes.
Sher Singh replied that he had murdered his two brothers and was burning their dead bodies.
He, however threatened them to mind their own business and said that if they raised any alarm, they would be similarly murdered and put to fire.
P.W. 10 Jhandu and Bhagtu then left the place.
The process of burning took about three hours.
All this time the culprits were at the place of occurrence scraping the blood stained spots.
They then changed their blood stained clothes, threw them to the fire and put on new clothes and left the place with weapons in hands towards village Bhana.
After the departure of the culprits the witness along with P.W. 4 left for the nearby village.
They narrated the occurrence to the villagers and told them as to how her husband and brother in law had been murdered and their dead bodies burnt.
But they remarked that that was a dispute between brothers and they could not do anything.
The witness then left the village for police station at Pundri to lodge an offence report.
On the way falls village Pai, at the distance of about 4 5 miles from the place of occurrence, she met at village Pai a police officer and two constables to whom she narrated the occurrence.
Her statement was recorded by P.W. 12, Ram Sarup, an Assistant Sub inspector of Pundri Police Station, who was at Pai.
She was then accompanied home by two constables.
While P.W. 12 sent the F.I.R. to the police station for registering a case.
They reached the place of occurrence, after some time.
A short while after the arrival of the witness and the two constables at the place of occurrence, a senior police officer arrived at the place of occurrence.
They with the help of some other persons who had gathered there in the mean time started to extinguish the fire by putting buckets of water on it.
P.W. 4 Danni corroborates P.W. 3 on the commission of murder of the two deceased by the respondents and a few others.
P.W.10 who came to the place of occurrence on seeing smoke from the heap of cow dung cakes, inquired of Sher Singh as to what was happening.
He has deposed that he was told by Sher Singh that he had killed his two brothers and was burning their dead bodies and that he was asked on pain of murder to mind his own business, and not to raise alarm.
He and Bhagtu then left the place.
P.Ws. 3 and 4 were cross examined at great length by the defence counsel but nothing significant could be brought out in order to demolish their basic and substantial evidence given in examination 8 in chief.
Only some minor discrepancies with regard to omissions of details in their statements to the police were brought out.
These omissions in our opinion were not contradictions and insignificant.
The High Court has rejected the evidence of P.Ws. 3 and 4 on the ground (a) that they were close relations of the two deceased; (b) that P.W. 3 had omitted to mention in the F.I.R. that she had informed any person of the village before leaving for the police station; (c) that it was 'highly improbable and unnatural ' that P.W. 3 would go to the place of occurrence from her home when she was in advance pregnancy; (d) that she was not accompanied to the police station by anybody; (e) that none of the villagers came to the place of occurrence; and (f) that she and P.W. 4 did not physically attempt to save the two deceased who were respectively their husband and brother.
Ultimately the High Court found that "most probably both Smt.
Nariman and Danni were not present on the spot and had not witnessed the occurrence.
" In our opinion the conclusion arrived at by the learned High Court is untenable.
The learned High Court has taken a very unrealistic view of the situation and of the facts and circumstances of the case.
There is no evidence that P.Ws 3 and 4 could or did raise any alarm.
When they were about to scream they were threatened on pain of murder, to keep quiet and sit.
There is evidence that both the deceased as well as P.Ws 3 and 4 were unarmed, whereas the respondents were armed with dangerous weapons.
In such a situation it will be too much to expect of P.Ws 3 and 4 to try to physically intervene and save the two deceased.
Although it is true that P.Ws 3 and 4 were close relations of the two deceased, their evidence could not be rejected on that ground.
They were also related to the respondents and there is nothing on record to show that they were inimically disposed to the respondents to falsely implicate the respondent in a murder case like this.
They were the most natural witnesses.
Although it was not the case of defence that some of the people of the Panchayat conspired with P.Ws 3 and 4 to implicate the respondents in this murder case the High Court made out its own theory to that effect.
There is no evidence or circumstances from which that inference could be drawn.
It was a pure conjecture that "it was best opportunity for the Panchas and Sarpanch and other respectables of the village to take special interest in bringing the culprits to book by contacting the police at the earliest if the culprits were not other persons than the appellants.
" The High Court has also based its finding on conjecture that the two deceased were murdered by unknown culprits and they were falsely implicated by the village 9 respectables" on suspicion.
This hypothesis does not stand any scrutiny.
Respondent Sher Singh in his statement says "It was routine for me and my two elder sons and two step brothers to sleep in the Bagichi during night where we used to tie our cattle." Even the High Court has found ". . that they (deceased) like Sher Singh or Sher Singh 's sons used to sleep in the Bagichi in the night to keep watch over them (cattle).
" If that be so, had the murder been perpetrated by unknown culprits, there was no reason as to why the the respondents did not intervene and inform any of the neighbours.
The learned High Court, as stated above, has rejected the evidence of P.W. 3 on the ground that she did not mention in the F.I.R. that she had informed any person of the village before she lodged the F.I.R. The F.I.R. need not contain the details of the occurrence.
The omission referred to by the High Court is an omission of details and not really a contradiction.
The High Court also was not right in observing that it was surprising 'that as stated by Mst.
Narman nobody in the village listened to her story nor did anybody go to her help when she went to Abadi land of the village after the departure of the appellants from the place of occurrence." In fact P.W. 10 had come to the place of occurrence before P.Ws 3 and 4 left the place of occurrence for the village.
The way P.W. 10 was treated by respondent, Sher Singh, was sufficient to deter any other villager to come to the place of occurrence.
The High Court has also found it a 'mystery ' that none of the villagers came to the place of occurrence and intervened in the matter.
There is no evidence on record to show that when the assaults on the deceased were in progress or the dead bodies were being burnt, any of the villagers in fact knew about the occurrence.
In fact P.W. 10 and Bhagtu had seen the smokes from the cow dung cakes, and came to the place of occurrence.
The High Court has also observed that it was unlikely that P.W. 3 would go to the Bagichi in such an advance stage of pregnancy in order to bring milk from there at sun rise in as much as P.W. 4 had already come there to help her in domestic work.
It is common experience that in villages women who regularly attend to their domestic chore and work in the field, work some time till the very moment of actual child birth.
P.W. 4 was brought to help her as in her advance stage of pregnancy she could not work as briskly as before.
The learned High Court has also observed that presence of P.W. 4 Danni at the place of occurrence was "not natural because had she been present there she would have out of love for her real brothers physically intervened and tried to save them from the clutches of assaults.
" It has been observed before that they were asked to keep 10 quiet and sit on pain of murder.
It cannot be forgotten that Danni was also an unarmed village women and the first instinct of a being is the instinct of self preservation.
In our opinion, therefore, it was not, "unnatural" that she would not, as she could not, attempt to save the two deceased from murder.
The High Court has also observed that in any case P.W. 4 would have raised hue and cry.
She could not raise an outcry as she was told by Sher Singh that she would be murdered and burnt, if she did so.
It was therefore but natural that she did not raise any hue and cry.
(iii) Extra Judicial Confession: The evidence of P.W. 10 has also been referred to above.
He has deposed that when seeing the smoke he went to the place of occurrence and inquired of Sher Singh as to why they were burning the heap of cow dung cakes, he replied that he had murdered his two brothers and was burning their dead bodies.
This is an extrajudicial confession so far as Sher Singh is concerned.
The High Court has not accepted the evidence of P.W. 10 on the ground that this was not mentioned by P.W. 3 in the first information report.
This was an omission.
That apart, it must be remembered that P.W. 4 who saw with her own eyes such a brutal murder of her husband and brother in law must have been dazed and at her wits end.
In such a situation, it could not be expected of her to give all the details in the first information report.
And on account of the omission, P.W. 10 could not be disbelieved.
(iv) Recoveries of incriminating articles : The last piece of evidence on which reliance has been taken by the prosecution is the recoveries of incriminating weapons.
The evidence of P.W. 13, the Investigating Officer, is that respondent Sher Singh on 23rd of October, 1973 made a disclosure statement which is Exhibit PL.
The disclosure was that Sher Singh had kept concealed a Gandasi in the bundle of sugar cane in his field and he could get the same recovered.
In pursuance of his disclosure the Gandasi exhibit P. 26 was recovered from that place.
The Gandasi was stained with blood and was seized under seizure memo exhibit PL/1.
On the same day respondent Dalel Singh made a disclosure statement exhibit PM and disclosed that he had kept concealed a lathi to which an iron piece was attached in his Gowar field and he could get the same recovered.
In pursuance of his disclosure, lathi exhibit P. 27 which was stained with blood was recovered.
It was seized under seizure memo exhibit PM/1.
On the same day respondent, Balkar Singh made a disclosure statement, exhibit PN that he had kept concealed a lathi in his kikar branches fence and he could get the same recovered.
In pursuance of his disclosure 11 statement, lathi exhibit P. 28 which was stained with blood was recovered.
It was seized under seizure memo exhibit PN/1.
These discoveries were made in presence of P.W. 11 Lila, who was Sarpanch of the local panchayat.
The High Court declined to put any importance to the recoveries as the respondents were not interrogated by Police from October 20 to 24.
In our opinion that cannot be a sufficient justification to hold that the recoveries were 'fake '.
The weapons were recovered at the pointing of the respondents.
In addition the Investigating Officer seized an empty kerosenetin lying at the place of occurrence, The tin was emitting smell of kerosene oil and it was seized under seizure memo exhibit PJ which was attested by P.W. 11.
In addition another circumstance tends to support the complicity of the respondents in the offence.
It is the conduct of the respondents.
The two deceased who had been murdered, by whomsoever it might be, were near blood relations of the respondents.
If the murder had been committed by some others, as supposed by the High Court, they would not have kept quiet.
Of course, they have stated in their defence that they were away from home in some other places and returned to the place of occurrence on 17th October, 1973 which has been found by us to be untrue.
This conduct of the respondents is incriminating.
As a result of the above discussions we, hold agreeing with the learned Sessions Judge, that the guilt of the respondents has been established by the prosecution beyond all reasonable doubt.
In the result we allow, the appeal, set aside the judgment and order of acquittal of the High Court and convict the respondents under Section 302/34 of the Penal Code.
Now comes the question of sentence.
The murder is ghastly and brutal.
Respondent Sher Singh deserved the extreme penalty provided by law, The learned Sessions Judge was right in imposing death sentence on him.
But in view of the fact that the learned Sessions Judge passed the order of conviction and sentence as early as 27th July, 1974 and the High Court passed the order of acquittal as early as 2nd of April, 1975, we refrain from visiting respondent Sher Singh with the extreme penalty provided by law for murder.
We sentence all the respondents to imprisonment for life.
We are told that respondents Balkar Singh and Dalel Singh are on bail.
Their bail bonds are cancelled.
They shall surrender forthwith to serve out their sentences.
N.V.K. Appeal allowed.
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The two deceased were the two younger half brothers of the first respondent.
A day before the day of the murder of the two deceased, the brothers had divided the family properties and started living separately.
P.W. 3, the wife of one of the deceased, in the F.I.R. given to the police, stated that on the day of the occurrence when the two deceased and she went to the bagichi for milking the cattle, the first respondent and his sons surrounded the two deceased in the court yard, the first respondent dealt a blow on the head of her husband with a gandasi while the others gave lathi blow on the second deceased.
Both of them succumbed to the injuries.
It was also stated in the F.I.R. that P.W. 4, the sister of the deceased, was with her at the time of the occurrence and that when they screamed, the assailants asked them to keep quiet on pain of death to them.
The assailants, it was alleged, thereafter dragged the two dead bodies and burnt them in the nearby heap of cow dung cakes after pouring kerosene on the heap.
The defence of the two accused was alibi.
All the accused, who were charged of offences under section 302 read with section 34 of the Penal Code were sentenced; the first respondent to death and the others to imprisonment for life.
On appeal, the High Court set aside the conviction and sentences and acquitted all of them.
Allowing the State 's appeal, ^ HELD : 1.
When an accused pleads alibi, the burden of proof under section 103 of the Evidence Act is on the accused.
The plea of all the accused that they were elsewhere at the time of the offence is not true.
[4 G, 5 C] 2.
The guilt of the two respondents had been established beyond all reasonable doubt.
The High Court rejected the evidence of P.W. 10 on the ground that he had not stated in the statement before the police that in the partition of the family properties among the brothers, there was a hitch.
The prosecution is not bound to prove motive of any offence in a criminal case, for motive is known only to the perpetrators of the crime and may not be known to others.
If the motive is proved by the prosecution, the Court has to consider it and see whether it is adequate.
[11E, 6 B C] 2 In the instant case the motive proved is apparently inadequate, although it might be possible.
[6 C] 3.
The High Court had taken a wrong view in rejecting the evidence of P.Ws. 3 and 4 on the ground that they were close relations of the deceased; that it was highly improbable that P.W. 3 who was in advance stage of pregnancy would go to the place of occurrence.
[8F; 9F G] 4.
Although both the witnesses P.Ws. 3 and 4 were close relations of the deceased, their evidence could not be rejected solely on that ground.
They were also related to the respondents and there is nothing on record to show that they were inimically disposed towards the respondents to falsely implicate them in the murder.
Secondly, it was a pure conjecture of the High Court when it said that panchas and sarpanchas and other respectables of the village took an opportunity to implicate the respondents.
It was also a conjecture on the part of the High Court to say that the deceased were murdered by unknown culprits and that the respondents were falsely implicated by the village respectables.
The High Court found as a fact that the respondents and the deceased slept in the bagichi during nights to keep watch over the cattle.
Had the murder been perpetrated by unknown persons, the respondents would have intervened and informed the neighbours.
[8F 9B] 5.
The fact that P.W. 3 did not mention in the F.I.R. that she had informed some persons of the village before the lodging of the F.I.R. and that for this reason her statement could not be relied on is not correct.
The F.I.R. need not contain all details of the occurrence nor does the omission to mention the name of persons whom she informed in the village detract from the credibility of the report.
The omission is a mere omission of details and not a contradiction.
[9 C] 6.
The High Court was not right in disbelieving the evidence of P.W. 4 on the ground that had she been present at the scene of occurrence, she would have out of love for her real brothers, intervened and tried to save them.
There is nothing unnatural if she had out of a sense of self preservation at the threat of the assailant refrained from attempting to save the two deceased from the murder.
P.W. 3 must have been dazed at the brutal murder of her husband and brother in law.
In such a situation she could not be expected to mention all the details, in the F.I.R. and therefore, the High Court was not right in rejecting the evidence of P.W. 10 solely on the ground that no mention of the extra judicial confession of Respondent No. 1 had been made in the F.I.R. [9H 10B; 10D E] 7.
In view of the fact that the conviction and sentence were passed by the Session Judge in July, 1974 and the High Court passed the order of acquittal in 1975, the extreme penalty of death given to the first respondent is not called for now; ends of justice will be met if all the respondents are sentenced to imprisonment for life.
[11 G]
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: Criminal Appeal No. 91 of 1976.
Appeal by Special Leave from the Judgment and Order dated 29.7.1975 of the Karnataka High Court in Criminal Appeal No. 364 of 1975.
N. Nettar for the Appellant.
A.K. Sen, S.K. Bisaria and V.P. Gupta for the Respondents.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
This appeal by special leave has been preferred by the State of Karnataka.
The three respondents being the partners of the firm, M/s. Mafatlal and Co., and the firm itself were charged for offences under Sections 18(c), 18(a) (ii) and 18A of the read with Section 27(a) (ii), 27(a) (i) and Section 28 of the Drugs Control Act, (hereinafter, the Act).
The defence was a plea of "Not Guilty".
The Chief Metropolitan Magistrate found respondents 1 and 3, that is, one of the partners and the firm, guilty under Section 18(a) (ii) and Section 18(c) of the and sentenced respondent No. 1 to suffer rigorous imprisonment for one year under section 18(a) (ii) and to pay a fine of Rs. 500.
in default, to suffer simple imprisonment for one month, and sentenced respondents 1 and 3 to pay a fine of Rs. 1,000 each, under section 18(c), in default, to suffer simple imprisonment for three months.
The respondent No. 2 was acquitted of these two offences as the Magistrate found that it was respondent No. 1 and not respondent No. 2 who was in charge of the business of the firm.
All the respondents were acquitted of the offence under section 18A. 3.
The appellant preferred an appeal before the High Court of Karnataka from the order of acquittal of respondent No. 2 of the 202 offence under Section 18(a) (ii) and 18(c) and of all the respondents under section 18A of the Act.
The High Court summarily dismissed the appeal.
Section 18A of the Act requires that every person who has acquired drug or cosmetic, if required, shall disclose to the inspector the name, address and other particulars of the persons from whom the drug or cosmetic was acquired.
The respondents pleaded that they did disclose to the Drugs Inspector, the name, address and other particulars of the person from whom the drugs were acquired, by section 18A of the Act and in support of their defence they rely on Exhibit P. 20, a letter dated 17.7.1971 addressed to the Drugs Controller.
The learned Chief Metropolitan Magistrate has found that Exhibit P.20 contained the name, address and other particulars of the person from whom the drugs were claimed to have been acquired as M/s. Mangilal Jayantilal & Company, 65 Princess Street, Second Floor, Bombay, which name and address, according to the prosecution, were fictitious.
P.W.3, the Assistant Commissioner, Food and Drug Administration, Bombay North Circle, has deposed that he got it verified by his Inspector who submitted a report that the above name and address were fictitious.
But the Inspector has not been examined, nor his report proved.
Obviously, therefore, the defence version remained unrebutted and violation of section 18A remained unestablished.
Regarding the acquittal of the 2nd respondent of the offence under section 18 (a) (ii) and section 18(c), the learned counsel for the State of Karnataka submitted that under section 34 of the the firm, as well as its partners were liable to be convicted.
Section 34 may be extracted here: "section 34.
(1) Where an offence under this Act has been committed by a company every person who at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in the sub section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without 203 his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.
For the purpose of this section (a) "company" means a body corporate, and includes a firm or other association of individuals; and (b) "director" in relation to a firm means a partner in the firm.
" It is seen that the partner of a firm is also liable to be convicted for an offence committed by the firm if he was in charge of, and was responsible to, the firm for the conduct of the business of the firm or if it is proved that the offence was committed with the consent or connivance of, or was attributable to any neglect on the part of the partner concerned.
In the present case the second respondent was sought to be made liable on the ground that he alongwith the first respondent was in charge of the conduct of the business of the firm.
Section 23 C of the Foreign Exchange Regulation Act 1947 which was identically the same as section 34 of the came up for interpretation in G. L. Gupta vs D. N. Mehta it was observed as follows: "What then does the expression "a person in charge and responsible for the conduct of the affairs of a company mean"? It will be noticed that the word 'company ' includes a firm or other association and the same test must apply to a director in charge and a partner of a firm incharge of a business.
It seems to us that in the context a person 'in charge ' must mean that the person should be in over all control of the day to day 204 business of the company or firm.
This inference follows from the wording of section 23C(2).
It mentions director, who may be a party to the policy being followed by a company and yet not be in charge of the business of the company.
Further it mentions manager, who usually is in charge of the business but not in over all charge.
Similarly the other officers may be in charge of only some part of business.
" The evidence in the present case shows that it was respondent No. 1 and not respondent No. 2 who was in over all control of the day to day business of the firm.
The second respondent is not liable to be convicted merely because he had the right to participate in the business of the firm under the terms of the Partnership Deed.
This appeal has no merit and is dismissed.
P.B.R. Appeals dismissed.
|
All the three respondents (respondents nos.
1 and 2 partners and respondent No. 3, the firm) were prosecuted for the alleged contravention of section 18A, in that when asked by the Drugs Inspector to disclose the name, address and other particulars of the person from whom a certain drug was acquired by them, they gave a fictitious address and that, therefore, they were liable to be convicted under section 18(a) (ii) read with section 18(c) of the Act.
The Metropolitan Magistrate convicted respondent No. 1 (the partner incharge of the business of the firm) and respondent No. 3 (the firm) but acquitted respondent No. 2 on the ground that it was respondent No. 1 who was incharge of the firm and sentenced them variously.
The High Court summarily dismissed the State 's appeal against the acquittal of respondent No. 2 and of all the respondents under section 18A. Dismissing the appeal, ^ HELD: Violation of the provisions of section 18A remained unestablished and the defence version remained unrebutted.
[202E] The Assistant Commissioner, Food and Drug Administration Bombay, North Circle, deposed that the particulars given by the respondents as to the person from whom the drugs were purported to have been acquired were verified by an Inspector who in his report stated that the name and address given by the respondents were fictitious; but the Inspector has not been examined nor was his report proved.
The defence version, therefore, remained unrebutted.
[202 D E] The second respondent was not liable to be convicted merely because he had the right to participate in the business of the firm under the terms of the partnership deed.
The term "person incharge" referred to in section 34 must mean that the person should be in overall control of the day to day business of the firm.
A person may be a party to the policy being followed by a firm and yet not be incharge of its business or a person may be incharge of a business but not in overall charge or may be incharge or only some part of the business.
In short, a partner of a firm is liable to be convicted for an offence if he was in 201 charge of and was responsible to the firm for the conduct of its business or if it is proved that the offence was committed with the consent or connivance of or was attributable to any neglect on the part of the partner concerned.
[204A B] G.L. Gupta vs D.N. Mehta ; applied.
In the instant case respondent No. 2 was not in overall control of the business.
It was respondent No. 1, who was in that position.
[204 C]
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Civil Appeal Nos.
1801 1805 of 1975.
From the Judgments and Orders dated the 27th January and 3rd February 1975 of the Karnataka High Court at Bangalore in STRPs.
14, 15 19, 26 & 32 of 1974.
N. Nettar for the Appellant.
J. Ramamurthy and Miss R. Vaigai for the Respondent.
Ex parte Respondents in CAs 1801 1803 & 1805/75.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The question which arises for consideration in these appeals by certificate is whether the respondents (here 282 inafter referred to as 'the assessees ') are liable to pay purchase tax under section 6(i) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as 'the Act ') on the turnover consisting of the price paid by them for purchasing paddy for the purpose of converting it into rice for sale, in their respective rice mills.
The assessees are owners of rice mills in the State of Karnataka and are registered dealers under the Act.
In the course of their business, they purchase paddy and after milling paddy sell the resultant rice.
During the assessment years, the assessees purchased paddy from agriculturists who were not liable to pay sales tax.
The assessing authority under the Act levied on the assessee in each of these cases purchase tax on the purchase turnover of paddy under section 6(i) of the Act.
The appeals filed by the assessees against the said assessments were dismissed by the appellate authority.
The Karnataka Sales Tax Appellate Tribunal allowed the appeals filed by the assessees against the orders of the appellate authority except the one filed by the assessee who is the respondent in Civil Appeal No. 1805 of 1975 holding that the conversion of paddy into rice did not involve any manufacturing process and that the purchase turnovers of paddy in those cases were not liable to tax under section 6(i) of the Act.
In the case of the assessee who is the respondent in Civil Appeal No. 1805 of 1975, the Tribunal held that the turnover was liable to be taxed as he had manufactured boiled rice out of the paddy purchased by him.
Aggrieved by the decisions of the Tribunal, the State Government filed revision petitions before the High Court under section 23(1) of the Act in the first four cases and the assessee filed a revision petition in the last case.
The High Court after holding that the turnovers in question were not liable to tax under section 6(i) of the Act dismissed the petitions filed by the State Government and allowed the petition of the assessee who is the respondent in Civil Appeal No. 1805 of 1975.
Thereafter the High Court granted by a common order a certificate of fitness in all these cases to prefer appeals before this Court to the State Government.
On the basis of said certificate, these appeals have been filed by the State Government against the orders of the High Court.
Since these appeals involve a common question of law, they are disposed of by this common judgment.
The relevant part of section 6 of the Act reads: "6.
Levy of purchase tax under certain circumstances.
Subject to the provisions of sub section (5) of 283 section 5, every dealer who in the course of his business purchases any taxable goods in circumstances in which no tax under section 5 is leviable on the sale price of such goods and, (i) either consumes such goods in the manufacture of other goods for sale or otherwise or disposes of such goods in any manner other than by way of sale in the state, or (ii). . . . shall be liable to pay tax on the purchase price of such goods at the same rate at which it would have been leviable on the sale price of such goods under section 5." The contention of the State Government before the High Court was and before us is that the sale price of paddy which is a taxable commodity having not been subjected to tax under section 5 the assessees are liable to tax under section 6(i) of the Act as they had consumed it in the manufacture of rice which was a different commodity for sale.
The assessees ' contention which was accepted by the High Court is that paddy and rice being the same it cannot be said that they had manufactured 'other goods ' out of paddy and hence section 6(i) is not attracted.
Paddy and rice have been held to be different commodities by this Court in Ganesh Trading Co., Karnal vs State of Haryana & Anr.
in which it is observed thus: "Now, the question for our decision is whether it could be said that when paddy was dehusked and rice was produced its identity remained.
It was true that rice was produced out of paddy but it is not true to say that paddy continued to be paddy even after dehusking.
It had changed its identity.
Rice is not known as paddy.
It is a misnomer to call rice as paddy.
They are two different things in ordinary parlance.
Hence quite clearly when paddy is dehusked and rice produced, there has been a change in the identity of the goods".
284 The above view has been followed by this Court in Babu Ram Jagdish Kumar and Co. vs The State of Punjab & Ors.
It is unfortunate that the High Court as well as the Tribunal have tried to distinguish the decision of this Court in Ganesh Trading Co. 's case (supra) on insubstantial grounds, a detailed reference to which is unnecessary We reiterate the view expressed in the above two cases and hold that paddy and rice are two distinct commodities and that the milling of paddy involves a manufacturing process.
There is no merit in the submission made on behalf of the assessees that they had not consumed paddy when they produced rice from it by merely carrying out the process of dehusking at their mills.
Consumption in the true economic sense does not mean only use of goods in the production of consumers ' goods or final utilisation of consumers ' goods by consumers involving activities like eating of food, drinking of beverages, wearing of clothes or using of an automobile by its owner for domestic purposes.
A manufacturer also consumes commodities which are ordinarily called raw materials when he produces semi finished goods which have to undergo further processes of production before they can be transformed into consumers ' goods.
At every such intermediate stage of production, some utility or value is added to goods which are used as raw materials and at every such stage the raw materials are consumed.
Take the case of bread.
It passes through the first stage of production when wheat is grown by the farmer, the second stage of production when wheat is converted into flour by the miller and the third stage of production when flour is utilised by the baker to manufacture bread out of it.
The miller and the baker have consumed wheat and flour respectively in the course of their business.
We have to understand the word 'consumes ' in section 6(i) of the Act in this economic sense.
It may be interesting to note that this is the basis of the levy of 'Value Added Tax ', popularly called as VAT, which is levied as an alternative to tax on turnover in some Western countries.
The difference between 'Value Added Tax ', and tax on the turnover of sales or purchases is explained by Professor Paul A. Samuelson in his book entitled 'Economics ' (Tenth Edition, 1976) at page 168 thus: "A turnover tax simply taxes every transaction made: wheat, flour, dough, bread, VAT is different because it does not include in the tax on the miller 's flour that part of its 285 value which came from the wheat he bought from the farmer.
Instead, it taxes him only on the wage and salary, cost of milling, and on the interest, rent, royalty, and profit cost of this milling stage of production.
(That is, the raw material costs used from earlier stages are subtracted from the miller 's selling price in calculating his "value added" and the VAT tax on value added. . )" At every stage of production, it is obvious there is consumption of goods even though at the end of it there may not be final consumption of goods but only production of goods with higher utility which may be used in further productive processes.
While construing the word 'consumption ' which was found in the Explanation to Article 286(1)(a) as it stood prior to its deletion by the Constitution (Sixth Amendment) Act, 1956, this Court in M/s. Anwarkhan Mahboob Co. vs The State of Bombay & Ors.
observed thus: "The Act of consumption with which people are most familiar occurs when they eat, or drink or smoke.
Thus, we speak of people consuming bread, or fish or meat or vegetables, when they eat these articles of food; we speak of people consuming tea or coffee or water, when they drink these articles; we speak of people consuming cigars or cigarettes or bidis, when they smoke these.
The production of wealth, as economists put it, consists in the creation of "utilities".
Consumption consists in the act of taking such advantage of the commodities and services produced as constitutes the "utilization" thereof.
For each commodity, there is ordinarily what is generally considered to be the final act of consumption.
For some commodities, there may be even more than one kind of final consumption.
Thus grapes may be "finally consumed" by eating them as fruits; they may also be consumed by drinking the wine prepared from "grapes".
Again, the final act of consumption may in some cases be spread over a considerable period of time.
Books, articles of furniture, paintings may be mentioned as examples.
It may even happen in such cases, that after one consumer has performed part of the final act of consumption, another portion of the final act 286 of consumption may be performed by his heir or successor in interest, a transferee, or even one who has obtained possession by wrongful means.
But the fact that there is for each commodity what may be considered ordinarily to be the final act of consumption, should not make us forget that in reaching the stage at which this final act of consumption takes place the commodity may pass through different stages of production and for such different stages, there would exist one or more intermediate acts of consumption.
" Applying the above test, it has to be held that the assessees had consumed the paddy purchased by them when they converted it into rice which is commercially a different commodity.
Since it is not disputed that the sales of paddy, which is a taxable commodity, in favour of the assessees had not suffered tax under section 5 in view of the circumstances in which they had taken place and it is held that the assessees had consumed paddy in the manufacture of rice which was a different commercial commodity for sale, the case of the assessees squarely falls under section 6(i) of the Act.
The charge under section 6(i) should, therefore, be given due effect.
This view is in accord with the opinion of this Court in State of Tamil Nadu vs M. K. Kandaswami etc.
and in Ganesh Prasad Dixit vs Commissioner of Sales tax, where provisions corresponding to section 6(i) of the Act arose for consideration.
It is next contended that since the assessees would be exposed to double taxation both as buyers of paddy and as sellers of rice we should hold that the levy in question is impermissible because paddy and rice are liable to be taxed at a single point.
No provision is shown to us which bars such taxation when the commodities are different.
In fact, in this case there is no double taxation on the same commodity.
A similar contention was rejected by this Court in the case of Babu Ram Jagdish Kumar (supra) thus: "We may at this stage refer to one other subsidiary argument urged on behalf of the appellants.
It is argued that because paddy and rice are not different kinds of goods 287 but one and the same, the inclusion of both paddy and rice in Schedule C to the Act would amount to imposition of double taxation under the Act.
There is no merit in this contention also because the assumption that paddy and rice are one and the same is erroneous.
In Ganesh Trading Co., Karnal vs State of Haryana (1973) 32 S.T.C. 623 (S.C.), arising under the Act, this Court has held that although rice is produced out of paddy, it is not true to say that paddy continued to be paddy even after dehusking; that rice and paddy are two different things in ordinary parlance and, therefore, when paddy is dehusked and rice produced, there is a change in the identity of the goods.
" In the result these appeals are allowed, the judgments of the High Court against which these appeals are filed are set aside and the turnover in question in each case is held to be taxable under section 6(i) of the Act.
There shall, however, be no order as to costs.
|
The assessees (respondents) are the owners of rice mills and are registered dealers under the Karnataka Sales Tax Act, 1957.
In the course of their business, they purchase paddy and after milling paddy, sell the resultant rice.
During the assessment years, the assessees purchased paddy from agriculturists who were not liable to pay sales tax.
The assessing authority under the Act levied on the assessee in each of these cases purchase tax on the purchase turnover of paddy under section 6(i) of the Act.
The appeals filed by the assessees were dismissed by the Appellate Authority except the one, holding that the conversion of paddy into rice did not involve any manufacturing process and that the purchase turnovers of paddy in those cases were not liable to tax under section 6(i) of the Act.
In the case of the other assessee, the Tribunal held that the turn over was liable to be taxed as he had manufactured milled rice out of the paddy purchased by him.
The appellant filed revision petitions in the High Court and the assessee filed revision petition in the last case.
The High Court after holding that the turn overs in question were not liable to tax under section 6(i) of the Act dismissed the petitions filed by the appellant and allowed the petition of the last assessee.
The High Court granted a certificate of fitness to this Court.
The appellant argued that the sale price of paddy which is a taxable commodity having not been subjected to tax under section 5, the assessees were liable to tax under section 6(i) of the Act as they had consumed it in the manufacture of rice which was a different commodity for sale.
The respondent argued that they had not consumed paddy when they produced rice from it by merely carrying out the process of dehusking at their mills.
Allowing the appeals, ^ HELD: 1.
(i) Paddy and rice are two distinct commodities.
The milling of paddy involves a manufacturing process.
[284 B] (ii) The levy in question is not impermissible even though paddy and rice are liable to be taxed at a single point, as in fact there is no double taxation on the same commodity.
[286 F G] 281 Ganesh Trading Co. Karnal vs State of Haryana and Anr.
32 S.T.C. 623, Babu Ram Jagdish Kumar and Co. vs The State of Punjab and Anr.
44 S.T.C. 159 affirmed.
Consumption in the true economic sense does not mean only use of goods in the production of consumer goods or final utilisation of consumer goods by consumers involving activities like eating of food, drinking of beverages, wearing of clothes or using of an automobile by its owner for domestic purposes.
A manufacturer also consumes commodities which are ordinarily called raw materials when he produces semi finished goods which have to undergo further processes of production before they can be transformed into consumer goods.
At every such intermediate stage of production, some utility or value is added to goods which are used as raw materials and at every such stage the raw materials are consumed.
[284 D E] 3.
At every stage of production there is consumption of goods even though at the end of it there may not be final consumption of goods but only production of goods with higher utility which may be used in further productive processes.
[285 B B] M/s.
Anwar Khan Mahboob Co. vs The State of Bombay and Ors.
at pp.
715 716; Economics (Tenth Edition 1976) at page 168 by Professor Paul A. Samuelson, referred to.
In the instant case, the assessees had consumed that paddy purchased by them when they converted it into rice which is commercially a different commodity for sale.
The case of assessees therefore, squarely falls under section 6(i) the Act.
[286 C] State of Tamil Nadu vs M. K. N. Kandaswami etc.
; , Ganesh Prasad Dixit vs Commissioner of Sales Tax ; , referred to.
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minal Appeal No. 126 of 1959.
Appeal by special leave from the judgment and order dated June 19, 1959, of the Punjab High Court in Criminal Revision No. 144 of 1959.
R. L. Kohli, for the appellant.
G. C. Mathur and P. D. Menon, for the respondent.
March 6.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal by special leave against the judgment and order of the High Court of the Punjab and raises the constitutionality of s.178A of the (Act 8 of 1878), which has been held by this Court to be constitutional in the Collector of Castoms, Madras vs Nathella Sampathu Chetty(1).
At the time, of arguments before us a further point was raised that in order that s.178A of the may become applicable, the prosecution must further prove that the goods which were sought to be affected by the order of the Customs Officer were goods of foreign origin and there must be evidence in support of the reasonableness of the belief of the Customs Officer that the goods were smuggled goods.
The question now sought to be raised was not agitated in any of the courts below.
The appellant on February 11, 1958, when he was sitting in a third class compartment of the Amritsa Kalka train standing on Platform No. 5 of the Amrsar Railway Station, was searched by a Customs Official and some bars of gold were found tied round his waist.
These gold bars were seized and a recovery memo wits prepared, Out of these gold (1) ; 615 bars four were of base metal and the rest were of pure gold some bearing the stamp of Johmon Mathey & Co. Ltd., 999 10 tolas and 2 1/4 bars bore marks of N.M. Rothschild & Sons 10 tolas (990 0).
No permit from the the Reserve Bank to import this gold was produced by the appellant.
Under the Foreign Exchange Regulation Act, 1917, the importation of gold without such permit is prohibited and such contravention is punishable under s.23 A of the said Act read with s.167(81) of the .
The appellant was prosecuted under s.23A of the Foreign Exchange Regulation Act and 167(81) of the and his defence was that he was not in possession of the gold bars which were taken from an attache case left by a stranger under the seat where he (the appellant) was sitting.
The Additional District Magistrate held the offence to be proved and convicted the appellant of the offence and sentenced him to one year 's rigorous imprison ment.
An appeal to the Sessions Judge resulted in the reduction of the sentence to 8 months ' rigorous imprisonment.
On revision to the High Court the sentence was reduced to six months ' rigorous imprisonment.
The appellant has come in appeal by special leave.
The trial court accepted the testimony of the Customs Officials and held that the defence of the appellant was false and that gold worth Rs. 14,000/ was found in his possession.
The learned Sessions Judge in appeal also accepted the testimony of the Customs Officials and held the defence to be false and came to the conclusion that the gold was found in possession of the appellant.
In the High Court the same plea was taken and was rejected.
For the first time in this Court it is contended that before the presumption under s.178A can be made applicable, it must be proved by the prosecution that the goods were of foreign origin, i.e. had beep 616 imported from abroad and only then does the presumption under section 178A arise which relates only to the question of Customs duty having been paid.
In other words the contention comes to this that the prosecution must first prove that the goods in dispute in a particular case have been imported from a foreign country and once that is proved the onus then will be on the person in whose possession the goods are found that he had paid the Customs duty.
Apart from the fact that this question has never been raised, that is not the effect of s.178A of the which provides: "178A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.
(2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, cigaretters and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf.
(3) Every notification issued under sub section (2) shall be laid before both Houses of Parliament as soon as may be after it is issued".
Two Customs officers appeared as witnesses, Inspector Satnam Singh and Deputy Superintendent A.N. Kapur, the former is an Inspector of Land Customs and the latter a Deputy Superintendent of Customs.
There is nothing to indicate in their cross examination that the officers did not have a reasonable belief that the goods were smuggled goods and the question that the officers did not have reasonable belief is not suggested either from the cross examination of these witnesses of from the findings 617 of the courts below.
Even in his statement of case it is contended that the mere existence of stamp of foreign companies on gold does not necessarily prove that the gold is of foreign origin.
It might be put on spurious gold which may be of Indian origin.
In our opinion apart from the fact that this question has not been raised, it is quite clear that what s.178A of the provides is that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods is on the person from whose possession the goods are seized.
The onus is on him to show that the goods are not smuggled, that is, not of foreign origin on which duty is not paid.
The onus is not on the prosecution to show that the goods are not, of Indian origin.
That appears to be the view taken in the Collector of Customs, Madras vs Nathella Sampathu Chetty (1) where at the learned Judges observed : "We are therefore of opinion (1) that section 178A was constitutionally valid, (2) that the rule as to the burden of proof enacted by that section applies to a contravention of a notification under section 8(1) of the Foreign Exchanges Regulation Act 1947 by virtue of its being deemed to be a contravention of a notification on under section 19 of the , (3) that the preliminary require ment of section 178A that the officer seizing should entertain , 'a reasonable belief ' that the goods seized were smuggled" was satisfied in the present case.
" In our opinion there is no merit in this appeal and it is dismissed.
The appellant will surrender to his bail bonds.
Appeal dismissed.
|
The appellant was searched by a Customs Official and some bars of gold were found tied round his waist.
Out of those bars some were of base metal and the rest of pure gold which borne foreign markes.
The appellant had no permit from the Reserve Bank of India to import the gold.
He was prosecuted and convicted under section 167(81) of the .
He brought an appeal to the Supreme Court by Special leave.
Held, that section 178A of the , is constitutional.
The contension that before the presumption under s.178A of the could be raised the prosecution had to prove that the gold was of foreign origin was rejected and held that section 178A provides that when the goods are seized in the reasonable belief that they are smuggled goods the onus is on the accused to show that they are not smuggled.
Collector of Customs, Madras vs Nathella Sampathu Chetty (1962) 3 S.C.R. p.786 followed.
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N: Criminal Appeal No. 220 of 1974.
Appeal by Special Leave from the Judgment and Order dated 9th January, 1974 of the Allahabad High Court in Criminal Appeal No. 356/77 connected with Criminal Appeal No. 723 of 1970.
R. K. Garg, section section Bhatnagar, V. J. Francis and Sunil Kumar Jain for the Appellants.
R. K. Bhat for the Respondent.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
This appeal by special leave has been directed against the judgment and order passed by the Allahabad High Court dismissing two appeals filed by the appellants before it.
The appellants were convicted under Sections 302, 307 and 323 all read with Section 149 of the Penal Code.
They were sentenced to imprisonment for life, each, under Section 302/149, rigorous imprisonment for 7 years, each, under Section 307/149 and rigorous imprisonment for six months, each, under Section 323/149 of the Penal Code.
Appellants Harish Chandra and Nathu were further convicted under Section 148 of the Penal Code and sentenced to rigorous imprisonment for two years, each.
The sentences were directed to run concurrently.
The facts material for the purpose of disposal of this appeal may be stated thus.
The prosecution alleges that there was 354 long standing enmity between the parties of the deceased and the appellants.
Some time prior to the incident a flour mill was installed and a house constructed by P.W. 1, Pahelwan, in his plot of land.
In front of the flour mill and the residence of Pahelwan there was some vacant land in his possession.
The appellants had started throwing rubbish on the land.
Pahelwan and his son, Ram Swarup (deceased) objected to this.
The appellants were annoyed at the objection of Pahelwan and his son Ram Swarup.
On 31st December, 1968 at about noon appellants Harish Chandra and Ram Sewak had some alteration with Pahelwan and Ram Swarup in connection with throwing of rubbish on the aforesaid land and as a consequence the relation between the parties worsened.
In the evening at about 8 O 'clock on the 1st of January, 1969, appellant, Ram Sewak, armed with a lathi went to the front of the flour mill of Pahelwan and started to hurl abuses on Pahelwan and his son Ram Swarup.
Appellant, Ram Sewak, challenged Pahelwan and his companions to see them that day.
At that time, it has been alleged, an electric light was burning in the front of the room of the flour mill as usual.
At the call of the appellant, Ram Sewak, the other appellants came variously armed with lathis and spears and started giving blows to Pahelwan and his son, Ram Swarup, both of whom, according to the prosecution, were unarmed.
Pahelwan, somehow, managed to snatch the spear from the hand of the appellant, Ishwari, and started giving blows to the assailants in order to defend himself.
At that time, it has been further stated, appellants Harish Chandra and Nathu fired their gun and pistol respectively.
As a result, Ram Swarup was hit and he fell down in front of the flour mill.
The shot of Nathu hit P.W. 1 Pahelwan, Lal Ram and Shri Kishan, all of whom received injuries.
Lekh Raj, P.W., then attacked the appellants with his lathi, as a result of which some injuries were caused to the appellants including Harish Chandra.
Thereafter the appellants escaped.
Ram Swarup succumbed to bullet injuries while he was being removed to the police station.
A first information report was lodged by P.W. 1, and eventually the appellants were committed to the court of Sessions that convicted and sentenced as stated above.
Their appeal was also dismissed by the High Court as earlier stated.
Learned counsel for the appellants submitted that large number of injuries had also been received by the appellants and that there was no finding by the courts below as to how the assault 355 initially started and which party was the aggressor, prosecution has not explained as to how the appellants received the injuries.
As such, he submitted, the conviction for the offences with the aid of Section 149, Penal Code, was bad in law.
In support of his contention he relied on a decision of this Court reported in AIR 1976 section C. 2263.
This Court in A.I.R. 1976 S.C. 2263 has held: (1) That the prosecution has suppressed the genesis and the origin of the occurrence and has thus not presented the true version; (2) that the witnesses who have denied the presence of the injuries on the person of the accused are lying on most material point and therefore their evidence is unreliable; (3) that in case there is a defence version which explains the injuries on the person of the accused it is rendered probable so as to throw doubt on the prosecution case.
The omission on the part of the prosecution to explain the injuries on the person of the accused assumes much greater importance where the evidence consists of interested or inimical witnesses or where the defence gives a version which competes in probability with that of the prosecution one.
" The submission of the learned counsel is that the injuries found in the persons of the appellants have not been explained by the prosecution.
The injuries are serious.
The appellants had the right of private defence, and therefore, they have committed no offence.
The submission of the learned counsel is not warranted by the findings of the High Court.
The High Court agreeing with the trial Court has found that the prosecution case as alleged has been established by the evidence of the prosecution witnesses.
The High Court as well as the trial Court has rejected the defence version of the case, in view of their inconsistent pleas before the Committing Court and the trial Court.
Before the Committing Magistrate pleas of appellants, Harish Chandra and Soney Lal, were alibi.
The defence of appellants, Ram Sewak and Nathu, was that the occurr 356 ence had not taken place on the land of P.W. 1, Pahelwan, as alleged by the prosecution, but it had taken place at a different place.
According to them there was a quarrel in respect of some property between Ram Swarup, (deceased) and Zorawar, brother in law of Ram Swarup, in which appellant Nathu intervened whereupon Pahelwan (P.W. 1), Lala Ram, Shri Kishan, Triloki, Ram Swarup Prasad, Munna Jamadar, Lekthraj and others attacked the appellants and in that incident injuries were received by P.W. 1 and the deceased.
The defence of appellant, Ishwari, before the Committing Magistrate was that Pahelwan (P.W.1), Lekh Raj and others attacked him, as a result of which he became unconscious.
The defence of the appellants before the Sessions Judge was one of the right of private defence.
The defence of appellant Harish Chander before the Sessions Judge was an alibi.
The defence of the other appellants was that Ishwari had been returning from Ghurwal Chak.
At that time he was attacked by the prosecution witnesses and the deceased.
The incident took place on a land between residence and flour mill of P.W.1 and in that assault the appellants had to defend themselves.
On a consideration of the evidence on record the learned High Court agreeing with the Sessions Judge has accepted the version of the prosecution and rejected that of the defence.
In coming to that conclusion the High Court has also taken notice of the fact that P.W.1.
had a licensed gun.
Had he and Ram Swarup and other P.W 's been the aggressors, he (P.W.1) would not have come without the gun.
In view of the "inconsistent pleas" and "in view of the fact that no infirmity worth the name has been shown in the statement of eye witnesses of the occurrence", the High Court accepted the prosecution case as true and held "that the defence case is false".
The High Court has also held that "appellants were the aggressors".
It is therefore, not correct to suggest as contended by the learned counsel for the appellants that there were no findings on record to show as to how the quarrel started and that the appellants were the aggressors.
From the findings of learned courts below the facts that emerge are (1) that it was the appellants who were the aggressors; (2) that the occurrence took place on the land in front of the house of P.W. 1, Pahelwan, who was in possession thereof; (3) that P.W.1 and the deceased had the right of the private defence of property and person and they did exercise that right.
Aggres 357 sors, even if they receive injuries from the victims of their aggression cannot have the right of private defence.
The findings are that P.W.1 and the deceased were unarmed.
P.W.1 snatched a weapon from one of the assailants and caused injuries on them.
On the top of it two of the appellants brought fire arms and fired at the deceased and the P. W. 1, as a result of which the deceased expired.
The submissions of learned counsel for the appellants do not stand scrutiny.
This appeal has no merit and is dismissed.
|
The prosecution alleged that there was a long standing enmity between the parties of the deceased and the appellants.
There was a vacant plot of land in front of the flour mill and residence of PW. 1.
The appellants started throwing rubbish on this piece of land.
PW.1 and his son, the deceased, objected to this.
On the fateful day at about noon there was an altercation in connection with the throwing of rubbish, and at about 8 p.m. one of the appellants armed with a lathi went to the flour mill and challenged PW. 1 and his companions.
At the call of this appellant, the other appellants who were armed with gun, pistol, lathi and spear arrived at the spot.
PW. 1 managed to snatch the spear from the hands of one of the appellants and started giving blows to the assailants in order to defend himself.
At that time two of the appellants fired their gun and pistol as a result of which the son of PW. 1 received injuries, to which he succumbed while being removed to the Police Station.
The defence of the appellants was one of alibi and that the offence had not taken place on the land of PW. 1.
The appellants were tried before the Sessions Judge who convicted and sentenced them under Sections 302 307 and 323 read with Section 149 of the Penal Code.
The High Court dismissed the appeal.
It agreed with the trial Court and found that the prosecution case was established by the evidence of the prosecution witnesses and that the defence version of the case had to be rejected on account of the inconsistent pleas made by the appellants before the committing court and the Sessions Court.
In the appeal in this Court, it was contended that there was no finding by the trial and appellate courts as to how the assault initially started and which party was the aggressor, that the prosecution had not explained as to how the 353 appellants received the injuries, and that the appellants had the right of private defence and, therefore, they had committed no offence.
Dismissing the appeal, ^ HELD: 1.
The High Court rightly accepted the prosecution case as true and held that the defence case was false.
[356 F] 2.
The findings of the two courts below indicate that it was the appellants who were the aggressors and that the occurrence took place on the land lying in front of the house of PW. 1 who was in possession thereof and that the deceased and PW. 1 had the right of private defence of property and person and that they exercised that right.
The appellants who were the aggressors, even if they received injuries from the victims of their aggression, cannot have any right of private defence.
The findings are that the deceased and PW. 1 were unarmed and that P.W. 1 snatched the weapon from one of the assailants and caused injuries to them.
If the deceased and the other prosecution witnesses had been the aggressors, PW. 1 would not have come without his licensed gun.
[356 H 357A, 356E]
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N: Criminal Appeal No. 543 of 1976.
Appeal by special leave from the judgment and order dated the 6th May 1975 of the Rajasthan High Court in D.B. Criminal Jail Appeal Nos.
277, 413 to 416 and 918 of 1971.
Badri Das Sharma for the Appellant.
Dalveer Bhandari for the Respondent.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
This appeal by special leave on behalf of the State of Rajasthan is directed against the judgment of the Rajasthan High Court acquitting the two respondents, Shrimati Kalki alias Kali and her husband, Amara (alongwith four other co accused).
Respondent Kalki was convicted under Section 302 and Section 148 of the Penal Code and sentenced to imprisonment for life and for rigorous imprisonment for two years, respectively.
The five other accused persons including respondent, Amara, were convicted under Section 302 read with Section 149 and under Section 147 of the Penal Code, and each of them was sentenced to imprisonment for life and to one and a half years rigorous imprisonment respectively.
The material facts of the prosecution case were that there was a land dispute between Nimba (P.W.6) father of the deceased, Poona, on the one hand, and respondent Amara and the members of his family, on the other.
On July 17, 1970 at about sunset the accused persons of whom respondent Kalki was armed with an axe and respondent, Amara with a dharia, came to the house of the deceased.
At that time the deceased was inside his hut with his wife Mooli (P.W.1).
Amara called Poona.
Poona came out followed by his wife Mooli, when he was knocked down by Amara and Rama whereupon Kalki gave him blow with the axe on the neck.
Poona met with instantaneous death.
Mooli (P.W.1) raised an outcry when Geli, mother of the deceased (P.W.2) who had been at some distance from the hut came running to the place of occurrence and saw the assailants leaving the place.
506 3.
Nimba lodged a report at the police station at Nana.
Police registered a case.
In due course the case was sent to, and tried by, the Session Judge who convicted and sentenced the six accused persons including the two respondents as stated above.
This Court granted special leave to appeal only against the two respondents and refused it as against the other four.
The question before us is whether the two respondents or any of them caused the death of Poona.
There is no dispute that Poona met a homicidal death.
The High Court has set aside the Order of conviction and sentence passed by the Session Judge on the grounds (1) that P.W.1 the widow of the deceased "is. a highly interested witness, in as much as, she is the wife of the deceased and there was an enmity between the deceased and the accused on account of the dispute about the agricultural land", and (2) "that there are material discrepancies in her statement".
We have been led through the evidence of P.W. 1, the only eye witness in the case, of P.W.2, Geli, who says that she saw the respondents leaving the place of occurrence with the weapons in their hands, and of P.W.5 the Medical Officer, who held the Post Mortem examination on the deceased.
His evidence fully supports the evidence of P.W.1, who deposed that respondent Kalki gave a blow on the neck of the deceased with an axe.
P.W. 5 found one incised wound measuring 5" X 2" X 4" on the lateral side of the left side of neck.
On a perusal of the evidence of these witnesses, we do not have the least doubt in our mind that it was respondent Kalki who gave an axe blow on the neck of the deceased and that respondent Amara came along with his wife with a dharia with the common intention of causing the death of Poona.
In fact it was he who called out Poona from inside the hut, and felled down and facilitated the murder of Poona by his wife, Kalki.
As mentioned above the High Court has declined to rely on the evidence of P.W.1 on two grounds: (1) she was a "highly interested" witness because she "is the wife of the deceased", and (2) there were discrepancies in her evidence.
With respect, in our opinion, both the grounds are invalid.
For, in the circumstances of the case, she was the only and most natural witness; she was the only person present in the hut with the deceased at the time of the occurrence, and the only person who saw the occurrence.
True, it is she is the wife of the deceased; but she cannot be called an 'interested ' 507 witness.
She is related to the deceased.
'Related ' is not equivalent to 'interested '.
A witness may be called 'interested ' only when he or she derives some benefit from the result of a litigation; in the decree in a civil case, or in seeing an accused person punished.
A witness who is a natural one and is the only possible eye witness in the circumstances of a case cannot be said to be 'interested '.
In the instant case P.W.1 had no interest in protecting the real culprit, and falsely implicating the respondents.
The second ground on which the High Court refused to place reliance on the evidence of P.W. 1 was that there were "material discrepancies".
As indicated above we have perused the evidence of P.W. 1.
We have not found any "material discrepancies" in her evidence.
The discrepancies referred to by the High Court are, in our opinion, minor, insignificant, natural and not 'material '.
The discrepancies are with regard to as to which accused "pressed the deceased and at which part of the body to the ground and sat on which part of the body; with regard to whether the respondent Kalki gave the axe blow to the deceased while the latter was standing or lying on the ground, and whether the blow was given from the side of the head or from the side of the legs.
In the depositions of witnesses there are always some normal discrepancies however honest and truthful they may be.
These discrepancies are due to normal errors of observation, normal errors of memory due to lapse of time, due to mental disposition such as shock and horror at the time of the occurrence, and the like.
Material discrepancies are those which are not normal, and not expected of a normal person.
As indicated above we have not found any material discrepancies in the evidence of the P. W. 1. 7.
Learned counsel for the respondent submitted that the appeal involved only appreciation of evidence and this Court may not interfere with the findings of facts resulting from appreciation of evidence.
It is true that in an appeal under Article 136 of the Constitution this Court normally does not interfere with findings of facts arrived at by the High Court.
But when it appears that the findings of facts arrived at are bordering on perversity and result in miscarriage of justice, this Court will not decline to quash such findings to prevent the miscarriage of justice.
In our opinion the guilt of the two respondents has been established by the prosecution beyond reasonable doubt and their acquittal resulted in grave miscarriage of justice.
508 In the result we set aside the order of acquittal passed by the learned High Court and convict respondent Kalki alias Kali under section 302 of the Penal Code and respondent, Amara, under Section 302/34 of the Penal Code, and sentence each of them to suffer imprisonment for life.
The appeal is allowed.
The respondents are said to be on bail.
They shall surrender forthwith to serve out their sentences.
V.D.K. Appeal allowed.
|
Respondent Kalki alias Kali and her husband Amara (along with four other co accused) were charged, convicted under section 302 I.P.C. and sentenced to life imprisonment.
While Kalki was also convicted and sentenced under section 148 I.P.C. for two years ' rigorous imprisonment, the other five accused were convicted and sentenced under section 147 I.P.C. for rigorous imprisonment for a period of one and a half years.
In appeal the High Court of Rajasthan acquitted all of them on the grounds (i) that P.W. 1, the widow of the deceased "is. . a highly interested witness, inasmuch as, she is the wife of the deceased and there was an enmity between the deceased and the accused on account of the dispute about the agricultural land" and (ii) "that there are material discrepancies in her statement".
This Court granted special leave to appeal only against Kalki and her husband and refused it as against the four.
Dismissing the appeal, the Court ^ HELD: 1.
It is true that in an appeal under Article 136 of the Constitution the Supreme Court normally does not interfere with findings of facts arrived at by the High Court.
But when it appears that the findings of facts arrived at are bordering on perversity and have resulted in miscarriage of justice, the Court will not decline to quash such findings to prevent miscarriage of justice.
[507 F G] 2.
Material discrepancies are those which are not normal, and not expected of a normal person.
In the depositions of witnesses there are always some normal discrepancies however honest and truthful the witnesses may be.
These discrepancies are due to normal errors of observation, normal errors of memory due to lapse of time, due to mental disposition such as shock and horror at the time of the occurrence, and the like.
There are no material discrepancies in the evidence of P.W. 1 so as to reject the evidence in its entirety.
[507 D E] 3.
"Related" is not equivalent to "interested".
A witness may be called "interested" only when he or she derives some benefit from the result of a 505 litigation; in the decree in a civil case, or in seeing an accused person punished.
A witness who is a natural one and is the only possible eye witness in the circumstances of a case cannot be said to be "interested".
In the instant case.
P.W. 1 had no interest in protecting the real culprit, and falsely implicating the respondents.
[507 A B]
|
Appeal No. 359 of 1962.
Appeal by special leave from the Award dated April 3, 1961 of the Seventh Industrial Tribunal, West Bengal, in Case No. VIII 303 of 1960.
B.Sen, S.C. Mazumdar, D. N. Mukherjee for B. N. Ghosh, for the appellant.
Janardhan Sharma, for the respondents.
February 22.
The judgment of the Court was delivered by HIDAYATULLAH J.
By this appeal filed with the special leave of this Court, by the Meenglas Tea 167 Estate against its Workmen the Company seeks to challenge an award dated April 3 , 1961, pronounced by the Seventh Industrial Tribunal, West Bengal.
The order of reference was made by the Government of West Bengal as far back as October 29, 1957, in respect of the dismissal of 44 workmen.
The issue which was referred was as follows: "Whether the dismissal of the workmen mentioned in the attached list is justified ? What relief by way of reinstatement and/or compensation are they entitled to?" From November 5, 1957, to August 17, 1960, this reference remained pending before the First Labour Court.
It was then transferred to the Seventh Industrial Tribunal and the letter made the impugned award on April 3, 1961.
By the time the award was made two of the workmen (Nos. 12 and 37) had died and four had been reemployed (Nos. 31, 33, 34 and 35).
One of the workmen (No. 22) was not found to be a workman at all.
The Tribunal held that the orders of dis missal of fourteen workmen were justified though retrospective effect could not be given to the orders.
The Company was ordered to re instate the remaining workmen and to pay them compensation in some cases (but not all) amounting to three months ' wages.
In the present appeal the Company seeks to challenge the award regarding 13 of those workmen who have, been ordered to 'be reinstated.
of these workmen the cases of three fall to be considered separately and those of the remaining ten can be considered together.
We shall now give the facts from which the reference arose.
The appellant Meenglas Tea Estate in Jalpaiguri District of West Bengal is owned by Dun can Brothers Ltd. The workers belong to the Zilla Chabagan Workers ' Union, Malbazar, District 168 jalpaiguri.
On January 18, 1956, there was an ugly incident in which a group of workmen assaulted the Manager, Mr. Marshall and his two Assistant Managers Mr. Nichols and Mr. Dhawan.
This happened one morning in a section of the tea gardens where about two hundred workmen had surrounded Mr. Nichols and were making a violent demonstration.
First Mr. Dhawan and soon after Mr. Marshall arrived on the scene and the workmen surrounded them also.
In the assault that followed these three officers were wounded Mr.Marshall seriously.
A criminal cage was started against some of the rioters but we are not concerned with it.
The Company also started proceedings against some workmen.
It first issued a notice of suspension which was to take effect from February 6, 1956, and then served charge sheets on a large number of workmen charging them with participation in .
the riot.
The Work men replied denying their complicity.
The Company then held enquiries and ordered the dismissal of a number of workmen with effect from January 18, 1956.
A sample order of dismissal is exhibited as annexure F in the case.
In the enquiry before the Tribunal the Union admitted the incident though it said that it was caused by provocation on the part of the Management.
The Union, however, denied that any of the workmen who were charged was concerned in the affray pointing out that none of these workmen was prosecuted by the police.
The enquiry was held by Mr., Marshall and Mr. Nichols and the record of the proceedings is marked Exhibits 17 and 18 series.
That record was produced before us by the appellant for our perusal.
It was admitted before us that there was no further record of evidence for the Company as none was recorded.
Exhibit 17 and 18 series are the answers of the workmen to the charges against .
them and such replies as they gave to questions put to them in cross examination, 169 The Tribunal held that the enquiry was vitiated because it was not held in accordance with the principles of natural justice.
It is contended that this conclusion was erroneous.
But we have no doubt about its correctness.
The enquiry consisted of putting questions to each workman in turn.
No witness was examined in support of the charge before the workman was, questioned.
It is an elementary principle that a person who is required to answer a charge must know not only the accusation but also the testimony by which the accusation is supported.
He must be given a fair chance to hear the evidence in support of the charge and to put such relevant questions by way of cross examination as he desires.
Then he must be given a chance to rebut the evidence led against him.
This is the barest requirement of an enquiry of this character and this requirements must be substantially fulfilled before the result of the enquiry can be accepted.
A departure from this requirement in effect throws the burden upon the person charged to repel the charge without first making it out against him.
In the present case neither was any witness examined nor was any statement made by any witness tendered in evidence.
The enquiry, such as it was, was made by Mr. Marshall or Mr. Nichols who were not only in the positionof judges but also of prosecutors and witnesses.
There Was DO opportunity to the persons charged to cross examine them and indeed they drew upon their own knowledge of the incident and instead cross examined the persons charged.
This was such a travesty of the principles of natural ,justice that the Tribunal was justified in rejecting the findings and asking the Company to prove the allegation against each workman de novo before it.
In the enquiry which the Tribunal held the Company examined five witnesses including Mr. Marshall, Mr. Nichols and Mr. Dhawan, who were the eye witnesses.
In view of the fact that the 170 enquiry was being made into an incident which took place four and a half years ago the Tribunal in assessing the evidence held that it would not accept that any workman was incriminated unless at least two witnesses deposed against him.
Some of the workmen got the benefit of this approach and it is now contended that the Tribunal was in error in insisting upon corroboration before accepting the evidence of a single witness.
Reference in this connection is made to section 134 of the Indian Evidence Act (1 of 1872) which lays down that no particular number of witnesses shall in any case be required for the proof of any fact.
It is not a question of an error in applying the Evidence Act.
It is rather a question of proceeding with caution in a case where admittedly many persons were involved and the incident itself took place a very long time ago.
The Tribunal acted with caution and did not act upon uncorroborated testimony.
It is possible, that the evidence against some of the persons to whom the benefit has gone, might be cogent enough for acceptance, but the question is not one of believing a single witness in respect of any particular workman but of treating all workmen alike and following a method which was likely to eliminate reasonably chances of faulty observation or incorrect recollection.
On the whole, it cannot be said that the Tribunal adopted an approach which made it impossible for the company to prove its case.
It followed a standard which in the circumstances was prudent.
We do not think that for this reason an interference is called for.
Since no other point was argued the appeal of the Company in respect of the ten workmen, who were alleged to be concerned in the occurrence of January 18, 1956, must be dismissed.
This brings us to the consideration of the three special cases.
They concern Dasarath Barick (No. 25), Lea Bichu (No. 26) and Nester Munda (No. 27).
Dasarath Barick was said to have threatened the 171 loyal workers and to have prevented them from work on March 15, 1956.
Lea Bichu was said to have forced the chowkidar to hand over the keys of the gate to him on the same day and to have locked the gate with a view to hampering the movement of workmen.
The Tribunal held that the enquiry in both the cases was not a proper enquiry and the conclusion was not acceptable.
Here, again no witness was examined in the enquiry to prove the two occurrences and even before the Tribunal there was no evidence against them except the uncorroborated testimony of Mr. Mar shall.
No worker was examined to prove that he was threatened by Dasarath Barick or to show that it was Lea Bichu who had taken the keys from the chowkidar and locked the gate.
In view of these circumstances the Tribunal was justified in not accepting the findings which proceeded almost on no evidence.
We agree with the Tribunal that no case was made out before the Tribunal for the dismissal of Dasarath Barick and Lea Bichu.
The last case is of Nester Munda who is the Secretary of the Union., ' It was alleged against him that on, January 16, 1956, he had abused Mr. Nichols and had demonstrated at the head of a hostile group of workmen.
Here, again, no proper enquiry was held and the conclusion reached at the enquiry by the Company was not acceptable.
The Tribunal, therefore, enquired into the case for itself.
Mr. Nichols and Mr. Dhawan gave evidence which the Tribunal was not prepared to accept.
It pointed out that their testimony conflicted on vital points.
Since the Tribunal had the opportunity of hearing and seeing Mr. Nichols and Mr. Dhawan we should be slow to reach a conclusion different from that of the Tribunal.
In addition, in such cases, it is not the practice of this Court to enter into evidence with a view to finding facts for itself.
Following this well settled practice we see no reason 172 to interfere with the conclusion of the Tribunal.
The result is that the appeal fails and is dismissed with costs.
|
In January, 1956, there was an incident in which a group of workmen assaulted the Manager and two Assistant Managers of tile appellant company.
All the three officers Were Wound ed.
Some workmen were suspended, and charge sheets were served on them, charging them with participation in the riot.
After an inquiry the workmen were dismissed.
The inquiry was held by the Manager and one of the Assistant Managers,During the inquiry, no witness was examined and no statement made by any witness was tendered in evidence.
(1) , 166 The dispute was first referred to the Labour Court and then to the Industrial Tribunal, West Bengal.
The Tribunal set aside the inquiry held by the appellant company and asked the company to prove the allegations against each workman de novo before it.
The company examined five witnesses.
The Tribunal held that orders for dismissal of 15 workmen were justified but it ordered the remaining workmen to be reinstated.
The company came to this Court by special leave.
Held, that the view of the Tribunal was correct that the inquiry made by the company was not in accordance with the principles of natural justice.
The inquiry consisted of putting questions to each workman in turn.
No witness was examined in support of the charge before the workman was questioned.
It is an elementary principle that a person who is required to answer a charge must not only know the accusation but also the testimony by which the accusation is supported.
He must be given a clear chance to hear the evidence in support of the charge and to put such relevant questions by way of cross examination as he desires.
He must also be given a chance to rebut the evidence led against him.
As regards two workmen, this Court held that the Tribunal was justified in not accepting the findings which proceeded almost on no evidence.
As regards one workman, this Court held that as the Tribunal had the opportunity of hearing and seeing the two Assistant Managers, this Court would be slow to reach a conclusion different from that of the Tribunal.
Moreover, in such cases, it is not the practice of this Court to enter into evidence with a view to finding facts for itself.
|
N: Criminal Appeal Nos.
543 545 of 1979.
Appeals by special leave from the judgment and order dated the 15th April, 1978 of the Madhya Pradesh High Court in Criminal Revision No. 701/77, 105/78 & 103/78 respectively.
H.K. Puri for the Appellant.
R.K. Garg, Sunil Kumar Jain and V.J. Era for Respondents Nos. 1, 2, 5 & 6.
S.K. Gambhir and Vijay Mansaria for the State.
The following Judgments were delivered CHINNAPPA REDDY, J. I agree with my brother A.P. Sen that the order passed by the High Court should be set aside and that the Magistrate should be directed to record the plea of the accused under Sec.
251 Criminal Procedure Code and thereafter, to proceed with the trial according to law.
The facts leading to these appeals have been stated in the judgments of both my brethren A.P. Sen and Baharul Islam and it is unnecessary for me to state them over again.
The prayer in the application before the High Court was merely to quash the order dated November 30, 1977 of the learned Chief Judicial Magistrate, Bhopal and not to quash the complaint itself as the High Court has done.
But, that was only a technical defect and we do not take serious notice of it in an appeal under article 136 of the Constitution where we are very naturally concerned with substantial justice and not with shadow puppetry.
The position now is this: The news item in the Blitz under the caption 'MISA Rape in Bhopal Jail ' undoubtedly contained serious imputations against the character and conduct of the complainant.
In order to attract the 9th Exception to Sec.
499 of the Indian Penal Code, the imputations must be shown to have been made (1) in good 631 faith, and (2) for the protection of the person making it or of any other person or for the public good. 'Good Faith ' is defined, in a negative fashion, by Sec.
52 Indian Penal Code as follows: "Nothing is said to be done or believed in 'Good faith ' which is done or believed without due care and attention".
The insistence is upon the exercise of due care and attention.
Recklessness and negligence are ruled out by the very nature of the definition.
The standard of care and attention must depend on the circumstances of the individual case, the nature of the imputation, the need and the opportunity for verification, the situation and context in which the imputation was made, the position of the person making the imputation, and a variety of other factors.
Good faith, therefore is a matter for evidence.
It is a question of fact to be decided on the particular facts and circumstances of each case.
So too the question whether an imputation was made for the public good.
In fact the 1st Exception of Sec.
499 Indian Penal Code expressly states "Whether or not it is for the public good is a question of fact". 'Public Good ' like 'Good faith ' is a matter for evidence and not conjecture.
In Harbhajan Singh vs State of Punjab, this Court observed (at p. 244): "Thus, it would be clear that in deciding whether an accused person acted in good faith under the Ninth Exception, it is not possible to lay down any rigid rule or test.
It would be a question to be considered on the facts and circumstances of each case. what is the nature of the imputation made, under what circumstances did it come to be made; what is the status of the person who makes the imputation; was there any malice in his mind when he made the said imputation; did he make any enquiry before he made it; are there reasons to accept his story that he acted with due care and attention and was satisfied that the imputation was true? These and other considerations would be relevant in deciding the plea of good faith made by an accused person who claims the benefit of the Ninth Exception".
Again in Chaman Lal vs The State of Punjab this Court said (at p. 916): 632 "In order to establish good faith and bona fide it has to be seen first the circumstance under which the letter was written or words were uttered; secondly, whether there was any malice; thirdly, whether the appellant made any enquiry before he made the allegations; fourthly, whether there are reasons to accept the version that he acted with care and caution and finally whether there is preponderance of probability that the appellant acted in good faith".
Later the Court said (at p. 918): "Good faith requires care and caution and prudence in the background of context and circumstances.
The position of the person making the imputation will regulate the standard of the person making the imputation will regulate the standard of care and caution".
Several questions arise for consideration if the Ninth Exception is to be applied to the facts of the present case.
Was the Article published after exercising due care and attention? Did the author of the article satisfy himself that there were reasonable grounds to believe that the imputations made by him were true? Did he act with reasonable care and a sense of responsibility and propriety? Was the article based entirely on the report of the Deputy Secretary or was there any other material before the author? What steps did the author take to satisfy himself about the authenticity of the report and its contents? Were the imputations made rashly without any attempt at verification? Was the imputation the result of any personal ill will or malice which the author bore towards the complainant? Was it the result of any ill will or malice which the author bore towards the political group to which the complainant belonged? Was the article merely intended to malign and scandalise the complainant or the party to which he belonged? Was the article intended to expose the rottenness of a jail administration which permitted free sexual approaches between male and female detenus? Was the article intended to expose the despicable character of persons who were passing off as saintly leaders? Was the article merely intended to provide salacious reading material for readers who had a peculiar taste for scandals? These and several other questions may arise for consideration, depending on the stand taken by the accused at the trial and how the complainant proposes to demolish the defence.
Surely the stage for deciding these questions has not arrived yet.
Answers to these questions at this stage, even before the plea of the 633 accused is recorded can only be a priori conclusions. 'Good faith ' 'public good ' are, as we said, questions of fact and matters for evidence.
So, the trial must go on.
SEN, J.
This appeal, by special leave, is directed against an order of the Madhya Pradesh High Court dated April 15, 1978 quashing the prosecution of the respondent, R.K. Karanjiya, Chief Editor, Blitz, for an offence under section 500 of the Indian Penal Code for publication of a news item in that paper which was per se defamatory, on the ground that he was protected under Ninth Exception to section 499 of the Code.
During the period of Emergency the appellant, who is a senior lawyer practising at Bhopal, was placed under detention under s.3 (1) (a) (ii) of the and was lodged in the Central Jail, Bhopal.
There were several other detenus belonging to the opposition parties lodged along with him in the same jail, including three lady detenus, viz., Smt.
Uma Shukla, Smt.
Ramkali Misra, Advocate and Smt.
Savitha Bajpai, later State Minister, Public Works Department.
The husband of Smt.
Uma Shukla, a practising advocate at Bhopal, was not detained.
Shukla was released on parole for a week between June 10 and 18, 1976.
On her return to the jail it was found that she had conceived.
She was examined on July 30, 1976, by a lady doctor, Dr. (Mrs) N.C. Srivstava, Woman Asst.
Surgeon and the pregnancy was reported to be six weeks old.
Shukla was again released on parole in the month of August 1976 and on August 24, 1976, she got the pregnancy terminated by Dr. (Mrs) Upadhayay at the Zanana Hamidia Hospital, Bhopal with the written consent of her husband under s.3 of the Medical (Termination of Pregnancy) Act, 1976.
While the order of detention of the appellant was still in operation, there was an ex parte confidential enquiry held by Shri S.R. Sharma, I.A.S. Deputy Secretary (Home) Government of Madhya Pradesh, into the circumstances leading to the pregnancy of Smt.
Shukla.
The Enquiry Officer by his report dated November 3, 1976, apparently held that the pregnancy was due to illicit relations between the appellant and Smt.
Shukla, during their detention in the Central Jail.
On December 25, 1976, the Blitz, in its three editions in English, Hindi and Urdu simultaneously flashed a summary of the report and the story as given out was that (i) there was a mixing of male and female detenus in the Central Jail, Bhopal, (ii) the appellant had the opportunity and access to mix with Smt.
Shukla freely, and (iii) Smt.
Shukla became pregnant through the 634 appellant.
The news item was per se defamatory.
It is somewhat surprising that the Enquiry Report, which was a document of highly confidential nature, should have found its way to the Press.
With the revocation of Emergency, the appellant along with the other political detenus was released from detention.
On his release, the appellant lodged a criminal complaint for defamation against the respondent, R.K. Karanjia.
The respondent, on appearing before the Magistrate, moved an application under section 91 of the Code of the Criminal Procedure, 1973, praying that the report of the Enquiry Officer be sent for as it was likely to be lost or destroyed.
On August 23, 1976 the learned Magistrate allowed the application and directed that the report with the concerned file be produced.
The State Government, however, did not comply with the direction and by an application dated December 31, 1977, claimed privilege in respect of the Enquiry Report which still awaited consideration.
On October 29, 1977 when the case was fixed for recording the plea of the accused under section 251 of the Code, the respondent moved an application stating that the plea should be recorded only after the Enquiry Report was produced.
The learned Magistrate by his order dated November 30, 1977, rejected the said application of the respondent as to the summoning of the records and directed the accused persons to appear in person or through counsel for explaining to them the substance of the accusation and also for recording their pleas.
Thereafter, the respondent filed a revision before the High Court under section 397 of the Code for setting aside the order of the learned Magistrate and alternatively under section 482 of the Code, if it were held to be an interlocutory order.
The revision was heard by a learned Single Judge and it appears that the Government Advocate made available a copy of the Enquiry Report for the perusal of the learned Judge.
The learned Judge by his order dated April 15, 1978, quashed the proceedings on the ground that the respondent 's case "clearly falls within the ambit of exception 9 of section 499 of the Indian Penal Code".
In reaching that conclusion, he observed that "it would be abuse of the process of the court if the trial is allowed to proceed which ultimately would turn out to be a vexatious proceeding".
The reasoning advanced by him was as follows: The real question to ask is, did the applicants publish the report for public good, in public interest and in good faith? My answer is in the affirmative.
It was a publication 635 of a report for the welfare of the society.
A public institution like prison had to be maintained in rigid discipline; the rules did not permit mixing of male prisoners with female prisoners and yet the report said the prison authorities connived at such a thing, a matter which was bound to arouse resentment and condemnation.
The balance of public benefit lay in its publicity rather than in hushing up the whole episode.
Further, there was good faith in the publication.
The source on which the publishers acted was the proper source on which they were entitled to act and they did so with care and circumspection.
The report further shows that the publication had been honestly made in the belief of its truth and also upon reasonable ground for such a belief, after the exercise of such means to verify its truth as would be taken by a man of ordinary prudence under like circumstances.
(emphasis added) It is somewhat strange that the learned Judge should have made public the contents of a document in respect of which the State Government claimed privilege.
The order recorded by the High Court quashing the prosecution under section 482 of the Code is wholly perverse and has resulted in manifest miscarriage of justice.
The High Court has pre judged the whole issue without a trial of the accused persons.
The matter was at the stage of recording the plea of the accused persons under section 251 of the Code.
The requirements of section 251 are still to be complied with.
The learned Magistrate had to ascertain whether the respondent pleads guilty to the charge or demands to be tried.
The circumstances brought out clearly show that the respondent was prima facie guilty of defamation punishable under section 500 of the Code unless he pleads one of the exceptions to section 499 of the Code.
The offending article which is per se defamatory, is as follows: MISA RAPE IN BHOPAL JAIL (By Blitz Correspondent).
Blitz: A shocking sex scandal involving a top RSS leader of M.P. was discussed at a secret meeting of Jan Sangh MLAs and MPs here recently.
The alleged escapades of 55 years old Sewakram Sobhani, a close confidant of RSS Chief Bhausaheb Devras, with the young wife of another RSS man in the Bhopal Central Jail, where both were detained under MISA, have rocked RSS Jan Sangh circles of the State.
636 According to a report submitted to the State Government by a Deputy Secretary in the Home Deptt.
who inquired into the grisly affair, Sobhani was reportedly responsible for making Mrs. Uma Shukla, 22 year old wife of a lawyer Yogesh Shukla, pregnant.
Abortion? When this was discovered she was quietly released on parole and, at her own request, taken for abortion to the Sultania Zanana Hospital.
After discharge she refused to rejoin her husband but stayed during the remaining period of her parole in the hide out of the 'total revolutionaries ' in the Professor 's Colony.
She returned to jail later and was transferred to the Hoshangabad Jail, while Sobhani was sent to the Raipur Central Jail.
The Official report throws light on how Sobhani allegedly enticed Mrs. Shukla with the help of a high official of the Bhopal Central Jail despite a ban on contacts between male and female detenus.
The jail official, himself a close sympathiser of the RSS allowed Sobhani to meet her frequently in his office and their love sessions were in his anteroom.
Yogesh Shukla has made a representation to the State Government alleging that Sobhani had committed adultery with his wife and demanded action against the jail authorities for permitting a "rape" of his wife.
It is for the respondent to plead that he was protected under Ninth Exception to section 499 of the Code.
The burden, such as it is, to prove that his case would come within that exception is on him.
The ingredients of the Ninth Exception are that (1) the imputation must be made in good faith, and (2) the imputation must be for the protection of the interests of the person making it or any other person or for the public good.
We are completely at a loss to understand the reasons which impelled the High Court to quash the proceedings.
The respondent, in his revision directed against the order of the learned Magistrate dated November 30, 1977, asserted in paragraph 5 that the case pre eminently a fit case for quashing the impugned order either in the revisional jurisdiction of the High Court or in the exercise of its inherent powers under section 482 of the Code to prevent the abuse of 637 the process of law and to secure the ends of justice.
The prayer made in the revision was in these terms: The applicants pray that the impugned order be quashed and the learned Magistrate be directed to persue the report which he has sent for under section 91, Criminal Pro.
Code and pass suitable orders according to law.
All that the respondent wanted is that learned Magistrate should not proceed to record the plea of the accused persons under section 251 of the Code without perusing the Enquiry Report under section 91 of the Code.
There was no application made before the High Court under section 482 of the Code for quashing the prosecution itself.
The averment contained in paragraph 4 that the Blitz only published a concise summary from the findings reached by the Deputy Secretary (Home) who was the Enquiry Officer appointed by the Government and, therefore, it was the duty of the learned Magistrate, to go through the report for himself and hold that no accusation had been made and the question of explaining it to the accused did not arise and the proceedings were liable to be dropped because no ingredients constituting an offence under section 500 of the Code had been made out, must be read in conjunction with paragraph 5 and in support of the limited prayer made in revision.
This cannot be construed as invoking the High Court 's powers under section 482 of the Code for quashing the whole proceedings.
We have considerable doubt about the propriety of the High Court making use of the Enquiry Report which has no evidentiary value and in respect of which the Government claimed privilege.
The application made by the Government claiming privilege still awaited consideration.
While the Government claimed privilege at one stage, it appears to have waived the claim and produced the Enquiry Report and made the contents public.
There was no factual basis for the observations made by the High Court underlined by me, except the Enquiry Report.
The contents of the Enquiry Report cannot be made use of unless the facts are proved by evidence aliunde.
There is also nothing on record to show that the accused persons made any enquiry of their own into the truth or other wise of the allegations or exercised due care and caution for bringing the case under the Ninth Exception.
The Enquiry Report cannot by itself fill in the lacunae.
A bare perusal of the offending article in Blitz shows that it is per se defamatory.
There can be no doubt that the imputation 638 made would lower the appellant in the estimation of others.
It suggested that he was a man devoid of character and gave vent to his unbridled passion.
It is equally defamatory of Smt.
Shukla in that she was alleged to be a lady of easy virtue.
We need not dilate on the matter any further.
It is for the accused to plead Ninth Exception in defence and discharge the burden to prove good faith which implies the exercise of due care and caution and to show that the attack on the character of the appellant was for the public good.
In Sukro Mahto vs Basdeo Kumar Mahto & Anr this Court observed: The ingredients of the Ninth Exception are first that the imputation must be made in good faith; secondly, the imputation must be for protection of the interest of the person making it or of any other person or for the public good.
Good faith is a question of fact.
So is protection of the interest of the person making it.
Public good is also a question of fact.
After referring to the two earlier decisions in Harbhajan Singh vs State of Punjab and Chaman Lal vs State of Punjab the Court held that there must be evidence showing that the accused acted with due care and caution. "He has to establish as a fact that he made enquiry before he made the imputation and he has to give reasons and facts to indicate that he acted with due care and attention and was satisfied that the imputation was correct.
The proof of the truth of the statement is not an element of the Ninth Exception as of the First Exception to section 499.
In the Ninth Exception the person making the imputation has to substantiate that his enquiry was attended with due care and attention and he was thus satisfied that the imputation was true.
" The High Court appears to be labouring under an impression that journalists enjoyed some kind of special privilege, and have greater freedom than others to make any imputations or allegations, sufficient to ruin the reputation of a citizen.
We hasten to add that journalists are in no better position than any other person.
Even the truth of an allegation does not permit a justification under First Exception unless it is proved to be in the public good.
The question 639 whether or not it was for public good is a question of fact like any other relevant fact in issue.
If they make assertions of facts as opposed to comments on them, they must either justify these assertions or, in the limited cases specified in the Ninth Exception, show that the attack on the character of another was for the public good, or that it was made in good faith: per Vivian Bose, J. in Dr. N.B. Khare vs M.R. Masani and Ors.
As the matter is of great public importance, it would, perhaps, be better to quote the well known passage of Lord Shaw in Arnold vs King Emperor (2) The freedom of the journalist is an ordinary part of the freedom of the subject, and to whatever lengths the subject in general may go, so also may the journalist, but, apart from statute law, his privilege is no other and no higher.
The responsibilities which attach to this power in the dissemination of printed matter may, and in the case of a conscientious journalist do, make him more careful: but the range of his assertions, his criticisms, or his comments, is as wide as, and no wider than, that of any other subject.
No privilege attaches to his position.
For these reasons, we must set aside the order passed by the High Court and direct the Magistrate to record the plea of the accused persons under section 251 of the Criminal Procedure Code, 1973 and thereafter, to proceed with the trial according to law.
BAHARUL ISLAM, J. Had there been no subsequent development after the impugned judgment of the High Court, I could have persuaded myself to agree to the order proposed by my Brother Sen, J., but after the Inquiry Report has been released by the Government and placed before us I regret my inability to agree to the order of sending back the case to the Magistrate as proposed by my Brother, and proceed to give my own judgment.
The facts material for the purpose of disposal of these appeals may be stated thus: During the period of Emergency between June 1975 and March 1976 the appellant, Shri Sewakram Sobhani, an advocate, was one of the detenus under the Main 640 tenance of Internal Security Act, 1976 (hereinafter 'MISA ') and lodged in the Bhopal Central Jail.
There were also three women detenus including Smt.
Uma Shukla and Smt.
Ramkali Mishra, Advocate.
The husband of Smt.
Uma Shukla was a practising advocate at Bhopal.
He was not a detenu.
Uma Shukla became pregnant while in detention in the aforesaid Central Jail and abortion was carried out in the month of August, 1976 in the Zanana Hamidi Hospital to relieve her of the pregnancy.
This circumstance created an uproar and an inquiry into the affairs had to be held by Shri S.R. Sharma, Dy.
Secretary (Home), Government of Madhya Pradesh, (hereinafter 'Sharma ') who submitted his report dated 7.10.1976 to the Government.
Respondent No. 1 is the Chief Editor of the Blitz and respondent No. 5 was, at the relevant time, Bhopal Correspondent of the Blitz.
Respondents 2, 3 and 4 are persons connected with the Blitz Weekly publication.
The Blitz weekly is published in three languages, viz., English, Hindi and Urdu.
The Blitz weekly dated 25.12.76 published a news item purported to be a summary of the report submitted by Sharma in its Urdu and Hindi editions.
The appellant took exception to the publication and filed a criminal case for defamation against the respondents under Sections 500 and 501 of the Penal Code.
The Magistrate issued processes to the respondents.
The respondents appeared before the Magistrate and made an application on 23.8.77 under Section 91 of the Code of Criminal Procedure, 1973 (hereafter 'the Code ') requesting the court, before arriving at a conclusion whether it should proceed further with the case or not, to call for (a) the original Enquiry Report submitted by Sharma on 7.10.76; (b) the statement of witnesses recorded by Sharma, (c) the original complaint; and (d) documents of the jail Department including letters from the Government to the Department (Vide para 4 of Annexure D to the Special Leave Petition).
The Magistrate called for the original Inquiry Report dated 7.10.76 submitted by Sharma to the Government, and then posted the case for production of the said records by the Government and recording the plea of the respondents.
The Government failed to produce the inquiry report before the Magistrate whereupon the Magistrate issued a notice to the Government to show cause as to why contempt proceedings should not be initiated against them.
The Magistrate, however, did not wait for the receipt of the report and wanted to record the plea of respondents.
641 The respondents then filed an application before the High Court of Madhya Pradesh under Section 397/401 read with Section 482 of the Code.
It was alleged by the respondents that the Deputy Home Secretary in his report came to the following conclusions : (1) There was free mixing of male and female prisoners in the Bhopal Central Jail ; (2) Shri Sewakram Sobhani had opportunity and also availed of the opportunity and mixed very freely with Smt.
Uma Shukla; and (3) Smt.
Uma Shukla became pregnant through Shri Sewak Ram Sobhani.
It may be mentioned that the Government later on produced the inquiry report before the High Court but claimed privilege.
The learned High Court presumably perused the report before passing the impugned order.
It may also be mentioned that although the Government claimed privilege in respect of the report at that time, it appears, they subsequently, after the impugned order of the High Court, waived the claim of privilege, and released the inquiry report; for, in fact, a copy of the report has been annexed and is available in the paper book of these appeals before us as Annexure `A '. 5.
The submission of the appellants is that the impugned order of the High Court is beyond its revisional jurisdiction.
The submission is that the respondents prayed for quashing the order of the Magistrate proceeding to record their plea before the inquiry report was produced by the Government, but the High Court has wrongly quashed the complaint itself.
On the other hand the reply of the respondent is that although there was no specific prayer in the petition, the petition was also made for quashing the criminal case under Section 500/501 of the Penal Code pending before the Magistrate.
The respondents ' submission is that they are not guilty for the impugned publication in view of Exception 9 to Section 499 of the Penal Code.
A perusal of the respondents ' petition before the High Court and its impugned judgment justifies the factual submission of the respondents, namely, that their application before the High 642 Court (Copy Annexure C) was under Section 482 as well as Sections 397 and 401 of the Code, and that the respondents claimed and canvassed the protection under the Ninth Exception of Section 499 of the Penal Code.
For, para 6 of the Judgment of the High Court reads : "The applicants feeling aggrieved have come to this Court for quashing the complaint, since they contend that the publication would squarely fall within exception 9 of Section 499 of the Indian Penal Code.
The applicants further contend that the report of the Deputy Secretary (Home) is the document on the basis of which the reporting was done and unless that is got produced and inspected, the defence of exception 9 cannot be made out. (Emphasis added) 7.
The omission in the prayer portion of a petition of a part of the claim, particularly in a criminal case, is not fatal.
The High Court in its revisional jurisdiction can always grant suitable relief justified by law as well as facts and circumstances of a particular case.
That a part, Article 136 of the Constitution of India gives wide powers to the Supreme Court to grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
The power is discretionary and therefore to be sparingly exercised.
This power is to be exercised to meet ends of justice, to enhance justice and remove miscarriage of justice in a particular case.
It does not exercise such powers for academic reasons but for practical purposes.
The High Court in the impugned order has held that "it would be abuse of the process of the court if the trial is allowed to proceed or alternatively to turn out to be vexatious proceeding" and therefore quashed the complaint.
Such an order would be warranted under Section 482 of the Code of Criminal Procedure if the merit of the case before the High Court justified it.
We have therefore to examine whether the respondents ' case falls within the ambit of the Ninth Exception to Section 499 of the Penal Code as held by the High Court.
643 9.
The appellant has not submitted before us that the summary of the report published in the Blitz is not a correct summary of the Inquiry Report.
The copy of the Report, Annexure A, shows that a complaint was received from one Shri Krishsan Gopal Maheshari, advocate, alleging certain objectionable activities and misconduct on the part of the appellant and Shrimati Uma Shukla.
Annexure A also shows that the Inquiry Officer Sharma, examined several witnesses including Shri Yogesh Shukla, husband of Smt.
Uma Shukla.
Para 4 of the report reads : "The following points are in dispute : (a) whether as alleged by the complainant there was free mixing of female members with male members detained under MISA; (b) in case (a) is in the affirmative, whether Shri Sewakram Sobhani had an opportunity to mix freely with Smt.
Uma Shukla; (c) in case (a) and (b) are in the affirmative when, how and through whom Smt.
Uma Shukla a MISA detenu conceived".
His findings are "(a) There was a free mixing of male and female prisoners in the Bhopal Central Jail; (b) Shri Sewakram Sobhani had opportunity and also availed of opportunity and mixed very freely with Smt.
Uma Shukla; (c) Smt.
Uma Shukla became pregnant through Shri Sewakram Sobhani".
It, therefore, appears that the impugned publication is a correct summary of the report and no submission has been made to the contrary by the appellant before us.
The only question is whether the publication falls within the Ninth Exception to Section 499 of the Penal Code, as claimed by the respondents.
644 Before we do that, we must not be oblivious of the fact that the Inquiry Report in question was a privileged document; it is now an unprivileged open document as indicated above.
The High Court proceeded on the footing that if the document is not produced to be utilized by the accused, the benefit would go to him.
Section 499 defines `defamation '.
It is as follows: "section 499.
Whoever, by words either spoken or intended to be read, or by signs or by visible representations makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm the reputation of such person, is said, except in the cases hereinafter defame that person".
The Ninth Exception reads: "It is not defamation to make an imputation on the character of another provided that the imputation be made in good faith for the protection of the interests of the person making it, or of any other person, or for the public good".
The Ninth Exception requires, inter alia, that the imputation made must be in good faith for the public good.
`Good faith ' has been defined in Section 52 of the Penal Code as: "52.
Nothing is said to be done or believed in "good faith" which is done or believed without due care and attention", The definition is expressed in negative terms.
Normally proof of an exception lies on the person who claims it; but the definition of the expression "good faith" indicates that lack of good faith has been made a part of the offence which the prosecution has to establish beyond reasonable doubt.
On the other hand the mere proof by the accused of the report to be an authentic document is enough; it will create a doubt in the mind of the Court as to the lack of "good faith" on the part of the accused.
The inquiry was made and the report prepared by a highly responsible officer and submitted to the Government.
It was in pursuance of a complaint made by one of the citizens pointing 645 out laxity in observance of jail rules and highly objectionable practices of some of the prisoners and seeking improvement in jail administration.
The object was to see improved conditions, and maintenance of certain standard of moral conduct by prisoners, in jail.
If the complaint and the consequent inquiry report be for public good, and the respondents had reasons to believe its contents to be true, they will be protected under the Ninth Exception.
Even if the burden of proof of `good faith ' be on the accused `good faith ' need not be proved beyond reasonable doubt.
Once this is done, whether the publication was for public good would be a matter of inference.
The Dy.
Secretary (Home) examined Shri Bhandari, Editor of Prach who was a MISA detenu as witness No. 1, complainant Maheshwari as witness No. 2, Smt.
Ramkali Mishra, an advocate, and a member of Jana Sangha, another MISA detenu, as witness No. 4, Dr. Hamid Quireshi, another MISA detenu as witness No. 6, Shri Ramesh Chand Shrivastava an `independent ' witness as witness No. 7, and Shri Yogesh Shukla, husband of Smt.
Uma Shukla as witness No. 3.
Most of the said witnesses, it appears, were the party colleagues of the appellant and his co MISA detenus.
I must not be understood to suggest the contents of the inquiry report are true; it is an exparte inquiry report; it might be the result of political rivalry, as alleged by the appellant, but it appears that political rivalry, if any, was between the members of the appellant 's party and not between the party in power and party in opposition.
The comment of Mr. Sharma on the evidence of witness No. 3 is as follows: "Shri Yogesh Shukla witness No. 3 has categorically stated that he had no connection with his wife and that she became pregnant through Shri Sobhani, Advocate and got the child aborted.
It is worth consideration as to why the husband will come up with such an open allegation against his own wife, unless there be no very strong reasons for such a conviction.
Normally, no husband, even though his wife may have conceived through somebody else will like to see his name being scandalised.
Shri Yogesh Shukla witness No. 3 is an advocate, quite an educated person and we can safely presume that he knows the consequences of his statement and also their legal and moral implications on his profession.
Such an open scandalous statement against 646 his own wife could not but be a result of very strong abhoration or an outcome of utter desperation.
It could also be an expression of a naked truth.
" The entire report is exhaustive, reasoned and based on evidence.
A perusal of the report will normally lead one to believe the imputations.
If that be so, it cannot be said that the respondents published the report or its summary without due care and attention.
This establishes `good faith ' as required by the Ninth Exception to Section 499 of the Penal Code.
From what has been stated above, the publication obviously appears to be for public good.
The appellant submitted that he wanted an opportunity to clear himself of the imputations made against him by adducing evidence before the Magistrate to establish the falsity of the imputations made in the publication.
We are not concerned with the truth or falsity of the imputations published.
Even if the findings in the report be proved to be false, the respondents will be protected.
Sending back the case to the Magistrate to record the respondents ' plea after the perusal of the Inquiry Report will, in my opinion, be an exercise in futility and abuse of the process of the criminal court.
The appellant may seek his remedy, if any, in the Civil Court.
The learned High Court, therefore, in my opinion committed no error in quashing the complaint.
The appeal is dismissed.
ORDER In view of majority judgments, the appeals are allowed.
P.B.R. Appeals allowed.
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A news item published in the Blitz weekly of which the respondent was the Editor, stated that the appellant enticed a female detenu who alongwith him, was detained in the Central Jail under the Maintenance of Internal Security Act and that she had conceived through him and that on getting released on parole she had the pregnancy terminated.
It was further stated that a confidential enquiry conducted by a senior officer of the Home Department revealed that it was the appellant who was responsible for the detenu 's pregnancy.
On release from jail the appellant lodged a criminal complaint against the respondent.
Before the Magistrate the respondent prayed that the report of the Enquiry Officer be sent for.
But the report could not be obtained because the State Government claimed privilege in respect of that report.
When the Magistrate proceeded to record the plea of the accused under section 251 of the Code of Criminal Procedure, the respondent requested that his plea be recorded only after the enquiry report was produced; but the Magistrate rejected the request.
The respondent thereupon filed a revision before the High Court for setting aside the order of the Magistrate.
Waiving privilege the State Government produced a copy of the enquiry report before the High Court.
A single Judge of the High Court quashed the proceedings on the view that the respondent 's case clearly fell within the ambit of the ninth exception to section 499, I.P.C. because, according to him, the publication had been made honestly in the belief of its truth and also upon reasonable ground for such belief, after the exercise of such means to verify its truth as would be taken by a man of ordinary prudence under like circumstances.
On the question whether the High Court was right in quashing the order of the Magistrate, remanding the case to the Magistrate.
628 (Per majority: Chinnappa Reddy and A.P. Sen JJ Baharul Islam J dissenting) ^ HELD: The order passed by the High Court should be set aside.
The Magistrate should record the plea of the accused under section 251 Cr.
P.C. and thereafter proceed with the trial according to law.
(Per Chinnappa Reddy, J.) To attract the ninth exception to section 499, I.P.C. the imputations must be shown to have been made (1) in good faith and (2) for the protection of the person making it or of any other person or for the public good.
The insistence of the section is upon the exercise of due care and attention.
The standard of care and attention must depend on the circumstances of an individual case, the nature of imputation, the need and the opportunity for verification and so on.
In every case it is a question of fact to be decided on its particular facts and circumstances.
[631 A B] Harbhajan Singh vs State of Punjab, @ 244, Chaman Lal vs The State of Punjab ; @ 916 and 918.
Several questions may arise for consideration depending on the stand taken by the accused at the trial and how the complainant proposed to demolish the defence.
In the instant case the stage for deciding these questions had not arrived yet.
Answers to such questions, even before the plea of the accused was recorded, could only be a priori conclusions.
[632 H] The respondent 's prayer before the High Court was to quash the Magistrate 's order and not to quash the complaint itself as the High Court has done.
But that was only a technical defect which need not be taken seriously in an appeal under Article 136 of the Constitution where the Court is concerned with substantial justice and not with shadow puppetry.
[630 G] (Per A.P. Sen J.) The order of the High Court quashing the prosecution under section 482 of the Code of Criminal Procedure is wholly perverse and had resulted in manifest miscarriage of justice.
The High Court has pre judged the whole issue without a trial of the accused persons.
The matter was at the state of recording the pleas of the accused under section 251 Cr.
P.C. The circumstances brought out clearly showed that the respondent was prima facie guilty of defamation punishable under section 500 of the Indian Penal Code unless covered by one of the exceptions of section 499 Indian Penal Code.
[635 E F] The burden to prove that his case would come within the ninth exception to section 499, namely, that the imputation was in good faith and was for the protection of the interests of the person making it or of any other person or for the public good was on the respondent.
All that the respondent prayed for was that the Magistrate should not proceed to record his plea under section 251 Cr.
P.C. without perusing the enquiry report.
There was no application for quashing the prosecution itself.
C] 629 The enquiry report in respect of which the Government claimed privilege had by itself no evidentiary value.
The contents of that report could not be made use of unless the facts were proved by evidence aliunde.
The report being per se defamatory, it was for the accused to plead the ninth exception in defence and discharge the burden of proving good faith which implies the exercise of due care and caution and to show that the attack on the character of the appellant was for the public good.
[637 E; G; H] Sukro Mahto vs Basdeo Kumar Mahto and Anr.
[1971] Supp.
SCR 329 at 332, Harbhajan Singh vs State of Punjab ; , Chaman Lal vs State of Punjab ; , referred to.
The High Court appears to be labouring under an impression that journalists enjoyed some kind of special privilege.
Journalists are in no better position than any other person.
Even the truth of an allegation does not permit a justification under the first exception unless it is proved to be in the public good.
The question whether or not it was for public good is a question of fact like any other relevant fact in issue.
If they make assertions of facts as opposed to comments on them, they must either justify these assertions or in the limited cases specified in the ninth exception, show that the attack on the character of another was for the public good or that it was made in good faith.
[638 G H] Dr. N.B. Khare vs M.R. Masani and Ors., ILR 1943 Nag.
347, Arnold vs King Emperor at 169, referred to.
(Per Baharul Islam J.) The Court did not commit any error in quashing the appellant 's complaint.
[646 E] The High Court 's judgment justifies the factual submission of the respondents that their application was under section 482 as well as under sections 397 and 401 of Cr.
P.C. and that they claimed and canvassed the protection under the ninth exception to section 499, I.P.C. The omission in the prayer portion of a petition, particularly in a criminal case, is not fatal.
The High Court, in its revisional jurisdiction, can always grant suitable relief justified by law as well as facts and circumstances of a particular case.
[641 H; 642 D] The definition of "good faith" which is couched in negative terms indicates that lack of good faith has been made a part of the offence which the prosecution has to establish beyond reasonable doubt.
On the other hand, proof by the accused of the report to be an authentic document is enough.
It would create a doubt in the mind of the Court as to the lack of "good faith" on the part of the accused.
[644 F G] If on a complaint made by a citizen alleging laxity in the observance of jail rules, if the report submitted by a high Government official on the basis of an enquiry conducted by him was for public good and if the respondents had reasons to believe its contents to the true, they will be protected under the ninth exception even if the burden of proof of good faith is on the accused.
Good faith need not be proved beyond reasonable doubt.
[645 B] The report of the enquiry officer was exhaustive, reasoned and was based on evidence.
The report leads one to believe the imputations.
If that be so, it 630 cannot be said that the respondents published the report or its summary without due care and attention.
This establishes good faith under the ninth exception to section 499.
Therefore, the publication obviously was for public good.
[646 B C] In the instant case even if the findings of the report be proved to be false, the respondents would be protected.
Sending back the case to the Magistrate would be an exercise in futility and abuse of the process of the criminal court as the High Court has pointed out.
[646 D E]
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ION: Civil Appeal No. 1757 of 1980.
From the judgment and order dated 11th September, 1980 of the Industrial Tribunal at Nagpur in Reference (II) No. 22/78.
Y.S. Chitale, R.K. Thakur, O.C. Mathur and K.J. John for the Appellant H.W. Dhabe and A.G. Ratanaparkhi for Respondent 1.
G.L. Sanghi, V.A. Bobde, A.K. Sanghi and Miss Vasudha Sanghi for Respondent 2.
The Judgment of the Court was delivered by GUPTA J.
During the pendency of a reference before the Industrial Tribunal at Nagpur, a written agreement in settlement of the disputes covered by the reference as also certain other disputes between the management and the workmen was signed; on behalf of the trade unions representing the workmen the agreement was signed by their office bearers.
A few days later the executive committee of one of the Unions rejected the agreement on the ground that the agreement had given rise to discontent among a section of the workers whose problems had not been satisfactorily solved.
A question then arose, whether the agreement was a settlement within the meaning of section 2 (p) of the from which the Union could not resile.
The Tribunal by its award held that the agreement was not a settlement binding on the union: the validity of this award is challenged in this appeal by special leave preferred by the management.
The relevant facts are those.
The appellant, Brooke Bond India Limited, a Company incorporated and registered under the Indian Companies Act, hereinafter referred to as the company, have a factory at Kanhan, District Nagpur, in Maharashtra.
Two trade unions of workmen employed by the company function in the 32 Kanhan factory; one is known as Bharatiya Swatantra Brooke Bond Chaha Karamchari Sangh (Bharatiya Union for short) and the other is called M.P. Rashtriya Brooke Bond Chaha Karamchari Sangh (Rashtriya Union for brevity 's sake).
In this case we are concerned with the Rashtriya Union.
On September 27, 1975 Government of Maharashtra made a reference under section 10 (1) (d) of the for the adjudication of an industrial dispute between the company and the workmen in respect of 4 demands set out in the schedule to the order of reference.
Subsequently on June 11, 1977 a joint charter of demands was submitted by the workmen through the aforesaid two unions; this charter included 26 demands.
At a meeting of the executive committee of the Rashtriya Union held on August 19, 1977 several resolutions were passed of which two only appear to be relevant for the present purpose.
By one of the resolutions a negotiation committee composed of six members including some of office bearers of the union was formed "for a discussion to be held with the management".
The other resolution related to the 26 demands mentioned above and it said that "a proper decision" regarding these demands would be taken after "due consideration of the proposals given by the members and after placing the same before the negotiation committee of both the unions".
Thereafter two more charters of demands, one by each union, were submitted.
At a meeting of the executive committee of the Rashtriya Union held on January 8, 1978 the office bearers of the union put it on record that in respect of the 4 demands pending before the Tribunal the union would accept a satisfactory settlement and that the executive committee had granted permission to the negotiation committee for carrying on discussion with the company and the Bharatiya Union as regards the pending demands.
Subsequently the resignation of some of the office bearers of the union led to the reconstitution of the negotiation committee at a meeting of the executive committee of the union held on February 18, 1978.
On the subject of the proposed settlement it was disclosed at this meeting that the company had agreed to obtain clarification from the head office on several points including the absorption in company 's employment of workers employed in loading and unloading job and confirmation of casual workers.
The general secretary of the Rashtriya Union by a letter dated March 9, 1978 informed the factory manager that the members of the reconstituted negotiation committee "will participate in the negotiations to be commenced from 13th March, 1978 for arriving at an agreement".
On March 16, 1978 a 33 memorandum of settlement was signed.
The following office bearers of the Rashtriya Union signed the memorandum, the working president, two vice presidents, general secretary, joint secretary and the organizing secretary.
They were also members of the negotiation committee along with others.
On the next day, March 17, a joint petition was filed before the Industrial Tribunal signed by the factory manager of the company, the general Secretary of the Bharatiya Union and the General Secretary of the Rashtriya Union praying that an award in terms of the settlement be passed.
About a week later, on March 24, 1978 a meeting of the executive committee of the Rashtriya Union was held in which "it was unanimously resolved to withdraw from the agreement dated March 16, 1978" in view of the "discontent amongst the workers about the agreement".
On April 1, 1978 at an emergent meeting of the executive committee of the Rashtriya Union, after an elaborate discussion on the agreement it was "resolved to reject the agreement as the problems of the workers were not satisfactorily solved".
On April 7, 1978 an application was made to the Tribunal on behalf of the Rashtriya Union praying that the agreement be rejected.
The Tribunal heard the question as to the validity of the settlement so far as the Rashtriya Union was concerned as a preliminary issue.
The Tribunal rejected the contention raised on behalf of the Rashtriya Union that the agreement signed on March 16, 1978 was only a draft agreement and held that it was intended to be a settlement.
The Tribunal however came to the conclusion that it could not be treated as a settlement within the meaning of section 2 (p) of the .
It cannot be disputed that unless the office bearers who signed the agreement were authorised by the executive committee of the Union to enter into a settlement or the constitution of the Union contained a provision that one or more of its members would be competent to settle a dispute with the management, no agreement between any office bearer of the Union and the management can be called a settlement as defined in section 2 (p) There is no provision in the constitution of the Rashtriya Union authorising any office bearers of the Union to enter into a settlement with the management.
We have referred above to the proceedings of the executive committee.
As the Tribunal points out, the resolutions passed by the 34 executive committee do not support the claim that the Negotiation Committee was empowered to enter into a settlement without seeking ratification from the executive committee.
The Tribunal held, in our opinion rightly, that the fact that the agreement was signed by the office bearers of the Union does not clinch the matter because the executive committee at no stage had accepted the agreement.
In fact no meeting of the executive committee was held before the agreement was signed on March 16, 1978 to consider whether the agreement was acceptable.
Section 2 (p) of the defines "settlement"; "Settlement" means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate Government and the conciliation officer;" In the present case the purported settlement was arrived at not in the course of conciliation proceedings.
Section 18 (1) of the Act provides: "Section 18 .
Persons on whom settlements and awards are binding: (1) A settlement arrived at by agreement between the employer and workmen otherwise than in cause of conciliation proceeding shall be binding on the parties to the agreement :" It is also necessary to refer to rule 62 (2) (b) of the Industrial Disputes (Bombay) Rules, 1957.
Rule 62 (2) (b) is as follows: "62.
Memorandum of Settlement: . . . 35 (2) The settlement shall be signed by: (a) . . .
(b) in the case of workmen, either by the President or Secretary (or such other officer of a trade union of the workmen as may be authorised by the Executive Committee of the Union in this behalf ), or by five representatives of the workmen duly authorised in this behalf at a meeting of the workmen held for the purpose.
" Sub rule (4) of rule 62 requires the parties to the settlement to send copies thereof jointly to the prescribed authorities.
That this was done in the present case is not disputed.
It was argued on behalf of the appellant that as the agreement was signed in the manner prescribed by rule 62 (2) (b) and as the requirements of rule 62 (4) have been complied with, the agreement must be accepted as a settlement within the meaning of section 2 (p) of the and as such binding on the Rashtriya Union under section 18 (1) of the Act.
But, as pointed out by the Tribunal rule 62 only prescribes the form of the memorandum of settlement and by whom it should be signed, and the question whether the procedure prescribed by rule 62 has been complied with will arise only if there is in existence a valid settlement between the parties concerned.
In this case it has been found that the office bearers who signed the agreement were not competent to enter into a settlement with the company and as such it cannot be said that an agreement was reached between the employer and the workmen represented by the Rashtriya Union.
What is binding as a settlement under section 18 (1) of the is an agreement between the employer and workmen.
Here the Tribunal found that there was no agreement between management and the Rashtriya Union.
Reliance was placed on behalf of the appellant on the decision of this Court in Workmen of M/s. Delhi Cloth and General Mills vs Management of M/s. Delhi Cloth and General Mills.(1) In that case among other matters rule 58 of the Industrial Disputes (Central) Rules, 1957 made under section 38 of the came up for consideration.
Rule 58 (2) (b) of the Central Rules which is similar to rule 62 (2) (b) of the Bombay Rules reads: 36 "85.
Memorandum of settlement: (1) x x x (2) the settlement shall be signed (a) x x x (b) In the case of workmen, by any officer of a trade union of workmen or by five representatives of workmen duly authorised in this behalf at a meeting of the workmen held for the purpose.
" It was held that the rule must be fully complied with if the settlement is to have a binding effect on all workmen.
Section 18 (3) of the makes a settlement which has become enforceable, binding among others, on all parties to the industrial dispute.
It is not clear why this decision was considered relevant.
Possibly this case was referred to for the observation occurring on page 897 of the report: "We may observe here that we were not impressed by the appellant 's argument that r. 58 rub rule (2) (b) required that the officer of a trade union of workmen must also be duly authorised.
We, however, do not express any considered opinion in view of our conclusion on other points".
Reference to this observation may have been intended as a reply to the construction sought to be put on rule 62 (2) (b) of the Bombay Rules on behalf of the Rashtriya Union that the words "duly authorised" applied not only to the five representatives of workmen" but also to the office bearers mentioned in the rule to enable them to sign the settlement; on such construction it was contended that the office bearers of the Union who signed the agreement were not specifically authorised to do so.
This construction of rule 62 (2) (b) was rightly rejected by the Tribunal.
But neither rule 58 of the Central Rules nor rule 62 of the Bombay Rules contains anything to suggest that any officer of a trade union who is entitled to sign a settlement must be deemed to have had the authority to enter into this settlement.
The procedure prescribed by either rule 58 of the Central Rules or rule 62 of the Bombay Rules presupposes the existence of a valid settlement, and the question in this case is whether there was such a settlement.
Another case relied on by the appellant is The Sirsilk Ltd. and others vs Government of Andhra Pradesh and another.(1) The facts of that case 37 are that after the proceedings before the Tribunal had come to an end and the Tribunal had sent its award to government the parties concerned in the dispute came to a settlement.
Section 17 (1) of the lays down that every award shall within a period of thirty days from the date of its receipt by the appropriate government be published in such manner as the appropriate government thinks fit.
Section 18 (1) makes a settlement arrived at between the employer and workmen otherwise than in the course of conciliation proceedings binding on the parties to the agreement.
Under section 18 (3) an award of a Tribunal on publication shall be binding on all parties to the industrial dispute.
In Sirsilk case difficulty was felt in giving effect to the settlement because the proceedings before the tribunal had ended and the tribunal had sent its award to the government before the settlement was arrived at.
This Court held: "The only way in our view to resolve the possible conflict which would arise between a settlement which is binding under section 18 (1) and an award which may become binding under section 18 (3) on publication is to withhold the publication of the award once the Government has been informed jointly by the parties that a settlement binding under section 18 (1) has been arrived at.
In such a situation we are of opinion that the government ought not to publish the award under section 17 (1) and in cases where government is going to publish it, it can be directed not to publish the award in view of the binding settlement arrived at between the parties under section 18 (1) with respect to the very matters which were the subject matter of adjudication under the award.
" We think this decision was relied on only to emphasize that a settlement reached between the parties concerned in the dispute must prevail if it is reached at any time before the publication of the award.
That is undoubtedly so, but the question before us is different which is, whether in fact a settlement within the meaning of section 2 (p) of the was reached.
Other questions will arise only after it is found that there was such a settlement in existence.
Sirsilk does not therefore afford any assistance to the appellant.
The tribunal in support of the view taken by it relied on a decision of the Delhi High Court.
In 38 Hindustan Housing Factory Ltd. vs Hindustan Housing Factory Employees ' Union and others, the High Court held: ". the contention on behalf of the petitioner company that the fact that the Memorandum of settlement was in the prescribed form and was signed by one or more of the office bearers of the Union is by itself sufficient to make the settlement arrived at between the Management of the petitioner company and the signatories binding on the Union and all its members, is untenable.
The language of section 18 (1) clearly shows that the settlement will be binding only "on the parties to the agreement.
" The definition of "settlement" in section 2 (p) of the Act also states that "settlement" means a settlement arrived at "between the employer and the workmen.
" So, normally in order that a settlement between the employer and the workmen may be binding on them, it has to be arrived at by agreement between the employer and the workmen.
Where the workmen are represented by a recognised Union, the settlement may be arrived at between the employer and the Union.
If there is a recognised Union of the workmen and the Constitution of the Union provides that any of its office bearers can enter into a settlement with the Management on behalf of the Union and its members, a settlement may be arrived at between the employer and such office bearer or bearers.
But, where the Constitution does not so provide specifically, the officer bearer or bearers who wish to enter into a settlement with the employer should have the necessary authorisation by the executive committee of the Union or by the workmen.
A reading of rule 58 clearly shows that it presupposes the existence of a settlement already arrived at between the employer and the workmen, and it only prescribes the from in which the Memorandum of settlement should be, and by whom it should be signed.
It does not deal with the entering into or arriving at a settlement.
Therefore, 39 where a settlement is alleged to have been arrived at between an employer and one or more office bearers of the Union, and the authority of the office bearers who signed the Memorandum of settlement to enter into the settlement is challenged or disputed, the said authority or authorisation of the office bearers who signed the Memorandum of settlement has to be established as a fact, and it is not enough if the employer merely points out and relies upon the fact that the Memorandum of settlement was signed by one or more of the office bearers of the Union.
" In our opinion the above extract from the judgment of the Delhi High Court states correctly the law on the point.
The appeal is accordingly dismissed; in the circumstances of the case we direct the parties to bear their own costs.
N.K.A. Appeal dismissed.
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Two Trade Unions of Workmen function at appellant 's factory.
The State Government made a reference under the Industrial Dispute Act, 1947 for adjudication of an Industrial Dispute between the appellant and its workmen regarding their demands.
A joint charter of Demands was later submitted by the Unions raising certain other demands.
On behalf of one of the union a negotiation committee was formed composed of some of the office bearers of that union to participate in the negotiations for a settlement.
Ultimately a memorandum of settlement was signed.
The members of the negotiation committee of aforesaid union who happened to be office bearers of that union signed the settlement for their union.
The settlement covered the disputes mentioned in the reference and also certain other disputes between the management and workmen.
A joint petition for passing an award in terms of the settlement was filed before the tribunal.
A few days later the executive committee of the aforesaid Union rejected the agreement on the ground that the agreement had given rise to discontent among a section of the workers whose problems had not been satisfactorily solved.
The question was whether the agreement was a settlement within the meaning of section 2(p) of the from which the Union could not resile.
30 The Tribunal by its award held that the agreement was not a settlement within the meaning of section 2(p) of the Act.
Hence this appeal by special leave.
It was argued on behalf of the appellants that as the agreement was signed in the manner prescribed by rule 62(2)(b) of the Industrial Disputes (Bombay) Rules, 1957 and as the requirements of rule 62(4) have been complied with, the agreement must be accepted as a settlement within the meaning of section 2(p) of the , and as such was binding on the Union under Section 18(1) of the Act.
Dismissing the appeal, ^ HELD: 1.
In this case it has been found that the office bearers who signed the agreement were not competent to enter into a settlement with the company and as such it cannot be said that an agreement was reached between the employer and the workmen represented by the Union.
[35 E F] 2.
What is binding as a settlement under section 18 (1) of the is an agreement between the employer and workmen and the Tribunal found that there was no agreement between the Management and the Union.
[35 E F] Workmen of M/s Delhi Cloth & General Mills vs Management of M/s Delhi Cloth & General Mills ; referred to.
The procedure prescribed by either rule 58 of the Central Rules or Rule 62 of the Bombay Rules pre supposes the existence of a valid settlement.
But neither rule 58 of the Central Rules nor rule 62 of the Bombay Rules contains anything to suggest that any officer of a trade union who is entitled to sign a settlement reached between the parties must be deemed to have had the authority to enter into the settlement.
Rule 62 only prescribes the form of memorandum of settlement and by whom it should be signed and the question whether the procedure has been complied with will arise only if there is in existence a valid settlement.
[36 F H] The Sirsilk Ltd. and others vs Govt.
of Andhra Pradesh 31 Hindustan Housing Factory Ltd. vs Hindustan Housing Factory Employees ' Union & Others approved.
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Civil Appeal No. 3133 of 1979 Appeal by special leave from the judgment and order dated the 30th July, 1979 of the Allahabad High Court in Sales Tax Revision No. 573 of 1979.
150 G.L. Sanghi, Bharat Ji Aggarwal, Naresh Kumar Sharma and Vineet Kumar for the appellant.
S.C. Manchanda and Mrs. Sobha Dixit for the respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The short point for consideration in this appeal is whether the expression 'cooked food ' used in certain notifications issued under the U.P. Sales Tax Act, 1948 (U.P. Act XV of 1948) (hereinafter referred to as 'the Act ') can be construed as including within its meaning 'biscuits ' also.
The assessee, the appellant herein, is a registered firm engaged in the business of manufacture and sale of biscuits intended for human consumption.
The assessee is a registered dealer under the Act.
During the assessment proceedings under the Act for the year 1972 73 the assessee claimed that the turn over relating to biscuits manufactured and sold by it amounting to Rs. 35,09,920.38 P. was liable to be taxed at two per cent which was the rate prescribed by a notification issued by the State Government for cooked food contending that 'cooked food ' included 'biscuits ' also.
The notification relied on was one issued on October 6, 1971 under subsection (2) of section 3 A of the Act in supersession of an earlier notification dated July 1, 1969.
In both the notifications the tax was fixed at two per cent of the turn over payable at all points of sale in the case of cooked food.
The Assistant Commissioner (Tax Assessment) Sales Tax, Kanpur who was the assessing authority rejected the contention of the assessee that cooked food included biscuits also and imposed tax at the rate of three and a half per cent on the turn over relating to biscuits treating the same as an unclassified commodity.
An appeal filed against the order of the assessing authority before the Deputy Commissioner Sales Tax and a further appeal before the Judge (Appeal) Sales Tax, Lucknow were unsuccessful.
The High Court of Allahabad also declined to interfere with the said order.
This appeal by special leave is filed against the order of the High Court under Article 136 of the Constitution.
The only ground urged before us is that biscuits should have been treated by the authorities under the Act and by the High Court as cooked food and sales tax should have been levied on the turnover of biscuits at the rate prescribed in respect of cooked food under the notification referred to above.
The argument urged on 151 behalf of the appellant is that biscuit which was consumed by human being for nourishment is food and since it is prepared by baking which is a kind of cooking process it should be treated as cooked food.
Relying on some foreign English dictionaries it is contended that cooking means preparation of food by application of heat as by boiling, baking, roasting, broiling etc.
and biscuit should therefore be treated as cooked food.
What is of significance in this case is that the Hindi version of the notification issued uses the expression cooked food (pakaya hua bhojan) for 'cooked food ' found in the notification in English language.
It is a well settled rule of construction that the words used in a law imposing a tax should be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force.
If an expression is capable of a wider meaning as well as narrower meaning the question whether the wider or the narrower meaning should be given depends on the context and the background of the case.
In Hinde vs Allmond the question was whether tea was an "article of food" within the meaning of an Order designed to prohibit the hoarding of food namely Food Hoarding Order of 1917.
The learned judges held it was not even though in some other decisions it had been held to be an "article of food".
Shearman, J. one of the judges said that he rested his judgment on the common sense interpretation of the word 'food ' in the Order, apart from its meaning in any other statute '.
It is interesting to note that in a case before the Allahabad High Court in Annapurna Biscuit Manufacturing Co. vs State of U.P. the assessee had contended that biscuit was an article of confectionery and that contention was negatived.
It is relevant to note, as we have mentioned earlier, that when the Hindi text of the notification was issued contemporaneously with the English version, the words ( 'pakaya hua bhojan ') were used as the equivalent of the words 'cooked food '.
It may be that biscuit is served at tea time and in its wider meaning 'cooked food ' may include biscuit.
But ordinarily biscuit is not understood as cooked food.
If a person goes to a hotel or restaurant and asks for some cooked food or cooked food ( 'pakaya hua bhojan ') certainly he will not be served with biscuits in Uttar Pradesh.
While it is not necessary to state in the present case as to what all items may be called as cooked food, we can definitely say that in the context and background of the notification biscuit cannot be treated as cooked food.
152 The High Court of Allahabad has in an earlier case in Commissioner of Sales Tax vs Jassu Ram Bakery Dealer held that biscuit was not cooked food.
The High Court of Madhya Pradesh has also taken the same view in Commissioner of Sales Tax Madhya Pradesh vs Shri Ballabhdas Iswardas.
We approve of the views expressed in the aforesaid decisions.
There is no ground to interfere with the orders under appeal.
In the result, this appeal fails and is dismissed.
No costs.
S.R. Appeal dismissed.
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Dismissing the appeal, the Court ^ HELD: 1.
In the context and background of the notification "biscuit" cannot be treated as "cooked food".
In the Hindi text of the notification, issued contemporaneously with the English version, the words (cooked food) were used as the equivalent for cooked food.
Ordinarily biscuit is not understood as "cooked food".
Nor any one asking for some "cooked food" in a hotel will be served with "biscuits" in Uttar Pradesh.
The item has been correctly treated as "unclassified commodity" and tax levied accordingly.
[151F,G,H] Commissioner of Sales Tax vs Jassu Ram Bakery Dealer, 38 S.T.C. 461; Commissioner of Sales Tax Madhya Pradesh vs Shri Bailabhdas Iswardas, 21 S.T.C. 309, approved.
It is a well settled rule of construction that the words used in a law imposing a tax should be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force.
If an expression is capable of a wider meaning as well as narrower meaning the question whether the wider or the narrower meaning should be given depends on the context and the background of the case.
[151 C E] Hinde vs Allmond, , quoted with approval.
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Civil Appeals No. 2815 & 2816 of 1980.
110 Appeals by special leave from the Award dated the 3rd September, 1980 of the National Industrial Tribunal at Bombay in Complaint No. NTB 2 and NTB 3 of 1980 arising out of Reference No. NTB 1 of 1979.
WITH CIVIL APPEAL NO.
2607 of 1980 Appeal by special leave from the Award dated the 3rd Sept. 1980 passed by the National Industrial Tribunal, Bombay in Complaints Nos.
NTB 2 & 3 of 1980 in Reference No. NTB 1 of 1979.
AND CIVIL APPEAL NO.
3150 of 1980 Appeal by Special leave from the Award dated 3rd September, 1980 passed by the National Industrial Tribunal, Bombay in Complaints Nos.
NTB 2 & 3 of 1980 in Reference No. NTB 1 of 1979.
F.S. Nariman R.A. Shroff, H.S. Parihar and Shradul section Shroff, for the Appellant in CAS 2815 16/80, for Respondent No. 2 in CA.
2607/80 & for Respondent No. 1 in C.A. 3150/80.
C. N. Murthy and P. P. Mittal for Respondent No. 1 in CA.
2815 16/80.
M.K. Ramamurthy, P.S. Khera and S.K. Dawar, for RR 2 70 in CAS.
2815 16/80, for Respondent No. 3 in CA 2607/80 & for Respondent Nos. 3 & 40 67 in CA.
3150/80.
K.K. Venugopal, C.N. Murthy and P.P. Mittal 1980 for the Appellants.
A.K. Sen, A.K. Gupta, Brij Bhushan, N.P. Mahendra and Miss Renu Gupta, for the Appellants in CA.
3150/80.
S.K. Bisaria for RR.
2 4 and 6 39 in CA.
3150/80.
The Judgment of the Court was delivered by GUPTA, J.
These are four appeals by special leave from an Award of the National Industrial Tribunal, Bombay, made on September 3, 1980 disposing of two complaints under section 33 A of the holding that the employer, 111 Reserve Bank of India, Bombay had changed to the prejudice of the complainants their conditions of service by modifying the existing scheme of promotion during the pendency of a reference before the Tribunal and had thereby contravened the provisions of section 33 (1) (a) of the Act.
Civil Appeals 2815 and 2816 of 1980 have been preferred by the Reserve Bank of India, Bombay.
In civil appeal 2607 of 1980 the appellants are some of the stenographers employed in the Bombay office of the Reserve Bank of India.
The four appellants in civil appeal 3150 of 1980 are also employees of the Reserve Bank of India, Bombay, one of whom is a clerk grade I and the other three are officiating as staff officers grade A.
How the appellants in Civil Appeals 2607 and 3150 are affected by the Award will appear from the facts stated below.
The facts leading to the making of the complaints under section 33 A are as follows.
On June 16, 1979 the Government of India, Ministry of Labour, in exercise of powers conferred by section 7B of the constituted a National Industrial Tribunal with headquarters at Bombay and referred to it for adjudication an industrial dispute existing between the Reserve Bank of India and their class III workmen.
The dispute as described in the schedule to the order of reference related to "specific matters pertaining to class III workmen" enumerated in the schedule.
The schedule listed 35 matters in all, item No. 12 of which is described as 'Promotion '.
On May 13, 1972 appellant Reserve Bank of India, Bombay, had issued Administration Circular No. 8 introducing a revised scheme for promotion of employees as Staff Officers Grade A.
This Circular No. 8 prescribed as a condition for promotion passing a test consisting of three papers on the following subjects: noting, drafting, precis & essay writing, (ii) Reserve Bank of India Act, and (iii) functions and working of the Reserve Bank of India.
Candidates with less than 15 years ' service in class III cadre at the time of the test and who had not passed in the subjects 'Practice and Law of Banking ' and 'Book keeping and Accounts ' in Part I of the Institute of Bankers Examination were to appear and pass in an extra paper divided into two parts on the aforesaid two subjects.
Candidates who had passed in either or both these subjects in part I of the Institute of Bankers Examination were exempted from appearing in the corresponding part or both parts of this paper.
The circular further provided that an estimate of the vacancies anticipated to occur in each office during a 'panel year ' i. e. from September 1 to 112 August 31, was to be declared by the Bank in advance and the number of candidates in that office to be called for the test to fill the vacancies in that office was not to exceed twice the number of such vacancies.
A candidate who had been unsuccessful in more than one test was to be treated as a repeater and the number of such repeaters sitting for a test would be in addition to the aforesaid number of candidates.
An employee in the substantive rank of teller, stenographer grade II, stenographer grade I or personal assistant was eligible to appear in the test under this circular provided he had put in a minimum period of 15 years ' service in class III cadre.
A further condition relating to these three types of employees, tellers, stenographers and personal assistants, was that they could be called to appear in the test only if a clerical candidate of the same length of service found a place within twice the number in the combined seniority list.
The said three types of employees were required to pass both parts I and II of the Institute of Bankers examination, or if they were graduates, in part I only.
Those of them who would pass the test were to be posted on the clerical desk for one year for acquiring experience and thereafter they were to be absorbed in the next list to be prepared on the result of the test succeeding the one in which they had passed.
They were to rank in seniority below the juniormost successful candidate in the test in which they qualified.
A further requirement was that the stenographers and personal assistants should have worked for at least 5 years as such; this condition was thought necessary because it was possible that some of them may have been employed as typists for some time.
Feeling that the aforesaid circular No. 8 adversely affected them, the Stenographers filed a writ petition in the Andhra Pradesh High Court challenging the validity of the circular.
The main grievance seems to have been that by the said Circular No. 8 they were placed en bloc below the clerks which made the chances of promotion so far as they were concerned illusory.
The Andhra Pradesh High Court dismissed the writ petition with the following observations: ". .the clerks and the stenographers who have passed at the qualifying written examination do not acquire any right to promotion by merely being put in a panel.
As observed by the Supreme Court in the case cited in Gangaram vs Union of India, A.I.R. 1970 S.C. 2178, the effect of passing at the qualifying examination is only 113 to remove a hurdle in their way for further promotions to the posts of staff officers, grade II.
In the matter of actual promotion there is nothing illegal in the department promoting the clerks as a group in the first instance and postponing the promotions of the stenographers to a later stage. .It is urged on behalf of the petitioners that previous to the new scheme, the stenographers were placed at the top of the clerks en bloc and that they have now been brought to the bottom.
This argument is based upon a misconception that the panel creates any rights.
Hence nothing turns upon the place fixed in the panel".
The High Court however made certain recommendations "to avoid frustration and dissatisfaction among the stenographers".
It was suggested that "the Reserve Bank may frame suitable rules for fixing the seniority among the staff officers, grade II, on some rational and equitable principles, i.e., by length of service or marks obtained at the qualifying examination or by adopting a reasonable ratio between the two classes, so that the chances of further promotions for the stenographers may not be illusory".
This judgment was delivered on March 5,1973.
In the months of March and November, 1973 charters of demand were submitted respectively by the All India Reserve Bank Workers Organisation and the All India Reserve Bank Employees Association.
The latter Association is the one which is recognised by the Bank.
On January 23, 1976 by Administration Circular No. 5 the Bank modified Circular No. 8 to remedy the alleged adverse effect suffered by the stenographers as a result of Circular No. 8.
On June 16, 1979 the order referring to the National Tribunal at Bombay the dispute between the Bank and the class III workmen was made.
The All India Reserve Bank Employees Association filed a writ petition in the Calcutta High Court in July 1979 challenging this order of reference.
The High Court at Calcutta issued an injunction restraining the National Tribunal from adjudicating on the reference until the writ petition was disposed of.
A settlement was thereafter reached between the Bank and the All India Reserve Bank Employees Association and the injunction was vacated.
On November 21, 1979 the Bank and the Association applied to the Tribunal jointly for making an award on the basis of the settlement.
In the meantime on October, 10, 1979 the impugned Circular No. 6 was issued.
The following changes were introduced by Circular 114 No. 6 in the scheme of promotion set out in Circular No. 8 relating to personal assistants, stenographers, tellers and the clerical staff: (1) The eligibility period so far as these three types are concerned was reduced from 15 years to 10 years service.
(2) The condition requiring stenographers and personal assistants to put in 5 years service as such was dispensed with.
(3) Their period of training on clerical desk was reduced from 1 year to six months.
(4) They were to be fitted according to the length of their service in the panel for the year in which they passed the test and not in the next panel as before.
(5) Those who are graduates among these three groups, even if they had not passed in all the subjects in part I of Indian Institute of Bankers examination, would be eligible for exemption from appearing in the additional paper on 'Practice and Law of Banking ' and 'Book keeping and accounts ' if they had passed in these two subjects in the said examination.
(6) This benefit of exemption which was available to the clerical staff of 15 years ' standing previously was extended to those of them who had put in only 10 years service.
The two complaints (complaint Nos. 2 and 3 of 1980) on which the impugned award has been made were filed respectively on July 22, 1980 and August 1, 1980.
The complainants who were clerks grade I had passed the test in the panel year 1978 79 and were empanelled for promotion to the post of staff officer grade A.
The grievance made in the two complaints is that the result of the changes introduced in the promotional scheme by Circular No. 6 relaxing for the stenographers and personal assistants the conditions they were required to satisfy to be able to sit for the test and permitting them to be fitted according to the length of their service in the panel for the year in which they had passed the test, was that many who could not have been considered for promotion in preference to the complainants had circular No. 8 been in force, would 115 now be entitled to a higher preference.
According to the complainants the alterations made during the pendency of the reference before the National Tribunal amounted to changing their conditions of service to their prejudice in violation of section 33 (1) (a) of the .
The complainants in complaint No. 2 of 1980 stated that if the alterations introduced by Circular No. 6 were allowed to continue "the chances of promotion would become bleak for them '; complainants in complaint No. 3 of 1980 also expressed a similar apprehension that as a result of the changes introduced "their chances of promotion would recede further and further".
The appellants in civil appeal 2607 of 1980 who are stenographers acquired eligibility to appear in the qualifying test because of the modifications introduced in the existing scheme by Circular No. 6.
All the four appellants in civil appeal 3150 of 1980 are from clerical cadre, three of whom are officiating as staff officers grade A; they are also beneficiaries of the relaxations made in the existing scheme by circular No. 6.
The appellants in both these appeals are obviously affected by the Award allowing the complaints and declaring circular No. 6 as invalid.
Section 33 (1) (a) prohibits the employer during the pendency of a proceeding in respect of an industrial dispute before a Labour Court or Tribunal or National Tribunal from altering to the prejudice of the workmen concerned in the dispute their existing conditions of service.
Sub section (2) of section 33, however, permits the employer to alter the conditions of service in regard to any matter not connected with the dispute in accordance with the standing orders applicable to the workman concerned or in accordance with the terms of the contract between the employer and the workman.
The right given to the employer under sub section (2) is subject to the condition laid down in sub section (3) of section 33 that the right can be exercised only with the express permission in writing of the authority before which the proceeding is pending.
Section 33 A of the Act provides that where an employer contravenes the provisions of section 33 during the pendency of proceedings before a Labour Court, Tribunal or National Tribunal any employee aggrieved by such contravention may make complaint in writing to such Labour Court, Tribunal or National Tribunal, and on receipt of such complaint the Labour Court, Tribunal or National Tribunal shall adjudicate upon the complaint as if it were a dispute referred to it or pending before it in accordance with the provisions of the Act and submit its award to the appropriate government.
Section 31 (1) of the Act provides for penalty for contravention of the provisions of section 33; an 116 employer found guilty of such contravention is punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees or with both.
In this case circular No. 6 was not introduced with the permission of the National Tribunal, Bombay, before which the reference was pending; to determine whether thereby the provisions of section 33 have been contravened, the question that requires to be answered is whether the alterations introduced by Circular No. 6 are connected with the dispute pending in reference before the National Tribunal.
This again leads to the question, what was the dispute that was referred to the National Tribunal for adjudication? According to the complainants their promotional prospects were adversely affected by the impugned circular.
Item 12 of the schedule annexed to the order of reference is described as 'Promotion '.
Demand No. 19 in the charter of demands presented by the All India Reserve Bank Employees Association mentions 'Promotional avenues ' but, as the National Tribunal itself noticed, the matters specified under the head 'promotional avenues ' relate to the creation of more promotional posts and the upgrading of certain posts.
Demand No. 19 does not thus relate to the promotional scheme in question.
The impugned award also refers to demand No. 27 of the charter of demands submitted by the All India Reserve Bank Workers organisation.
Demand No. 27 is described as 'Promotional Policy ' and all that is said in the charter of demands under this head is that the matter "should be discussed and finalised on the basis of pre requisites of promotional policy submitted in 1969".
It is not therefore clear how demand No. 27 could have a connection with the promotional scheme set out in circular No. 6 issued in 1979.
The award does not refer to the statements of claim filed on behalf of the workmen; it is likely that because of the order of injunction issued by the Calcutta High Court to which we have earlier referred, the unions representing the workmen were not able to file their statements of claim before the National Tribunal disposed of the complaints under section 33A.
The Tribunal however held: " contemplates reference in wider terms than the actual item in dispute.
Section 10 (IA) of the which provides for the appointment of the National Tribunal shows that the Central Government could form its opinion not only on the existing dispute but also on the apprehended dispute and the order of reference can cover not only the dispute but any matter appearing to be connected with or relevant to the dispute.
In view of it, it cannot be said that when the item 'Promotion ' has been referred to 117 the Tribunal, it has the limitation of remaining in the frame work of the demand. the Tribunal has the jurisdiction to decide on the natural meaning of the words used in the item of reference.
The item seems to have been deliberately stated in terms. it looks to be referring to the process involving promotions." Having said so the Tribunal added: "The extent of such process will have to be carefully defined because there is no dispute with the axiomatic principle that promotion is a matter in the discretion of the employer".
It is difficult to follow the steps of reasoning in the extract from the award quoted above; it is also not clear how the view expressed therein helps in ascertaining what was the dispute referred to the Tribunal for adjudication.
No one can deny that under section 10 (IA) the Central Government could refer to the National Tribunal an existing or an apprehended dispute; the order or reference in this case however shows that it was not an apprehended dispute but an industrial dispute that "exists between the employers in relation to the Reserve Bank of India and their class III workmen in respect of the matters specified in the schedule" annexed to the order which was referred to the Tribunal for adjudication.
As section 10 (IA) expressly says, any matter appearing to be connected or relevant to the existing or apprehended dispute can also be referred to the National Tribunal for adjudication, but obviously unless it is determined what the dispute was that has been referred for adjudication, it is not possible to say whether a particular matter is connected with it.
The Tribunal thought it unjust to restrict the meaning of the word 'promotion ' to what was suggested by the charters of demand and decided to give it its "natural meaning" which according to the Tribunal includes "the process involving promotion".
The question however remains how did the Tribunal satisfy itself that when by the order of reference a specific matter, namely, 'promotion ' was referred to it for adjudication, it was implied that the word should be given a "natural meaning" in the sense in which the Tribunal understood it.
We do not think it reasonable to suppose that the order of reference required the Tribunal to adjudicate on all possible matters relating to promotion.
We therefore accept the contention of the appellants that the Tribunal should have defined the area of the dispute referred to it for adjudication before proceeding to consider whether the promotional scheme set out in Circular No. 6 could be said to be connected with that dispute.
118 Having reached this conclusion we should have sent the matter back to the National Tribunal for ascertaining the scope of the dispute referred to it for adjudication, if the assumption were correct that the alterations in the promotional scheme introduced by Circular No. 6 amounted to changing the conditions of service of the complainants; if not, remitting the matter to the Tribunal will be unnecessary.
What Circular No. 6 did was to relax for stenographers and personal assistants the conditions they had to satisfy to be able to sit for the test.
If they passed the test, they would get into the penal along with employees belonging to the clerical cadre who also had passed the test.
Vacancies in the post of staff officer Grade A are filled by recruiting employees from the panel.
The panel, it appears from the award, is a permanent one.
How those who come out successful in the test are to be fitted in the panel has been stated earlier.
The panel is made up of employees belonging to different cadres.
It is difficult to see how alteration of the conditions of eligibility governing employees belonging to a particular cadre can amount to changing the conditions of service of employees who belonged to another cadre, assuming for the present that the said conditions were conditions of service.
The changes introduced in respect of the stenographers and personal assistants may have an impact on the promotional prospects of employees from another cadre who are already in the panel or even of those who were expecting to be included in the panel, but it is not possible to agree that this would amount to changing their conditions of service.
It is difficult to think of the conditions of service of an employee as including an implied right to prevent the employer from altering the conditions of service of other employees.
In a given case such alteration may be inequitable, and a way may be found in the to redress the grievance of the employees affected thereby, but in this case the question is whether if amount to altering the condition of service of the complainants.
In Reserve Bank of India vs N.C. Paliwal this Court upheld the validity of the combined seniority scheme introduced by the Reserve Bank for the clerical staff.
The first paragraph of the head note to the report summarizes the facts on which challenge to the scheme was based: "At every centre of the Reserve Bank of India there were five departments, the General Department and four Specialised Departments.
There was a separate 119 seniority list for the employees in each Department at each centre and confirmation and promotion of employees was only in the vacancies arising within their Department at each centre.
There were two grades of clerks in each Department, namely, Grade I and Grade II.
The pay scales of Grade I and Grade II clerks in all the departments were the same and their conditions of service were also identical.
There was automatic promotion from Grade II to Grade I and when a clerk from Grade II was promoted to officiate in Grade I, he got an additional officiating allowance of Rs. 25/ per month.
There were also several categories of non clerical posts in the General as well as Specialised Departments, and their pay scale was the same as that of Grade II clerks.
In view of expanding activities in the Specialised Departments, there were greater opportunities for confirmation and promotion for employees in the Specialised Departments than in the General Department.
This gave rise to dissatisfaction amongst employees in the General Department and they claimed equal opportunities by having a combined seniority list for all the clerks for confirmation and promotion.
The Reserve Bank, sought to justify the separate seniority lists on the ground that the work in each department was of a special nature and inter transferability was undesirable and hard to achieve.
As a result of the recommendation of the National Tribunal.
however, the Reserve Bank introduced the Optee Scheme of 1965 as a first step towards equalization of opportunities.
Under the scheme, the option to go over to the Specialised Departments was confined to confirmed Grade II clerks and officiating Grade I clerks in the General Department.
If he exercised the option, he was eligible to be selected.
If he was selected.
he would be entitled to be absorbed only as Grade II clerk in one of the Specialised Departments with the result that if he was an officiating Grade I clerk in the General Department at the time of the exercise of the option, he would lose the benefit of officiation in Grade I in the General Department as also the monetary benefit of Rs. 25/ .
His seniority in the cadre of Grade II clerks in the Specialised Department in which he was absorbed would be deter 120 mined on the basis of his length of service calculated from the date of his recruitment if he was a graduate when he joined service, or from the date of his graduation if he became a graduate whilst in service.
It was argued in Paliwal 's case that the combined list was invalid because it discriminated against the petitioners vis a vis other grade II clerks who had opted under the optee Scheme of 1965.
This Court held: "The contention of the petitioners was that some of the Grade II clerks who had opted under the optee Scheme of 1965 were promoted as Grade I Clerks, while the petitioners continued as Grade II Clerks and before their turn for promotion could arrive, the Combined Seniority Scheme was brought into force and that prejudicially affected their promotional opportunities and thus brought about unjust discrimination between persons belonging to the same class.
This contention has no force and must be rejected.
We have already discussed and shown that it was competent to the Reserve Bank to introduce the Combined Seniority Scheme for the purpose of integrating the clerical staff in all the departments and the Reserve Bank was not bound to wait until all the transferee Grade II Clerks under the optee Scheme of 1965 were promoted as Grade I Clerks in their respective Specialised Departments.
There was no such assurance given by the Reserve Bank when it introduced the optee Scheme of 1965.
What it did was merely to equalise the opportunities of Grade II Clerks in the General Departments with those of Grade II Clerks in the Specialised Departments.
The Reserve Bank did not undertake that it will not take any steps for bringing about total integration of the Clerical services until all the transferee Grade II Clerks were promoted.
The Reserve Bank was entitled to introduce the Combined Seniority Scheme at any time it thought fit and the validity of the Combined Seniority Scheme cannot be assailed on the ground that it was introduced at a time when some of the transferee Grade II Clerks still remained to be promoted and was discriminatory 121 against them.
It may be that some transferee Grade II Clerks had already obtained promotion as Grade I Clerks by the time the Combined Seniority Scheme was introduced, while others like the petitioners had not.
But that cannot be helped.
It is all part of the incidence of service and in law, no grievance can be made against it." These observations in Paliwal 's case are equally applicable to the case before us.
It was competent for the Bank to introduce a combined promotional scheme for the clerical staff, stenographers, and personal assistants and the Bank was not bound to wait until all employees belonging to the clerical cadre whose names were already in the panel when circular No. 6 was introduced had been promoted as staff officers Grade A.
There was no such assurance given by the Bank when it introduced circular No. 8 on which the complainants rely.
The Bank did not undertake that it would not take any step to change the conditions the stenographers and the personal assistants were required to satisfy to be able to appear in the test until all the clerks already empanelled were promoted.
Circular No. 6 cannot therefore be assailed on the ground that it was introduced when some employees belonging to the clerical grade whose names were already in the panel remained to be promoted.
That cannot be helped, and, as observed in Paliwal 's case, "it is all part of the incidence of service and in law no grievance can be made against it".
Being in the panel in any particular year does not ensure a fixed place in the panel for an employee until he is promoted.
It may be recalled that in 1964 and again by circular No. 8 in 1972 the stenographers conditions of service were altered to their prejudice.
The right the complainants now claim is based on the change in the conditions of service of the stenographers made to their detriment earlier.
The grievance of the complainants really relates to the changes affecting their chances of promotion.
We have earlier quoted from the charters of demand to show that the complainants themselves looked upon the alterations made by circular No. 6 as affecting their "chances of promotion".
It is well settled that a rule which affects the promotion of a person relates to his condition of service but this is not so if what is affected is a chance of 122 promotion only.
This Court in Mohd. Shujat Ali and others etc.
vs Union of India & Ors. etc.
held: "But when we speak of a right to be considered for promotion, we must not confuse it with mere chance of promotion the latter would certainly not be a condition of service. that though a right to be considered for promotion is a condition of service, mere chances of promotion are not." In Shujat Ali 's case the respondents went down in seniority and it was urged that this affected their chances of promotion.
In Shujat Ali reference was made to earlier decision of this Court, State of Mysore vs G.B. Purohit where also it was held that though a right to be considered for promotion is a condition of service, mere chances of promotion are not and that a rule which merely affects chances of promotion cannot be regarded as varying a condition of service.
The facts of Purohit 's case and what was decided in that case have been summarized in Shujat Ali 's case as follows: "What happened in State of Mysore vs G.B. Purohit was that the districtwise seniority of Sanitary Inspectors was changed to Statewise seniority and as a result of this change, the respondents went down in seniority and became very junior.
This, it was urged, affected their chances of promotion which were protected.
This contention was negatived and Wanchoo J., as he then was, speaking on behalf of this Court observed: It is said on behalf of the respondents that as their chances of promotion have been affected their conditions of service have been changed to their disadvantage.
We see no force in this argument because chances of promotion are not conditions of service.
" The fact that as a result of the changes made by circular No. 6 the complainants lost a few places in the panel affects their chances of promotion but not the right to be considered for promotion.
123 that being so, it cannot be said that the alterations made by circular No. 6 amount to changing the conditions of service of the complainants; the grievance made by the complainants does not therefore appear to have any basis.
The appeals are accordingly allowed and the complaints dismissed, in the circumstances of the case the parties will bear their own costs.
V.D.K. Appeals allowed.
|
On May 13, 1972 the Reserve Bank of India, Bombay issued Administration Circular No. 8 introducing a revised scheme for promotion of employees as staff officers Grade A. Feeling that the aforesaid Circular adversely affected them, the stenographers filed a writ petition in the Andhra Pradesh High Court challenging its validity, Their grievance was that by the said circular No. 8 they were placed en bloc below the clerks which made their chances of promotion illusory.
On March 5, 1973 the Andhra Pradesh High Court dismissed the writ petition, but made certain recommendations to avoid frustration and dissatisfaction among the stenographers.
In 1973 charters of demands were submitted to the Reserve Bank of India by the employees ' associations.
On January 23, 1976 the Bank issued Administration Circular No. 5 modifying Circular No. 8 to remedy the alleged adverse effect suffered by stenographers as a result of Circular No. 8.
On June 16, 1979, the Central Government in exercise of powers conferred by section 7B of the constituted a National Industrial Tribunal with head quarters at Bombay and referred to it for adjudication an industrial dispute existing between the Reserve Bank of India and their Class III workmen.
The dispute as described in the Schedule to the order of reference related to "specific matters. . pertaining to Class III workmen" enumerated in the Schedule.
The Schedule listed 35 matters in all, item No. 12 of which is described as "promotion".
During the pendency of the reference, on October 10, 1979 the Reserve Bank of India issued Administration Circular No. 6 introducing certain change in the scheme of promotion set out in circular No. 8 by relaxing certain conditions of eligibility for the personal assistants, stenographers, tellers and the clerical staff.
Feeling aggrieved, some clerks (Grade I) who were empanelled for promotion to the post of Staff Officer Grade A after passing the test, filed two complaints before the National Tribunal under section 33A of the Industrial Dispute Act alleging (i) that as a result of Circular No. 6 many who could not have been considered for promotion in preference to the complainants had Circular No. 8 been in force, would now be entitled to a higher preference, 108 and (ii) that the alterations made during the pendency of the reference before the National Tribunal amounted to changing their conditions of service to their prejudice in violation of section 33 (1) (a) of the inasmuch as their chances of promotion would recede.
The National Tribunal by its award dated September 3, 1980 disposed of these two complaints holding that the Reserve Bank of India had changed to the prejudice of the complainants their conditions of service by modifying the existing scheme of promotion during the pendency of a reference before the Tribunal and thereby contravened the provisions of section 33 (1) (a).
Hence the appeals by special leave.
Allowing the appeals and dismissing the complaints, the Court ^ HELD: 1: 1.
The order of reference did not require the Tribunal to adjudicate on all possible matters relating to promotion.
The Tribunal should have defined the area of the dispute referred to it for adjudication before proceeding to consider whether the promotional scheme set out in Circular No. 6 could be said to be connected with that dispute.
[117 G H] 1 : 2.
Item No. 12 of the Schedule annexed to the order of reference is described as "promotion".
Demand No. 19 in the Charter of Demands presented by the All India Reserve Bank Employees Association mentions "promotional avenues", but the matters specified under the head "promotional avenues" relate to the creation of more promotional posts and the upgrading of certain posts.
Demand No. 19 does not thus relate to the promotional scheme in question.
Demand No. 27 of the Charter of Demands submitted by the All India Reserve Bank Workers Organisation is described as "promotional policy" and all that is said in the charter of demands is that the matters "should be discussed and finalised on the basis of prerequisites of promotional policy submitted in 1969".
Demand No. 27 could, therefore, have no connection with the promotional scheme set out in Circular No. 6 issued in 1979.
[116 C E] 1: 3.
Under section 10 (1A) the Central Government could refer to the National Tribunal an existing or an apprehended dispute; the order or reference in this case shows that it was not an apprehended dispute but an industrial dispute that "exists between the employers in relation to the Reserve Bank of India and their class III workmen in respect of the matters specified in the schedule" annexed to the order which was referred to the Tribunal for adjudication.
As section 10 (1A) expressly says, any matter appearing to be connected or relevant to the existing or apprehended dispute can also be referred to the National Tribunal for adjudication, but obviously unless it is determined what the dispute was that has been referred for adjudication, it is not possible to say whether a particular matter is connected with it.
[117 C E] 2: 1.
What circular No. 6 did was to relax for stenographers and personal assistants the conditions they had to satisfy to be able to sit for the test.
It they passed the test, they would get into the panel along with employees belonging to the clerical cadre who also had passed the test.
Vacancies in the posts of staff officer Grade A are filled by recruiting employees from the panel.
The panel is a permanent one.
Alterations of the conditions of the eligibility governing employees belonging to a particular cadre can amount to changing the conditions of service of employees who belonged another cadre, assuming for the present 109 that the said conditions were conditions of service.
The changes introduced in respect of the stenographers and personal assistants may have an impact on the promotional prospects of employees from another cadre who are already in the panel or even of those who were expecting to be included in the panel, but this would not amount to changing their conditions of service.
The conditions of service of an employee cannot include an implied right to prevent the employer from altering the conditions of service of other employees.
In a given case such alteration may be inequitable, and a way may be found in the to redress the grievance of the employees affected thereby.
[118 B F] 2: 2.
It was competent for the Bank to introduce a combined promotional scheme for the clerical staff, stenographers, and personal assistants and the Bank was not bound to wait until all employees belonging to the clerical cadre whose names were already in the panel when Circular No. 6 was introduced had been promoted as staff officers Grade A.
There was no such assurance given by the Bank when it introduced Circular No. 8.
The Bank did not undertake that it would not take any step to change the conditions of the stenographers and the personal assistants were required to satisfy to be able to appear in the test until all the clerks already empanelled were promoted.
Circular No. 6 cannot therefore be assailed on the ground that it was introduced when some employees belonging to the clerical grade whose names were already in the panel remained to be promoted.
[121 B E] Being in the panel in any particular year does not ensure a fixed place in the panel for an employee until he is promoted.
The right the complainants now claim is based on the change in the conditions of service of the stenographers made to their detriment earlier.
[121 E F] Reserve Bank of India vs N.C. Paliwal ; , followed.
It is well settled that a rule which affects the promotion of a person relates to his condition of service but this is not so if what is affected is a chance of promotion only.
Though a right to be considered for promotion is a condition of service, mere chances of promotion are not and that a rule which merely affects chances of promotion cannot be regarded as varying a condition of service.
[121 G H, 122 A, C D] The fact that as a result of the changes made by Circular No. 6 the complainants lost a few places in the panel affects their chances of promotion but not the right to be considered for promotion.
That being so, it cannot be said that the alterations made by Circular No. 6 amount to changing the conditions of service of the complainants; the grievance made by the complainants does not therefore appear to have any basis.
[122 G H, 123 A B] Mohd. Shujat Ali and others etc.
vs Union of India & Ors. etc.
; , ; State of Mysore vs G.B. Purohit, C.A. 2281 of 1965 decided on 25 1 1967 (S.C.) unreported, applied.
|
Civil Appeal No. 2324 of 1980.
Appeal by special leave from the judgment and order dated the 23rd April, 1979 of the Allahabad High Court in Civil Misc.
Writ No. 2228 of 1979.
Dr. L. M. Singhvi, and section K. Verma for the Appellant.
Mrs. Shobha Dikshit for Respondent Nos.
I & 2.
section N. Kacker and B. R. Agarwala & P. G. Gokhale for Respondent No. 4.
The Judgment of the Court was delivered by CHANDRACHUD, C. J.
: The question which arises for consideration in this appeal is whether the appellant, Dr. R. K. 285 Khandelwal, is entitled to be admitted to the M. D. Course in Paediatrics of the Agra University and whether in denying him that opportunity, the State has violated any of his legal rights.
The appellant passed his M.B.B.S. Examination from the section N. Medical College, Agra, in December 1976 and completed his internship in December 1977.
Being desirous of prosecuting post graduate studies in Paediatrics, he took a year s house job in the Paediatrics Department of the section N. Medical College Hospital, which he completed in January 1979.
He then applied for admission to the M. D. Course in Paediatrics for the academic year 1979 80.
He was admitted to the D.C.H. Course but he was refused admission to the M.D. Course on two grounds: First, that amongst the applicants for the M. D. Course in Paediatrics there were four students who had secured higher marks than him in the M.B.B.S. Examination, and second, that on the basis of the 1:1 ratio between teachers and students, there were only four seats available for the post graduate course in Paediatrics.
The appellant filed a writ petition in the High Court of Allahabad challenging the decision of the College by which he was denied admission to M.D. (Paediatrics).
That petition was dismissed summarily by a Division Bench of the High Court on the ground that the relief of mandamus sought by the appellant could not be granted to him since he had failed to establish that any of his legal rights was violated.
This appeal by special leave is directed against the High Court 's order dated April 23, 1979.
The appellant, as stated earlier, was admitted to the D.C.H. Course after he had finished his house job in Paediatrics.
His case is that for many years in the past, candidates who had passed the D.C.H. Examination were preferred for admission to the M. D. Course but that the University suddenly discontinued that practice, as a result of which he had to compete with others who had passed their M.B.B.S. Examination.
There is no substance in this contention and in any case the appellant cannot make a grievance of a change in the practice for admission to the particular course.
Admittedly, there was no rule at any time requiring that an applicant seeking admission to the M.D. Course in Paediatrics had to pass his D.C.H. Examination.
All that is alleged is that such a practice was recognised over many years or at least, that such was the under standing of all concerned.
Both the practice and the understanding have been denied on behalf of the College.
But apart from that, 286 discontinuance of a mere practice cannot sustain a charge of injury to legal rights.
The practice had not ripened into a rule and the University was under no obligation to admit only those who had passed their D.C.H. Examination.
We also feel some difficulty on the facts before us in accepting the contention of the appellant that passing the D.C.H. Examination was a passport for admission to the M.D. Course.
It may, at the highest, be said that it was easier for students to get admitted to the M.D. Course after passing the additional examination of D.C.H. after the M.B.B.S. Examination.
The appellant applied for admission to the M.D. (Paediatrics Course for the academic year 1979 80.
He had passed his M.B.B.S. Examination in December 1976.
There were other students who had applied for admission to the M.D. Course in Paediatrics along with the appellant.
Some of them had passed their M.B.B.S. Examination prior to December 1976 and had secured higher marks than the marks obtained by the appellant in the December 1976 Examination.
The number of seats being limited, admissions were given according to merit and the four students who had secured highest number of marks were given preference to others regardless of the year in which they had passed their M.B.B.S. Examination.
No one was admitted to the 1979 80 academic year for the M.D. Course in Paediatrics, who had secured lesser marks than the appellant.
The four students who secured admission had obtained marks varying between 60.06% to 65.80% while the appellant had secured 58.56% marks only.
He was sixth in order of merit amongst the applicants and there were only four seats available bearing in mind the ratio of 1:1 between the teachers and the students.
Dr. Singhvi, who appears on behalf of the appellant, raised a further contention that the ratio 1:1 was relaxed from time to time by the University and that the appellant was discriminated against by the arbitrary refusal of the authorities to relax the ratio in his favour.
We are prepared to accept that if there is a power to relax the ratio, that power must be exercised reasonably and fairly.
It cannot be exercised arbitrarily to favour some students and to disfavour some others.
But the difficulty in the way of the learned counsel is that this point of discrimination was not taken in the Writ Petition which was filed in the High Court, it was not argued in the High Court and is not even mentioned in the Special Leave Petition before us.
The question as to whether the authorities have the power to relax the ratio and the further question as to whether that power has been exercised arbitrarily in this case raise new points 287 into which it is difficult for us to enquire for the first time.
We are therefore unable to entertain the submission made by the counsel.
The appellant has thus failed to make out a case of injury to any of his legal rights, for which reason the appeal must fail.
The appeal is accordingly dismissed.
But considering that under interim orders passed by this Court from time to time the appellant has appeared for the M.D. Examination on the completion of the Course, we hope that the University and the S.N. Medical College will take a sympathetic view of the appellant 's case and have his result declared.
It may be mentioned that because of the interim orders passed by this Court directing the College and the University to admit the appellant to the M.D. Course in Paediatrics, the College cancelled the appellant 's admission to the D.C.H. Course.
That may have been right because no student can do the D.C.H. Course and the M D. Course simultaneously.
But the point of the matter is that if this Court were not to direct as an interim measure that the appellant should be allowed to prosecute his studies in M.D. Paediatrics (subject to the result of this Appeal), the appellant might have completed his D.C.H. Course and, subject to being admitted to the M.D. Course within a year or so from now he would have taken his M.D. Examination after passing the D.C.H. Examination.
The authorities concerned will bear in mind that the appellant should not be placed in a worse position than he would have been in, had he not filed this appeal.
Therefore, if the appellant has passed the examination, he should be declared to have passed it like any other student.
He should not be subjected to any disadvantage for the reason that he was not entitled initially to be admitted to the M.D. Course in Paediatrics.
If he has failed, he should be permitted to take the examination again (or again and again) in accordance with the rules of the University.
Since the result of the other students, who had appeared for the M.D. Examination along with the appellant, was declared in February 1981, we hope that the appellant 's result would be declared forthwith.
There will be no order as to costs.
N.V.K. Appeal dismissed.
|
The appellant applied for admission to the M.D. (Paediatrics) Course for the academic year 1979 80.
He had passed his M.B.B.S. Examination in December, 1976.
There were other students who had applied for admission along with the appellant.
Some of them had passed their M.B.B.S. Examination prior to December 1976 and had secured higher marks than the appellant.
The number of seats being limited, admissions were given according to merit and four students who had secured the highest number of marks were given preference to others regardless of the year in which they had passed their M.B.B.S. Examination.
The appellant filed a writ petition in the High Court challenging the E decision of the college by which he was denied admission.
The petition was dismissed summarily by a Division Bench on the ground that the relief of mandamus could not be granted since the appellant had.
failed to establish that any of his legal rights was violated.
In the appeal to this Court it was contended on behalf of the appellant that: (a) For many years in the past candidates who had passed the D.C.H. Examination were preferred for admission to the M.D. Course but that the University suddenly discontinued that practice, as a result of which he had to compete with others who had passed their M.B.B.S. Examination, and (b) the ratio 1:1 between teachers and students was relaxed from time to time by the University and that the appellant was discriminated against by the arbitrary refusal of the authorities to relax the ratio in his favour.
Dismissing the appeal, ^ HELD: The appellant has failed to make out a case of injury to any of his legal rights.
Because of interim orders passed by this Court directing the College and the University to admit the appellant to M.D. Course in Paediatrics, the College cancelled the appellant 's admission to the D.C.H. Course.
If the appellant has passed the M.D. Examination, he should be declared to have passed it like any other student.
He should not be subjected to any disadvantage for the 284 reason that he was not entitled initially to be admitted to the M.D. Course in Paediatrics.
If he has failed he should be permitted to take the examination again (or again and again) in accordance with the rules of the University.
Since the result of the other students, who had appeared for the M.D. Examination along with the appellant, was declared in February, 1981 the appellant 's result to be declared forthwith.
[287 B F] (a) There was no rule at any time requiring that an applicant seeking admission to the M.D. Course in Paediatrics had to pass his D.C.H. Examination.
That such a practice was recognised over many years or that such was the understanding of all concerned has been denied on behalf of the College.
Besides discontinuance of a mere practice cannot sustain a charge of injury to legal rights.
The practice had not ripened into a rule and the University was under no obligation to admit only those who had passed their D.C.H. Examination.
The appellant therefore cannot make a grievance of a change in the practice for admission to the M.D. Course.
[285 G 286 B] In the instant case no one was admitted to the M.D. Course who had secured lesser marks than the appellant.
He was sixth in order of merit and there were only four seats available.
[286 E] (b) If there is a power to relax the ratio, that power must be exercised reasonably and fairly.
It cannot be exercised arbitrarily to favour some students and to disfavour some others.
[286 G] In the instant case this point of discrimination was not taken in the writ petition filed in the High Court, not argued in the High Court, and not even mentioned in the Special Leave Petition.
The question as to whether the authorities have the power to relax the ratio and the further question as to whether that power has been exercised arbitrarily raise new points into which it is difficult to enquire for the first time.
This plea cannot therefore be entertained.
[286 H 287 A]
|
Civil Appeal No. 1867 of 1970.
From the judgment and order dated the 18th February, 197() of the Gujarat High Court in Letters Patent Appeal No. 6/60.
section section Sheth, Ravinder Narain, J. B. Dadachanji, O.C. Mathur and Mrs. Anjali K. Verma for the Appellant.
Gautham Philip, P. H. Parekh and Mrs. Vineeta Sen Gupta for the Respondent.
The Judgment of the Court was delivered by MISRA, J.
The present appeal by certificate is directed against the judgment of the High Court of Gujarat at Ahmedabad in 169 Letters Patent Appeal No. 6 of 1966 dated the 18th of February, 1970 decreeing the suit for redemption.
The property in dispute, situated in Baroda City, originally belonged to Motibhai Bapubhai Shibandi Baxi (for short Motibhai).
He created a mortgage with possession of the disputed property in favour of one Nanaji Balwant Pilkhanewala (for short Nanaji) in 1871 for a sum of Rs. 800.
In 1890 a second mortgage was created in favour of the same mortgage and the amount secured by this second mortgage was Rs. 375.
Somewhere between 1890 and 1912 the original mortgagee Nanaji died leaving behind his two sons Hari and Purshottam as his heirs and legal representatives.
The two sons of Nanaji sold the entire mortgagee rights and interest to one Ganpatram Mugutram Vyas (for short Ganpatram) on 4th of July, 1912.
Ganpatram in his turn sold the mortgagee rights in a part of the mortgaged property, viz., common latrine, to one Vamanrao Laxmanrao Nirkhe (for short Vamanrao).
Ganpatram died and his son Chhotelal Ganpatram (for short Chhotelal) sold away his rights as a mortgagee in possession in respect of the rest of the properties which still remained with him, to Chhaganlal Keshavlal Mehta (for short Chhaganlal Mehta.) Mortgagor Motibhai.
also died leaving behind his son Chimanrai Motibhai Baxi (for short Chimanrai).
Chimanrai died leaving behind his widow Chhotiba and a daughter Taralaxmibai.
On September 12, 1950 Taralaxmi sold her right, title and interest in the suit property to one Shantilal Purshottamdas Dalia (for short Shantilal).
Later on Shantilal conveyed his right, title and interest in the property to the plaintiff, Narandas Haribhai Patel (for short Narandas).
It appears that during the life time of Chimanrai Ganpatram the mortgagee had sent a notice, Ext. 77, dated 15th of April, 1913 to Chimanrai informing him that the mortgaged property was in a dilapidated condition and required repairs.
He had already spent some amount towards repairs but still substantial repairs were needed and the same should be got done by him or he should pay the mortgage amount and redeem the property.
On receipt of this letter Chimanrai made the following endorsement: "During the lifetime of my father, I had become separated from him without taking any kind of the moveable or immovable property belonging to him and even 170 after his death, I have not taken any kind of his properties nor have I kept my right over the said properties and so I am not in any way responsible for your any transaction whatsoever in connection with his properties.
Be it known to you.
And while giving you a definite assurance to that effect I have made attestation on the aforesaid document in respect of purchase of the mortgagee 's rights, which may also be known to you." Long after the death of Chimanrai, Chhotelal, son of Ganpatram, gave a similar notice, Ext.
28, dated 6th of October, 1933 to Chhotiba, the widow of Chimanrai calling upon her to Redeem the mortgage in question.
On this notice similar endorsement on behalf of Chhotiba was made on 10th of October, 1933 by Lomeshprasad Hariprasad Desai (for short Lomeshprasad).
her daughter 's son, as had been made by Chimanrai earlier on the notice given by Ganpatram.
Yet another notice, Ext.
78 dated 21st of September, 1933 was sent by Chhotalal to Taralaxmibai, daughter of Chimanrai to the same effect.
In her reply, Ext.
73, dated 3rd of October, 1933 to the notice, Taralaxmibai stated inter alia that her father Chimanrai had foregone all rights whatsoever in the property of his father, Motibhai, during his lifetime and hence she had no concern with the property of Motibhai.
It was further stated that her own mother Chhotiba was alive (in October 1933) and, Therefore, she had no concern whatsoever with the property of Motibhai or the liabilities arising out of the dealings of Motibhai.
Narandas after the purchase of the mortgagor 's rights from Shantilal filed a suit for redemption impleading both the assignees For the mortgagee 's rights, Chhaganlal Keshavlal Mehta, as the 1st defendant, and Vamanrao Laxmanrao Nirkhe, as the 2nd defendant.
The claim was resisted by.
the 1st defendant on grounds that the plaintiff had no right to redeem inasmuch as his predecessor in interest, Chimanrai, his widow Chhotiba and his daughter Taralaxmibai on their own admission had no subsisting right, title and interest in the mortgaged property.
The plaintiff who is only a transferee from Taralaxmibai could not rank higher, that Ganpatram, the predecessor in interest of defendant No. 1 was not in possession of the property as a mortgagee but as an absolute owner thereof.
The defendant No. 1, who claims through Ganpatram 's son Chhotalal, was also an absolute owner and continued to remain in possession from 1933 34 as such.
As an abso 171 lute owner he carried out repairs to the mortgaged property.
He also obtained permission from the municipality and built the house afresh after incurring heavy expenditure and in doing so he had spent about Rs. 3374 2 0.
He also denied that Shantilal, purchaser of the equity of redemption was the plaintiff 's benamidar.
Indeed, the plaintiff had falsely created the evidence of benamidar to bring the present suit, and the suit was barred by limitation and estoppel.
In the alternative he pleaded that he should be paid the sum of Rs. 5099 2 0 if the plaintiff 's suit for redemption was to be decreed.
The trial court came to the conclusion that the plaintiff had no right to redeem the mortgaged property as he had failed to prove that he had purchased the property benami in the name of Shantilal and that afterwards Shantilal had passed deed of conveyance or mutation in his favour.
In view of this finding it was not necessary for the trial court to decide other issues but all the same the trial court recorded findings on the remaining issues also in order to complete the judgment.
It found that Chimanrai, Chhotiba or Taralaxmibai never relinquished their right, title and interest in the suit property, that the suit was within limitation, and that the suit was not barred by estoppel.
As regards the amount spent on repairs the court came to the conclusion that the defendant No. I had spent Rs. 3374 2 O and, therefore, if the plaintiff was to be allowed to redeem the property he would have to pay that amount in addition to the mortgage consideration.
The suit was dismissed by the trial court on the ground that the plaintiff had no right to redeem.
Feeling aggrieved the plaintiff went up in appeal, and the defendant No. 1 filed a cross objection against the finding that went against him.
The appeal and the cross objection were allowed by the Assistant Judge by his judgment dated 31st of March, 1956 on the finding that the plaintiff had purchased the equity of redemption benami in the name of Shantilal and that Shantilal had executed a deed of conveyance, Ext.
66, in favour of the plaintiff and, therefore, he was entitled to redeem the property.
He further found that the endorsements made by Chimanrai, his widow Chhotiba and his daughter Taralaxmibai did not amount to relinquishment of their right, title and interest in the property.
He set aside the decree of the trial court and remanded the case for deciding the remaining points after allowing the parties to lead fresh evidence on those issues.
The defendant No. I challenged the remand order by 172 filing an appeal in the High Court.
His complaint was against the direction given by the appellate court while remanding the case.
The High Court allowed the appeal in part and modified the direction of the lower appellate court asking the trial court to decide other issues afresh after allowing further evidence, except issues Nos. 1 and 4.
Consequent upon the order of remand the Joint Civil Judge, Jr. Division, decided other issues against the plaintiff.
He held that Chimanrai, his widow Chhotiba and his daughter Taralaxmibai had relinquished their right, title and interest in the suit property and, therefore.
Taralaxmibai had no subsisting interest or title to transfer to the plaintiff or his predecessor in interest.
He further held that the suit was barred by time and estoppel, and that defendant No. I had spent a substantial amount on repairs.
On these findings he again dismissed the suit by his judgment dated 21st of August, 1958.
The plaintiff again took up the matter in appeal, It appears that during the pendency of the appeal Vamanrao, defendant No. 2 died in August, 1958.
His heirs were, however, not brought on the record.
A question arose whether the appeal abated as a whole or only as against defendant No. 2.
The District Judge by his separate order dated 25th of September, 1959 held that the appeal abated only so far as defendant No. 2 was concerned but it could proceed as against the surviving defendant No. 1.
The appeal was eventually allowed by the Assistant Judge, Baroda against defendant No. 2 by his judgment dated 12th of November, 1959 holding that the appellant was entitled to redeem the mortgaged property on payment of Rs. 4724 2.0 on account of the mortgage money as well as the expenditure incurred by defendant No. 1 on repairs and that the suit was neither barred by time nor by estoppel.
The appeal was, however, dismissed as against defendant No. 2.
The defendant No. 1 challenged the judgment and decree of the Assistant Judge before the High Court and only two contentions were raised before it: (1) that the mortgage cannot be split up and must be treated as one and indivisible security and since the right to redeem against one of the two co mortgagees had become extinguished because of abatement of the suit against Vamanrao and his heirs, the suit against defendant No. 1, the other co mort 173 gagee, must be dismissed; and (2) that the suit was barred by estoppel inasmuch as Chimanrai, the heir of the original mortgagor and after him his widow Chhotiba and daughter Taralaxmibai having relinquished their right in the disputed property which she could have conveyed to Shantilal by sale.
Consequently, Shantilal in his turn could not pass a better title to the plaintiff.
In the result the plaintiff had no right to file the suit for redemption.
A learned Single Judge who heard the appeal repelled the first contention but accepted the second one.
Accordingly, he allowed the appeal and dismissed the plaintiff 's suit.
The plaintiff undaunted took up the matter in a Letters Patent Appeal and the defendant also filed a cross objection.
A Division Bench of the High Court allowed the appeal and decreed the suit reversing the finding of the learned Single Judge that the plaintiff had no right to sue.
The Division Bench, however, granted a certificate of fitness for appeal to this Court.
The learned counsel for the appellant was raised the same two contentions before us.
We take up the first point first.
The first contention is based on the principle of indivisibility of the mortgage.
Section 60 of the Transfer of Property Act deals with the rights and liabilities of a mortgagor.
It confers a right of redemption.
There is, however, a rider to the right of redemption in the section itself, which provides : "Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except only where a mortgagee or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgagor." A perusal of this provision indicates that a co mortgagor cannot be permitted to redeem his own share of the mortgaged property only on payment of proportionate part of the amount remaining due.
In other words the integrity of the mortgage cannot be broken.
Order 34, rule I of the Code of Civil Procedure deals with the parties to suits for foreclosure, sale and redemption.
It provides: "Subject to the provisions of this Code, all persons having an interest either in the mortgage security or in the 174 right of redemption shall be joined as parties to any suit relating to the mortgage.
" It has already been pointed out that defendant No. 2 was the purchaser of mortgagee rights in respect of common latrine while defendant No. I is the purchaser of the mortgagee rights in respect of the remaining mortgaged property, viz., the houses.
When the plaintiff filed the suit he impleaded both the mortgagees as defendants Nos. 1 and 2.
Before the Assistant Judge a statement was made on behalf of the original plaintiff that he was prepared to pay the entire mortgage amount for redemption of the mortgaged property to the 1st defendant.
A similar statement was made by Mr. Oza, counsel for the plaintiff in the High Court who further stated that in no event hereafter would the plaintiff seek any relief against the property in possession of defendant No. 2, viz., the right to the common latrine in which mortgagee rights had been transferred to defendant No. 2 by Ganpatram.
Besides, the severance of the two properties by Ganpatram was recognised by the mortgagor and hence the severance was with the implied consent of the mortgagor.
It is a well recognised principle that even if all the mortgagees are not before the court in a suit filed by the mortgagor for redemption of the property, but the mortgagor is prepared to pay the entire amount due at the foot of the mortgage to such mortgagees as are before the court and gives up his right under the mortgage as against those mortgagees who are not before the court, the court can pass a decree for redemption directing that the entire mortgage amount should be paid to the mortgagees who are actually before the court.
This principle was recognised in a Full Bench decision in Motilal Yadav v Samal Bechar.(1) If one of the defendants in a suit dies and his heirs are not brought on record the suit certainly would abate as against that party.
The suit, however, could not abate as against the other surviving defendants.
A question may arise whether the suit is maintainable against the surviving defendants.
In the instant case the suit abated as against defendant No. 2 in respect of the common latrine.
But there is no difficulty in the suit proceeding against the surviving defendant No. 1 if the plaintiff is prepared to pay the entire mortgage consideration.
It may, however, be pointed out that defendant No. 2 never contested the suit.
He was impleaded as a party it was incumbent on the plaintiff to have impleaded all the mortgagees as a party.
But if the defendant did not contest the suit at any stage, 175 will he be a necessary party in an appeal ? A person may be A a necessary party in a suit but he 'may not be a necessary party in the appeal.
The Division Bench of the High Court was fully justified in holding that the suit against the surviving defendant No. I was maintainable despite the abatement of the suit against the 2nd defendant.
We fully endorse the view taken by the Division Bench of the High Court.
This takes us to the second point.
This contention is based on the aforesaid various endorsements made by Chimanrai.
his widow Chhotiba and his daughter Taralaxmibai on the notices sent by the mortgagee.
The question is whether these endorsements amount to relinquishment of their rights and interest so as to estop them from transferring the property in suit ? The notice by Ganpatram to Chimanrai and the notices by his son Chhotalal to Chhotiba and Taralaxmibai and their respective endorsements thereon have been referred to in the earlier part of the judgment.
Whether these endorsements amount to relinquishment of their rights and title and if so whether the same amounts to estoppel within the meaning of section 115 of the Evidence Act ? In our opinion the endorsements have to be read not in isolation but with reference to the notices sent.
So read, the endorsement only indicate that the heirs of the mortgagor were not prepared to bear the expenses on repairs of the mortgaged property.
The property cannot remain in vacuum even for a single moment.
It must vest in somebody.
Accordingly, after the death of Motibhai his property vested in his son who was the sole heir.
The endorsement of Chimanrai, his widow Chhotiba and daughter Taralaxmibai on the notices at the most would amount to an admission.
The contention raised on behalf of the defendant appellant is that he would not have purchased the mortgagee rights from Ganpatram if such a statement had not been made by Chimanrai, his widow Chhotiba and his daughter Taralaxmibai and, therefore, they would be estopped from taking up a different stand from the one taken by them earlier.
In substance, the question is whether the endorsements would amount to estoppel.
The difference between admission and estoppel is a marked one.
Admissions being declarations against an interest are good evidence but they are not conclusive and a party is always at liberty to withdraw admissions by proving that they are either mistaken or untrue.
But estoppel creates an absolute bar.
In this state of 176 the legal position, if the endorsement made by Chimanrai or by his widow, Chhotiba or his daughter Taralaxmibai amounts to an estoppel they or their transferees would be prevented from claiming the property.
It may be pointed out that estoppel deals with questions of facts and not of rights.
A man is not estopped from asserting a right which he had said that he will not assert.
It is also a well known principle that there can be no estoppel against a statute.
After the death of Motibhai his son Chimanrai succeeded in law.
To bring the case within the scope of estoppel as defined in section ] I 5 of the Evidence Act: t I ) there must be a representation by a person or his authorised agent to another in any form a declaration, act or omission; (2) the representation must have been of the existence of a fact and not of promises de futuro or intention which might or might not be enforceable in contract; (3) the representation must have been meant to be relied upon; (4) there must have been belief on the part of the other party in its truth; (5) there must have been action on the faith of that declaration, act or omission, that is to say, the declaration, act or omission must have actually caused another to act on the faith of it, and to alter his former position to his prejudice or detriment; (6) the misrepresentation or conduct or omission must have been the proximate cause of leading the other party to act to his prejudice; (7) the person claiming the benefit of an estoppel must show that he was not aware of the true state of things.
If he was aware of the real state of affairs or had means of knowledge, there can be no estoppel; (8) only the person to whom representation was made or for whom it was designed can avail himself of it.
A person is entitled to plead estoppel in his own individual character and not as a representative of his assignee.
None of these conditions have been satisfied in the instant case, for example, no representation was made to defendant No. 1.
Therefore, he cannot plead estoppel.
Secondly, the representation was not regarding a fact but regarding a right of which defendant No. I or his predecessor in interest had full knowledge or could have known if he had cared to know.
It is difficult to say that defendant No. I has moved his position on account of the representation made by the mortgagor or his heirs or assignees.
On the facts and circumstances of this case it is not possible to hold that 177 ingredients of section 115 of the Evidence Act have been fulfilled.
The view taken by the Division Bench of the High Court is fully warranted by law.
For the foregoing discussion we find no force in this appeal.
It is accordingly dismissed with costs.
S.R. Appeal dismissed.
|
Motibhai created two mortgages in respect of the same property in the years 1871 and 1893 in favour of one Nanaji who died somewhere between 1 890 and 1912 leaving behind his two sons Hari and Purushottam as his heirs and legal representatives.
They both sold the entire mortgagee rights and interest to one Ganpatram on 4th July, 1912, who in his turn sold the mortgagee rights in a part of the mortgaged property, namely, common latrine to one Vamanrao.
Ganpatram died and his son Chhotalal sold away his rights as a mortgagee in possession in respect of the rest of the properties which still remained with him, to Chhaganlal Keshavlal Mehta, the appellant defendant No. 1.
Mortgagor Motibhai also died leaving behind his son Chimanrai.
Chimanrai died leaving behind his widow Chhotiba and a daughter Taralaxmibai.
On September 12, 1950 Taralaxmibai sold her right, title and interest in the suit property to one Shantilal who later on conveyed his right, title and interest in the property to the respondent plaintiff Narandas Haribhai Patel.
During the life time of Chimanrai, Ganpatram, the mortgagee had sent a notice, Exhibit 77 dated 15th April, 1913 informing him that the mortgaged property was in a dilapidated condition and required repairs.
He further called upon Chimanrai to pay the amount already spent by him towards the repairs to get further repairs done or in the alternative pay up the mortgage amount and redeem the property.
Chimanrai, denied his responsibility.
After the death of Chimanrai Chhotalal gave a similar notices, Exhibits 68 and 78, dated 21st of September, 1933 and 6th October 1933 to Taralaxmibai daughter of Chimanrai and to Chhotiba, the widow to the same effect.
Both Chhotiba and Taralaxmibai denied their liabilities.
Narandas after the purchase of the mortgagor 's rights from Shantilal filed a suit for redemption impleading both the assignees of the mortgagee 's rights, namely, Chhaganlal Keshavlal Mehta, the appellant as defendant No. I and Vamanrao as defendant No. 2.
The suit was dismissed by the trial court on the ground that the plaintiff had no right to redeem In this view of the matter it was not necessary to decide other issues but the trial court recorded findings on other issues also including the issue of estoppel.
The appeal and the cross objection filed by the parties were 167 allowed by the Assistant Judge holding that plaintiff had purchased the equity of redemption and so he was entitled to redeem and that the suit was not barred by estoppel.
He however remanded the case for deciding the remaining issues.
On remand the Joint Civil Judge held that Chimanrai, his widow Chhotiba and his daughter Taralaxmibai relinquished their right, title and interest in the suit property and, therefore, Taralaxmibai had no subsisting interest or title to transfer to the plaintiff or his predecessor in interest.
He further held that the suit was barred by time and estoppel, and that defendant No. 1 had spent a substantial amount on repairs.
On these findings the suit was dismissed once again.
During the pendency of the appeal by the respondent, Vamanrao died in August, 1958.
His heirs were, however, not brought on the record.
The appeal was allowed as against defendant No. I but dismissed as abated against defendant No. 2 and it was held that the respondent was entitled to redeem the mortgaged property on payment of the mortgaged money as well as the expenditure incurred on repairs, and that the suit was neither barred by time nor by estoppel.
On further appeal to the High Court a learned single Judge reversed the Judgment and decree of the lower appellate Court and dismissed the suit.
The respondent plaintiff took up the matter in the letters patent appeal and the appellant defendant No. 1 also filed a cross objection.
A Division Bench of the High Court allowed the appeal and decreed the suit reversing the finding of the learned Single Judge that the respondent plaintiff had no right to sue.
The Division Bench, however, granted a certificate of fitness of appeal to the Supreme Court.
Dismissing the appeal, the Court ^ HELD: 1.
Under section 60 of the Transfer of Property Act, a co mortgagor cannot be permitted to redeem his own share of the mortgaged property only on payment of proportionate part of the amount remaining due.
In other words, the integrity of the mortgage cannot be broken.
[173 G] 2.
It is, however, a well recognised principle that even if all the mortgagees are not before the court in a suit filed by the mortgagor for redemption of the property, but the mortgagor is prepared to pay the entire amount due at the foot of the mortgage to such mortgagees as are before the court and gives up his right under the mortgage as against those mortgagees who are not before the court, The court can pass a decree for redemption directing that the entire mortgage amount should be paid to the mortgagees who are actually before the court.
[174 D F] Motilal Yadav vs Samal Bechar , approved.
If one of the defendants in a suit dies and his heirs are not brought on record, the suit certainly would abate as against that party.
The suit, however, G could not abate as against the other surviving defendants.
A question may arise whether the suit is maintainable against the surviving defendants.
In the instant case, the Suit abated as against defendant No. 2 in respect of the common latrine.
But the suit may proceed against the surviving appellant defendant No. 1 if the respondent plaintiff is prepared to pay the entire mortgage consideration.
[174 F G] 3:2.
A person may be a necessary party in a suit but he may not be a necessary party in the appeal.
[175 A] 168 4:1.
To bring the case within the scope of estoppel as defined in section 115 of the Evidence Act: (i) there must be a representation by a person or his authorised agent to another in any form a declaration, act or omission; (ii) the representation must have been of the existence of a fact and not of promises de futuro or intention which might or might not be enforceable in contract: (iii) the representation must have been meant to be relied upon; (iv) there must have been belief on the part of the other party in its truth; (v) there must have been action on the faith of that declaration, act or omission, that is lo say, the declaration, act or omission must have actually caused another to act on the faith of it, and to alter his former position to his prejudice or detriment; (vi) the mis representation or conduct or omission must have been the proximate cause of leading the other party to act to his prejudice; (vii) the person claiming the benefit of an estoppel must show that he was not aware of the true state of things.
If he was aware of the real state of affair or had means of knowledge, there can be no estoppel; (viii) only the person to whom representation was made or for whom it was designed can avail himself of it.
A person is entitled to plead estoppel in his own individual character and not as a representative of his assignee.
[176 C F] 4:2.
The difference between an admission and estoppel is a marked one.
Admissions being declarations against an interest are good evidence but they are not conclusive and a party is always at liberty to withdraw admissions by proving that they are either mistaken or untrue.
But estoppel creates an absolute bar.
Estoppel deals with questions of facts and not of rights.
A man is not estopped from asserting a right which he had said he would not assert It is also a well known principle that there can be no estoppel against a statute.
[175G, H 176 B] 4:3.
In the instant case (i) the ingredients of section 115 of the Evidence Act have not been fulfilled.
No representation was made to defendant No. 1, therefore, estoppel cannot be pleaded; (ii) the representation was not regarding a fact but regarding a right of which defendant No. I or his predecessor in interest had full knowledge or could have known if he had cared to know lt is difficult to say that defendant No. ] has moved his position on account of the representation made by The mortgagor or his heirs or assignees, [176 G H]
|
iminal Appeal No. 46 of 1958.
Appeal from the judgment and order dated March 17, 1958, of the Allahabad High Court in Criminal Appeal No. 1635 of 1953, 123 A. section R. Chari, section Pichai and section Venkatakrishnan, for the appellant.
SarjooPrasad, G.C.Mathur and G.P.Lal, for the respondent.
March 28.
The Judgement of the Court was delivered by GAJENDRAGADKAR, J. The appellant R.R. Chari was a permanent employee in a gazetted post under the Government of Assam.
In 1941, his services were lent to the Government of India.
The first appointment which the appellant held under the government of India was that of the Deputy Director of Metals in the Munitions Production Department at Calcutta.
Then he came to Delhi on similar work in the office of the Master General of Ordnance which was the Steel Priority Authority during the War period.
He was subsequently trans ferred to Kanpur as Assistant Iron a Steel Controller in 1945.
Sometime thereafter, he become the Deputy Iron & Steel Controller, Kanpur Circle; which post he held for one month in September, 1945.
From January, 1946, be was appointed to the said post and he held that post until September 20 1946.
The period covered by the charges which were eventually formed against the appellant and, others is from January 1, 1946 to September 20, 1946.
On the latter date, the appellant proceeded on leave for four months and did not return to ' service either under the Government of India or under the Assam Government.
It appears that while the appellant had proceeded on leave the Government of India wrote to the Assam Government on February 8, 1947, intimating that it had desided to replace the services of the appellant at the disposal of the Assam Government on the expiry of the leave granted to him with effect from September, 21, 1946.
The Government of India also added that the exact 124 period of the leave granted to the appellant would be intimated to the Assam Government later.
On April 28, 1947, leave granted to the appellant was gazetted with effect from September 21, 1946 for a period of four months.
A subsequent notification issued by the Central Government extended the leave up to May 13, 1947.
On this latter date, the Central Government suspended the appellant, and on a warrant issued by the District Magistrate, Kanpur, he was arrested on the October 28, 1947.
Subsequently, he was released on bail.
Thereafter, the Government of India accorded sanction for the prosecution of the appellant under section 197 of the Criminal Procedure Code on the January 31, 1949.
A Charge sheet was submitted by the prosecution alleging that the appellant along with three of his former assistants had committed various acts of conspiracy, corruption and forgery during the period 1, 1.1946 to 20 9 1946 The other persons who were alleged to be co conspirators with the appellant, were vaish, a clerk in charge of licensing under the appellant, Rizwi and Rawat who were also working as clerks under the appellant.
Bizwi abs conded to Pakistan and Rawat died.
In the result, the case instituted on the ,,aid charge sheet proceeded against the appellant and Mr. Vaish.
Broadly stated the prosecution case was that during the period December 1945 to September 20, 1946, the appellant and Vaish and other entered into a criminal conspiracy to do illegal acts, such as the commission of offenses under, sections 161, 165, 467.
Indian Penal Code or in the alternative, Offenses such as were prescribed by r. 47 (3) read with r. 47 (2) of the Defence of India Rules, 1939 and.
abetment in the acquisition and sale of Iron and .steel, in contravention of the Iron and Steel (Control of Distribution) Order 1941 ; and that in pursuance of the said conspiracy, they did commit the aforesaid illegal acts from time to time and thus rendred themselves liable to be punished under s.120 B 125 of the Indian Penal Code.
That was the substance of the first charge.
The Second Charge was in regard to the commission of the offence under section 161 and it set out in detail the bribes accepted by the appellant from 14 specified persons.
In the alternative, it was alleged that by virtue of the fact that the appellant accepted valuable things from the persons specified, he had committed as offence under section 165 Indian Penal Code.
The third charge was under section 467 Indian Penal Code or in the alternative, under r. 47(3) read with r. 47(2) (a) of the Defence of India Rules.
The substance of this charge was that in furtherance of the conspiracy, the appellant fraudulently or dishonestly made, signed or executed fourteen documents specified in clauses (a) to (n) in the charge.
Amongst these documents were included the orders prepared in the names of several dealers and licences issued in their favour.
The fourth charge was that the appellant had abetted the firms specified in clauses (a) to (k) in the commission of the offence under r 81(2) of the Defence of India Rules.
That, in brief, is the nature of the prosecution case against the appellant as set out in the several charges.
At the initial stage of the trial, the appellant took a preliminary objection that the sanction accorded by the Government of India to the prosecution of appellant under section 197 Code of Criminal Procedure was invalid.
This objection was considered by Harish Chandra J. of the Allahabad High Court and was rejected on the July, 18th 1949.
The learned Judge directed that since he found no substance in the preliminary contention raised by the appellant, the record should be sent back to the trial Court without delay so that it may proceed with the trial of the case.
On 126 May 7 1953, the appellant alone with Vaish was tried by the Additional District and Sessions Judge at Kanpur.
The charge under section 120 B was tried by the learned Judge with the aid of assessors, whereas the remaining charges were tried by him with the aid of the jury.
Agreeing with the opinion of the assessors and the unanimous verdict of the jury, the learned Judge convicted the appellant under section 120 B and sentenced him to two years ' rigorous imprisonment.
He also convicted him under section section 161 and sentenced him to two years Rigorous imprisonment and a fine of Rs, 25,000/ .
in default to suffer further rigorous imprisonment for six months.
For the offence under section 467 Indian Penal Code of which the appellant was convicted, the learned Judge sentenced him to four years ' rigorous imprisonment.
Be was also convicted under r. 81 (4) read with r. 121 and cls.
4,5, 11 b (3) and 12 of the Iron and Steel Order of 1941 and sentenced to two years 'rigorous imprisonments.
All the sentences thus imposed on the appellant were to run concurrently.
Vaish who was also tried along with the appellant was similarly convicted and sentenced to different terms of imprisonment.
The appellant and Vaish then appealed to the High Court against the said order of convictions and sentence.
It was urged on their behalf before the High Court that the charge delivered by the Judge to the jury suffered from grave misdirections and non directions amounting to misdirections.
his plea was accepted by the High Court and so, the High Court examined the evidence for itself.
In the main, the High Court considered the ten instances adduced by the prosecution for showing that the appellant had accepted illegal gratification and had committed the other offenses charged, and came to the conclusion that the prosecution evidence in respect of eight instances could not be acted upon, whereas the said evidence in respect of two instances could be safely acted upon.
These two instances 127 were deposed to by Lala Sheo Karan Das and other witnesses and by Sher Singh Arora and other witnesses.
In the result, the High Court confirmed the appellant 's conviction under sections 161 and 467 and the sentences imposed by the trial Court in that behalf.
His conviction under section 120 B Indian Penal Code, and under r. 81(4) read with r. 121 Defence of India Rules was set aside and he was acquitted of the said offenses.
The High Court directed that the sentences imposed on the appellant under sections 161 and 467 should run concurrently.
The appeal preferred by Vaish was allowed and the order of conviction and sentence passed against him by the trial Court in respect of all the charges was set aside.
This order was passed on March 17th, 1958.
The appellant then applied for and obtained a certificate from the High Court and it is with that certificate that he has come to this Court in appeal.
At, this stage, it would be useful to indicate briefly the main findings recorded by the High Court against the appellant.
As we have just indicated, there are only two instances out of ten on which the High Court has made a finding against the appellant.
The first is the case of Lala Sheo Karan Das.
According to the prosecution case, as a motive or reward for issuing written orders and expediting supply of iron by the stock holders ' Association Kanpur to Lala Sheo Karan Das, the appellant accepted from him Rs. 4,000/ on 31.3.1946, Rs. 2,000/ on 9.4.1946; Rs. 1,060/ on 11.4.1946 and Rs. 1,000/ on 12.5 1946 as illegal gratification.
That is the basis of the charge under section 161.
The prosecution case further is that in regard to the supply of iron to Lala Sheo Karan Das, certain documents were forged and it is alleged that the written orders issued in that behalf Exhibits P 341 and P 342 were ante dated and the licences issued in that behalf were similarly ante dated.
In support of this case, oral evidence was given by 128 Lala Sheo Karan Das himself, his son Bhola Nath and Parshotam Das, his nephew who is a partner with him.
This oral evidence was sought to be corroborated by relevant entries in kachhi rokar books.
These entries indicated that the several amounts had been paid by the firm to the appellant.
The High Court considered the oral evidence and held that the said evidence was corroborated by entries in the account books.
The argument that dacca rokar books had not been produced did not appear to the High Court to minimise the value of the kachhi rokar books which were actually produced, and the contention that the books of Account kept by accomplices themselves could not, in law, corroborate their oral evidence, did not appeal to the High Court as sound.
It held that even though Sheo Karan Das, his son and his nephew may be black marketeers, it did not necessarily follow that they were liars.
Besides, the High Court took the view that there were certain pieces of circumstantial evidence which lent support to the oral testimony of the accomplices.
The ante dating of the orders, and the supply of a large quantity of iron, were two of these circumstances.
It is on these grounds that the High Court accepted the prosecution case against the appellant under section 161 Indian Penal Code.
The High Court then examined the evidence in support of the charge under section 467 and it held that the manner in which the dates in the quota register had been tampered with supported the oral testimony of the witnesses that the applications made by Sheo Karan Das had been deliberately and fraudulently ante dated and orders passed on them and the licences issued pursuant to the said orders all were fraudulent documents which proved the charge under section 467 as well as under r. 47 (3) read with 47(2)(a).
On these grounds, the appellant 's conviction under section 467 was also confirmed.
As to the prosecution case in respect of the bribes offered by Sher Singh Arora, the High Court 129 was not satisfied with the evidence adduced in respect of the actual offer of money, but it held that the evidence adduced by the prosecution in respect of the offer and acceptance of certain valuable things was satisfactory.
These valuable things were a three piece sofa sot, a centre piece, two stools and a revolving chair (Exts.
16 to 21).
These were offered on behalf of Sher Singh Arora and accepted by the appellant in January, 1946.
In dealing with this part of the prosecution case, the High Court considered the statements made by the appellant and ultimately concluded that the charge under section 161 had been proved in respect of the said articles.
In regard to the charge under section 467, the High Court adopted the same reasons as it had done in dealing with the said charge in respect of Sheo Karan Das 's transactions and held that the said .charge had been proved.
The licences which are alleged to have been ante dated are Exts.
P 535 and P 536.
The application which is alleged to have been ante dated is Ext.
P 294, and the High Court thought that the relevant entries in the quota register showed that the dates had been tampered with.
In the result, the charge under section 467 in respect of this transaction was held to be established.
An alternative charge was also proved against the appellant under r. 47(3) read with r. 47(2) (c) Defence of India Rules.
The first point which Mr. Chari has raised before us is that the Addl.
District & Sessions Judge had no jurisdiction to try this case, because at the relevant time, the Criminal Law Amendment Act, 1952(46 of 1952) had come into operation and the case against the appellant could have been tried only by a Special Judge appointed under the said Act.
This argument has been rejected by the High Court and Mr. Chari contends that the decision Of the High Court in erroneous in law.
In order to deal with the merits of this point, it is necessary to 130 refer to some dates.
The order of commitment was passed in the present proceedings on March 1, 1952.
It appears that thereafter a list of defence witnesses was tiled by the appellant before the Commiting Magistrate on July 24, 1952.
On July 28, 1952, the Criminal Law Amendment Act came into force.
On August 14, 1952, Vaish filed a list of witnesses before the committing Magistrate and requested that one of the prosecution witnesses should be recalled for cross examination.
On September 18, 1952, the District & Sessions Judge at Kanpur was appointed a Special Judge under the Act.
On December 19, 1952, the case was taken up before the Special Judge and the question as to where the case should be tried was argued.
The Special judge held that the question had been considered by the Madras High Court in the case of P. K. Swamy and it had been held that the Special Judge had no jurisdiction to hear the case because the order of commitment ' had been passed prior to the passing of the Criminal Law Amendment Act.
Since the order of commitment in the present case had also been passed before July 28, 1952, the Special Judge held that the case against the appellant must be tried under the provisions of the Criminal Procedure Code and not under the provisions of the Criminal Law Amendment Act; and so, an order was passed that the trial should be held by the Additional District & Sessions Judge at Kanpur.
After the case was thus transferred to the Add1.
Sessions Judge at Kanpur, it was actually taken up before him on May 7, 1953, when the charge was read out to the accused persons and the jury was empanelled.
It is in the light of these facts.
that the question about the jurisdictions of the trial Judge has to be determined.
Two provisions of the Criminal Law Amendment Act fall to be considered in this connections Section 7 provides that notwithstanding anything contained in the Code of Criminal Procedure, or in 131 any other law, the offenses specified in sub section (1) of section 6 shall be triable by a Special Judge only, Offenses under sections 161 and 165 Indian Penal Code are amongst the offenses specified by section 6(1).
Section 7(2)(b) provides that when trying any case, a Special Judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure be charged at the same time.
Therefore, if the offence under section 161 falls under section 7(1) and has to be tried by a Special Judge, the other offenses charged would also have to be tried by the same Special Judge as a result of section 7(2)(b).
It is clear that the provisions of a. 7 are prospective.
This position is not disputed.
But it would be noticed that section 7 does not provide for the transfer of pending cases to the special Judge and so, unless the appellant 's case falls under the provisions of section 10 which provides for transfer, it would be tried under the ordinary law in spite of the fact that the main offence charged against the appellant falls under section 6(1) of the Criminal Law Amendment Act.
That takes us to section 10 which deals with the transfer of certain pending cases.
This section provides that all cases triable by a special Judge under section 7 which immediately before the commencement of the Act, were pending before any Magistrate shall, on such commencement, be forwarded for trial to the special Judge having jurisdiction over such cases.
It is thus clear that of the cases made triable by a special Judge by section 7, it is only such pending cases as are covered by s.10 that would be tried by the special Judge.
In other words, it is only cases triable by a special Judge under section 7 which were pending before any Magistrate immediately before the commencement of this Act that would tie transferred to the special Judge and thereafter tried by him.
So, the question to consider is whether the appellant 's case could be said to have been pending 132 before any Magistrate immediately before the commencement of the Act.
This position also is not in dispute.
The dispute centres round the question as to whether the appellant 's case can be said to have been pending before a magistrate at the relevant time, and this dispute has to be decided in the light of the provisions contained in section 219 of the Code of Criminal Procedure.
This section occurs in Chapter 18 which deals with the enquiry into cases triable by the Court of Sessions or High Court.
We have already seen that on March 1, 1952, an order of commitment had been passed in the present case and that means that the jurisdiction of the committing Court had been exercised by the said Court under section 213 of the Code.
Mr Chari contends that though the order of commitment had been passed, that does not mean that the case had ceased to be pending before the committing Magistrate.
It is not disputed that once an order of commitment is made, the committing Magistrate has no jurisdiction to deal with the said matter; he cannot either change the order or set it aside.
So far as the order of commitment is concerned, the jurisdiction of the Magistrate has come to an end.
The said order can be quashed only by the High Court and that too on a point of law.
That is the effect of section 215 of the Code.
It is, however, urged that section 216 confers jurisdiction on the committing magistrate to summon witnesses for defence as did not appear before the said Magistrate and to direct that they should appear before the Court to which the accused had been committed.
Similarly, before the said Magistrate, bonds of complainants and witnesses can he executed as prescribed by section 217.
Section 219 confers power on the committing Magistrate to summon and examine supplementary witnesses after the commitment and before the commencement of the trial, and to bind them over in manner here in before provided to appear and give evidence.
It is on the 133 provisions of this section that the appellant 's case rests.
The argument is that since the committing magistrate is given power to summon supplementary witnesses even after an order of commitment has been passed, that shows that the committing magistrate still hold jurisdiction over the case and in that sense, the case must be deemed to be pending before him.
We are not impressed by this argument.
The power to summon supplementary witnesses and take their evidence is merely a supplementary power for recording evidence and no more.
This supplementary power does not postulate the continuance of jurisdiction in the committing magistrate to deal with the case.
It is significant that this power can be exercised even by a Magistrate other than the committing magistrate, provided he is empowered by or under section 206 and clearly, the case covered by the commitment order passed by one magistrate cannot be said to be pending before another magistrate who may be empowered to summon supplementary witnesses.
When section 10 of the Criminal law Amendment Act refer to cases pending before any magistrate, it obviously refers to cases pending before magistrates who can deal with them on the merits in accordance with law and this requirement is plainly not satisfied in regard to any case in which a commitment order had been passed by the committing magistrate.
After the order of commitment is passed, the case cannot be said to be pending before the committing magistrate within the meaning Of section 10.
Therefore, we are satisfied that the High Court was right in coming to the conclusion that section 10 did not apply to the present case and so, the Addl.
Sessions Judge had jurisdiction to try the case in accordance with the provisions of the Code of Criminal Procedure.
It is true that in dealing with this point, the High Court has pro ceeded on the consideration that the appellant 's trial had actually commenced befere the 134 Addl.
Sessions Judge even prior to July 28, 1952.
In fact, it is on that basis alone that the High Court has rejected the appellant 's contention as to absence of jurisdiction in the. trial Judge.
We do not think that the reason given by the High Court in support of this conclusion is right, because the trial of the appellant could not be said to have commenced before May 7, 1953.
However, it is unnecessary to pursue this point any further because we are inclined to take the view that the appellant 's case does not fall under section 10 of the Criminal Law Amendment Act and that is enough to reject the contention of the appellant on this point.
The next argument raised is in regard to the validity of the sanction given by the Government of India to the prosecution of the appellant.
This sanction Ext.
P 550 purports to have been granted by the Governor General of India under section 197 of the Code for the institution of criminal proceedings against the appellant.
It has been signed by Mr. section Boothalingam, Joint Secretary to the Government of India on January 31, 1949.
The sanction sets out with meticulous care all the details of the prosecution case on which the prosecution rested their charges against the appellant and so, it would not be right to contend that the, sanction has been granted as a mere matter of formality.
The several details set out in the sanction indicate that prima facie, the whole case had been considered before the sanction was accorded.
Mr. Chari, however, attempted to argue that on the face of it, the sanction does not show that the Governor General granted the sanction after exercising his individual judgment.
Section 197 of the code at the relevant time required that sanction for the prosecution of the appellant should have been given by the Governor General exercising his individual Judgment, and since, in terms ' , it does not say that the Governor General in exercise of his individual 135 judgment had accorded sanction, the requirement of section 197 is not satisfied.
That is the substance of the contention.
In support of this contention, reliance is sought to be placed on certain statements made by Mr. Boothalingam in his evidence.
Mr. Boothalingam stated that sanction of the Governor General was conveyed by him as Joint Secretary to the Government of India.
He also added that authorities of the Government of India competent to act in this behalf accorded the sanction and he conveyed it.
His evidence also showed that the matter had been considered by the competent authorities and that he was one of those authorities.
Mr. Chari argues that Mr. Boothalingam has not, expressly stated that the Governor General applied his individual mind to the problem and exercising his individual Judgment, came to the conclusion that the sanction should be accorded.
This contention had not been raised at any stage before and the point had not been put to Mr. Boothalingam who gave evidence to prove the sanction.
If the point had been expressly put to Mr. Boothalingam be would have either given evidence himself on that point or would have adduced other evidence to show that the Governor General had exercised his indi vidual judgment in dealing with the matter.
Therefore, we do not think that this plea can be allowed to be raised for the first time in this Court.
The next ground of attach against the validity of the sanction is based on the assumption that at the time when the sanctions was (riven, the appellant had ceased to be in the employment of the Government of India and had reverted to the Assam Government.
.If it is established that at the relevant time, the ,appellant was a person employed in connection with the affairs of the Assam State, then of course, it is the Assam Government that would be competent to give the sanction.
The High Court has found that at the relevant time, the appellant continued to be 136 in the employment of the affairs of the Federation and had not reverted to the Assam Government ; and in our opinion, this finding of the High Court is right.
We have already referred to the course of events that led to the granting: of the leave to the appellant by the Government of India; to the extension of the leave by the said Government and to his subsequent suspension.
The appellant 's argument is that after he went on leave, he moved the Assam Government for extension of his leave and was, in fact, asked by the Assam Government to appear before a medical board appointed by it.
We do not think that these facts are enough to prove that the appellant had reverted to the service of the Assam Government.
In fact., it is clear that the Government of India had intimated to the Assam Government that the appellant continued to be under its employment and that the Assam Government had expressly told the Government of India that it had no desire that the appellant should revert to its service until the 'criminal proceedings instituted against him were over.
The Assam Government also pointed out that the appellant himself did not wish to rejoin in his post of Superintendent of the Assam Government 's Press but had only asked for Leave Preparatory to Retirement following medical advice.
It is thus clear that though the Government of India had originally thought of replacing the appellant 's services with the Assam Government at the end of the leave which was proposed to be granted to him, subsequent events which led to an investigation against the appellant and his suspension caused a change in the attitude of the Government of India and it decided to continue him in its employment in order that he should face a trial on the charges which were then the subject matter of investigation.
There is no order reverting him to the Assam Government passed by the Govt.
of India and there is no order passed by the Assam Government at all on this subject.
Therefore 137 there can be no doubt that at the relevant time, the appellant continued to be employed in the affairs of the Federation.
It was then sought to be argued that the effect of SR 215 was that the reversion of the appellant to the Assam Government should be deemed to have taken effect from the date when the leave was granted to him by the Government of India.
In our opinion, there is no substance in this argument.
The portion on which the appellant relies is merely an administrative direction under the Rule and it cannot possibly over ride the specific orders issued by the Government of India in respect of the appellant 's leave and reversion.
Besides, even the requirements of the said Rule are not satisfied in the present case.
Therefore, the conclusion is inescapable that the appellant was employed in the affairs of the Federation at the time when the sanction was accorded.
That takes us to the question as to whether the Government of India was competent to grant the sanction even if the appellant was at the relevant time a person employed in connection with the affairs of the Federation.
Mr. Chari contends that in the case of the appellant whose services had been loaned by the Assam Government to the Government of India, it could not be said that he was a parson permanently employed in connection with the affairs of the Federation and so, cl.
(a) of section 197 (1) would not apply to him at all.
He was a person permanently employed in connection with the affairs of a State and that took the case under cl.
(b) which means that it is the Governor of Assam exercising his individual judgment who could have a(, corded valid sanction to the appellant 's prosecution.
We are not impressed by this argument.
It is clear that the first part of section 197 (1) provides a special protection, inter alia, to public servants who are not removable from their offices save by or with the 138 sanction of the State Government or the Central Government where they are charged with having committed offenses while acting or purporting to act in the discharge of their official duties; and the form which this protection has taken is that before a criminal court can take cognizance of any offence alleged to have been committed by such public servants, a sanction should have been accorded to the said prosecution by the appropriate authorities.
In other words, the appropriate authorities must be satisfied that there is a prima facie, case for starting the prosecution and this prima facie satisfaction has been interposed as a safeguard before the actual prosecution commences.
The object of section 197(1) clearly is to save public servants from frivolous prosecution, Vide, Afzelur Rahman vs The King Emperor(1).
That being the object of the section, it is clear that if persons happened to be employed in connection with the affair 's of the Federation, it was the Governer General who gave sanction and if persons happened to be employed in connection with the affairs of the State, it was the Governor.
What is relevant for the purpose of deciding as to who should give the sanction, is to ask the question where is the public servant employed at the relevant time ? If he is employed in the affairs of the Federation, it must be the Governor General in spite of the fact that such employment may be temporary and may be the result of the fact that the services of the public servant have been loaned by the State Government to the Government of India.
Therefore, having regard to the fact that at the relevant time the appellant was employed in connection with the affairs of the Federation, it was the Governor General alone who was competent to accord sanction.
Therefore, our conclusion is that the sanction granted by the Governor General for the prosecution of the appellant is valid.
That still leaves the validity of the sanction to be tested in the light of the provisions of (1) ,12.
139 a. (6) of the prevention of the Corruption Act, 1947.
At the relevant time, section 6 read thus: "No court shall take cognizance of an offence punishable under section 161 or section 165 of the Indian Penal Code (XIV of 1860) or under sub section (2) of section 5 of this Act, alleged to have been committed by a public servant, except with the previous sanction: (a) In the case of a person who is employed in connection with the affairs of the Federation and is not removable from his office save by or with the sanction of the Central Government or some higher authority, Central Government.
(b) In the case of a person who is employed in connection with the affairs of a province and is not.
removable from his office save by or with the sanction of the Provincial Government or some higher authority, Provincial Government: (c) in the case of any other person, of the authority competent to remove him from his service".
It would be noticed that the scheme of this section is different from that of section 197 of the Code of Criminal Procedure.
The requirement of the first part of section 197 (1) which constitutes a sort of preamble to the provisions of section 197(1)(a) & (b) respectively, has been introduced by s.6 severalty in cls.
(a) and (b).
In other words, under els.
(a) and (b) of section 197(1) the authority competent to grant the sanction is determined only by reference to one test and that is the test provided by ,,the affairs in connection with which the public servant is employed"; if the said affairs are the affairs of the Federation, the Governor General grants the sanction ; if the said affairs are the affairs of a Province, the 140 Governor grants the sanction.
That is the position under section 197(1) as it then stood.
The position under section 6 of the Prevention of Corruption Act is substantially different.
Clauses (a) & (b) of this section deal with persons permanently employed in connection with the affairs of the Federation or in connection with the affairs of the Province respectively, and in regard to them, the appropriates authorities are the Central Government and the Provincial Government.
The case of a public servant whose services are loaned by one Government to the other, does not fall either under cl.
(a) or under cl.(b), but it falls under el.
Having regard to the scheme of the three clauses of section 6, it is difficult to construe the word "employed in cls.
(a) & (b) as meaning "employed for the time being".
The said Words, in the context, must mean ,,,permanently employed".
It is not disputed that if the services of a public servant permanently employed by a Provincial Government are loaned to the Central Govt., the authority to remove such public servant from office would not be the borrowing Government but the loaning Government which is the Provincial Government, and so, there can be no doubt that the employment referred to in cls.
(a) & (b) must mean the employment of a permanent character and would not include the ad hoc or temporary employment of an officer whose services have been loaned by one Government to the other.
Therefore, the appellant 's case for the purpose of sanction under section 6 will fall under el.
(c) and that inevitably means that it is.
only the Provincial Government of Assam which could have given a valid sanction under section 6.
At the relevant time, section 6 had come into operation, and section 6 expressly bars the cognizance of offenses under s.161 unless a valid sanction had been obtained as required by it.
Therefore, in the absence of a valid sanction, the charge against the appellant under a. 161 and section 163 could not have been tried and that renders the 141 proceedings against the appellant in respect of those two charges without jurisdiction.
The result is that the contention of the appellant that the sanction required for his prosecution under section 161 and section 165 is invalid, succeeds and his trail in respect of those two offenses must, therefore, be held to be invalid and without jurisdiction.
That being so, it is unnecessary to consider whether the finding of the High Court in respect of the charge under section 161 is justified or not.
So, we do not propose to consider the evidence led by the prosecution in respect of the said charge in relation to the two cases of Lala Shoo Karan Das and Sher Singh Arora.
The charge under section 467 or the alternative charge under Defence of India Rules still remains to be considered, because the said offenses are outside the scope of section 6 of the Prevention of Corruption Act and the sanction accorded by the Governor General in respect of the appellant 's prosecution for the said offenses is valid under section 197 of the Code of Criminal Procedure.
What, then, are the material facts on which the conclusion of the High Court is based? The first point on which stress has been laid both by Mr. Chari and Mr. Sarjoo Prasad relates to the background of the case.
Mr. Chari contends that the prosecution of the appellant is, in substance, the result of the attempts successfully made by the back marketeers in Kanpur to involve the appellant in false charges and in support of his plea, Mr. Chari has very strongly relied on the evidence of Mr. Kanhaiya Singh.
This witness was, at the relevant time, an Inspecting Assistant Commissioner of Income tax at Kanpur and his evidence seems to show that unlike his predecessor Mr. Talwar, the appellant gave whole hearted co operation to the witness in discovering the illegal dealings of black marketeers in Kanpur in 142 iron.
According to the witness, the black marketeers came to know about the cooperation between him and the appellant and that disturbed them very rudely.
Some lists were prepared by the appellant giving the witness detailed infor mation about the activities of the black marketeers and the witness suggested that in order to destroy the papers thus supplied to him by the appellant, a burgulary was arranged in his house in May or June, 1946.
A similar burgulary took place in the appellant 's house.
There was also a fire in the appellant 's house.
The witness was asked whether any of the persons who have given evidence against the appellant in the present case, were included in the list supplied by the appellant to him, and the witness refused to answer the said question and.
claimed protection under section 54 of the Income Tax Act.
Mr Chari 's argument is that the activities of the appellant in cooperation with Mr. Kanhaiya Singh frightened the black marketeers and so, they organised the present plot to involve the appellant in a false case.
In that connection, Mr. Chari also relies on the fact that out of the ten instances, the story deposed to in respect of eight has been rejected by the High Court.
On the other hand, Mr. Sarjoo Prasad has argued that as soon as the appellant took charge from Mr. Talwar, he evolved a very clever scheme of establishing personal contacts with the black marketeers; dispensed with the enquiry which used to be held prior to the granting of licences to them and.
thus introduced a practice of direct dealings with the black marketeers which facilitated the commission of the offenses charged against him.
He has also referred us to the evidence given by Mr. Sen which tends to show that the appellant was frightened by the prospect of investigation and so, suddenly left Kanpur under the pretext of illness.
In other words, Mr. Sarjoo Prasad 's argument is that the appellant deliberately adopted a very clever 143 modus operandi in discharging his duties as a public servant and has, 'in fact, committed the several offenses charged against him.
We do not think that the ultimate decision of the narrow point with which we are concerned in the present_ appeal can be determined either on the basis that the appellant is more sinned against than a sinner or that he is a cold blooded offender.
Ultimately, we will have to examine the evidence specifically connected with the commission of the offence and decide whether that evidence can legitimately sustain the charge under section 467.
Let us take the case as disclosed by the evidence of Sheo Karan Das in respect of the charge under section 467.
According to Sheo Karan Das, the two applications Exts.
35 and 36 were given by him in the office of the appellant on the 29th or 30th March, 1946, but the appellant asked the witness to get other applications in which the date should be prior to 23rd of March.
Accordingly, the witness put the date 22nd March on his applications.
On the 29th or 30th March when the witness met the appellant, he asked for 130 tons and the appellant told him that he could give him more than that, provided, of course, the appellant got his profit.
Accordingly, after these applications were antedated, the appellant passed orders and licences were issued.
Thus, it would be seen that the prosecution case is that the applications which were presented by Sheo Karan Das on the 29th or 30th of March, were deliberately ante dated in order that the orders subsequently passed by the appellant and the licences issued thereunder should also appear to have been issued prior to the 23rd of March and that, in substance, is the essence of the charge under section 467.
When this case was put to the appellant, he made a somewhat elaborate statement which it is necessary to consider.
According to this statement, 144 the appellant left Kanpur on March 23, 1946, for a meeting with Mr. Spooner who was the Iron Steel Controller at Calcutta.
Mr. Spooner told him in confidence that there would be no more need to issue licences after March 31, on account of decontrol.
He also expressly desired that no further licences need be issued by any Regional Dy.
Iron & Steel Controller after March 26, 1946.
The appellant returned to Kanpur on March 28, and attended office on ,he 29th.
He then found that the office had placed on his table a number of licences for which he had already issued orders before he left Kanpur on the 23rd.
Some new applications had also come thereafter and these included applications from Government bodies and other public institutions.
These were also placed on his table.
The appellant urged that statutorily he had the power to issue licences until March 31, even so, in order to comply with the desire expressed by Mr. Spooner, he ordered that all licences should be issued as on March 23.
The appellant emphasised that even if he had dated the licences and his own orders as on the 30th or 31st March, that would have introduced no invalidity in the orders or licences respectively, and so, he contended that even though in form, the orders and the licences can be said to have been ante dated, the ante dating did not introduce, any criminal element at all.
It appears that after his return to Kanpur on the 28th, a large number of licences were issued in this way.
This statement of the appellant thus shows that even on applications admittedly received after the 23rd, licences were issued as on the 23rd and orders had been passed by the appellant in support of the issue of such licences.
This antedating of the licences is a circumstance on which the prosecution strongly relies in support of the charge under section 467.
It is, however, significant that besides the testimony of the accomplices, there is no other 145 evidence on the record to show that the applications given by Sheo Karan Das had been brought to the office of the appellant for the first time on the 29th or 30th of March as deposed to by him.
No register had been produced from the office showing the date of the receipt of the said applications.
It is true that in the quota register, dates had been tampered with, but there is no evidence to show who tampered with those dates and so, the fact that dates had been tampered with will not afford any legal evidence in support of the case that the applications presented by Sheo Karan Das had in fact, been presented for the first time on the 29th of March and had not been filed on the 22nd of March as pleaded by the appellant.
The ante dating of the applications is a very important fact and of this fact there is no other evidence at all.
Therefore, in our opinion, the crucial fact on which the charge under section 467 is based is deposed to only by accomplice witnesses and their statements are Dot corroborated by any other evidence on the record.
The admission made by the appellant does not necessarily show that the applications had been ante dated.
Indeed, it is very curious that the appellant should have passed necessary orders and should have directed the issue of licences as on the 23rd of March even in regard to the applications received by him subsequent to the 23rd March and this has been done in respect of applications received from Government bodies and public institutions.
This fact lends some support to the appellant 's theory that he did not want to appear to have contravened the desire expressed by Mr. Spooner that no license should be issued subsequent to the 26th March.
There is no doubt that the appellant was competent to issue licences until the 31st of March and so, it is not as if it was essential for him to ante date his orders or to ante date the licences issued in accordance with them.
Then as to the orders passed by the appellant on the applications presented by 146 Sheo Karan Das, there is no date put by the appellant below his signature, though the date 22nd March appears at the top of the document.
But it may be assumed that the order was passed on the 29th.
That, however, does not show that the applications were made on the 29th and without proving by satisfactory evidence that the applications were made on the 29th, the prosecution cannot establish its charge against the appellant under section 467.
In our opinion, the High Court appears to have misjudged the effect of the admissions alleged to have been made by the appellant when it came to the conclusion that the said admissions corroborated the accomplice 's case that the applications had been presented by him for the first time on the 29th March.
The fact that there is no evidence offered by any of the prosecution witnesses examined from the appellant 's office to show the dates when the applications were received, has not been considered by the High Court at all.
Therefore, the finding of the High Court on the essential part of the prosecution story in respect of the charge under section 467 really rests on the evidence of the accomplice uncorroborated by any other evidence.
That being so, we must hold that the High Court erred in law in making a finding against the appellant in respect of the charge under section 467 as well as the alternative charge under the relevant Defence of India Rules.
What we have said about this charge in respect of the licences issued to Sheo Karan Das applies with the same force to the said charge in respect of the licences issued to Sher Singh Arora.
In respect of those licences also, there is no evidence to show that the applications made by Sher Singh Arora had been ante dated, and so, the charge in respect of the said licences also cannot be held to have been established.
The result is, the finding Of the High Court in respect of the charge against the appellant under section 467 or the alternative charge under the relevant Defence of India Rules must be reversed, his 147 conviction for the, said offenses set aside and be should be ordered to be acquitted and discharged in respect of those offenses.
That raises the question as to whether we should order a retrial of the appellant for the offence under section 161.
Mr. Sarjoo Prasad has argued that the interests of justice require that the appellant should be asked to face a new trial in respect of the charge under a. 161, Indian Penal Code if and after a valid sanction is obtained for his prosecution for the same.
We are not inclined to accept this argument.
Two facts have weighed in our minds in coming to the conclusion that a retrial need not be ordered in this case.
The first consideration is that the accused has had to face a long and protracted criminal trial and the sword has been hanging over his head for over 14 years.
The accused was suspended in 1947 and since then these proceedings have gone on all the time, The second factor which has weighed in our minds is that though the prosecution began with a charge of a comprehensive conspiracy supported by several instances of bribery, on the finding of the High Court it is reduced to a case of bribery offered by two persons; and then again, the substantial evidence is the evidence of accomplices supported by what the High Court thought to be corroborating circumstances.
It is true that offenses of this kind should not be allowed to go unpunished, but having regard to all the facts to which our attention has been drawn in the present case, we are not inclined to take the view that the ends of justice require that the accused should be ordered to face a fresh trial.
The result is that the conviction of the appellant under section 161 is set aside on the ground that his trial for the said offence was without jurisdiction since his prosecution in that behalf was commenced without a valid sanction as required by s.6 of the prevention of Corruption Act.
Appeal allowed.
|
The appellant was in the permanent service of the Assam Government but his services were lent to the Central Government.
At the relevant time, i e , December 1945 to September 1946, he was posted at Kanpur as Deputy Iron & Steel Controller.
In connection with the granting of permits to certain persons charges under sections 120B, 161, 165 and 467 Indian Penal Code, and under r. 473(3) read with r.472, Defence of India Rules were leveled ' against him.
Sanction for his prosecution was granted by the Central Government on January 31, 1919, and a charge sheet was submitted against him.
On March 1, 1952, the appellant was committed to the Court of Sessions for trial.
The trial commenced on May, 7, 1953, and the Sessions judge convicted the appellant of all the charges.
On appeal the High Court upheld the conviction under sections 161 and 467 Indian Penal Code and set aside the conviction on the other charges.
The appellant contended (i) that the trial by the Sessions judge was illegal as after the coming into force of the Criminal Law Amendment Act, 1952, on July 28, 1952, he could only be tried by a Special judge, and (ii) that the sanction granted by the Central Government was invalid and of no avail as sanction for the prosecution of the appellant could only be granted by the Assam Government in whose permanent employment the appellant was.
Held, that the Sessions Judge had jurisdiction to hold the trial and it was not required that the appellant should have been tried by a special judge.
Though s.7 of the Criminal Law Amendment required all offenses under sections 1 61 and 165 Indian Penal Code to be tried by a Special judge, the section was only prospective and did not provide for transfer of all pending cases.
Under s.10 of the Act only such cases triable by a Special Judge under s.7as were ac tually pending before any Magistrate immediately before 122 the commencement of the Act could be transferred to the Special judge.
The case against the appellant having already been committed to the Sessions was no longer pending before the Magistrate.
The mere fact that the Magistrate still had power, under s.216 of the Code of Criminal, Procedure to summon witnesses for the defence and bind them to appear before the Court of Sessions, did not imply that his jurisdiction to deal with the merits of the case continued.
Held, further that though the sanction granted by the Central Government was a good sanction under section 197 of the Code of Criminal Procedure it was not a valid sanction under s.6 of the Prevention of Corruption Act.
At the time when the sanction was granted the appellant was in the permanent employment of the Assam Government but he was employed in the affairs of, the Federation.
Under s.197, in cases of persons employed in connection with the affairs of the Federation the Governor General was the authority to grant the sanction and in cases of persons employed in connection with the affairs of the States it was the Governor.
Under s.6 of the Corruption Act the position was different.
Clauses (a) and (b) of the section dealt with persons permanently employed in connection with the affairs of the Federation or of the Provinces and in regard to them, the appropriate authorities were the Central Government and the Provincial Government.
The word "employed" in cls.(a) and (b) referred to employment of a permanent character.
The case of a public servant whose services were loaned by one Government to another fell under cl.(c) under which sanction could be ranted by the authority competent to remove him from his service.
The authority competent to remove the appellant from his service was the Assam Government and that Government alone could have granted a valid sanction for the prosecution of the appellant.
Accordingly the trial of the appellant for offenses under sections 161 and 165 was without jurisdiction.
Held, further that the convinction of the appellant for the offence under s.467 could not stand as it was based entirely upon the uncorroborated testimony of accomplices.
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Civil Appeal No. 854 of 1971.
Appeal by Special leave from the judgment and order dated the 6th November, 1970 of the Andhra Pradesh High Court in S.A. Nos. 719 and 826 of ]967 T. section Krishnamoorti Iyer Mrs. J. Ramachandran and K. Ram Kumar for the Appellant.
P. Govindan Nair and G. Narasimhulu for Respondent No. 1.
A. V. Rangam for Respondents 2(c) & (e).
B. Parthasarthi for Respondent No. 3.
The Judgment of the Court was delivered by 240 BALAKRISHNA ERADI, J.
This appeal by special leave is directed against a judgment of the High Court of Andhra Pradesh in two connected Second Appeals Second Appeal Nos. 719 and 826 of 1967.
Those Second Appeals arose out of a suit filed by the appellant herein for setting aside the summary order passed in E.A. No. 90 of 1958 in E.P. 7 of 1956 in O.S. No. 26 of 1952 on the file of the Sub Court, Anantapur, and for recovery of possession of plaint 'C ' Schedule property or, in the alternative, for partition and recovery of one half of the property described in the plaint 'B ' Schedule.
The plaint 'C ' Schedule plot is a southern portion of the property described in the 'B ' Schedule.
The plaint 'B ' Schedule property consisting of 1 acre and 90 cents of land together with two houses situated therein belonged to one Allabaksh.
He was adjudged an insolvent and the official Receiver sold a half right in the said property to one Moola Narayanaswamy under Exh.
A 3 dated December 6, 1939.
The remaining half interest in the property belonging to Allabakash was also subsequently brought to sale by the official Receiver and one J. Narasimhulu became the purchaser.
A 27 dated January 5, 1945 is the sale certificate issued in his favour.
The resultant position was that the 'B ' Schedule property came to be owned in undivided half shares by Moola Narayanaswamy and J. Narasimhulu.
Subsequently, Narasimhulu transferred his interest in the property in favour of the plaintiff for a consideration of Rs. 4,000 under Exh.
A l dated May 10, 1948.
The plaintiff is the daughter of Moola Narayanaswamy.
One Nagappa (first defendant) obtained a simple money decree against Moola Narayanaswamy in O.S .
26152 on the file of the Subordinate Judge 's Court, Anantapur, and in execution thereof, he attached and brought to sale in court auction the two houses described in the plaint 'B Schedule property.
In the said court auction, the first defendant purchased the plaint 'B ' Schedule property for Rs. 2,050 and in enforcement of the sale certificate, he obtained delivery of possession of the two houses.
Since the judgment debtor, Narayanaswamy, was entitled to only a half interest in the property, the plaintiff filed E.A. No. 90/58 in the Executing Court under order 21, Rule 100 C.P.C, asserting her independent rights to the southern half of the property and praying for redelivery of the said portion in her favour.
That petition was dismissed by the Sub Court, Anantapur, by order dated March 11, 1960, and hence.
the plaintiff brought the suit out of which this appeal has 241 arisen for setting aside the said summary order and for recovery of possession of the southern portion of the property which is described in the plaint 'C ' Schedule.
During the pendency of the suit, the first defendant sold the northern half of the property in favour of the 7th defendant as per Exh.
B 14 dated March 21, 1961.
Later, the first defendant transferred the southern half of the property to the 8th defendant under the sale deed (Exh. B 15) dated June 19, 1961.
Reference has been made to the fact that the two sales effected by the official Receiver in favour of Narayanaswamy and Narasimhulu were in respect of unspecified half shares in the plaint 'B ' Schedule property.
The basis on which the plaintiff rested her claim for recovery of possession of the southern half of the property was that a partition had been effected between herself and the heirs of Narayanaswamy in 1952 and the 'C ' Schedule property had been allotted to her share at the said partition.
Defendants 2 to 6, who are the legal heirs of deceased Narayanaswamy, did not contest the o suit.
However, the first defendant, who was the main contesting defendant in the trial court, denied that any such partition had taken place.
put forward the case that in effecting the purchase of the balance undivided half interest in the property, when it was brought to sale by the official Receiver on November 28, 1944, Narasimhulu was acting as a benamidar for Moola Narayanaswamy and that the ownership in respect of the said half interest also became vested in Narayanaswamy himself.
It was further contended that the transfer by Narasimhulu in favour of the plaintiff was also a benami transaction for the benefit of Narayanaswamy and hence, the entire property I ad been validly purchased by him at the court sale held in execution of the money decree obtained by him against 1 Narayanaswamy in O.S. 26 of 1952 of the Subordinate Court, Anantapur.
The two main issues that arose for determination by the trial court (court of the Munsif Magistrate, Tadpatri) were (a) whether the transactions of purchase of the half share in the plaint 'B ' Schedule property by Narasimhulu at the court auction sale and the subsequent transfer of the same by Narasimhulu to the plaintiff were benami for the benefit of Narayanaswamy and (b) whether there was a subsequent partition of the property at which the plaintiff was allotted the southern half (plaint 'C ' Schedule property).
On on a consideration of the evidence adduced in the case, the trial court found that there was no, foundation whatever for the plea of 242 benami put forward by the first defendant, that the plaintiff was the owner of a half share in the plaint 'B ' Schedule property and that her interest could in no way be effected by the court sale held in execution of the money decree obtained by the first defendant against Narayanaswamy.
The learned Munsif further held that the plaintiff had not succeeded in establishing her case that there had been a partition of the property by metes and bounds, at which the southern half of the property, namely, the plaint 'C ' Schedule plot had been allotted to her share.
In view of the aforesaid findings, the trial court set aside the summary order passed in E.A. 90/58 in E.P. 7/56 in O.S. 26/52 of the Subordinate Court, Anantapur, and passed a preliminary decree for partition of the plaint 'B ' Schedule property by metes and bounds into two equal shares and for allotment and delivery of one such share to the plaintiff.
The first defendant carried the matter in appeal before the District Court, Anantapur (A.S. 173/56) reiterating his contention that the purchase of the half interest in the plaint 'B ' Schedule property by Narasimhulu and the subsequent sale by him to the plaintiff were benami transactions.
The plaintiff filed a memorandum of cross.
Objections questioning the correctness of the finding entered against by the Munsif that the plea of partition put forward by her had not been proved and praying that in place of decree for partition granted to her by the Munsif, she may be allowed to recover possession of the plaint 'C ' Schedule property after upholding her prayer regarding the partition.
After a detailed consideration of the oral and documentary evidence adduced in the case, the learned Additional District Judge, who heard the appeal, upheld the finding of the trial court that the first defendant had totally failed to establish the case put forward by him that the auction purchase effected by Narasimhulu and the subsequent transfer of the property by Narasimhulu to the plaintiff were both benami transactions intended for the benefit of Moola Narayanaswamy.
It was further held by the learned Additional District Judge that subsequent to the purchase of the half interest in the 'B ' Schedule property by the plaintiff, there had been a partition between her and the other heirs of Narayanaswamy in 1952, as pleaded by the plaintiff, and the plaint 'C ' Schedule property had been allotted to the plaintiff 's share at that partition.
In the light of the aforesaid findings, the appeal filed by the first defendant was dismissed by the learned Additional District Judge, the cross objections filed by the plaintiff were allowed and in modi 243 fication of the decree of the trial court, the plaintiff was granted a decree for recovery of possession of the plaint 'C ' Schedule property.
Against the aforesaid judgment of the Additional District Judge, Anantapur, the first defendant and the 8th defendant filed two separate Second Appeals before the High Court of Andhra Pradesh.
The two questions raised in those appeals were (a) whether the purchase of the property by the plaintiff was benami for Narayanaswamy and (b) whether a partition of the plaint 'B Schedule property had taken place as between the plaintiff and the heirs of Narayanaswamy, at which the plaintiff got the southern half thereof.
A learned Single Judge of the High Court disposed of the two Second Appeals by a common judgment, wherein he has discussed at great length the oral and documentary evidence and entered findings of his own on the two questions aforementioned.
The learned Judge found that there was no force in the contention put forward by the first defendant that the half interest in plaint 'B ' Schedule property was purchased at the court auction sale by Narasimhulu benami for Narayanaswamy.
He also rejected the further plea put forward by the first defendant that the subsequent transfer of the property by Narasimhulu to the plaintiff was also a benami transaction.
In consequence, the Second Appeal filed by the first defendant was dismissed, On the second question aforesaid, the learned Judge differed from the finding of the Additional District Judge and held that the plaintiff had failed to establish that a partition of the property had been effected as between herself and the legal heirs of Narayanaswamy at which the 'C ' Schedule property had been allotted to her share.
The learned Judge then proceeded to hold that the fact that the first defendant sold to the 7th defendant a specified portion in the north did not necessarily create any right in the 7th defendant to the particular properly and hence this was a case where a partition of the property should be effected between the plaintiff on the one hand and the defendants 7th and 8th on the C ' other.
In view of the said findings, the Second Appeal filed by the 8th defendant was allowed by the learned Judge and the suit was remanded to the trial court for effecting a partition of the plaint 'B ' Schedule property between the plaintiff, the 7th defendant and the 8th defendant.
It is against the said decision of the High Court that the 7th defendant has filed this appeal after obtaining special leave from this Court.
244 Two main contentions were advanced by the learned counsel on behalf of the appellant.
Firstly, it was urged that the High Court has acted illegally and in clear violation of the limitations imposed by Section 100 C.P.C. in interfering with the finding entered by the Additional District Judge on the question as to whether or not there had been a partition between certain parties which is a pure question of fact.
The second contention advanced on behalf of the appellant is that the High Court has committed a grievous error in omitting to notice that the 7th defendant had not been even impleaded as a party in the Second Appeal (S.A. 826/67) filed by the 8th defendant, and that while showing the plaintiff as the sole respondent in that Second Appeal a categorical statement had been made in the memorandum of the Second Appeal that "the other parties in the courts below are not necessary parties to this appeal".
It was, therefore, contended by the appellant that the High Court has acted wholly illegally in recording a finding adverse to the 7th defendant and directing a partition of the entire 'B ' Schedule.
property in spite of the fact that the northern plot had been sold to the 7th defendant by deceased Narayanaswamy.
After hearing counsel appearing on both sides, we have unhesitatingly come to the conclusion that both the aforesaid contentions advanced on behalf of the appellant have to be upheld.
The finding entered by the Additional District Judge that a partition had taken place between the plaintiff and the other legal heirs of Narayanaswamy in 1952, and as a result thereof the southern portion of the 'B ' Schedule property (plaint 'C ' Schedule property) had been allotted to the plaintiff 's share was based on a detailed consideration of the legal evidence available on the record.
It was not open to the High Court to reappreciate the said evidence and substitute its own conclusions in place of those entered by the lower courts while exercising the jurisdiction conferred by Section 100 C.P.C.
The learned counsel appearing on both sides have taken us through the relevant portions of the evidence having a bearing on the plea of partition, and we are satisfied that the finding entered by the Additional District Judge cannot be said to be unreasonable or perverse.
No question of law whatever was agitated before the High Court.
In the circumstances, there was no justification at all for the High Court to interfere with the finding of fact entered by the Additional District Judge that there had been a partition between the plaintiff and the legal heirs of Narayanaswamy in 1952 at which the plaint 'C ' Schedule property had been allotted to the share of the plaintiff.
245 In this view, it is unnecessary for us to go into the merits of the second contention advanced on behalf of the appellant.
In the light of the foregoing discussion, we allow this appeal, set aside the decision of the High Court and restore the judgment and decree of the Additional District Judge, permitting the plaintiff to recover possession of the plaint 'C ' Schedule property.
We make it clear that we are expressing no opinion on the question relating to the rights inter se as between the defendants 7th and 8th in respect of the remaining portion of plaint 'B ' Schedule property, and the said matter is left to open.
The parties will bear the respective costs in this appeal.
S.R. Appeal allowed.
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In the insolvency proceedings half the property of one Allabaksh was sold by the official Receiver to Moola Narayanaswamy in 1939 and the other half to Narasimhulu in 1945.
Subsequently Narasimhulu transferred his interest in the property in favour of the daughter of Moola Naraynaswamy for a consideration of Rs. 4,000 under Exh.
A 1 dated May 10, 1948.
One Nagappa obtained a simple money decree against Moola Narayanaswamy in O.S. 26/1952 on the file of Sub Judge Anantapur and in execution thereof, he attached and bright to sale in court auction two houses including the house purchased by the daughter of Moola Nalayanaswamy.
In the said court auction, Nagappa purchased the two houses for a sum of Rs. 2050 and in enforcement of the sale certificate, he obtained delivery of possession of the two houses.
Since the application No. E.A. 90/58 filed by the daughter of Narayanaswamy in the Executing Court under order XXI, Rule 100 C.P.C. asserting her independent right was dismissed, she filed a suit to set aside the said summary order and for recovery of possession of the property which is described in her plaint 'C ' Schedule as falling to her share arising out of a partition effected in 1952.
During the pendency of the suit, Nagappa sold the northern half of the property in favour of Mahboob Saheb, the appellant herein, on March 21, 1961 and later, the southern half of the property to N. Subbarayan Chowdhary, respondent No. 1 herein, on June 19, 1961.
Nagappa contested the suit on the ground that Narasimhulu was all along acting as a benamidar for Narayanaswamy, when he purchased the half share in court auction in 1944 45 and again transferred the said share in favour of Narayanaswamy 's daughter benami for Narayanaswamy and as such the sale by the court in his favour was valid.
The Trial Court disbelieved the plea of benami taken by Nagappa, found that the plaintiff was the owner of a half share in her own right, and that there was no partition by metes and bounds of the entire property brought to sale, by court auction.
The Trial Court, therefore, set aside the summary order passed in E.A. 90/58 in E.P. 7/56 in OS.
26/52 of the Sub Judge, Anantapur and a preliminary decree for partition of the 'B ' Scheduled property by metes and bounds into the equal shares and for allotment and delivery of one such share to the plaintiff.
239 Nagappa 's appeal before the District Court (A.S. 173/66) was dismissed and A the objections of the plaintiff were allowed, and accepting the plea of partition the District Court granted a decree for recovery of possession of the plaint 'C ' Schedule.
In further second appeals, the High Court dismissed Nagappa 's appeal on the plea of benami but reversed the findings of the District Court as to the question of partition pleaded by the plaintiff.
Allowing The appeal of the 8th defendant (Respondent No. I herein) the High Court held that it was a case where a partition of the property should be effected between the plaintiff on the one hand and the appellant and respondent No. 1 herein on the other.
Hence the appeal by special leave by 7th defendant Mahboob Saheb.
Allowing the appeal and leaving the question relating to the rights inter se as between appellant and respondent No. 1 open, the Court ^ HELD: 1.
It was not open to the High Court to reappreciate the evidence and substitute its own conclusions in place of those entered by the lower court, while exercising the jurisdiction conferred by section 100 C.P.C.
The finding entered by the Additional District Judge that a partition had taken place between the plaintiff and the other legal heirs of Narayanaswamy in 1952, and as a result thereof the southern portion of the 'B ' Schedule property (plaint 'C ' Schedule property) had been allotted to the plaintiff 's share was based on a detailed consideration of the legal evidence available on the record.
The relevant portions of the evidence having a bearing on the plea of partition make it clear that the finding entered by the Additional District Judge cannot be said to be unreasonable or perverse.
No question of law whatever was agitated before the High Court.
In the circumstances, there was no justification for the High Court to interfere with the finding of fact entered by the Additional District Judge.
[244F; E, G H ]
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tition (Crl.) No. 8193A of 1981.
(Under Article 32 of the Constitution of India) R. K Garg, V. J. Francis, Sunil Kumar Jain and D. K Garg for the Petitioner Ranga 59 R. K. Jain and P K. Jain for the Petitioner Billa.
N. C. Talukdar and R. N. Poddar for Respondent No. 1.
L. N. Sinha, Attorney General and Miss A. Subhashini for Attorney General.
K. Parasaran, Solicitor General, M. K. Banerji, Additional Solicitor General and Miss A. Subhashini for Union of India.
N. Nettar for the State of Karnataka.
Raju Ramachandran for Applicant/intervener Chhaganlal Aggarwal.
The Judgment of the Court was delivered by CHANDRACHUD C. J.
The question as regards the scope of the power of the President under article 72 of the Constitution to commute a sentence of death into a lesser sentence may have to await examination on an appropriate occasion.
This clearly is not that occasion because in so far as this case is concerned, whatever be the guidelines observed for the exercise of the power conferred by article 72, the only sentence which can possibly be imposed upon the petitioner is that of death and no circumstances exist for interference with that sentence.
Therefore we see no justification for saying that in refusing to commute the sentence of death imposed upon the petitioner into a lesser sentence, the President has in any manner transgressed his discretionary power under article 72.
Undoubtedly, the President has the power in an appropriate case to commute any sentence imposed by a court into a lesser sentence and as said by Chief Justice Taft in James Shewan & Sons v United States, the "executive clemency exists to afford relief from undue harshness or evident mistake in the operation or enforcement of the criminal law" and that the administration of justice by the courts is not necessarily or certainly considerate of circumstances which may properly mitigate guilt.
But the question as to whether the case is appropriate for the exercise of the power conferred by Article 72 depends upon the facts and circumstances of each particular case.
The necessity or the justification for exercising that power has therefore to be judged from case to case.
In fact, we do not see what useful purpose will be achieved by the petitioner by 60 ensuring the imposition of any severe, judicially evolved constraints on the wholesome power of the President to use it as the justice of a case may require.
After all, the power conferred by Article 72 can be used only for the purpose of reducing the sentence, not for enhancing it.
We need not, however, go into that question elaborately because in so far as this case is concerned, we are quite clear that not even the most liberal use of his mercy jurisdiction could have persuaded the President to interfere with the sentence of death imposed upon the petitioner, in view particularly of the considerations mentioned by us in our judgment in Kuljeet Singh @ Ranga vs Union of India & Anr.
We may recall what we said in that judgment that "the death of the Chopra children was caused by the petitioner and his companion Billa after a savage planning which bears a professional stamp", that the "survival of an orderly society demands the extinction of the life of persons like Ranga and Billa who are a menace to social order and security", and that "they are professional murderers and deserve no sympathy even in terms of the evolving standards of decency of a mature society".
The petition is accordingly dismissed.
We have heard Shri R. K. Jain as amicus on behalf of the accused Billa.
We see no substance in Shri Jain 's contentions also.
The order of stay of execution of the death sentence which we had passed in favour of the accused Ranga and Billa as also the general order of stay are hereby vacated If in any specific case or cases there is an express order of stay, it will not be affected by the order which we are passing today.
S.R. Petition dismissed.
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Dismissing the petition, the Court ^ HELD: 1.
Whatever be the guidelines observed for the exercise of the power conferred by Article 72 of the Constitution.
the only sentence which can, possibly be imposed upon the petitioner in The instant case, is that of death and no circumstances exist for interference with that sentence.
Not even tho most liberal use of his mercy jurisdiction could have persuaded tho President to interfere with the sentence of death imposed upon the petitioner in view particularly of the considerations mentioned in KS.
Ranga vs Union of India and Anr., [1981] 3 S.C R. 512.
Therefore, in refusing to commute the sentence the death imposed upon the petitioner into a lesser sentence the President has not in any manner transgressed his discretionary power under Article 72.
[59 D E, 60 B C] 2.
Undoubtedly, the President has the power in an appropriate case to commute any sentence imposed by Court into a lesser sentence.
But tho question as to whether the case is appropriate for the exercise of the power conferred by Article 72 depends upon the facts and circumstances of each particular case.
[59 E, G] 3.
After all the power conferred by Article 72 can be used only for the purpose of reducing the sentence, not for enhancing it.
Therefore, no useful purpose will be achieved by the petitioner by ensuring the imposition of any severe, judicially evolved constraints on the wholesome power of the President to use it as the justice of a case may require.
[59 H, 60 A] James Shewan & Sons vs United Stares, ; at 535, referred to.
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N: Criminal Appeal No. 221 of 1981.
Appeal by Special Leave from the Judgment and Order dated 23.10.1979 of the Madras High Court in Criminal Appeal No. 759/79 (Referred Trial No. 9/79).
A.T.M. Sampath and P.N. Ramalingam for the Appellant.
A.V. Rangam for the Respondent.
272 The Judgment of the Court was delivered by, CHANDRACHUD C. J.
The appellant, Muniappan, was convicted by the learned Sessions Judge, Dharmapuri under section 302 of the Penal Code and sentenced to death on the charge that he had committed the murder of his mother 's brother also called Muniappan and his son Chinnaswamy.
The conviction for murder and the sentence of death having been confirmed by the High Court of Madras by a Judgment dated October 23, 1979, this appeal has been filed by the accused by special leave.
The leave is limited to the question of sentence.
The judgments of the High Court and the Sessions Court, in so far as the sentence is concerned, leave much to be desired.
In the first place, the Sessions Court overlooked the provision, contained in section 354(3) of the Code of Criminal Procedure, 1973, which provides, in so far as is relevant, that when the conviction is for an offence punishable with death, the judgment shall in the case of sentence of death state special reasons for such sentence.
The learned Sessions Judge, in a very brief paragraph consisting of two sentences, has this to say on the question of sentence: "When the accused was asked on the question of sentence, he did not say anything.
The accused has committed terrific double murder and so no sympathy can be shown to him.
" The judgment of the Sessions Judge is in Tamil but we understand from the learned counsel, who appear in the case and both of whom understand Tamil well enough, that the Tamil word "Bhayankaram" has been rightly translated as "terrific".
We plead our inability to understand what is meant by a "terrific" murder because all murders are terrific and if the fact of the murder being terrific is an adequate reason for imposing the death sentence, then every murder shall have to be visited with that sentence.
In that event, death sentence will become the rule, not an exception and section 354(3) will become a dead letter.
We are also not satisfied that the learned Sessions Judge made any serious effort to elicit from the accused what he wanted to say on the question of sentence.
All that the learned Judge says is that "when the accused was asked on the question of sentence, he did not say anything".
The obligation to hear the accused on the question of sentence which is imposed by section 235(2) of the Criminal Procedure Code is not discharged by putting a formal question to the accused as to what he has to say on the 273 question of sentence.
The Judge must make a genuine effort to elicit from the accused all information which will eventually bear on the question of sentence.
All admissible evidence is before the Judge but that evidence itself often furnishes a clue to the genesis of the crime and the motivation of the criminal.
It is the bounden duty of the Judge to cast aside the formalities of the Court scene and approach the question of sentence from a broad sociological point of view.
The occasion to apply the provisions of section 235 (2) arises only after the conviction is recorded.
What then remains is the question of sentence in which not merely the accused but the whole society has a stake.
Questions which the Judge can put to the accused under section 235 (2) and the answers which the accused makes to those questions are beyond the narrow constraints of the Evidence Act.
The Court, while on the question of sentence, is in an altogether different domain in which facts and factors which operate are of an entirely different order than those which come into play on the question of conviction.
The Sessions Judge, in the instant case, complied with the form and letter of the obligation which Section 235(2) imposes, forgetting the spirit and substance of that obligation.
The High Court condemned the murders in terms equally strong by calling them "cold blooded" and thought that its duty to consider the propriety of the death sentence began and ended with that assertion.
Its failure to see the failings of the Sessions Court in the matter of sentencing led to an unexamined confirmation of the death sentence.
Coming to the judgement of the High Court itself, there are certain features of it which need a close reflection.
One of the questions before the High Court was as to the time when the double murder was committed because, upon that circumstance depended the veracity of the eye witnesses.
The doctor who performed the post mortem examination stated in his evidence that the deceased must have taken their food about four or five hours before their death.
The case of the prosecution was that the murders were committed at about 9.00 p.m. P.W. 1, who is the son of the deceased Muniappan, stated in his evidence that the deceased had taken their food at 8.30 p.m.
This was a very important aspect of the case to which the High Court should have applied its mind with care.
Instead, it took an extempore expedient by saying: "Both the deceased might have died a couple of hours after they substained the injuries at 9.00 p.m.".
It is impossible to appreciate how, after being shot in the chest and receiving the kind of injuries 274 which are described in the post mortem report, the deceased could have survived for a couple of hours after they were shot.
Yet another question which had an important bearing on the case was as to the delay caused in filing the F.I.R. The case of the prosecution is that P.W. 1 went to the Police Station promptly but the solitary police constable who was present there directed him to go to the village Munsif to have his complaint recorded.
Now, the record of the Police Station shows that a Sub Inspector of Police was also present at the Police Station which falsifies the evidence that only a police constable was present at the Police Station at the material time and, therefore, the F.I.R. could not be recorded.
The High Court has dealt with this aspect of the matter thus: "In passing, we may mention that this is a grave dereliction of duty on the part of the policeman who was in charge of the police station at that time and is a matter that ought to be enquired into by the higher authorities.
We hope that suitable directions will be issued to subordinate officers in this district to prevent a recurrence of such lapses on the part of policemen when reports of cognizable offences are given.
" The High Court added that the Inspector of Police was not on good terms with the Sub Inspector and, therefore, the former made a false entry that the latter was present at the police station, which, according to the High Court, was a serious matter which required to be probed by the Senior Officers.
We are not quite sure whether there is credible evidence on record to show any enmity between the Inspector and the Sub Inspector and whether the High Court merely relied on the statement made by counsel for the State that the relations between the two Police Officers were cordial.
Whatever that may be, we do not think that the High Court has explained satisfactorily why the F.I.R. was not recorded at the police station when P.W.1 went there.
The ex parte strictures passed by the High Court are likely to involve the two Police Officers or at least one of them into grave consequences.
They should have been given an opportunity to explain themselves before the High Court persuaded itself to make such scathing criticism on their conduct.
There is one more aspect of the Judgment of the High Court, which, with great respect, we are unable to appreciate.
A question arose before the High Court as to whether a "muchilikka" bears the signature of the appellant.
The High Court compared the 275 admitted signatures of the appellant with the disputed signature and came to the conclusion that the disputed signature was of the appellant himself.
The High Court castigated the Public Prosecutor who conducted the prosecution in the Sessions Court by saying that he had not followed the cross examination of P.W.1 "with attention, and not chosen to bring to the notice of P.W. 1 that the accused had signed the muchilikka, exhibit P. 1.
We do not know how the High Court came to know that the Public Prosecutor was not following the cross examination of the witness with attention, but we can guess why the High Court made that observation.
It added in parenthesis: "such lapses on the part of this Public Prosecutor have become frequent and have been commented upon by us, and we hope that at least hereafter he will take some interest in the cases which he is conducting.
" It is not the normal function of the High Court to pass judgment on the conduct of lawyers who appear before the lower courts.
One should understand if the High Court were to make its guarded observation on the conduct of lawyers appearing before it.
But how the learned Judges of the High Court had, in their capacity as Judges of the High Court, come to know that "such lapses on the part of this Public Prosecutor have become frequent. ," we are unable to understand.
These various matters make it unsafe to confirm the sentence of death imposed upon the appellant.
The reasons given by the learned Sessions Judge for imposing the death sentence are not special reasons within the meaning of section 354(3) of the Criminal Procedure Code and we are not sure whether, if he were cognisant of his high responsibility under that provision, he would have necessarily imposed the death sentence.
Accordingly, we set aside the sentence of death and sentence the appellant to imprisonment for life.
N.V.K. Appeal allowed.
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The Code of Criminal Procedure, 1973 by section 354(3) provides that when the conviction is for an offence punishable with death, the judgment shall in the case of sentence of death state 'special reasons ' for such sentence.
The appellant was charged under section 302 of the Penal Code for having committed the murder of his maternal uncle and his son.
The Sessions Judge convicted the appellant for murder and being of the opinion that it was "a terrific double murder" sentenced the appellant to death, The High Court condemned the murders as "cold blooded" and confirmed the conviction and sentence.
Allowing the appeal to this Court, limited to the question of sentence.
^ HELD: 1.
The sentence of death imposed on the appellant is set aside and he is sentenced to imprisonment for life.
[275 F] 2.
The reasons given by the Sessions Judge for imposing the death sentence are not 'special reasons ' within the meaning of section 354(3) of the Criminal Procedure Code.
It is not certain if he were cognizant of his high responsibility under that provision, that he would have imposed the death sentence.
[275 E] 3.
It is not understood what is meant by "a terrific murder" as suggested by the Sessions Judge.
All murders are terrific and if the fact of the murder being 271 terrific is an adequate reason for imposing the death sentence then every murder shall have to be visited with that sentence.
Death sentence will then become the rule, not an exception and section 354(3) would become a dead letter.
[272 F G] 4(i).
On the question of sentence it is not merely the accused but the whole society which has a stake.
[273 B] (ii) After the conviction is recorded, the occasion to apply the provisions of section 235(2) of the Criminal Procedure Code arises.
The obligation under this section to hear the accused on the question of sentence is not discharged by putting a formal question to the accused as to what he has to say on the question of sentence.
The Judge must make a genuine effort to elicit from the accused all information which will eventually bear on the question of sentence.
All admissible evidence is before the Judge but that evidence itself often furnishes a clue to the genesis of the crime and the motivation of the criminal.
It is the bounden duty of the Judge to cast aside the formalities of the Court scene and approach the question of sentence from a broad sociological point of view.
Questions which the Judge can put to the accused under section 235(2) and the answers which the accused makes are beyond the narrow constraints of the Evidence Act.
The Court, while on the question of sentence, is in an altogether different domain in which facts and factors of an entirely different order operate.
[273 B; 272 H 273 A; 273 C] In the instant case, the Sessions Judge complied with the form and letter of the obligation which section 235(2) imposes, forgetting the spirit and substance of that obligation.
[273 D] 5.
It is not possible to appreciate how, after being shot in the chest and receiving the injuries described in the post mortem report, the deceased could have survived for a couple of hours thereafter.
There is also no explanation as to why the F.I.R. was not recorded at the Police Station when P.W. 1 went there.
It is therefore unsafe to confirm the sentence of death imposed upon the appellant.
[273 H. E] 6.
It is not the normal function of the High Court to pass judgment on the conduct of lawyers who appear before the lower courts.
[275 C] 7.
The High Court should have given an opportunity to the two police officers to explain their conduct before making criticism on it.
[274 G]
|
: Civil Appeal No. 3373 of 1979.
From the Judgment and Decree dated 24.1.
1979 of t he Karnataka High Court in Regular Second Appeal Nos. 522 a nd 591 of 1973.
R.B. Datar for the Appellants.
S.S. Javali and Ranjit Kumar for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This defendants ' appeal by special lea ve is from the judgment of the High Court of Karnataka dat ed 24.1.
1979 in regular Second Appeal Nos 522/1973 and 59 1/1973 which arose out of the following facts.
Mallappa Kulkarni had two sons Veerappa and Gurapp a. Veerappa is survived by his son Lingappa.
Gurappa, a railw ay employee, married Channavva (first wife) on 16.2.
1928 b ut finding her issueless and sending her to her parent 's vi l lage, he married in 1935 his second wife Chinnavva who bo re him two daughters Shakuntalabai and Annapoornavva.
Channav va (first wife) however used to pay occasional visits to Gura p pa.
Chinnavva (second wife) died in 1943 whereafter Gurap pa is said to have married Nilavva.
Gurappa retired in 1961 a nd settled permanently at Hubli constructing the suit house a nd himself occupied a part and let out the other part on ren t.
After the death of Gurappa on 29.11.1976 his issueless fir st wife Channavva demanded 1/3 share in his moveable and i m moveable properties, but finding it difficult to acquire h er share sold her right to 1/3 share to 73 Lingappa son of late Veerappa on 29.3.
1967 for Rs.5,00 0.
The other heirs having rejected Lingappa 's request f or partition he instituted O.S. No. 387/1968 in the Court of Additional Munsif, Hubli impleading Channavva, Shakuntal a bai, Annapoornavva and Nilavva (describing her as havi ng illegal connection with deceased Gurappa) as first, secon d, third and fourth defendants, respectively, for partition of 1/3 share in the suit house and the moveable properties, a nd for possession thereof.
The first defendant supported t he case of the plaintiff; the other defendants contested t he suit and averred that the fourth defendant was lawful ly married wife of Gurappa.
On the pleadings the followi ng issues, inter alia, were settled: "1.
Whether the plaintiff proves the execution of the sa le deed by defendant No. 1? 2.
Whether the 1st defendant proves that she had valid tit le to the suit property and the alienation by her in favour of the plaintiff is valid and legal? 3.
Whether the plaintiff has derived any valid title by virtue of the sale deed in his favour? 4.
Whether the defendant No. 4 proves that she is legal ly wedded wife of the deceased Gurappa?" On 13.1.1971 the trial Court passed a preliminary decr ee for partition of 1/3 share of Gurappa 's properties in t he hands of defendants 2 to 4 by metes and bounds.
The secon d, third and fourth defendants appealed to the Civil Judge at Hubli impleading the plaintiff and the first defendant as respondents in regular Appeal No. 31/1971 and the learn ed Civil Judge by his judgment dated 21.2.
1973 confirmed t he decree only modifying it to the extent of 1/6 share inste ad of 1/3 share holding the fourth defendant to be legal ly married wife of Gurappa.
The second, third and fourth d e fendants appealed therefrom in R.S.A. 591/1973 and t he plaintiff appealed in R.S.A. 522/1973.
The High Court by t he impugned judgment dated 24.1.
1979 allowed the plaintiff 's appeal R.S.A. No. 522 restoring the decree of the tri al Court for 1/3 share and dismissed R.S.A. 591/1973 holdi ng that the fourth defendant was not legally married wife of Gurappa.
Hence this appeal by defendants two and three.
Mr. R.B. Datar, the learned counsel for the appellant s, stating that the case hinges on the question of validity of fourth defendant 's 74 marriage, submits that the High Court while holding that t he fourth defendant was not legally married wife of Gurap pa overlooked vital evidence on record in proof of her custo m ary Udiki marriage with Gurappa who himself declared her as his wife wherefore she earned family pension after h er husband 's (Gurappa 's) death.
Mr. S.S. Javali the learn ed counsel for the respondents submits that there was no suff i cient evidence to establish the custom of Udiki marriage a nd at any rate no custom to support the dissolution of marria ge of the fourth defendant with her previous husband Guruli n gappa was pleaded or proved.
Mr. Datar replied that t he custom of Udiki marriage itself implied the dissolution of the earlier 'marriage of the woman and there was sufficie nt evidence in support of the custom of dissolution of t he previous marriage and thereafter the Udiki marriage of t he fourth defendant with Gurappa.
The questions, therefore, are whether sufficient pro of of custom of Udiki marriage was adduced by the fourth d e fendant; and whether Udiki marriage itself implied t he dissolution of the earlier marriage, and if not, wheth er separate custom of dissolution of her earlier marriage w as pleaded and proved.
These were the questions in issue No. 4.
From the records we find that the custom of Udiki ma r riage was pleaded by the fourth defendant, in her writt en statement, stating that after the death of Chinnavva (seco nd wife) in the year 1943 Gurappa married her (fourth defen d ant) after she divorced her first husband Gurulingappa by mutual consent and the marriage was in Udiki form at Mir aj in accordance with their caste custom and that thereaft er she continued to live with Gurappa as his wife till h is death in the year 1966.
She further stated that there was a custom of Udiki form of marriage in Panchamsale sub sect of Lingayat community to which she belonged and that there w as a custom for dissolution of marriage in her sub sect.
S he also described the formalities of Udiki form of marria ge that a saree and a blouse were handed to her by the brid e groom Gurappa and the Mangalsutra was given by Gurappa aft er uttering Mantrums.
The saree was worn by her and the Manga l sutra was tied round her neck.
Considering the above in t he context of issue No. 4 we entertain no doubt that the cust om of Udiki marriage was pleaded.
It also appears that t he custom of dissolution of marriage prevalent amongst t he caste was also compositely pleaded to the above extent.
We have to see whether the above custom or customs were prov ed by evidence.
It would be logical first to take the question of custom of dissolu 75 tion.
In the written statement filed by the second defenda nt it was stated that after Chinnavva 's death in 1943 Gurap pa married the fourth defendant who divorced her first husba nd Gurulingappa by mutual consent.
We have, therefore, to s ee whether the custom of Udiki marriage itself implied su ch prior dissolution.
The relevant texts and instances reli ed on may be referred to for this purpose.
In Virasangappa vs Rudrappa & Anr., [1885] I.L.R. 8 Madras 440 the questions were whether Kusava, daughter of Rudrava, who married Rudrappa was legitimate being born in lawful wedlock according to the custom of Lingayats a nd whether the said marriage was legalised by the custom to which the parties belonged, it was found that Rudrava was 18 years earlier married to another person when she was 12 or 13 years old and out of Rudrava 's next marriage with Rudra p pa in Udiki form Kusava was born.
The defendant contend ed that the second marriage of a wife forsaken by the fir st husband was allowed amongst the Lingayats; that such a marriage was known as 'Serai Udiki ' (giving a cloth) as distinct from 'Lagna ' or 'Dhara ', the first marriage; a nd that Rudrappa married Rudrava in the Serai Udiki form; a nd that the plaintiff and all the members of the family and t he caste recognised that marriage and Kusava was, therefor e, legitimate and entitled to inherit.
In that case eviden ce was produced to show that several marriages took place in Serail Udiki form which was accepted by the society and t he children were considered legitimate.
It was held that t he parties were Sudras, and the Lingayat owed its origin to Vasava who held that caste distinctions were unworthy of acceptance and who repudiated Brahamanical observances.
It was observed that the sect was particularly represented in Mysore, to a certain extent in Wynad, also in ceded distri ct in Coimbatore and the South Canara in Bombay Presidency a nd that instances had been before the Court in which the rema r riage of widows amongst that sect had been supported.
It w as found that Rudrava was deserted by her husband who had nev er consummated his martage and expressed himself ready to return and live with Rudrava only on the condition th at certain property was secured to him by deed.
When th is request was not acceded to, he took no further interest in Rudrava and left her without information about him and d id not prevent her from forming a new connection.
It was al so in evidence that Rudrava was treated as a lawfully wedd ed wife both by the appellant and by the other members of t he family and there was proof to show that children of ma r riages contracted by wives deserted by their husbands we re not regarded as inferior in any respect to the parties to the suit and were received in the Maths of the sect a nd initiated as the children born of a first 76 marriage.
The court also observed that in matters of th is kind heresay evidence like tradition may be received a nd direct evidence of such marriages was not always possib le and one of the ways in which they might be proved was fr om the manner of their living and from the way in which th ey were treated by the neighbouts.
Kusava was accordingly he ld legitimate.
In Mayne 's Treatise on Hindu Law and Usage 11th Edn.
at page 175 it is said: "When we examine the usages of the aboriginal races, or of those who have not come under Brahamanical influence, we find a system prevailing exactly like that described by Narada.
Among the Jat population of the Punjab, not only a widow, but a wife who has been deserted or put away by h er husband, may marry again, and will have all the fights of a lawful wife.
The same rule exists among the Lingayats of South Kanara.
In Western India, the second marnage of a wi fe or widow (called Pat by the Maharattas, and Natra in Guj a rat) is allowed among all the lower castes.
The cases in which a wife may remarry are stated by Mr. Steele as bein g, if the husband prove impotent, or the parties continual ly quarrel; if the marriage was irregularly concluded; if by mutual consent the husband breaks his wife 's neck ornamen t, and gives her a chorchittee (writing of divorcement), or if he has been absent and unheard of for twelve years.
Shou ld he afterwards return, she may live with either party at h er own option, the person deserted being reimbursed his ma r riage expenses.
A widow 's pat is considered more honourab le than a wife ' but children by pat are equally legitimate wi th those by a first marnage.
The right of divorce and seco nd marriage has been repeatedly affirmed by the Bombay Courts .
" In Encyclopaedia of Religion and Ethics edited by Jam es Hastings Vol.
we find that the Lingayats are a religious community in India, numbering nearly three mi l lions at the.
census of 19 11, of whom more than half a re found in the southern districts of the Bombay Presidency.
In the Bombay districts of Belgaum and Bijapur one third of t he population is Lingayat, and in the adjacent district of Dharwar they constitute nearly 50 per cent of the tota l. Beyond the limits of the Bombay Presidency, Lingayats a re numerous in the Mysore and Hyderabad States.
They also fo rm an important element 77 in the population of the north west corner of the Madr as Presidency.
According to that Encyclopaedia the Lingayats are Dr a vidian, that is to say, they belong to a stock that w as established in India before the arrival of the Aryans.
Of the Brahamanic triad Brahma, Vishnu and Siva they acknow l edge only the god Siva, whose emblem, the linga, they be ar on their persons.
All wearers of the linga were proclaim ed equal in the eyes of God.
The traditional Lingayat teach er is Basava.
The denial of the supremacy of the Brahman s, coupled with the assertion of the essential equality of a ll men, constituted a vital departure from the doctrines of orthodox Hinduism.
Other important innovations were: t he prohibition of child marriage; the removal of all restri c tion on widows remarrying.
The Lingayats according to t he Encyclopaedia appear to consist of three groups of s ub divisions (1) Panchamsalis with full astavarna rites ( 2) NonPanchamsalis with astavarna rites (3) Non Panchamsal is without astavarana rites.
The astavarna or eightfold sacr a ment is a principal Lingayat ceremony.
While describing t he Lingayats marriage ceremony it goes on to say that the tyi ng of the tali is the binding portion of the ceremony.
Befo re the tali is given to the bridegroom, it is passed round t he assembly to be touched by all and blessed.
As soon as t he bridegroom ties it on the bride, all those present thr ow over the pair a shower of rice.
The bridegroom places so me curemill seed and jagri, or unrefined sugar, on the bride 's head, and the bride does the same to the bridegroom.
The remarriage of widows was one of the points on whi ch Basava insisted, and was probably one of the biggest bon es of contention with the Brahmans.
Widow remarriage is allow ed at the present day, but the authorities at Ujjini see fit to disregard it.
They say that among jangams it is prohibit ed and that among the other classes of Lingayats it is t he growth of custom.
It also says: "Among Lingayats wid ow remarriage is common, and divorce is permissible.
The ord i nary law of Hindus is followed in regard to t he inheritance.
" The Gazetteer of Bombay State, Dharwar District, 19 59 contains a description of Lingayats marriage and the ma r riage rules.
At page 138 it says: "The Lingayats do n ot allow the children of brothers to intermarry, nor may si s ter 's children.
Marriage with a mother 's sister 's daught er is also prohibited.
A man may marry his sister 's daughte r, but if the sister be a younger sister such marriage is looked on with disfavour.
Widow marriage is allowed at t he present day, except amongst Jangamas.
Divorce is permiss i ble.
The chief feature of the 78 actual marriage ceremony is the tying on of the mangalsut ra (bride 's luck neck thread), is performed by the bridegro om under the Jangama 's discretion.
The ceremony begins by t he mathapad bowing to the mangalsutra, and proclaiming that it is about to be tied to the bride 's neck.
The bridegroom la ys his right hand on the bride 's fight hand, the mathapati la ys the lucky thread on the boy 's hand.
The teacher gives t he order to tye on the lucky thread and the bridegroom ties it on the girl 's neck.
" In the Castes and Tribes of Southern India by Edg ar Thurston, first published in 1909 reprinted in 1975, it is said that the marriage of widows was one of the points on which Basava insisted and that the practice is widely fo l lowed and that divorce is permitted on proof of misconduc t.
The husband can exercise his right to divorce his wife by proving before a Panchayat the alleged misconduct.
The wi fe can only claim to divorce her husband when he has be en outcasted.
Wives who have been divorced cannot remarry.
T he above answers are given on the authority of the Ujjini mut t.
It goes on to say: "There appears to be considerable dive r gence of opinion in other quarters.
By some it is positive ly asserted that divorce is not permitted under any circu m stances; that the husband and wife may separate on t he ground of incompatibility of temper or for misconduct; a nd that in these circumstances the husband is at liberty to marry again, while the wife is not.
Others say that divor ce is permitted, and that both parties are at liberty to rema r ry." In connection with the Lingayats of South Canara, it is recorded, in the Indian Law Reports that "second marriage of a wife forsaken by the first husband is allowed.
Such ma r riage is known as serai udiki (giving a cloth); as disti n guished from lagna or dhara, the first marriage." In Hindu Law by S.V. Gupte 3rd Edn.
II, page 619 we read that divorce was not allowed by general Hindu law, it was in some cases permitted by customs.
Such custom, howe v er, prevailed only amongst the lower classes, especially in the Bombay Presidency.
Customs to be recognised by the Cou rt must be valid.
Though Hindu law did not contemplate divorc e, still in those districts, where it was recognised as an established custom, it had the force of law.
In Sankarling am vs Subban, [1894] 17 Madras 479 divorce by consent was he ld valid as a matter of custom of the Pakhali caste of Ahmed a bad observing that there was nothing immoral in a cas te custom by which divorce and remarriage were permitted by mutual agreement.
There was no invalidity in a custom by which married couple on account of disagreement between th em by consent could divorce and were 79 divorced by parties approaching the headman and other rel a tions, paying certain amount and taking away tali or t he sacred thread from round the wife 's neck and giving it ba ck to the husband.
It was only when the divorce was enforc ed against the wishes of his wife that the custom permitt ed divorce would be illegal.
1n Pakhali Jina Magan vs B ai Jethi, I.L.R. it was held that a custom of divorce with mutual consent of husband and wife stated to exist among the Hindus of Pakhali caste of Ahmedabad was n ot repugnant to Hindu Law.
When it was contended that t he institution of divorce was itself opposed to the concept of Hindu law and that there was no decision of any Court in India which held a custom of divorce as valid as it w as observed that would be going too far and that it was o b served in Tagore Law Lectures, 1908, on Customs and Custo m ary Law in British India, "divorce is not contemplated by the Hindu Law but it is not repugnant to its principles, a nd if there be a well established custom in its support, it m ay override the general provisions of that law.
" It was furth er observed that there had been many cases in our Courts ar t sing out of divorce in the lower castes.
1n all those cas es even where it was held that the divorce had not been prope r ly granted, it had been taken for granted that the custom of divorce can validly exist in a particular community, esp e cially if it is a sudra community, but that divorce grant ed cannot be forced by the caste against an Unwilling person.
In Shivalingiah vs Chowdamma, A.I.R. 1956 Mys 17 it h as been held that when a woman lives for a number of years in close association with a man and bears children who a re acknowledged by the man as born to him, relations and pe r sons of the village treat them as such, there is a presum p tion of legitimacy, as vice and immorality are not usual ly attributed to such association between a man and a woman.
In Rahi vs Govinda Valad Teja, Bom 97 t he legitimacy of 'Pat ' or 'Pata ' or 'Natra ' marriages among t he Marathas of Bombay Presidency was accepted.
Relying on Hin du law of Strange and the statement of Mr. Steele who in h is Law and Custom of Hindoo castes, which has been accepted as authority by the Courts, said that in that Presidency thou gh forbidden in the present age (Kaliyug) to twiceborn caste s, it was not forbidden to sudras and that Manu appeared to have limited the prohibition to the twiceborn classes.
Th is has been referred to by Sir Gooroodas Bannerjee in h is Tagore Law Lectures on Hindu Law of Marriage and Stridhan a, lecture VI.
Devala expressly permitted re marriage of a ll classes.
Narada also said: "Nashte mrite prabrajite klaibe cha patite patau; Pan 80 chaswapatsu narinang patih anyo bidhiate.
" In cases of first husband having perished, or di ed naturally or gone abroad, or if he is impotent, or have lo st his caste, in these five calamities a woman may take anoth er husband.
In Kautilya 's Arthasastra (See R Shamasastry, 2nd Ed. p. 189) which has been claimed to have been a work during t he period 32 1 296 B.C., anterior, therefore, to Manu a nd Yajnavalkya, said: "If a husband either is of bad characte r, or is long gone abroad or has become a traitor to his kin g, or is likely to endanger the life of his wife, or has fall en from his caste, or has lost virility, he may be abandoned by his wife." He further writes: "A woman hating her husba nd cannot dissolve her marriage with him against his will.
N or can a man dissolve his marriage with his wife against h er will.
But from mutual enmity, divorce may be obtain ed (parasparam dveshanmokshah).
If a man, apprehending dang er from his wife, desires divorce (mokshamichchhet), he sha ll return to her whatever she was given (on the occasion of h er marriage).
If a woman, under the apprehension of danger fr om her husband, desires divorce, she shall forfeit her claim to her property; marriages contracted in accordance with t he customs of the first four kinds of marriages cannot be dissolved.
" There is no doubt that the principle that once a marriage always a marriage was a subsequent development.
Ancient Hindu Law also said: Tasmindesha ya acarah paramparyakramagatah; Varnanam santa i ralanam sa sadachara uchyate.
Practice that obtains from generation to generation amo ng the pure and mixed classes is called sadachara.
The next question is whether the custom of Udiki ma r riage would be a valid custom under law.
In Edward vs Je n kins, the characteristics of a val id custom are stated.
They are, that it must be of immemori al existence, it must be reasonable, it must, be certain and it must be continuous.
Every custom must have to be in exis t ence preceding memory of man and if the proof was carri ed back as far as living memory would go, it should be presum ed that the right claimed had existed from time of legal mem o ry.
This was reiterated in Mohammed Ibrahim vs Shaik Ibr a him, AIR 1922 P.C. 59.
In Ramalakshmi Ammal vs Sivanant ha Perumal Sethurayar, 14 M.I.A. 81 570, it was held that it was the essence of special usag es modifying the ordinary law, (in that case of successio n) that they should be ancient and invariable; it is furth er essential that they should be established to be so, by cle ar and unambiguous evidence and that it is only by means of such findings that the Courts can be assured of their exis t ence and that they possess the conditions of antiquity a nd continuity and certainty on which alone their legal title to recognition depends.
Custom must be proved and the burden of proof is on the person who asserts it.
The Privy Council in Raja Rajendra Narain vs Kum ar Gangananda & Ors., AIR 1925 PC 213, held that after t he existence of a custom for some years has been proved by direct evidence, it can only, as a rule, be shown to be immemorial by hearsay evidence and it is for this reas on that such an evidence is allowable as an explanation to t he general rule.
In D.C. Bara Banki vs Receiver of the Esta te of Choudhry & Ors., AIR 1928 PC 202, it has been held th at breach of a custom in a particular instance need not destr oy it for all times.
In Effuah Amissah vs Effuah Krabah, A IR , it was held that material customs must be proved in the first instance by calling witnesses acquaint ed with them until a particular custom has by frequent proof in the Court becomes so notorious that the Courts take judici al notice of it.
A custom cannot be extended by logical pro c ess.
In Saraswati vs Jagadambal, ; , it h as been held that oral evidence as to instances which can be proved by documentary evidence cannot be fairly relied up on to establish custom when no satisfactory explanation f or withholding the best evidence is given.
Custom cannot be extended by analogy and it cannot be established by a prio ri method.
Uzagar Singh vs Mst.
Jeo, ; , la id down that the ordinary rule is that a custom, general or otherwise, has to be proved under Section 57 of the Eviden ce Act.
However, nothing need be proved of which the Courts c an take judicial notice.
When a custom has been judicial ly recognised by the Court then it passes into the law of t he land as proof of it becomes unnecessary under Section 57( 1) of the Evidence Act.
"In regard to marriage", says S ir Gooroodas Banerjee, "the ordinary Hindu Law does not, a nd cannot, form the common rule for all sects alike.
" Examining the written statements and the evidence a d duced in this case we find that the fourth defendant Neela va as DW 7 deposed: "Prior to my marriage with late Gurappa, it was said that during my childhood I had married.
The pri or husband 's name was one Gurulingappa.
When I was aged abo ut 16 or 17 years, my marriage with Gurulingappa was dissolve d.
The dissolution of the marriage took 82 place in the house of my elder brother Parappa Sallapur at Hubli.
In the presence of one N.M. Patil, S.R. Hiremath, t he then Chief Officer, my eider sister and her husband and my mother 's brother 's son one Rachappa, my prior husband Gur u lingappa, the dissolution took place.
When I was aged abo ut 23 or 24 years, my marriage with the late Gurappa took pla ce at Miraj.
" The marriage which took place at Miraj was in Udiki form.
There was a custom of Udiki form of marriage in Panchamasale subject of Lingayat community.
I belong to Panchamamasale subject.
There is also a custom for dissol u tion of marriage in our section.
The dissolution of my marriage with Gurulingappa was effected by my declaration in the presence of elders, that I did not require Gurulingap pa as my husband and by similar declaration by Gurulingap pa that he did not require me as his wife.
That declaration w as followed by our mutual expression of liberty to marry anot h er spouse.
That was approved by the elders present then.
" In cross examination on behalf of the plaintiff she sai d: "Since my marriage with Gurulingappa had been performed wh en I was too young and since I did not desire to continue as his wife, a situation arose for the dissolution of t he marriage.
There was no other reason for the dissolutio n. About 13 years after my marriage with Gurulingappa, t he marriage was dissolved." "I was not residing in my husband 's house ever since my marriage with Gurulingappa but I w as residing in my parent 's house.
" She also deposed that to h er knowledge her 's was the only case where there was dissol u tion in their family from the time of their ancestors.
H er mother was married in usual form and not in Udiki form.
N or her brothers or sisters got a dissolution of their ma r riages.
She also did not know if there were instances of dissolution of marriages among the relations of Gurulinga p pa.
She denied the suggestion that there was no dissoluti on of the marriage and that she continued to be the wife of Gurulingappa.
DW 8 Parappa, eider brother of the four th defendant testified about her re marriage with Gurapp a.
According to him there was a custom in the Lingayat commun i ty for dissolution of the marriage and he could give o ut certain instances of Udiki form of marriage in their famil y, relations and friends.
In his own family his eider sister 's marriage was gone through in Udiki form.
His wife 's eid er sister was also married in Udiki form.
He did not give t he names of the persons having entered into Udiki form of marriage at that time but said that there were thousands of instances.
The dissolution of the marriage of fourth defen d ant took place in his Railway Quarters at Hubli.
Outsider s, namely, Shri S.R. Hiremath, N.M. Patil were present.
Amo ng his relations, his eider sister, his cousin, Gurulingapp a, his sister and the fourth defendant were present.
He h ad written a letter to S.R. Hiremath requesting him 83 to come over there.
He requested the other persons also to come there.
It was about 7.30 or 8.00 P.M. when the dissol u tion took place.
The fourth defendant expressed that she h ad been married during her childhood and she was not going to continue with Shri Gurulingappa.
Gurulingappa also express ed that in view of the big disparity in age between himself a nd the fourth defendant and in view of the fact that she h ad expressed her intention for dissolution, he had no objecti on for dissolution.
Thereafter, Hiremath, Patil and his rel a tions also consented for the dissolution of the marriag e. Parappa 's mother removed the Tali from the neck of t he fourth defendant and handed over the same to Gurulingapp a. Gurulingappa, thereafter, went away telling that he was at liberty to marry again; and he later had married again.
He clearly stated that as per the custom of the caste, the re was nothing more to be done for the dissolution.
This wi t ness further deposed that in 1943, the Udiki marriage of t he fourth defendant took place at Miraj.
At the time of r e marriage she was aged about 19 or 20 years.
Parappa contac t ed Gurappa for the re marriage.
Gurappa brought his fath er with him and the re marriage was fixed.
He got his eid er sister and his brother in law from Bijapur.
His moth er Rachappa and his wife were present at the time of re ma r riage in addition to those who came from Bijapur.
Gurap pa and Jamakhandi were already there.
A priest was officiati ng the re marriage.
The lady who had already undergone Udi ki marriage was requested to present the clothes to the brid e groom and gold was brought by Gurappa and that was hand ed over to the priest who in turn gave it to the bride.
Prese n tation of saris and blouses was made by Udiki form of ma r riage.
Mangalsutra had been brought and it was given to t he priest who enchanted some Mantrum and, thereafter, it w as given to Gurappa who in turn tied it round the neck of t he fourth defendant.
The above said function of tying Mangals u tra took place in God 's room.
Then the married couple o f fered their pranams to God.
Thereafter, the priest tied t he ends of the clothes of bride and bridegroom who thereafte r, prostrated before the elders to receive their blessings.
It appears that this witness was thoroughly cross examined b ut could not be dislodged.
DW 9 Gangadhara deposed that he knew as to Gurap pa having been married in Udiki form and that the fourth d e fendant Neelava was his Udiki wife.
He was present at t he marriage.
He gives vivid description of the ceremony inclu d ing the persons who were present.
He testified that t he priest enchanted mantrum and thereafter handed over t he Guladali to Gurappa and, as directed by the priest to t ie Guladali around the neck of his wife, Gurappa tied t he Guladali.
Mr. Datar says Guladali meant Tali.
The clothi ng was presented by each 84 party to the other.
As per the direction of the priest t he bride made pranams to the elders present there.
This witne ss too was thoroughly cross examined but could not be shak en from his testimony.
DW 10 Neelakantappa Patil corroborated DWs.8 and 9 in material particulars.
DW 11 Rachappa testified to the diss o lution of the fourth defendants marriage with Gurulingap pa in vivid details.
DW 12 Gurulingappa himself testified th at his marriage with the fourth defendant was dissolved, th us fully corroborating the other witnesses.
He clearly depos ed that the fourth defendant 's mother removed the Tali from h er neck and gave it to him and he took it, went home and subs e quently married again.
Mr. Datar states on behalf of the second & third defen d ants that Neelava is dead and that while she was alive s he was addressed as younger mother by the children.
It is n ot denied that till her death she enjoyed the family pension as widow of Gurappa to the knowledge of the plaintiff.
There is no evidence to show that she was not accepted as wife of Gurappa by the members of the community though in the plai nt she was described as having had illegal connections wi th Gurappa.
The learned counsel for the respondents submits that a ll the witnesses were near relations and hence could not be believed.
We do not agree.
All elders were not relatives a nd their corroborated testimony could not be discarded.
T he second and third defendants in their written statemen ts asserted that Neelava was legally married wife of Gurapp a.
The High Court ignored these vital pieces of evidence whi ch the learned Civil Judge rightly considered.
From the above evidence on record, appreciated in t he light of the case law on the subject and the authoritati ve texts as discussed above relating to the custom of dissol u tion and Udiki form of marriage prevalent among the Linga y ats who are a religious sect following teachings of Basav a, we entertain no doubt that there has been ancient and unbr o ken customs of dissolution of marriage and of serai Udi ki marriage among the Pnachamasale Lingayats which was alrea dy judicially noticed by the Courts, and that the marriage of the fourth defendant with Gurulingappa was proved to ha ve been customarily dissolved and that she was subsequent ly legally married with Gurappa in the valid customary form of Udiki marriage, whereafter, she lived with Gurappa as hu s band and wife until Gurappa died, and that thereafter s he enjoyed the family pension by dint of her being nominated as 85 wife by Gurappa to the knowledge of all concerned.
She w as accepted by the community as wife of Gurappa even after h is death.
There is, therefore, no scope for declaring t he marriage illegal posthumously.
The result is that this appeal is allowed, the judgme nt of the High Court is set aside and the judgment and decr ee of the Civil Judge are restored, without any order as to costs.
Y.L. Appe al allowed.
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This is defendants ' appeal arising out of a suit for part i tion.
One Mallappa Kulkarni had two sons: Veerappa and Gura p pa.
Verrappa is survived by his son Lingappa.
Gurappa, w ho was in the service of Railways married Channavva (fir st wife) on 16.2.28 but since she remained issueless, he rema r ried in 1955 Chinnavva (second wife).
From this marriage t wo daughters were born viz. Shakuntlabai arid Annapoornav a. Consequent upon the death of his second wife Gurappa is sa id to have married Nilavva accroding to customary Udiki ma r riage.
After retirement Gurappa settled permanently at Hub li where he had house, property etc.
After the death of Gura p pa, his first wife Channavva claimed l/3rd share in t he property.
Having failed to get the same, she sold her 1/3 rd share to Lingappa.
Lingappa also could not procure the 1/3 rd share from defendants by mutual negotiation.
Thereupon he filed a suit for partition claiming his 1/3rd share in t he immovable properties left by Gurappa.
In the suit he i m pleaded Channavva (first wife) as Defendant No. 1 and t he children from 2nd wife as Defendant Nos. 2 & 3 and Nilla va was impleaded as Defendant No. 4, who was described as having illegal connections with the deceased Gurappa.
The Additional Munsiff, Hubli who tried the suit pass ed a preliminary decree for partition of l/3rd share of Gura p pa 's properties in the hands of the defendants 2 to 4 by metes and bounds.
Defendants 2 to 4 contested that Defenda nt No. 4 was lawfully married wife of Gurappa.
Defendants 2 to 4 appealed to the Civil Judge at Hub li impleading the plaintiff and Defendant No. 1 as respodent section The Civil Judge 71 modified the decree and granted I/6th share holding the 4 th defendant to be legally married wife of Gurappa.
Bei ng dissatisfied by the said order, the plaintiff as also D e fendants 2 & 3 filed appeals in the High Court.
The Hi gh Court by the impugned judgment allowed the plaintiff 's appeal and restored the decree of the trial Court for l/3 rd share and dismissed the defendant 's appeal.
The High Cou rt held that the 4th defendant was not legally married wife of deceased Gurappa.
Hence this appeal by Defendants 2 & 3 by special leave.
The question that was agitated before this Court wa s: Whether proof of custom of Udiki marriage was adduced by t he fourth defendant; and whether Udiki marriage itself impli ed the dissolution of earlier marriage and if not, wheth er separate custom of dissolution of the earlier marriage w as pleaded and proved.
Allowing the appeal, this Court, HELD: Custom must be proved and the burden of proof is on the person who asserts it.
A custom cannot be extended by logical process.
Customs cannot be extended by analogy a nd it cannot be established by a priori method.
[8lB. E] Nothing need be proved of which the Courts can ta ke judicial notice.
When a custom has been judicially reco g nised by the Court then it passes into the law of the la nd as proof of it becomes unnecessary under section 57(1) of the Evidence Act.
[81 F] From the evidence on record, appreciated in the light of the case law on the subject and the authoritative tex ts relating to the custom of dissolution and Udiki form of marriage prevalent among the Lingayats who are a religio us sect following teachings of Basava, the Court entertains no doubt that there has been ancient and unbroken customs of dissolution of marriage and of Serai Udiki marriage amo ng the Panchamasal Lingayats which was judicially noticed by the Courts, and that the marriage in the instant case, of the fourth defendant with Gurulingappa was proved to ha ve been customarily dissolved and that she was subsequent ly legally married with Gurappa in the valid customary form of Udiki marriage, whereafter, she lived with Gurappa as hu s band and wife until Gurappa died, and that, thereafter, s he enjoyed the family pension by dint of her being nominated as wife of Gurappa to the knowledge of all concerned.
She w as accepted by the community as wife of Gurappa even after h is death.
There is, therefore, no scope for declaring t he marriage illegal posthumously.
[84F H; 85A] 72 Virasangappa vs Rudrappa & Anr., Madr as 440; Pakhali Jina Magan vs Bai Jethi, I.L.R. 5; Sankarlingam vs Subban, [1894] 17 Madras 479; Shivalingi ah vs Chowdamma, A.I.R. 1956 Mys. 17; Rahi vs Govinda Val ad Teja, Bom. 97; Edward vs Jenkins, [189 6] ; Mohammed Ibrahim vs Shaik Ibrahim, AIR 19 ; Ramalakshmi Ammal vs Sivanantha Perumal Sethuraya r, 14 M.I.A. 570; Raja Rajendra Narain vs Kumar Gangananda Ors., AIR 1925 PC 213; D.C. Bara Banki vs Receiver of t he Estate of Choudhry & Ors., AIR 1928 PC 202; Effuah Amiss ah vs Effuah Krabah, AIR 1936 P.C. 147; Saraswati vs Jagada m bal; , and Uzagar Singh vs Mst.
Jeo, AIR 19 59 SC 1041, referred to.
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N: Criminal Appeal No. 329 of 1975.
From the Judgment & Order dated the 15th April, 1975 of the Allahabad High Court in Crl.
A. No. 1144 of 1971.
R.L. Kohli and S.K. Sabharwal for the Appellants.
D.P. Uniyal and R.K. Bhatt for the Respondent.
The following Judgments were delivered: FAZAL ALI, J.
This appeal by special leave is directed against a judgment dated 15.4.1975 of the Allahabad High Court by which the Judges of the High Court while acquitting the accused, Anil Kumar and Satish Kumar, altered the conviction of Ram Karan, Sunil Kumar and Ved Prakash from one under sections 302 and 307 read with section 149 I.P.C. to one under sections 302 and 307 read with section 34, I.P.C. and confirmed the sentences of imprisonment for life imposed on these appellants.
The prosecution case has been detailed in the judgment of the High Court as also in the judgment of our learned Brother Varadarajan J. and it is not necessary to repeat the same.
So far as the question of occurrence is concerned that has been proved beyond reasonable doubt as pointed out by Brother Varadarajan, J. as also by the High Court.
We also agree with the appreciation of the evidence by Brother Varadarajan, J. and his conclusion that the two deceased died at the hands of the appellants.
The entire occurrence seems to have been the result of a chronic land dispute between the parties in which several commissions were issued and which ultimately proved futile.
The prosecution has no doubt proved that the two persons were killed at the hands of the accused and that the occurrence had taken place while the Commissioners were present at the spot though they were not able to see the actual assault and were, therefore, not in a position to depose the detailed manner in which the assault had taken place.
The only serious question on which we would like to sound a discordant note from our Brother Varadarajan, J. is as to the actual nature of the offence which had been committed by the appellants, Sunil Kumar and Ved Prakash.
It would appear from the evidence 398 of CW 1 as also other eye witnesses that the accused were also assaulted with knife and one of them, Chhotey Lal, died as a result of the injuries caused to him.
The medical evidence as also the evidence of CW 1 clearly shows that there was exchange of hot words, followed by the assault on the appellants which, according to the prosecution, was a result of the exercise of self defence by the prosecution party, particularly Dinesh Chandra.
In fact, the learned Sessions Judge and the High Court held that the accused were the aggressors and, therefore, they had no right of private defence.
In order to ascertain whether the accused had the right of private defence, the genesis of the incident has to be traced.
Now, in this case the prosecution witnesses being partisan, the only important injured witness Dinesh Chandra, PW 11 being the son of the deceased, it would be necessary to ascertain with accuracy the genesis of the quarrel as revealed from the evidence of Court witnesses not shown to be partisan.
CW 1, Prem Narain Mathur is the practising advocate and was appointed as a Commissioner.
He was accompanied by Mahesh Chandra, Vakil, CW 3, advocate appearing on behalf of the plaintiffs (accused Ram Karan) in the suit in which Commission was issued and Shri Jafar Imam, CW 2, learned advocate appearing for the defendants in the same suit.
C.W. 1 and C.W. 3 were at the house of accused 1 Ram Karan.
C.W. 1 says that several persons assembled at that time at the house of Ram Karan.
He is a bit vague but he says that at that time after tea was served and he was about to leave that place he saw a person lying on the pavement of the road.
This injured person was lying in front of the house of accused 1 Ram Karan.
This statement has not been questioned in cross examination nor adversely commented upon.
It gives a clue to the genesis of the occurrence.
After measurements were taken as directed by the Court, C.W. 1 and C.W. 3 came to the house of accused 1 Ram Karan.
Some persons collected there.
According to C.W. 1 injured persons were seen lying in front of the house of accused 1 and that was none else than the deceased.
If amongst those who collected at the house were the two deceased and P.W. 11 Dinesh Chandra, another injured witness on the side of the prosecution, it is crystal clear that the prosecution witnesses and the two deceased Prakash Chandra and Umesh Chandra had come to the house of accused 1 Ram Karan.
How, if one of them was armed with a knife, they must have come with a view to either picking up quarrel or to guard themselves.
The occurrence took place in front of the house of 399 accused 1.
On the side of the prosecution Prakash Chandra and Umesh Chandra received fatal injuries and Dinesh Chandra was also injured.
However, on the side of the accused Chhotelal, son of accused 1 Ram Karan, suffered six injuries one of which proved fatal and he died.
Accused Ram Karan himself was also injured.
Injuries on both sides appear to have been caused with sharp cutting weapon like knife.
It is easy to infer the genesis of the dispute.
Both the parties were completely exasperated with the litigation.
Accused 1 Ram Karan had summoned Commission on five to six occasions and his attempt to end the litigation was thwarted by objections being taken on the side of Prakash Chandra deceased.
Therefore, both sides were in an exasperated mood.
Suddenly at the spur of the moment there ensued a quarrel.
Prakash Chandra and Umesh Chandra on the side of the prosecution died and Chhotelal on the side of the accused died and each of them met a homicidal death.
On the side of the prosecution Dinesh Chandra was injured, on the side of accused Ram Karan was injured.
From this an irresistible inference ensues that exception 4 to section 300, I.P.C. would be attracted.
The exception provides that culpable homicide is not murder, if it is committed without premeditation in a sudden fight in the heat of passion upon a sudden quarrel and without the offenders having taken undue advantage or acted in a cruel or unusual manner.
All the ingredients of Exception 4 are satisfied.
Prakash Chandra and his two sons and others came to the house of accused 1 to protest for the work of the Commissioner.
Dinesh Chandra amongst them was armed with a knife.
May be, he may be usually carrying the same for his safety.
The incident occurred in front of the house of accused 1 upon a sudden quarrel by this confrontation with eyebrows having been raised because of a persistent litigation, the occurrence took place.
There is no clear evidence to show that any one took undue advantage or acted in a cruel or unusual manner.
Taking an overall view of the situation, we find no evidence of any intention to kill the two deceased on the part of the accused because the occurrence itself had taken place suddenly when, to begin with, the entire episode started for the particular purpose of partitioning the land by the Commissioners who had visited the village.
In these circumstances we are satisfied that Exception 4 of section 300, I.P.C. is attracted and the offence of murder would be reduced to culpable homicide in respect of accused Sunil Kumar and Ved Prakash and, therefore, they would be guilty of committing 400 an offence under section 304(1)/34 I.P.C. and they should be convicted accordingly.
To this extent, therefore, we are unable to agree with Brother Varadarajan, J. that the conviction of the appellants Sunil Kumar and Ved Prakash under section 302 read with section 34 of the I.P.C. should be confirmed.
We, therefore, allow this appeal to the extent that the conviction of Sunil Kumar and Ved Prakash are altered from one under section 302 read with section 34 of the I.P.C. to that under section 304(1)/34 I.P.C. and they are sentenced to rigorous imprisonment for seven years.
Conviction and sentences under section 307/34, I.P.C. are maintained and sentences awarded have already been directed to run concurrently.
We allow the appeal of Ram Karan as indicated by Brother Varadarajan, J. VARADARAJAN, J.
This Criminal Appeal by special leave is directed against the judgment of a Division Bench of the Allahabad High Court in Criminal Appeal No. 1144 of 1971, whereby the learned Judges, while acquitting two appellants Anil Kumar and Satish Kumar of the charges, altered the conviction of Ram Karan, Sunil Kumar and Ved Prakash, appellants in this Criminal Appeal, under section 302 and 307, both read with section 149 I.P.C., into one under sections 302 and 307 both read with section 34 I.P.C. and confirmed the sentences of imprisonment for life for each of the two counts of murder of Prakash Chandra and Umesh Chandra and rigorous imprisonment for four years for attempt to murder Dinesh Chandra (P.W. 11) to run concurrently and set aside the conviction of the appellant Ram Karan under section 147 and the other two appellants under section 148 I.P.C.
The first appellant Ram Karan is the father of other appellants Sunil Kumar and Ved Prakash and also of Anil Kumar and Satish Kumar, who have been acquitted by the High Court as well as of deceased Chhotey Lal.
The learned Sessions Judge who tried the case convicted Ram Karan and all his four sons, Sunil Kumar, Anil Kumar, Ved Prakash and Satish Kumar under section 302 read with section 149 I.P.C. (two counts) and section 307 read with section 149 I.P.C. and sentenced them to undergo imprisonment for life on each of the two counts under section 302 read with section 149 I.P.C. and to imprisonment for four years under section 307 read with section 149 I.P.C. He convicted Ram Karan under section 147 and his aforesaid four sons under section 148 I.P.C. and sentenced Ram Karan to undergo rigorous imprisonment 401 for one year and his sons to undergo rigorous imprisonment for two years under section 147 and section 148 I.P.C. respectively.
The case of the prosecution was this: The deceased Prakash Chandra was the father of the deceased Umesh Chandra and the injured witness Dinesh Chandra (P.W. 11) as well as of Gyan Chand (P.W. 1).
Prakash Chandra and his sons were living in Seohara town, Bijnor district.
The appellant Ram Karan and his five sons including the deceased Chhotey Lal were living in another house in the same town as the neighbours of Prakash Chandra and his sons.
Prakash Chandra and his sons built a new house on a vacant land which existed between these two houses about three years prior to the occurrence in this case which has taken place at about 1.00 p.m. on 6.9.1970.
The appellant Ram Karan and five others filed Civil Suit No. 34 of 1967 in the court of the Munsif, Nagina against Prakash Chandra and his brother Gopi Chandra and one Krishna Devi, alleging that while constructing the new house Prakash Chandra had encroached upon a portion of their land.
In that suit, Ram Karan got Commissioners appointed by the court on five or six occasions for taking measurements of the properties with the object of proving his case of encroachment by Prakash Chandra.
But those Commissioners ' reports were set aside on the objection raised by Prakash Chandra and the other defendents.
The last Advocate Commissioner Mr. Mathur (C.W. 1) visited the spot on 6.9.1970, accompanied by Mr. Zafar Hussain (C.W. 2) who appeared for Prakash Chandra and another and Mr. Mahesh Chand (C.W. 3) who appeared for Ram Karan.
After the completion of the survey work at about 12.30 p.m. all the three lawyers were standing and talking in front of Ram Karan 's baithak at about 1.00 p.m.
Then Prakash Chandra and Umesh Chandra came there to talk with the Commissioner.
Ram Karan, who was present there along with his five sons, did not like that interference of Prakash Chandra and Umesh Chandra with the Commissioner.
He stated that he has spent thousands of rupees for taking out the commissions and that the reports of the Commissioners were set aside on the objection of Prakash Chandra.
So saying, he instigated his sons to kill Prakash Chandra and his sons.
Thereupon, Chhotey Lal and Ved Prakash attacked Prakash Chandra with knives while Sunil Kumar, Anil Kumar and Satish attacked Umesh Chandra with knives.
On seeing Dinesh Chandra (P.W. 11) who rushed meanwhile from the eastern side to help his father and brother, Ram Karan instigated his sons to attack him and caught hold of him by 402 his waist, and all his five sons attacked him and inflicted injuries.
Then P.W. 11 took out a knife from his pent pocket and wielded it against Ram Karan and Chhotey Lal in self defence and they sustained injuries.
P.W. 11 received injuries and fell down.
Gyan Chandra (P.W. 1), who was seeing the occurrence, ran to his house along with some others and bolted the door when Sunil Kumar, Anil Kumar and Satish chased him for attacking him.
Abdul Wahid, P.W. 10, and others who were witnessing the occurrence raised an alarm, and Ram Karan and his sons ran away.
Gyan Chand, (P.W. 1) came out of his house sometime later and found his father Prakash Chandra and brother Umesh Chandra dead and Dinesh Chandra (P.W. 11) lying with injuries.
He prepared the report, exhibit Ka. 3 and proceeded in a jeep with his brother Dinesh Chandra (P.W. 11), to Seohara Police Station situate about half a mile away and handed over that report at 1.30 p.m. Dinesh Chandra (P.W. 11) was taken to Dhampur hospital after he was given first aid by a Doctor on the way.
He was examined at the Dhampur hospital by Dr. Bagchi, P.W. 3 who found on his person an abrasion and nine incised wounds of which injury No. 7 on the right side of the chest through which blood and air were coming out was serious and the rest were simple.
The dead bodies of Prakash Chandra and Umesh Chandra which were found lying in front of their house where blood also was found, were later sent for autopsy.
Ram Karan and Chhotey Lal went to the Government hospital, Bijnor where they were examined by Dr. Sarin (P.W. 2) at 4 p.m. and 4.15 p.m. respectively on 6.9.1970.
P.W. 2 found one punctured wound and four incised wounds on Chhotey Lal and three incised wounds on Ram Karan.
The injuries on both of them were fresh and those on Ram Karan were simple while injury No. 1 on Chhotey Lal, namely, a punctured wound which was lung deep and anterior to the left nipple, was grievous and the rest were simple.
The injuries on both could, in the opinion of P.W. 2, have been caused by knife.
P.W. 2 issued the wound certificates exhibit Ka. 12 and Ka. 13.
Ram Karan 's report was lodged at the Police Station at 10.30 p.m. on 6.9.1970.
Chhotey Lal died in the District hospital, Bijnor on 10.9.1970.
Dr. Zuber conducted autopsy on the bodies of Prakash Chandra and Umesh Chandra on 7.9.1970 and found nine antemortem, injuries, of which six were incised wounds, on the body of Prakash Chandra and six antemortem incised wounds on the body 403 of Umesh Chandra and he opined that the death of both of them was due to shock and haemorrhage resulting from the incised injuries.
exhibit Ka. 1 and Ka. 2 are the postmortem certificates relating to Prakash Chandra and Umesh Chandra issued by Dr. Zuber who was examined as P.W. 1 in the Committing Magistrate 's Court (exhibit Ka. 37).
Dr. Dua (C.W. 4) conducted autopsy on the body of Chhotey Lal on 11.9.1970 and found an abrasion and five incised wounds which were sufficient in the ordinary course of nature to cause death.
The prosecution 's case rests mainly on the evidence of Gyan Chand (P.W. 1), Abdul Wahid (P.W. 10) and Dinesh Chandra (P.W. 11).
As stated earlier P.Ws 1 and 11 are the sons of deceased Prakash Chandra and brothers of the other deceased Umesh Chandra.
P.W. 11 had received injuries during the occurrence and P.W. 1 is the witness who had lodged the First Information Report (exhibit K. 3) in the Seohara Police Station at the earliest opportunity at 1.30 p.m. soon after the occurrence which had taken place at about 1.00 p.m.
These three witnesses were put forward as eyewitnesses and they have deposed in support of the case of the prosecution.
The accused put forward their version of the case.
According to the accused, after the Commissioner (C.W. 1) finished his work and went to the house of the appellant Ram Karan, Prakash Chandra and his sons Umesh Chandra and Dinesh Chandra (P.W. 11) came to the baithak of Ram Karan and attacked Ram Karan and deceased Chhotey Lal with knives and thereupon they grappled with those three persons and wrested the knives from them and attacked them in self defence.
The accused examined D.W. 1 on their behalf.
The court examined the Commissioner and the counsel of the parties in the civil suit as C. Ws. 1 to 3 and the Doctor who conducted autopsy on the body of Chhotey Lal as C.W. 4.
The evidence of C.W. 1 is that after he completed taking measurements he went along with Ram Karan 's counsel Mr. Mahesh Chandra (C.W. 3) to the baithak of Ram Karan 's house, that both of them came out of the house 8 or 10 minutes later, that when he advanced from the door of the baithak he saw a person lying injured on the pavement of the road and another injured person standing there, that a third person came and struck the injured person who was standing, and that he and C.W. 3 left the place thereafter.
The evidence of C.W. 3 is that he and C.W. 1 who had gone to the baithak of Ram Karan 's house after C.W. 1 had 404 taken the measurements, came out of the baithak 5 or 7 minutes later, and saw Chhotey Lal grappling with a young man, that in the course of grappling Chhotey Lal fell down bleeding, that Chhotey Lal managed to get up and snatched the weapon of the assailant and struck him with it, that Prakash Chandra came to the rescue of the young man and Chhotey Lal struck him with the same weapon and both the young man and Prakash Chandra fell down after receiving injuries from Chhotey Lal, and that on account of the incident he went away along with C.W. has added that soon after he went and sat in the baithak of Ram Karan 's house, Zafar Hussain (C.W. 2) came and said something to C.W. 1 from beyond the door of the baithak.
The evidence of Zafar Hussain (C.W. 2) is that after measurements had been taken C. Ws. 1 and 3 went to the baithak of Ram Karan 's house while he sat in the verandah of the old haveli of Prakash Chandra, that he and Prakash Chandra 's son, who is now no more, thereafter went near the Commissioner (C.W 1) and he told C.W. 1 that he may hear what Prakash Chandra wanted to say, that after saying so he got back for meeting another person while Prakash Chandra and his son remained there, that after reaching the verandah of Prakash Chandra he went away with Mehboob Ali who was waiting for him to Mehboob Ali 's house and that no quarrel took place when he was present there though when he was returning to the verandah of Prakash Chandra 's house he heard some hot words being exchanged near the baithak of Ram Karan 's house.
The learned Sessions Judge has observed in his judgment that the evidence of C.Ws. 1 to 3 is contradictory, unnatural and not truthful.
He found that P.W. 1 's report (Ka. 3) was lodged in the Police Station at 1.30 p.m. soon after the occurrence had taken place at about 1.00 p.m. and that there has been no attempt at concoction in this case.
He rejected the contention that Abdul Wahid, (P.W. 10) had any reason to depose falsely against the appellant Ved Prakash and found his evidence to be reliable.
He observed that though Prakash Chandra had been working as an Engineer in a sugar mill at Seohara and P.W. 10 was employed in the engineering department, P.W. 10 was actually working under one Bachcha Lal and is an independent witness.
P.W. 1 has stated in his evidence that Prakash Chandra, Umesh Chandra and Ram Karan did not have any weapon at the time of the occurrence.
The evidence of the injured witness P.W. 11 is that when he returned home from Moradabad at about 12.30 p.m. on the day of occurrence 405 he saw his father Prakash Chandra and brother Umesh Chandra lying in a pool of blood and that on seeing him Ram Karan shouted that he also should be killed and caught hold of him by his waist and that he was attacked with knives by the accused persons including Ram Karan and he wielded in self defence the knife which he had purchased on that day for his work.
The learned Sessions Judge accepted the evidence of P.Ws. 1, 10 and 11 and commented upon Ram Karan and Chhotey Lal going to the hospital at Bijnor without arranging for a report being given at the Police Station at Seohara in time and held that the accused were the aggressors and that Dinesh Chandra (P.W. 11) caused injuries to Ram Karan and the deceased Chhotey Lal in the exercise of the right of private defence.
Accordingly he found the accused guilty and convicted them and sentenced them as mentioned above.
The High Court also rejected the defence theory that Chhotey Lal was attacked by three persons armed with knife, chura and khukhri having regard to the fact that he had only one lung deep punctured wound and the other four wounds were only skin deep and of very minor dimensions.
The learned Judges of the High Court found that the name of Anil Kumar is not mentioned in the First Information Report (exhibit Ka. 3) but instead the name of one Virendra is mentioned and that it appears from the evidence of P.W. 1 that Virendra is the name of Prakash Chandra 's brother.
They found that in the statement of P.W. 11 recorded as dying declaration, Sushil Kumar is mentioned instead of Satish Kumar.
In these circumstances the learned Judges found that there is reasonable doubt regarding the participation of the accused Anil Kumar and Satish Kumar and they gave the benefit of that doubt to those two appellants before them and acquitted them.
In other respects, the learned Judges accepted the evidence of P.Ws. 1, 10 and 11 regarding the occurrence and rejected the defence version and held the appellants guilty under section 302 read with section 34 in respect of the murder of Prakash Chandra and Umesh Chandra and under section 307 read with section 34 in respect of Dinesh Chandra, (P.W. 11) and convicted them accordingly and sentenced them to undergo imprisonment for life under section 302 read with section 34 I.P.C. and rigorous imprisonment for four years under section 307 read with section 34 I.P.C. 406 We perused the records and the judgments of the learned Sessions Judge and of the learned Judges of the High Court and heard the arguments of Mr. R.L. Kohli, Senior Advocate who appeared for the appellants and of Mr. D.P. Uniyal, Senior Advocate who appeared for the respondent State of U.P.
We were taken through the evidence of P.Ws. 1, 10 and 11.
The learned Sessions Judge has observed in his judgment that the evidence of the three lawyers C.Ws. 1 to 3 is contradictory, unnatural and not truthful and that if they had given honest evidence it would have been easier for the court to conclude which side was the aggressor.
This observation of the learned Sessions Judge appears to be too sweeping and not correct at least with reference to C.W. 2 who has professed ignorance about the actual occurrence in the case and has stated that he left after asking C.W. 1 from outside the baithak of Ram Karan 's house to hear what Prakash Chandra who had gone with him and his deceased son wanted to tell him because another person Mehboob Ali with whom he later went to his house was waiting for him in the verandah of Prakash Chandra 's house.
The evidence of C.W. 2 that no quarrel took place when he was present there though when he was returning to the verandah of Prakash Chandra 's house he heard some hot words being exchanged near the baithak of Ram Karan 's house, is, in a way, corroborated by the evidence of P.W. 1.
P.W. 1 has stated that when exchange of hot words started the Commissioner and Vakils of the parties moved from there to the road and that just when Ram Karan 's Vakil had gone a short distance from Ram Karan 's house, Ram Karan and others stated that "they have got our thousands of rupees spent over litigation.
We have become tired of getting commissions issued.
Kill them today so that the trouble may be ended for ever.
At that time all the five sons of Ram Karan, Chhotey Lal, Ved Prakash, Satish Kumar, Sunil Kumar and Anil Kumar were present, and when Ram Karan said so all five sons whipped out knives and started assulting. .".
This portion of the evidence of P.W. 1 is to the effect that the lawyers C.Ws. 1 3 were not present at the time of the actual assault on the deceased Prakash Chandra and Umesh Chandra as a well as on P.W. 11.
Even P.W. 10 has stated in his evidence that "when he reached near dharmshala at about 12.45 p.m. he heard the shouts of Ram Karan from his house situate at a distance of 30 paces, that when he reached the end of the road he was in a position to see the house of Ram Karan, that on hearing the shouts he proceeded towards the place from where they came and stood near 407 the wall and found three Vakils present and also Prakash Chandra and Umesh Chandra, that as soon as he reached the place, the Vakils left the place, that Ram Karan then stated that he got the Commissioner appointed 5 or 6 times and spent several thousands of rupees and he should be killed and that when Ram Karan said so his sons Chhotey Lal and Ved Prakash began to attack Prakash Chandra with knives, that Sunil Kumar and Ram Karan 's other sons began to assault Umesh Chandra with knives, that during the marpit Prakash Chandra and Umesh Chandra fell down after receiving injuries, that thereafter Dinesh Chandra, son of Prakash Chandra came from the eastern direction, and on seeing him Ram Karan shouted that he should also be done to death, and he caught hold of Dinesh Chandra by his waist, and that all the four boys and deceased Chhotey Lal began to assault Dinesh Chandra with knives, and Dinesh Chandra wielded his knife in self defence and caused injuries to Ram Karan and Chhotey Lal and thereafter fell down and became unconscious. ".
This portion of the evidence of P.W. 10 also shows that C.Ws. 1 to 3 left the place soon after exchange of hot words began between the two sides.
Therefore, I am of the opinion that there is no reason to reject the evidence of C.W. 2 that no quarrel took place when he was present near about the scene of occurrence.
In the circumstances of the case, it is very probable that before serious trouble started from the exchange of hot words, C.Ws. 1 to 3.
the Commissioner and the counsel for both the parties in the civil suit, left the place and were not present at the time of the actual occurrence as stated by P.Ws. 1 and 10.
Mr. R.L. Kohli drew our attention to some portions of the judgment of the learned Judges of the High Court and submitted that the observation of the learned Judges that from the side of the defence it was not suggested to any witness that Abdul Wahid (P.W. 10) was a different man and that he has been introduced because the real Abdul Wahid was not prepared to support the prosecution case is incorrect.
The learned counsel further submitted that the observation of the learned Judges that the presence of Gyan Chand (P.W. 1) at the time of the occurrence does not appear to have been challenged by the defence is also not correct.
This criticism of the learned counsel for the appellants appears to be well founded, for I find that a suggestion has been made to P.W. 10 in cross examination and he has admitted that there is also 408 another person named Wahid son of Abdul Rehman in his mohalla and that that person was an accused in a rioting case.
And in the cross examination of P.W. 1 it has been clearly suggested that he was not present at the spot and that he prepared the report exhibit Ka. 3 afterwards with some consultation.
P.W. 1 has no doubt denied that suggestion and stated that he was present at the spot and that he himself wrote the report exhibit Ka. 3 before he came out of the house by opening the door.
The learned Judges have stated in their judgment that after Ram Karan stated that he has spent thousands of rupees on commissions and every time the report of the Commissioner was set aside on the objection of Prakash Chandra and he instigated his sons to kill Prakash Chandra and Umesh Chandra, all the five sons of Ram Karan started giving knife blows to Prakash Chandra and Umesh Chandra and both of them fell down.
This portion of the judgment of the learned Judges is to the effect that all the five sons of Ram Karan including the deceased Chhotey Lal attacked the deceased Prakash Chandra and Umesh Chandra whereas it is the case of the prosecution as brought out in the evidence of P.W. 1 that after Ram Karan instigated his sons to open the attack only Chhotey Lal and Ved Prakash attacked Prakash Chandra with knives and only Sunil Kumar.
Anil Kumar and Satish Kumar attacked Umesh Chandra with knives.
It is unfortunate that these inaccuracies have crept into the judgment of the learned Judges of the High Court.
But on an overall consideration of the entire material on record and the evidence in the case in the light of the arguments of the learned counsel for the parties I am of the opinion that the appreciation of the evidence of P.Ws. 1, 10 and 11 by the learned Sessions Judge and the learned Judges of the High Court in so far as the appellants Sunil Kumar and Ved Prakash are concerned is correct and that the evidence of P.Ws. 1 and 10 proves beyond reasonable doubt that these two appellants Sunil Kumar and Ved Prakash attacked the deceased Prakash Chandra and Umesh Chandra with knives as a result of which both of them, who had no weapons died on the spot, and the evidence of P.Ws. 10 and 11 proves satisfactorily and beyond any reasonable doubt that these two appellants attacked P.W. 11 with knives with such intention that if he had died as a result of the injuries sustained by him they would be guilty of murder in furtherance of their common intention to murder.
The dead bodies of Prakash Chandra and Umesh Chandra and blood were found in front of the house of both the 409 deceased and P.W. 11.
Both the deceased had no weapons and they had been attacked before P.W. 11 arrived and wield his knife against Ram Karan and Chhotey Lal.
The main occurrence had taken place in front of the house of both the deceased and P.W. 11.
Before the trial court it was not submitted that the attack by the accused persons on both the deceased Prakash Chandra and Umesh Chandra and P.W. 11 was without any pre meditation in a sudden fight in the heat of passion upon a sudden quarrel.
Nor is it a case in which it could be said that the offenders had not taken undue advantage or had not acted in a cruel or unusual manner.
No such argument was put forward even before the High Court to bring the main occurrence under section 304 (Part I) I.P.C.
Since I have found that the occurrence has taken place in front of the house of the two deceased and P.W. 11 in this case and that the accused persons were the aggressors neither Exception 2 nor Exception 4 to section 300 I.P.C. would apply to the facts of this case and the offence cannot be brought under section 304 (Part I) I.P.C.
In these circumstances, I agree with the learned Sessions Judge that the appellants Sunil Kumar and Ved Prakash were the aggressors and find that they have been rightly convicted under section 302 read with section 34 I.P.C. for the offence of murder of those two persons and under section 307 read with section 34 I.P.C. with reference to P.W. 11.
But I am of the opinion, having regard to the age of appellant Ram Karan, who was about 70 years old at the time of the occurrence that there is a reasonable doubt as to whether he would have caught hold of the young man Dinesh Chandra (P.W. 11) by his waist and whether he would have asked all his sons to attack and kill Prakash Chandra and his son.
I therefore, give the benefit of this reasonable doubt to the appellant Ram Karan and set aside his conviction under section 302 read with s.34 (two counts) and under section 307 read with section 34 and acquit him and direct him to be set at liberty forthwith if he is in custody and his presence is not required in connection with any other case.
In other respects I dismiss the criminal appeal and confirm the conviction of Sunil Kumar and Ved Prakash and the sentences awarded to them.
In accordance with the opinion of the majority, the appeal is allowed to the extent that the conviction of Ram Karan under section 302 read with section 34 (two counts) and under section 307 read with section 34 of the Indian Penal Code is set aside and he is acquitted and that convictions of the appellants, Sunil Kumar and Ved Prakash, are 410 altered from one under section 302/34, I.P.C. to that under section 304(1)/34, IPC and they are sentenced to rigorous imprisonment for seven years.
Conviction and sentences under section 307/34, I.P.C. are maintained and sentences awarded have already been directed to run concurrently.
S.R. Appeal partly allowed.
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The five accused Ram Karan, his sons Sunil Kumar, Ved Prakash, Anil Kumar, Satish Kumar and deceased son Chhoteylal filed a Civil Suit 34 of 1967 against the decased Prakash Chandra, his brother Gopi Chandra and one Krishan Devi, alleging that while constructing their new house Prakash Chandra had encroached upon a portion of their land.
In that suit appellant Ram Karan got Commissioners appointed by the court on five or six occasions for taking measurements of the properties with the object of proving his case of encroachment by Prakash Chandra, the deceased.
But these Commissioners ' reports were set aside on the objection raised by Prakash Chandra and the other defendants.
The last Advocate Commissioner Mr. Mathur (C.W. 1) visited the spot on 6 9 1970, the day of occurrence, accompanied by Mr. Zafar Hussain (C.W. 2) who appeared for deceased Prakash Chandra and Mr. Mahesh Chandra (C.W. 3) who appeared for Ram Karan.
After the completion of the survey work and measurements at about 1 P.M. when all the three lawyers were standing and talking in front of the house of the appellants deceased Prakash Chandra and Umesh Chandra came there to talk to the Commissioner, which interference was not liked by the appellants.
This resulted in a sudden quarrel, exchange of hot words later followed by assault with knife etc., on the appellants which, according to prosecution, was in the exercise of right of self defence by the prosecution party, particularly Dinesh Chandra (P.W. 11).
On the side of the appellants Ram Karan 's son Chhotey Lal (accused) died and on the side of the prosecution Prakash Chandra and his son Umesh Chandra died and Dinesh Chandra (P.W. 11) was grievously injured.
All the five accused were tried and convicted by the Sessions Judge for offences under sections 302/149 I.P.C. (two counts) and 307/149 I.P.C. and were sentenced to imprisonment for life and rigorous imprisonment for four years respectively.
Ram Karan was also convicted under section 147 and sentenced to undergo rigorous imprisonment for one year and his four sons were convicted under section 148 and sentenced to rigorous imprisonment for two years.
In appeal the 396 High Court acquitted Anil Kumar and Satish Kumar, set aside the conviction and sentence under sections 147 and 148 I.P.C. in respect of the rest and confirmed (a) their sentence of life imprisonment by altering the conviction one under sections 302/34 I.P.C. and (b) their sentence of four years rigorous imprisonment to one under sections 307/34 I.P.C. Hence the appeal by special leave by Ram Karan and his two sons.
Acquitting Ram Karan and allowing the appeal of the other two in part, the Court ^ HELD: Having regard to the age of the appellant Ram Karan who was about 70 years old at the time of the occurrence, there is a reasonable doubt as to whether he would have caught hold of the young man Dinesh Chandra (P.W. 11) by his waist and whether he would have asked all his sons to attack and kill Prakash Chandra and his sons.
The appellant Ram Karan is entitled to be set at liberty.
[409 D E] BY MAJORITY Per Fazal Ali, J. (and on behalf of D.A. Desai, J.) 1:1.
Exception 4 to section 300 I.P.C. provides that culpable homicide is not murder if it is committed without pre meditation in a sudden fight in the heat of passion upon a sudden quarrel and without the offenders having taken undue advantage or acted in a cruel or unusual manner.
[399 D] 1:2.
In this case, the incident occurred upon a sudden quarrel and no one took undue advantage or acted in a cruel or unusual manner on either side.
Prakash Chandra and Umesh Chandra on the side of the prosecution died and Chhotey Lal on the side of the accused died and each of them met a homicidal death.
Therefore exception 4 to section 300 Indian Penal Code is clearly attracted and the offence of murder would be reduced to culpable homicide in respect of Sushil Kumar and Ved Prakash and, therefore, they would be guilty of committing on offence under section 304(1)/34 I.P.C. A sentence of rigorous imprisonment for seven years would be appropriate; conviction and sentence under sections 307/34 I.P.C. being in order would run con currently.
[399 B C, G H, 400 A] Per Varadarajan, J. (contra).
Sunil Kumar and Ved Prakash were the aggressors and they have been rightly convicted under section 302 read with section 34 I.P.C. for the offence of murder of Prakash Chandra land Umesh Chandra and under sections 307/34 I.P.C. with reference to P.W. 11.
Neither Exception 2 nor Exception 4 to section 300 I.P.C. would apply to the facts of the case and the offence cannot be brought under section 304 (Part I) I.P.C.
The evidence of P.Ws. 1, 10 and 11 proves beyond reasonable doubt that these two appellants Sunil Kumar and Ved Prakash attacked the deceased Prakash Chandra and Umesh Chandra with knives as a result of which both of them, who had no weapons died on the spot and these two appellants attacked P.W. 11 with knives with such intention that if he had died as a result of the injuries sustained by him they would be guilty of murder in furtherance of their common intention to murder.
Their conviction under section 307/34 is proper.
[408 F H, 409 C D] 397
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ition No. 3783 of 1978.
(Under Article 32 of the Constitution of India) R.K. Garg and V.J. Francis for the Petitioner.
M.M. Abdul Khader, Mrs. Shobha Dikshit and Miss A. Subhashini for the Respondents.
The Judgment of the Court was delivered by PATHAK, J.
The Petitioners are Radio operators Grade (lII) (Naik) in the Signals branch of the Central Reserve Police Force.
They complain that under the Central Civil Services (Revised Pay) Rules, 1973 they have been placed in the pay scale Rs. 225 308 when they were entitled to the pay scale Rs. 260 430.
3 When the writ petition came on for hearing in the first instance, a Bench of this Court made an order on December 19, 1979 providing an opportunity to the petitioners to put in a representation before the Government and requiring the Government to dispose of the representation.
The petitioners did make the representation and the Government considered it but the relief claimed by the petitioners was denied.
In accordance with the further directions contained in the order dated December 19, 1979 this writ petition has now come on for consideration on its merits.
The Central Reserve Police Force forms a part of the Ministry of Home Affairs in the Government of India, and it has a Signals branch in which one of the categories is that of Radio operators Grade III (Naik).
The petitioners say that Naik Radio operators are appointed either by direct recruitment, in which case the candidate is required to be a Matriculate or his equivalent, or by promotion from the rank of Constable, in which case the Constable should have passed the Radio operators Grade III course.
Originally, members of the Central Reserve Police Force of the rank of Naik enjoyed the pay scale Rs.85 110, and Naik Radio operators were given a special pay of Rs. 30 in view of their special qualifications and the specialised nature of their duties.
By its order dated April 23, 1970 the Central Government appointed the Third Pay Commission to make recommendations in regard to the structure of the emoluments and the conditions of service of different classes of Central Government employees.
The Commission submitted its final report to the Central Government on March, 31, 1973.
Paragraph 30 of Chapter 29 of Part I of Volume 2 contains the recommendations in respect of Radio Mechanics in the Central Reserve Police Force.
It states : "30.
Post of Radio Mechanic, Grade I in the CRP and Sub Inspector (Radio Mechanic) in the BSF are on the scale of Rs. 150 10 290 15 380, but the Diploma holders are given the scale of Rs. 180 10 290 15 380.
We recommend for these posts the scale of Rs. 380 560 but the Diploma holders working on these posts should be remune rated on the scale of Rs. 425 700.
Below this level, posts of Radio Mechanic, Grade II and.
the Radio operators are on 4 the scale of Rs.150 10 210 or on the scale of Rs. 125 3 131 4 155 with a special pay of Rs. 35 per month and we recommend that these posts should be given the scale of Rs. 330 480.
For the posts of Radio Fitter on the scale of Rs. 125 3 131 4 155 we recommend the scale of Rs. 320 400.
" Admittedly, no reference has been made therein to Radio operators Grade III (Naik).
Following the recommendations of the Third Pay Commission the Central Government framed the Central Civil Services (Revised Pay) Rules, 1973 which came into force on January 1, 1973.
The petitioners exercised their option in favour of the revised pay scales.
They were paid a salary of Rs. 250 with a special pay of Rs. 30 from January, 1975 for a few months, together with arrears on that basis for the years 1973 and 1974.
The petitioners accepted the revised pay and special pay although, they say, it fell short of the pay to which they were entitled.
Subsequently, in April 1975, the petitioners were placed in the revised pay scale Rs. 225 308 given to Naiks and the excess amount paid earlier to them was sought to be recovered by deducting from future payments of their salary.
Aggrieved by the refixation of their pay and the deduction of the excess already paid, they have filed the present writ petition.
So far as the deduction is concerned, this Court has already directed by its order dated December 19, 1979 that the Government should restore to the petitioners the excess amount already recover ed from them.
Nevertheless, it will be necessary to examine the validity of the refixation of the salary now paid to the petitioners inasmuch as that question is relevant for the period commencing from the date from which salary has been actually paid on the refixed basis.
The question whether the petitioners have been properly placed in the pay scale Rs. 225 308 must be examined, therefore, from two aspects; 1, Their claim to the Pay scale Rs. 260.430 and 5 2.
Alternatively, their claim to the pay of Rs. 250/ and the special pay of Rs. 30 paid to them before the refixation of their salary.
On the first point, a few facts may be briefly stated.
On the basis of the recommendations of the Third Pay Commission the pay scales of all Central Government employees, including personnel in the para military forces, were revised with effect from January 1, 1973.
Under the original pay scales, Naik Radio operators were placed on the scale Rs.85 110 with a special pay of Rs. 30 in view of their special qualifications and the specialised nature of their duties.
They were entitled to allowances calculated on the aggregate of their basic pay and special pay.
The Commission prescribed a scale of Rs. 225 308 for the post of Naik, but did not make any separate recommendation in respect of the post of Radio operator Grade III (Naik).
Inasmuch as before the revision of the pay scales the scale of a Naik and Radio operator Grade III (Naik) was the same, that is to say, Rs. 85 110, the revised pay scale for the post of Radio operator Grade III (Naik) was raised to the same level as that prescribed for the post of Naik, that is to say, Rs. 225 308, and in view of their special qualifications and the specialised nature of their duties Radio operators Grade III (Naik) were given a special pay of Rs. 30 also.
The petitioners urge that posts in other departments of the Central Government, for which the minimum qualification was the Matriculation examination and an additional requirement of training, carried the pay scale of Rs. 260 430 and since that requirement was also the basis of appointments to the post of Radio operators Grade III (Naik) they should also be held entitled to that pay scale.
Now the revised pay has been given with effect from January 1, 1973 and on that date the qualification in the case of a Naik was the Middle School examination, and it was only with effect from January 24, 19 75 that the qualification was raised to the Matriculation examination.
As Naiks and Radio operators Grade III (Naik) had been uniformly treated at par in the matter of that basic s qualification it is not open to the petitioners to base their claim with reference to a qualification which did not exist on January 1, 1973.
In support of their claim to the pay scale Rs. 260 430, the petitioners have drawn our attention to the circumstance that the 6 immediately next senior category, Radio operators Grade II, carries the revised scale Rs. 330 480 and, it is contended, the revised pay scale in the case of Radio operators Grade III should not be far below It is not for this Court, we think, to examine how far below should be the revised pay scale of the Radio operators Grade III.
If the Government has prescribed a particular pay scale in respect of them, all that the court can do is to merely pronounce on the validity of that fixation.
In the event that the court finds that the prescription is contrary to law it will strike it down and direct thee Government to take a fresh decision in the matter.
It is a very different case from one where this Court has sought to prescribe pay scales in appeals directly preferred from an award of the Labour Court dealing with such a matter.
In the latter case, this Court in its appellate jurisdiction can be regarded as enjoying all the jurisdiction which the Labour Court enjoys.
That is not so in the present case.
We are satisfied that Radio operators Grade III (Naik) have to be considered substantially on the same basis as Naiks in the Central Reserve Police Force, and it is because of their special qualifications and of the specialised nature of their duties that they have been provided a special pay in addition.
It may be mentioned that ever since 1975 Radio operators Grade III (Naik) are selected only from the rank of Constables on the General Duty Side The revised pay scale of Radio operators of the rank of Head Constable as well as Head Constables on General Duty is Rs. 260 350, with a special pay of Rs. 40 to Head Constables (Radio operators).
This post is the immediately next higher post above the rank of Naik, and it is apparent that there would be no justification of giving to the petitioners, who are junior in rank, the pay scale Rs. 260 430.
The petitioners have also contended that they should be paid at par with comparable Government employees on the civil side.
This claim is refuted by the respondents who point out that the petitioners are entitled to certain benefits not available to the others.
Learned counsel for the respondents bas listed before us a number of such benefits.
It is pointed out that the petitioners are entitled to casual leave for a period of twenty days as against casual leave for a period of twelve days for Government employees on The civil side, earned leave for a period of sixty days as against earned leave for a period of thirty three days for Government employees on the civil side, and rent free accommodation or house 7 allowance at 10% of the salary in contrast to Government employees on the civil side who are liable to pay 10% of the salary if accommodation is provided.
We are not satisfied that the petitioners are entitled to the pay scale Rs. 260 430.
The second point requires us to consider the validity of the refixation of the pay of the petitioners when they were receiving Rs. 250 with a special pay of Rs. 30 According to the recommendations of The Third Pay Commission, the existing pay scale of a Government servant drawing basic pay upto Rs. 1800 per month was to be augmented by an amount representing five per cent of the basic pay subject to a minimum of Rs. 15 and a maximum of Rs. 50.
The Government of India Memorandum No. F. 67/II/23/ 74 lC dated May 17, 1974 directed that special pay was not to be included in the existing emoluments for the purpose of determining the accretion where in addition to the revised pay the Government servant was to be given a special pay also.
The revised pay actually paid to the petitioners initially was computed in error inasmuch as when fixing the pay in the revised scale the special pay was taken into account for the purpose of computing the accretion.
It, therefore, became necessary to recompute the amount payable to the petitioners and to reduce it to the level now paid to them.
It has not been shown to us that the basis adopted for refixation of the pay is invalid.
In the result, this petition fails and is dismissed, but in the circumstances there is no order as to costs.
This will not affect the order dated December 19, 1979 directing the Government to restore to the petitioners the excess paid to them earlier and subsequently recovered from them.
H.L.C. Petition dismissed.
|
An identical scale of pay was being enjoyed by both Naiks and Radio operators Grade III (Naik) in the antral Reserve Police Force before the revision of scales of pay of Central Government employees with effect from January 1,1973 consequent upon the recommendations of the Third Pay Commission.
However, Radio operators Grade III (Naik) were entitled to a special pay of Rs. 30.
The Pay Commission recommended the scale of pay of Rs. 225 308 for the post of Naik but did not make any separate recommendation in respect of Radio operator Grade III (Naik).
The petitioners who were Radio operators Grade III (Naik) were initially paid a salary of Rs. 250 with a special pay of Rs. 30 from January 1,1973.
They were subsequently placed in tho revised scale of pay of Rs. 225 308 given to Naiks with a special pay of Rs. 30 and the excess amount paid earlier was sought to be recovered from them.
The petitioners contended: (i) that they were entitled to the scale of pay of Rs. 260 430 as that was the scale of pay prescribed for posts in other departments for which matriculation was the minimum qualification, (ii) that their scale of pay could not be far below the scale of pay of Rs. 330 480 prescribed for the next immediate senior post of Radio operator Grade II and (iii) that they should be paid at par with comparable government employees on the civil side.
In the alternative, the petitioners contended that they were entitled to the pay of Rs. 250 and the special pay of Rs. 30 paid to them before refixation of their salary.
Dismissing the petition, ^ HELD: 1.
The minimum qualification prescribed for the post of Naik as on January 1,1973 was Middle School Examination and it had been raised to Matriculation Examination only from January 24, 1975.
As Naiks and Radio operators Grade III (Naik) had been uniformly treated at par in the matter of that basic qualification, it was not open to the petitioners to base their claim with reference to a qualification which had not existed on January 1, 1973.
[5 E G] 2 2.
It was not for the Court to examine how far below should be the revised scale of pay of Radio operators Grade Ill as compared to that of Radio operators Grade II.
If the Government had prescribed a particular pay scale in respect of them, all that the Court could do was to merely pronounce on the validity of that fixation.
If the prescription was found contrary to law, the Court would strike it down and direct the Government to take a fresh decision in the matter.
This case was very different from one where the Court had sought to prescribe scales of pay in appeals directly preferred from an award of the Labour Court dealing with such a matter.
In the latter case, the Court in its appellate jurisdiction could be regarded as enjoying all the jurisdiction which the Labour Court enjoyed.
[6 A C] 3.
Radio operators Grade Ill (Naik) had to be considered substantially on the same basis as Naiks and it was because of their special qualifications and of the specialised nature of their duties that they had been provided with a special pay in addition.
Ever since 1975 Radio operators Grade III (Naik) had been selected only from the rank of Constables on the General Duty Side.
The revised pay scale of Radio operators of the rank of Head Constable as well as Head Constables on General Duty was Rs. 260 350 with a special pay of Rs. 40 to the former.
As this post was the next immediate higher post above the rank of Naik.
it was apparent that there was no justification for giving to the petitioners, who were junior in rank, the scale of pay of Rs. 260 430.
[6 D F] 4.
The petitioners could not claim to be paid at par with comparable government employees on the civil side as they were entitled to certain benefits which were not available to the latter.
[6 G H; 7 A B] 5.
The revised pay initially paid to the petitioners had been computed in error inasmuch as when fixing the pay in the revised scale the special pay had been wrongly taken into account.
[7 D E]
|
Civil Appeal No. 94 of 1972.
Appeal by Special leave from the Judgment and order dated the 23rd July, 1971 of the Punjab and Haryana High Court in Execution Second Appeal No. 1941 of 1969.
Uma Datta and Krishna Datta for the Appellant.
S.K. Mehta, P.N. Puri and M.R. Dua for the Respondent.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
In this appeal by special leave under Article 136 of the Constitution, the appellant is the victim of Court 's craze for technicalities of law at the cost of justice.
This Court 846 exercises its discretionary power under Article 136 of the Constitution to meet the ends of justice or to remove miscarriage of justice perpetrated in a case.
This appeal arises out of an execution proceeding.
The facts material for the purpose of disposal of this appeal may be stated thus.
The appellant was the plaintiff in a pre emption suit and Bot a decree.
Respondent No. I was the vendee and respondent No. 2, who was the real brother of the plaintiff appellant, was the vendor.
The suit was for pre emption and possession in respect of some agricultural land.
The trial court decreed the suit, on payment of Rs. 15,500 as the price of the land and Rs. 100 as the charges on account of registration and other charges of the deed.
The appellant deposited the amount as directed by the Court.
3 Respondent No. I filed an appeal and the Additional District Judge who heard and disposed of the appeal dismissed the appeal with the modification directing the appellant to deposit a sum of Rs. 1836.25 more in the trial court for payment to the vendee, within 15.4.1967; in case of failure the suit was directed to be dismissed.
On 14.4.1967, the appellant deposited Rs. 1836.00 instead of Rs. 1836.25.
He, however, made good the short deposit of 25 paise on 28.
10.1968 with the permission of the Court on the allegation that the omission to deposit 25 paise was due to bona fide mistake.
Respondent No. 1 filed a regular second appeal before the High Court of Punjab and Haryana.
The High Court affirmed the decree of the first appellate Court but ordered the appellant to deposit a further sum of Rs. 500.00 for the improvements made to the land.
The appellant was given three months ' time to make the payment of the said sum of Rs. 500.00, failing which, it was directed, the suit would stand dismissed.
The appellant deposited this sum to. within the time limit.
The appellant on 28.10.1968 filed an execution case before the executing court to get possession of the suit land.
The executing court issued notice to the judgment debtor (respondent No. 1 herein).
The judgment debtor filed an application under order XX, rule 14(1)(b) of the Code of Civil Procedure on the ground, inter alia that the appellant was directed to make the payment of the sum of Rs. 1836.25 within April 15, 1967, but the appellant had deposited only a sum of Rs. 1836.00 within the due date and the amount fell short of 25 paise, and as such the execution proceedings 847 should be struck off.
The appellant filed a rejoinder to the objection petition of the judgment debtor.
His plea was that the short deposit of 25 paise was due to a bona fide mistake on his part, but that the shortage was made good on October 28, 1968 after obtaining necessary permission from the trial Court.
The executing Court, by its order dated February 1, 1969, held that the short deposit of 25 paise was due to a bona fide mistake on the part of the degree holder and over ruled the objection of the judgment debtor, taking the view that in the interest of justice the default on the part of the decree holder should be condoned.
The Judgment debtor preferred an appeal in the Court of the IInd Additional District Judge, who, by his order dated October 24, 1969 set aside the order of the executing court.
He held that the provisions of order 20, rule 14(1)(b) of the Code of Civil Procedure were mandatory, and as such the suit should be deemed to have stood dismissed.
He also held that the short deposit of 25 paise was not on account of mistake and the default could not be condoned.
The appellant preferred a second execution appeal, being Execution Second Appeal No. 1941 of 1969 in the High Court.
The appeal was however presented without a certified copy of the order of the executing Court.
The appellant, however, made an application for dispensing with the filing of the certified copy.
The High Court while admitting the appeal passed the following order: E "Admitted.
Certified copy to be filed as soon as it is available . . . . . . " Sd/ R.S. Narula 25.11.69".
The appellant obtained the certified copy on June 3, 1970 and filed it in the High Court on June 10, 1970.
The appellant filed an application on July 17, 1970 under section S of the Limitation Act for the condonation of the delay.
The second appeal came up for hearing on March 25, 1971 before a single Judge.
Respondent No. I raised the preliminary objection that the appeal was barred by limitation.
The objection was upheld by the learned single Judge; asa result he dismissed the execution second appeal filed by the appellant herein.
The appellant prayed for leave to appeal under Letters Patent.
The prayer was also rejected.
Hence this appeal by special leave.
848 7.
Shri S.K. Mehta, learned counsel appearing for Respondent No. I submitted that the execution appeal filed by the appellant in the High Court was incompetent as the certified copy of the impugned order of the lower appellate Court was not filed alongwith the memorandum of appeal.
We do not find any substance in the submission for the reason, as we have already stated above, that the appellant was granted time by the High Court at the time of the admission and was allowed to file the certified copy "as soon as it is available.
" It is not the contention of the respondent that the copy was not filed at all, nor it is his submission that the Court had no power to grant time to file the copy of the impugned order.
As stated above, the copy was obtained on 3.6.1970 and filed in court on 10.6.1970 seven days after the copy was obtained.
So he filed the petition under Section 5 of the Limitation Act.
There was no reason as to why the delay could not be condoned.
That apart, under Section 148 of the Code of Civil Procedure, the Court has enough power to enlarge time from time to time.
Section 148 provides: "Where any period is fixed or granted by the Court for the doing of any act prescribed or allowed by this Code, the Court, may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired.
" The power given to the Court under Section 148 is discretionary and is given for the purpose of securing the ends of justice in case of necessity.
In our opinion, the High Court committed an error in not adverting to, and not exercising its powers under Section 148 C.P.C. and in dismissing the appeal without going to the merit of the matter.
Mr. Mehta drew our attention to the second proviso to subrule of Order 41, rule (1) C.P.C. as amended by Punjab, Haryana and Chandigarh.
The amendment is in the following words: "Provided further that the Court may permit the appeal to be filed with true copies duly authenticated by an advocate as correct." This provision hardly helps him.
It is not understandable, how the counsel for the appellant could file 'true copies ', when his client had not obtained the certificate copy of the order tn question.
849 8.
The next question for decision is whether the first execution A appellate Court was justified in holding that the amount directed to be deposited was not deposited as it fell short by 25 paise.
Order 20, rule 14 CPC provides: "Decree in pre emption suits Where the Court decrees a claim to pre emption in respect of a particular scale of property and the purchase money has not been paid into Court, the decree shall (a) specify a day on or before which the purchase money shall be so paid, and (c) direct that on payment into Court of such purchase money, together with the costs (if any) decreed against the plaintiff, on or before the day referred to in clause (a), the defendant shall deliver possession of the property to the plaintiff, whose title thereto shall be deemed to have accrued from the date of such payment, but that, if the purchase money and the costs if any) are not so paid, the suit shall be dismissed with costs.
(2) . . . . . . . .
Under order 20, rule 14 CPC, the plaintiff decree holder, in order to get delivery of possession of the land, has to fulfil two conditions, (i) he has to deposit in Court the purchase money together with the cost, if any, decreed against him and (ii) the deposit must be made on or before the date fixed by the Court.
F Here the admitted position is that the appellant deposited the entire amount of purchase money together with the costs decreed against him, less 25 paise within the time fixed by the Court and 25 paise too was deposited, but beyond time.
The executing Court held that the short deposit was .
due to a bona fide mistake, while the executing appellate Court held that it was not due to any bona fide mistake, but it was a default and thereby the executing appellate Court deprived the decree holder of the legitimate fruits of the decree he obtained in all the Courts.
The finding of the first executing appellate Court that the non deposit could not be due to any bona fide mistake, is absolutely untenable for the reason that while the 850 appellant has deposited in total Rs. 17,936.00 from time to time as directed by the Courts, there was absolutely no reason as to why he would not have deposited 25 paise, unless it was due to a mistake.
This was pre eminently a case in which the first execution appellate Court ought to have exercised its discretionary powers under section 148 CPC and accepted the delayed deposit of 25 paise, 85 was done by the original executing Court.
In the result, we allow the appeal with costs, set aside the orders of the High Court as well as the first execution appellate Court and restore the order of the original executing Court.
S.R. Appeal allowed.
|
Appellant plaintfull in the pre emption suit against the respondent (vendee) and Respondent 2 (Vendor) got a decree.
As per the Trial Court decree the appellant deposited a sum of Rs. 15,500 as the price of the land and RB.
100 u tho charges on account of registration and other expenses of the dead.
Respondent I (vendee) filed an appeal and the Additional District Judge dismissed the appeal with the modification directing the appellant to deposit a sum of Rs. 1836 25 more in the trial Court for payment to the vendee, within 15.4.1967; in case of failure the suit was directed to be dismissed.
On 14.4.1967, the appellant deposited Rs. 1836.00 instead of Rs. 1836 25.
He, however, made good the short deposit of 25 Paise on 28.10.1968 with the permission of the Court averring that the omission to deposit 25 paise was due to bona fide mistakes.
The vendee held a regular second appeal and the High Court while dismissing the appeal directed the appellant to deposit within three Months ' time, a further sum of Rs. 500 for the improvements made to the land.
The appellant deposited this sum within the time limit.
In the execution case filed before the executing court, the respondent vendee Sled an application under order XX Rule 14(1)(b), raising an objection to the maintainability of the Execution Petition on the plea that short deposit of 25 Paise within 15.4.1967 amounted to deemed dismissal of the suit itself and that the default could not be condoned.
The executing court by its order dt.
1.2.1969 overruled the objections.
The Judgment debtor 's appeal before the II Additional District Judge was accepted holding that the provisions of order XX Rule 14(1)(b) C.P.C. were mandatory, the short deposit was not due to bona fide mistake and the default could not be condoned.
The appellant preferred a second execution appeal before the High Court, without a certified copy of the order of the executing Court, but with an application for exemption from filing the certified copy.
The appellant was directed on 25.11.1969 to file the 845 certified copy "as soon as is available".
Tho appellant obtained a certified copy A on June 3, 1970 and filed it in the High Court on July 17, 1970.
The appellant filed r an application on July 17, 1970 under section 5 of the Limitation Act for condonation of delay.
The preliminary objection raised by the Respondent No. 1 that the appeal was barred by limitation, was accepted by the learned single Judge and the Execution second appeal thus stood dismissed.
Hence the appeal after obtaining special leave of the Court.
Allowing the appeal, the Court ^ HELD: 1.
The High Court committed an error in not adverting to and not exercising its powers under Section 148 of the Code of Civil Procedure and in dismissing the appeal without going into the merit of the matter.
Under section 148 C.P.C., the Court has enough power to enlarge time from time to time.
The power given to the Court under section 148, is discretionary and is given for the purpose of securing the ends of justice in case of necessity.
[848 C D, E F, 850 B] 2.
Under order XX, rule 14 C.P.C. the plaintiff decree holder, in order to get delivery of possession of the land, has to fulfill two conditions : (i) he has to deposit in the court the purchase money together with the cost, if any decreed against him, and (ii) the deposit must be made on or before the date fixed by the Court.
[849 E F] However, in view of the deposit of 25 Paise having been made, under the orders of the court after the acceptance of the bona fide mistake, the finding of the first executing appellate court that the non deposit could not be due to any bona fide mistake is absolutely untenable for the reason that while the appellant has deposited in total Rs. 17,936.00 from time to time as directed by the Courts there was absolutely no reason as to why he would not have deposited 25 paise, unless it was due to a mistake.
Indeed, the appellant is the victim of Courts craze for technicalities of law at the cost of justice.
[845 H, 849 G.H, 850 A]
|
: Criminal Appeal No. 69 of 1981 Appeal by special leave from the Judgment and order dated the 16th December, 1980 of the Allahabad High Court in Criminal Appeal No. 342 of 1976.
Soli J. Sorabjee, R.K Jain, R.P. Singh and Natin Mohan Popli for the Appellant.
P.R. Mridul, Praveen Kumar, A.K. Sharma and Dalveer Bhandari for the Respondent.
The Judgment of the Court was delivered by MISRA J.
The present appeal by special leave is directed against the judgment of the High Court of Judicature at Allahabad, 873 dated 16th December, 1980, convicting the appellant under section 448 of the Indian Penal Code.
Premises Aranya Kutir bearing Municipal No. 47A Jakhan in Dehra Dun was owned by one R.C. Sood.
He executed a gift deed in favour of Shri Anand Mayee Sangh, Dehra Dun with the stipulation that the donor shall remain in possession of the premises during his life time and after his death his widow if alive would remain in possession.
The management of the same would be taken up by the Sangh after their death.
The appellant is the widow of the brother of Shri R.C Sood.
It appears that in 1967 the appellant was invited by Shri R.C. Sood to reside with him in the aforesaid house and ever since she has been residing peacefully there.
On 10th of October, 1973, Shri R.C. Sood expired.
The appellant, however, continued to live in the said house.
Respondent No. 1, Shri Nawal Kishore as Secretary of the aforesaid Sangh served a notice dated 13th November, 1973 on the appellant asking her to vacate the premises in dispute immediately, failing which a criminal action under section 448 of the Indian Penal Code would be taken against her as her further stay in the premises would be deemed to be in the nature of a criminal trespass.
The appellant, however, did not vacate the premises as she was convinced that her stay in the said premises could not amount to criminal trespass.
Respondent No. 1, Shri Nawal Kishore thereupon filed a complaint under section 448 of the Indian Penal Code against the appellant in the Court of Sub Divisional Magistrate, Mussoorie.
He examined himself as P.W. 1 and also produced Shri K. Bose as P.W.2.
The appellant in her statement under section 313, as well as in her statement as a witness D.W. 1 admitted the services of notice on her but denied that any criminal action was called for.
She further stated that she had met Anand Mayee who had permitted her to live in the house.
The learned Magistrate, however, took the view t hat the premises in dispute has been vested in the Anand Mayee Sangh by 874 virtue of the gift deed and a notice to vacate having been served upon the appellant, the continued stay of the appellant in the said premises amounted to a criminal trespass within the meaning of section 441 of the Indian Penal Code.
He accordingly convicted the appellant under section 448 to the Indian Penal Code and sentenced her to pay 1 fine of Rs. 100 and in default to undergo simple imprisonment for 40 days.
In addition, the learned Magistrate also passed an order directing the appellant to vacate the premises within two months of the passing of the order, purporting to be one under section 456 of the Criminal Procedure Code.
The appellant feeling aggrieved by the order of the learned Magistrate went up in appeal and took up various grounds.
The learned Sessions Judge allowed the appeal, set aside the order of the learned Magistrate and acquitted the appellant by his judgment Dated 19th August, 1975.
Respondent No. 1 Shri Nawal Kishore assailed the order of acquittal by filing criminal appeal in the High Court and the High Court in its turn allowed the appeal and reversed the order of acquittal passed by the learned Sessions Judge and convicted the appellant.
In the opinion of the High Court the appeal filed by the appellant before the Sessions Judge was incompetent as no appeal could lie against the imposition of fine.
It also took the view under the provisions of section 401(5) of the Criminal Procedure Code it is permissible to treat a revision as an appeal but not vice versa.
It therefore, declined to treat the appeal against the order of Magistrate as a revision.
The High Court further expressed the opinion that the appellant may file a revision if she so chooses which would be considered by the Court of Admission and then It proper the same may be allowed.
The appellant feeling aggrieved by the judgment of the High Court bas filed the present appeal with the special leave as stated earlier.
Shri Soli J. Sorabji appearing for the appellant has contended that on the allegations made in the complaint no offence under section 411 of the Indian Penal Code is made out.
In order to appreciate the contention it will he appropriate at this stage to read section 441 of the Indian Penal Code: "441.
Criminal trespass : Whoever enters into or upon property in the possession of another with intent to commit an offence or to intimidate, insult or annoy any person in possession of such property, or having lawfully entered into or upon such property, unlawfully remains 875 there with intent thereby to intimate, insult or annoy any such person, or with intent to commit an offence.
is said to commit "criminal trespass".
There has been local amendment by U.P. Act 31 of 1961 for section 441 of the Indian Penal Code, 1 960, the following shall be substituted: "441.
Criminal Trespass: Whoever enters into or upon property in possession of another with intent to commit an offence or to intimidiate, insult or annoy any person in possession of such property, or, having lawfully entered into or upon such property, unlawfully remains there with intent thereby to intimidiate, insult or annoy any such person, or with intent to commit an offences, or having entered into or upon such property, whether before or after the coming into force of the Criminal Law (U.P.Amendment) Act, 1961, with the intention of taking unauthorised possession or making unauthorised use of such property fails to withdraw from such property, or its possession or use when called upon to do so by that another person by notice in writing, duly served upon him, by the date specified in the notice, is said to commit, 'criminal trespass '.
It may be pointed out that the appellant was allowed to occupy the premises in 1967 by Shri R.C. Sood.
Under the terms of gift deed Shri Sood was entitled to remain in occupation of the premises during his life time.
He could as well grant, leave and licence to p the appellant to occupy the premises along with him.
Now the question arises about her status after the death of Shri R.C. Sood.
At the most, it can be said that after the death of Shri Sood the leave and license granted by Shri Sood came to an end and if she stayed in the premises after the death of Shri Sood, her possession may be that of a trespasser but every trespass does not amount to criminal trespass within the meaning of section 141 of the Indian Penal Code.
In order to satisfy the conditions of section 441 it must be established that the appellant entered in possession over the premises with intent to commit an offence.
A bare persual of the complaint filed by Respondent No. I makes it abundantly clear that there is absolutely no allegation about the intention of the appellant to commit any offence or to intimidate, insult or annoy 876 any person in possession, as will be evident from three material paragraphs which are quoted below: "2.
That the late Shri R.C. Sood was occupying the said premises in accordance with clause No. I of a gift deed executed by him in favour of Shri Anand Mayee Sangh and after his demise the said premises had to be delivered to Shri Anand Mayee Sangh.
That after the demise of Shri R.".
Sood, the accused was repeatedly requested to voluntarily vacate and deliver the possession of the said premises to the Sangh but the accused paid no heed and hence a notice dated 13.11.1973, copy of which enclosed, was sent to the accused as required by U.P. Amendment of Section 448 I.P.C. the said notice was served upon accused on 14.11.73 as per postal A.D. receipt attached herewith.
That the accused was required to quit and vacate the said premises by the 20th day of November, 1973 but instead of vacating the premises the accused has been making unusual pretext and has thus committed an offence under section 448 I.P.C." The appellant may be fondly thinking that she had a right to occupy the premises even after the death of Shri R.C. Sood.
If a suit for eviction is filed in Civil Court she might be in a position to vindicate her right and justify her possession.
This is essentially a civil matter which could be properly adjudicated upon by a competent Civil Court.
To initiate criminal proceedings in the circumstances appears to be only an abuse of the process of the Court.
We also do not agree with the view taken by the Court that the appeal filed by the appellant before the Sessions Judge was incompetent.
If the learned Magistrate had only awarded a sentence of fine, in that case revision alone would be competent and not an appeal but in the instant case the Magistrate not only awarded the fine of Rs. 100 but also directed the appellant to vacate the premises within two months from the date of the order.
This part of the order presumably was passed under section 456 of the Criminal Procedure Code, and this made the order appealable and the High Court has gone wrong in holding that appeal filed by the appellant before the Sessions Judge was not maintainable.
877 There were certain other pleas taken by the respondent before the High Court but it is not necessary to refer to those pleas in the view that we have taken that on the complaint itself no offence under section 448 of the Indian Penal Code is made out.
For the foregoing discussion, the appeal must succeed.
It is accordingly allowed.
The judgment of the High Court dated 16th December, 1980 is set aside and that of the Court of Sessions is restored.
The bail bond if any shall be cancelled.
S.R. Appeal allowed.
|
Premises, "Aranaya Kutir" bearing Municipal No. 47A Jakhan in Dehradun was owned by one Shri R.C. Sood.
He executed a gift deed in favour of Shree Anand Mayee Sangh, Dehradun, with a stipulation that the donor shall remain in possession of the premises during his life time and after his death his widow if alive would remain in possession.
The management of the same would be taken up by the Sangh after their death.
In 1967, the appellant, the widow of the brother of Shri R.C. Sood was invited by Shri Sood to reside with him in the aforesaid house and ever since she has been residing peacefully there.
On 10th of October, 1973 Shri R.C. Sood expired.
Respondent No. 1, Shri Nawal Kishore as secretary of the Anand Mayee Saogh, served a notice dated 13th November, 1973 on the appellant asking her to vacate the premises immediately, and threatening to take criminal action against her on failure to do so, as her further stay in the premises would be deemed to be in the nature of a criminal trespass.
When the appellant did not vacate the premises, respondent No. 1 filed a complaint under section 468 of the Penal Code.
The Sub Divisional Magistrate, Mussorie found that the continued stay of the appellant amounted to criminal trespass within the meaning of section 441 of the Penal Code, convicted her under section 448 and sentenced her to pay a fine of Rs. 100 or in lieu thereof to undergo simple imprisonment for 40 days.
In addition, the learned Magistrate also passed an order directing the appellant to vacate the premises within two months of the order, purporting to be one under section 456 o; the Criminal Procedure Code.
The appeal preferred by the appellant was allowed and the conviction and sentence passed were set aside.
Respondent No. 1, therefore assailed the order of acquittal by filing a criminal appeal before the High Court.
The High Court allowed it and reversed the order of acquittal passed by the Sessions Judge and convicted the appellant.
In the opinion of the High Court, the appeal filed by the appellant before the Sessions Judge was incompetent, as no appeal would lie against the imposition of fine.
The High Court declined to treat the appeal as a division in as much as under the provisions of section 401(5) of the Criminal 872 Procedure Code, it is permissible to treat a revision as an appeal but not vice versa.
Hence the appeal by special leave.
Allowing the appeal, the Court ^ HELD: 1.1.
In order to satisfy the conditions of section 441 of the Penal Code, it must be established that the party, complained of entered in possession over the premises with intent to commit an offence.
Every trespass does not amount to criminal trespass within the meaning of that section.
[875 G] 1:2.
Initiating criminal proceedings in the circumstances of this instant case is only an abuse of the process of the court.
This is essentially a civil matter which could be properly adjudicated upon by a competent civil court.
(a) The appellant was allowed to occupy tho premises in 1967 by Mr. Sood perhaps on 'lease and license ' basis.
(b) A bare perusal of the complaint filed by Respondent No. 1 makes it abundantly clear that there is absolutely no allegation about the intention of the appellant to commit any offence, or to intimidate, insult or annoy any person in possession; and (c) If a suit for eviction is filed in the civil court, the appellant, who may be fondly thinking that she had a right to occupy the premises even after the death of Shri Sood, might be in a position to vindicate her right and justify her possession.
[875 E H, 876 A, E F] 2.
The appeal filed by the appellant before the Sessions Judge was competent and maintainable.
If the learned Magistrate had only awarded a sentence of fine, in that case revision alone would be competent and not an appeal.
But in the instant case, the Magistrate not only awarded the fine of Rs. 100 but also directed the appellant to vacate the premises within two months from the date of the order.
This part of the order presumably was passed under section 456 of Criminal Procedure Code, and this made the order appealable.
[876 F H]
|
N: Criminal Appeal No. 701 of 1980.
Appeal by special leave from the Judgment and order dated the 5th March, 1980 of the Delhi High Court in Criminal Revision No. 335 of 1974.
B.P. Maheshwari for the Appellants.
M.C. Bhandari, Mrs. Madhhu Mull Chandani and R.B. Datar for the Respondents.
F.S. Nariman, Parveen Kumar Jain, Kapil Sibbal and Anil Kumar Sharma for Respondents.
This appeal by special leave is directed against a judgment dated March 5, 1980 of the Delhi High Court quashing the proceedings taken against respondents Nos. 1 to S and arises in the following circumstances.
On March 25, 1974, one Shri M.M. Gupta, Food Inspector, Municipal Corporation of Delhi visited premises No. 5171, Basant Road, Delhi where Shri Madan Lal had kept for sale 'Morton Toffees '.
The said Inspector after purchasing the sample of the article sent it to the Public Analyst who opined that the said sample did not conform to the standards prescribed for toffees.
The toffees were manufactured by M/s. Upper Ganges Sugar Mills.
Respondent No. 1 (Rain Kishan Rohtagi) was the Manager of the company and Respondent Nos.
2 to 5 were the Directors of the Company, including the company also.
A complaint was filed before the Metropolitan Magistrate who summoned all the respondents for being tried for violating the provisions of the Prevention of Food Adulteration Act (hereinafter referred to as the 'Acts).
The said complaint was filed by the Assistant Municipal Prosecutor in the court of Metropolitan Magistrate, Delhi against the accused for having committed offences under sections 7/16 of the Act.
The only point canvassed before us was that on the allegations made in the complaint, a clear case was made out against all the 887 respondents and the High Court ought not to have quashed the proceedings on the ground that the complaint did not disclose any offence.
Before going through the relevant part of the complaint, it mag be necessary to say a few words about the law on the subject.
After the coming into force of the Code of Criminal Procedure, B 1973 (hereinafter referred to as the 'present Code '), there was a serious divergence of judicial opinion on the question as to whether where a power is exercised under section 397 of the present Code, the High Court could exercise those very powers under section 482 of the present Code.
It is true that section 397 (2) clearly bars the jurisdiction of the Court in respect of interlocutory orders passed in appeal, enquiry or other proceedings.
The matter is, however, no longer res integra as the entire controversy has been set at rest by a decision of this Court in Madhu Limaye vs State of Maharashtra(1) where this Court pointed out that section 482 of the present Code had a different parameter and was a provision independent of section 397(2).
This Court further held that while section 397(2) applied to the exercise y of revisional powers of the High Court, section 482 regulated the .
inherent powers of the court to pass orders necessary in order to prevent the abuse of the process of the court.
In this connection, Untwalia, J. speaking for the Court observed as follows: "On a plain reading of section 482, however, it would follow that nothing in the Code, which would include sub section (2) of section 397 also, "shall be deemed to limit or affect the inherent powers of the High Court".
But, if we were to say that the said bar is not to operate in the exercise of the inherent power at all, it will be setting at naught one of the limitations imposed upon the exercise of the revisional powers .
But in case the impugned order clearly brings about a situation which is an abuse of the process of the court or for the purpose of securing the ends of justice interference by the High Court is absolutely necessary, then nothing contained in section 397(2) can limit or affect the exercise of the inherent power by the High Court.
But such cases would be few and far between.
The High Court must exercise the inherent power very sparingly.
" 888 It may be noticed that section 482 of the present Code is the ad verbatim copy of section 561A of the old Code.
This provision confers a separate and independent power on the High Court alone to pass orders ex debito justitiae in cases where grave and substantial injustice has been done or where the process of the Court has been seriously abused.
It is not merely a revisional power meant to be exercised against the orders passed by subordinate courts.
It was under this section that in the old Code, the High Courts used to quash the proceedings or expunge uncalled for remarks against witnesses or other persons or subordinate courts.
Thus, the scope, ambit and range of section 561A (which is now section 482) is quite different from the powers conferred by the present Code under the provisions of section 397.
It may be that in some cases there may be overlapping but such cases would be few and far between.
It is well settled that the inherent powers under section 482 of the present Code can be exercised only when no other remedy is available to the litigant and not where a specific remedy is provided by the statute.
Further, the power being an extraordinary one, it has to be exercised sparingly.
If these considerations are kept in mind, there will be no inconsistency between sections 482 and 397(2) of the present Code.
The limits of the power under section 482 were clearly defined by this Court in Raj Kapoor and Ors.
vs State and Ors.(l) where Krishna Iyer J. Observed as follows: "Even so, a general principle pervades this branch of law when a specific provision is made: easy resort to inherent power is not right except under compelling circumstances.
Not that there is absence of jurisdiction but that inherent power should not invade areas set apart for specific power under the same Code." Another important consideration which is to be kept in mind is as to when the High Court acting under the provisions of section 482 should exercise the inherent power in so far as quashing of criminal q proceedings are concerned.
This matter was gone into in greater detail in Smt.
Nagawwa vs Veeranna Shivalingappa Konjalji and Ors.(2) where the scope of sections 202 and 204 of the present Code was consider ed and while laying down the guidelines and the grounds on which proceedings could be quashed this Court observed as follows: 889 "Thus, it may be safely held that in the following cases an order of the Magistrate issuing process against the accused can be quashed or set aside: (1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused; (2) Where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused; (3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like.
The cases mentioned by us are purely illustrative and provide sufficient guidelines to indicate contingencies where the High Court can quash Proceedings.
" Same view was taken in a later decision of this Court in Sharda Prasad Sinha vs State of Bihar(l) where Bhagwati, J. speaking for the Court observed as follows: "It is, now settled law that where the allegations set out in the complaint or the charge sheet do not constitute any offence, it is competent to the High Court exercising its inherent jurisdiction under section 482 of the Code of Criminal Procedure to quash the order passed by the Magistrate taking cognizance of the offence." 890 It is, therefore, manifestly clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted.
In other words, the test is that taking the allegations and the complaint as they are, without adding or subtracting any thing, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under section 482 of the present Code.
In the instant cases the argument of the appellant before us is that taking the complaint as a whole, it cannot be said that no offence is made out or that the facts mentioned in the complaint do not constitute any offence against the respondents or some of them.
On the other hand, the counsel for the respondents submitted that even taking the allegations of the complaint ex facie no case for trial has been made out at all.
Before going to the complaint, we might state that it is common ground that the complaint clearly contains the allegations regarding the visit of the Inspector to the shop of respondent No. 6 (Madan Lal) and that the sample taken by him, which was sent to the Public Analyst, was manufactured by Upper Ganges Sugar Mills, Daryagang, Delhi having its registered office at Calcutta and that the Public Analyst found the samples to be adulterated.
There is no dispute regarding these facts.
The only point on which the contro versy centres is as to whether or not on the allegations, the Manager as also the other respondents I to 5 committed any offence.
The main clause of the complaint which is the subject matter of the dispute is clause No. S which may be extracted thus: "5.
That the accused No. 3 is the Manager, of accused No. 2 and accused No. 4 to 7 are the Directors of accused No. 2 and as such they were incharge of and responsible for the conduct of business of accused No. 2 at the time of a sampling.
" According to this clause, accused No. 3 (Ram Kishan) who is respondent No. I in this appeal and accused Nos. 4 7 who are respondent Nos. 2 to 4, were the Directors of the company, respondent No. 5.
So far as the Manager, respondent No. 1, is concerned it was not and could not be reasonably argued that no case is made out against him because from the very nature of his 891 duties, it is manifest that he must be in the knowledge about the affairs of the sale and manufacture of the disputed sample.
It was, however, contended that there is no allegation whatsoever against the Directors, respondent Nos. 2 to 4.
Reliance has been placed on the words 'as such ' in order to argue that because the complaint does not attribute any criminal responsibility to accused Nos. 4 to 7 except that they were incharge of and responsible for the conduct of the business of the company.
It is true that there is no clear averment of the fact that the Directors were really incharge of the manufacture and responsible for the conduct of business but the words 'as such ' indicate that the complainant has merely presumed that the Directors of the company must be guilty because they are holding a particular office.
This argument found favour with the High Court which quashed the proceedings against the Directors as also against the Manager, respondent No. 1.
So far as the Manager is concerned, we are satisfied that from the very nature of his duties it can be safely inferred that he would undoubtedly be vicariously liable for the offence; vicarious liability being an incident of an offence under the Act.
So far as the Directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show, apart from the presumption drawn by the complainant, that there is any act committed by the Directors from which a reasonable inference can be drawn that they could also be vicariously liable.
In these circumstances, therefore, we find ourselves in complete agreement with the argument of the High Court that no case against the Directors (accused Nos 4 to 7) has been made out ex facie on the allegations made in the complaint and the proceedings against them were rightly quashed.
We, however, do not agree that even accused No. 3, respondent No. 1, who is Manager of the Company and therefore directly incharge of its affairs, could fall in the same category as the Directors.
Hence, we would set aside that part of the judgment of the High Court which quashes the proceedings against the Manager, respondent No. I (Ram Kishan Rohtagi).
Although we uphold the order of the High Court we would like to state that there are ample provisions in the Code of Criminal 892 Procedure, 1973 in which the Court can take cognizance against persons who have not been made accused and try them in the same manner along with the other accused.
In the old Code, section 351 contained a lacuna in the mode of taking cognizance if a new person was to be added as an accused.
1 he Law Commission in its 41st Report (para 24.81) adverted to this aspect of the law and section 319 of the present Code gave full effect to the recommendation of the Law Commission by removing the lacuna which was found to exist in section 351 of the old Code.
Section 319 as incorporated in the present Code may be extracted thus: "319.
Power to proceed against other persons appearing to be guilty of offence.
(1) Where, in the course of any inquiry into, or trial of, an offence, it appears from the evidence that any person not being the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed.
(2) Where such person is not attending the Court, he may be arrested or summoned, as the circumstances of the case may require, for the purpose aforesaid.
(3) Any person attending the Court, although not under arrest or upon a summons, may be detained by such Court for the purpose of the enquiry into, or trial of, the offence which he appears to have committed.
(4) Where the Court proceeds against any person under sub section (1) then (a) the proceedings in respect of such person shall be commenced afresh, and the witnesses re heard; (b) subject to the provisions of clause (a), the case may proceed as if such person had been an accused person when the Court took cognizance 893 of the offence upon which the inquiry or trial was commenced.
" This provision gives ample powers to any court to take cognizance and add any person not being an accused before it and try him alongwith the other accused.
This provision was also the subject matter of a decision by this Court in Joginder Singh and Anr.
vs State of Punjab and Anr.(1) where Tulzapurkar, J., speaking for the Court observed thus: "A plain reading of section 319 (1), which occurs in chapter XXIV dealing with general provisions as to inquiries and trials, clearly shows that it applies to all the Courts including a Sessions Court and as such a Sessions Court will have the power to add any person, not being the accused before it, but against whom there appears during trial sufficient evidence indicating his involvement in the offence, as an accused and direct him to be tried along with the other accused.
" In these circumstances, therefore, if the prosecution can at any stage produce evidence which satisfies the court that the other accused or those who have not been arrayed as accused against whom proceedings have been quashed have also committed the offence the Court can take cognizance against them and try them along with the other accused.
But, we would hasten to add that this is really an extraordinary power which is conferred on the Court and should be used very sparingly and only if compelling reasons exist for taking cognizance against the other person against whom action has not been taken.
More than this we would not like to say anything further at this stage.
We leave the entire matter to the discretion of the court concerned so that it may act according to law.
We would, however, make it plain that the mere fact that the proceedings have been quashed against respondent Nos. 2 to S will not prevent the court from exercising its discretion if it is fully satisfied that a case for taking cognizance against them has been made out on the additional evidence led before it.
894 For these reasons, therefore, we allow this appeal only to the extent that the order of the High Court quashing the proceedings against the Manager (Rohtagi), respondent No. 1, is hereby set aside and that of the Metropolitan Magistrate is restored.
As regards the other respondents (Directors) the order of the High Court stands and the appeal in respect of these respondents only will stand dismissed.
An attested copy of this judgment be placed on the file of criminal appeal No. 749 of 1980.
H.L.C. Appeal partly allowed.
|
A Food Inspector of the Municipal Corporation visited tho premises of a shopkeeper and purchased a sample of toffees which, when analysed by Public Analyst, was found not to conform to the prescribed standards.
In clause No. S of the complaint filed before the Magistrate it was stated: "That the accused No. 3 is tho Manager of accused No. 2 and accused No. 4 to 7 are the Directors of accused No. 2 and as such they were incharge of and responsible for the conduct of business of accused No. 2 at the time of sampling." Accused No. 2 was the Company which manufactured the toffees, accused No. 3 was its Manager and accused Nos. 4 to 7 were its Directors (respondents l to 5 here).
The Magistrate passed an order summoning all the accused for being tried for violation of sections 7/16 of the Prevention of Food Adulteration Act and that order was assailed before the High Court.
It was argued before the High Court that the complaint did not attribute any criminal responsibility to the Directors inasmuch as there was no clear averment of the fact that the Directors were really incharge of the manufacture of toffees and were responsible for the conduct of business and that the words 'as such ' in clause No. S of the complaint indicated that the complainant had merely presumed that the Directors of the Company must be guilty because they were holding a particular office.
The High Court accepted the argument and quashed the proceedings against the Directors as well as the Manager of the Company.
In appeal, it was contended on behalf.
Of the appellant that on the allegations made in the complaint, a clear case had been made out against all the respondents and the High Court ought not to have quashed the proceedings on the ground that the complaint did not disclose any offence.
Counsel for respondents contended that even taking the allegations of the complaint ex facie no case for trial had been made out.
885 Upholding the order of the High Court in respect of quashing of proceedings against the Directors and allowing the appeal in respect of quashing of proceedings against the Manager, ^ HELD: Where the allegations set out in the complaint do not constitute any offence it is competent to the High Court exercising its inherent jurisdiction under 8.
482 of the Code of Criminal Procedure, 1973 to quash the order passed by the Magistrate taking cognizance of the offence.
It is true that section 397(2) bars the jurisdiction of the court in respect of interlocutory orders.
But section 482 confers a separate and independent power on the High Court alone to pass orders ex debito justitiae in cases where grave and substantial injustice has been done or where the process of the court has been seriously abused.
It is not merely a rovisional power meant to be exercised against the orders passed by subordinate courts.
Nothing in section 397(2) limits or affects the inherent power under section 482.
The scope, ambit and range of the power under section 482 are quite different from those of the power conferred under section 397.
It may be that in some cases there may be overlapping but such cases would be few and far between.
It is well settled that the inherent powers under section 482 can be exercised only when no other remedy is available to the litigant and Dot where a specific remedy is provided by the statute.
It is clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted.
The test is that taking the allegations and the complaint as they are, without adding or subtracting anything, if no offence is made out then the High Court would be justified in quashing the proceedings in the exercise of its powers under section 482.
[889 A B, G; 887 C; 888 A B; 887 G H; 888 C D; 890 A B] Madhu Limaye vs State of Maharashtra [1978] 1 S.C.R. 749; Ra; Kapoor and Ors.
vs State and Ors.
, [1980] 1 S.C.C. 43; Smt.
Nagavva vs Veeranna Shivalingappa Konjalgi and Ors., ; and Sharda Prasad Sinha vs State of Bihar.
[9771] 2 S.C.R. 357, referred to.
In the instant case, so far as the Manager of the Company was concerned, from the very nature of his duties it could be safely inferred that he would be vicariously liable for the offence as he must have been in the knowledge of the manufacture and sale of the disputed sample.
So far as the Directors of the Company were concerned, there was nothing to show, apart from the presumption drawn by the complainant, that there was any act committed by them from which a reasonable inference could be drawn to the effect that they were also vicariously liable and the High Court was right in holding that no case had been made out ex facie on the allegations made in the complaint.
{891 D; 891 A; 891 E F] 2.
The mere fact that the proceedings have been quashed against the Directors will not prevent the court from exercising its discretion under section 319 of the Code if it is fully satisfied that a case for taking cognizance against them is made out on the additional evidence led before it.
Section 319 gives ample powers to any court to take cognizance and add any person not being an accused before it and try him along with the other accused.
However, this being an extraordinary power conferred on the court, it should be used very sparingly and only if compelling reasons exist for doing so.
[893 G; 893 G; 893 F] Joginder Singh and Anr.
vs State of Punjab and Anr.
; , referred to. 886
|
minal Delhi Appeal Nos.
7 to 9 of 1961.
Appeals by special leave from the judgment and order dated January 2, 1961, of the Punjab High Court (Circuit Bench) at Delhi in Criminal Appeals Nos.
464 C, 465 C and 463 D of 1959.
Dingle Foot, D. R. Prem, section M. Sikri, G. H.Jauhari and A. N. Goyal, for the appellant (in Cr. A. No. 7 of 61).
R. L. Kohli and A. N. Goyal, for the appellant (in Cr. A. No. 8 of 1961).
Prem Nath Chadha, Madan Gopal Gupta and R. Choudhri, for appellant No. 2 (in Cr. A. No. 9 of 1961).
C. K. Daphtary, Solicitor General of India, R. L. Mehta and R. H. Dhebar, for the respondents.
April 5.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
These three appeals are by special leave.
Appeal No. 7 of 1961 is by R. K. Dalmia.
Appeal No. 8 of 1961 is by R.P.Gurha.
Appeal No. 9 of 1961 is by G.L.Chokhani and Vishnu Prasad.
All the appellants were convicted of the offence under section 120 read with s.409 I.P.C., and all of them, except Vishnu Prasad, were also convicted of certain offences arising out of the overt acts committed by them.
Dalmia and Chokhani were convicted under section 409 I.P.C. Chokhani was also convicted under section 477A read with section 110, I. P. C. Gurha was convicted under section 477A I. P. C. To appreciate the case against the appellants, we may first state generally the facts leading to the case.
Bharat Insuirance Company was incorporated 258 in 1896.
In 1936, Dalmia purchased certain shares of the company and became a Director and Chairman of the company.
He resigned from these offices in 1942 and was succeeded by his brother J. Dalmia.
The head office of the Bharat Insurance Company was shifted from Lahore to 10, Daryaganj, Delhi.
in 1947.
Dalmia was co opted a Director on March 1.0, 1949 and was again elected Chairman of the company on March 19, 1949 when his brother J. Dalmia resigned.
R. L. Chordia, a relation of Dalmia and principal Officer of the Insurance Company, was appointed Managing Director on February 27, 1950.
Dalmia was appointed Principal Officer of the company with effect from August 20, 1954.
He remained the Chairman and Principal Officer of the Company till September 22, 1955.
The period of criminal conspiracy charged against the appellant is from August 1954 to September 1955.
Dalmia was therefore, during the relevant period, both Chairman and Principal Officer of the Insurance Company.
During this relevant period, this company had its current account in the Chartered Bank of India, Australia and China Ltd. (hereinafter called the Chartered Bank) at Bombay.
The Company also had an account with this bank for the safe custody of its securities the company also had a separate current account with the Punjab National Bank, Bombay.
At Delhi, where the head office was, the company had an account for the safe custody of securities with the Imperial Bank of India, New Delhi.
Exhibit P 785 consists of the Memorandum of Association and the Articles of Association of the Bharat Insurance Company.
Articles 116 and 117 deal with the powers of the Directors.
Exhibit P 786 is said to be the original Byelaws passed by the Directors on September 8, 1951.
259 The pages are signed by K.L. Gupta, who was the General Manager of the company during, the relevant period, and not by Dalmia the Chairman, as De should have been the case in view of the resolution dated May 8, 1951.
The genuineness of this document is not, however, admitted.
Exhibits P 15 and P 897 are said to be copies of these Bye laws which were sent to Shri K. Annadhanam (Chartered Accountant, appointed by the Government of India on September 19, 1955, to investigate into the affairs of the Bharat Insurance Company under section 33(1) of the ) and to the Imperial Bank of India, Now Delhi, respectively, and the evidence about their genuineness is questioned.
Bye law 12 deals with the powers of the Chairman.
Clause (b)) thereof empowers the Chairman to grant loans to persons with or without security, but from August 30, 1954, the power was restricted to grant of loans on mortgages.
Clause (e) empowers the Chairman to negotiate transfer buy and sell Government Securities and to pledge, indorse, withdraw or otherwise deal with them.
On January 31, 1951, the Board of Directors of the Insurance Company passed resolutions to the following effect : (1) To open an account in the Chartered Bank at Bombay.
(2) To authorise Chokhani to operate on the account of the Insurance Company.
(3) To for the keeping of the Government securities had by the company, in safe custody, with the Chartered Bank.
(4) To instruct the Bank to accept institutions with regard to withdrawal from Chokhani and Chordia.
On the same day, Dalmia and Chordia made an application for the opening of the account at Bombay with the result that Current Account No. 1120 was opened.
On the same day Chokhani was appointed Agent of the company at Bombay.
260 He was its agent during the relevant period.
From 1951 to 1953, Chokhani alone operated ' on that account.
On October 1, 1953, the Board of Directors directed that the current account of the company with the Chartered Bank, Bombay, be operated jointly by Chokhani and Raghunath Rai, P.W. 4.
Ragbunath Rai, joined the company in 1921 as a Clerk, became Chief Accountant in 1940 and Secretary cum Chief Accountant of the company from August 17, 1954.
The modus operandi of the joint operation of the bank account by Chokhani and Raghunath Rai amounted, in practice to Chokbani 's operating that account alone.
Chokbani used to get a number of blank cheques signed by Raghunath Rai, who worked at Delhi.
Chokhani signed those cheques when actually issued.
In order to have signed cheques in possession whenever needed, two cheque books were used.
When the signed cheques were nearing depletion in one cheque book, Chokhani would send the other cheque book to Raghunath Rai for signing again a number of cheques.
Thus Raghunath Rai did not actually know when and to whom and for what amount the cheques would be actually issued and therefore, so far as the company was concerned, the real operation of its banking account was done by Chokhani alone.
This system led to the use of the company 's funds for unauthorized purposes.
Chokhani used to purchase and sell securities on behalf of the company at Bombay.
Most of the securities were sent to Delhi and kept with the Imperial Bank of India there.
The other securities remained at Bombay and were kept with the Chartered Bank.
Sometimes securities were kept with the Reserve Bank of India and inscribed stock was obtained instead.
The presence, of the inscribed stock was a guarantee that the securities were, in the Bank.
261 Chokhani was not empowered by any resolution of the Board of Directors to purchase and sell securities.
According to the prosecution, he purchased and sold securities under the instructions of Dalmia.
Dalmia and Chokhani state that Dalmia had authorised Chokhani in general to purchase and sell securities and that it was in pursuance of such authorisation that Chokhani on his own purchased and sold securities without any further reference to Dalmia or further instructions from Dalmia.
The transactions which have given rise to the present proceedings against the appellants consisted of purchase of securities for this company and sale of ' the securities which the company held.
The transactions were conducted through recognised brokers and ostensibly were normal transactions.
The misappropriation of funds of the company arose in this way.
Chokhani entered into a transaction of purchase of securities with a broker.
The broker entered into a transaction of purchase of the same securities from a company named Bhagwati Trading Company which was owned by Vishnu Prasad, appellant, nephew of Chokhani and aged about 19 years in 1954.
The entire business for Bhagwati Trading Company was really conducted by Chokhani.
The securities purchased were not delivered by the brokers to Chokhani.
It is said that Chokhani instructed the brokers that he would have the securities from Bhagwati Trading, Company.
The fact, however, Chokhani however was that Bhagwati Trading Company did not deliver the securities.
Chokhani however issued cheques in payment of the purchase price of the securities to Bhagwati Trading Company.
Thus, the amount of the cheques was paid out of the company 's funds without any gain to it.
The sale transactions consisted in the sale of the securities held or supposed to be held by the company to a broker and the price obtained from 262 the sale was unutilised in purchasing formally further securities which were not received: The purchase transaction followed the same pattern, viz., Chokhani purchased for the company from a broker, the broker purchased the same securities from Bhagwati Trading Company and the delivery of the securities was agreed to be given by Bhagwati Trading Company to Chokhani.
Bhagwati Trading Company did not deliver the securities but received the price from the Insurance Company.
In a few cases, securities so purchased and not received were received later when fresh genuine purchase of similar securities took place from the funds of the Bharat Union Agencies or Bhagwati Trading Company.
These securities were got endorsed in favour of the Insurance Company.
The funds of the company, ostensibly spent on the purchase of securities, ultimately reached another company the Bharat Union Agencies.
Bharat Union Agencies ( hereinafter referred to as the Union Agencies) was a company which dealt in speculation in shares and, according to the prosecution was practically owned by Dalmia who held its shares either in his own names or in the names of persons or firms connected with him.
The Union Agencies suffered Icsses in the relevant period from August 1954 to September, 1955.
The prosecution case is that to provide funds for the payment of these losses at the due time, the accused persons entered into the conspiracy for the diversion of the funds of the Insurance Company to the Union Agencies.
To cover up this unauthorised transfer of funds, the various steps for the transfer of funds from one company to the other and the falsification of accounts of the Insurance Company and the Union Agencies took place and this conduct of the accused gave rise to the various offences they were charged With and convicted of.
263 The real nature of the sale and ' purchase transactions of the securities did not come to the notice of the head office of the Insurance Company at Delhi as Chokhani communicated to the head office the contracts of sale and purchase with the brokers ' statements of accounts, with a covering letter stating the purchase of securities from the brokers, without mentioning that the securities had not been actually received or that the cheques in payment of the purchase price were issued to Bhagwati Trading Company and not to the brokers.
Raghunath Rai, the Secretary cum Accountant of the Insurance Company, on getting the advice about the purchase of securities used to inquire from Dalmia about the transaction and used to get the reply that Chokhani had purchased them under Dalmia 's instructions.
Thereafter, the usual procedure in making the entries with respect to the purchase of securities was followed in the office and ultimately the purchase of securities used to be confirmed at the meeting of the Board of Directors.
It is said that the matter was put up in the meeting with an office note which recorded that the purchase was under the instructions of the Chairman.
Dalmia however, denies that Raghunath Rai ever approached him for the confirmation or approval of the purchase transaction and that he told him that the purchase transaction was entered into under his instructions.
The firm of Khanna and Annadhanam, Chartered Accountants, was appointed by the Bharat Insurance Company, its auditors for the year 1954.
Shri Khanna carried out the audit and was not satisfied with respect to certain matters and that made him ask for the counterfoils of the cheques and for the production of securities and for a satisfactory explanation of the securities not with the company at Delhi.
264 The matter, however, came to a head not on account of the auditors ' report, but on account of Shri Kaul, Deputy Secretary , Ministry of Finance, Government of India, hearing at Bombay in September 1955 a rumour about the unsatisfactory position of the securities of the Insurance Company.
He contacted Dalmia and learnt on September 16, 1955 from Dalmia 's relatives that there was a short fall securities.
He pursued the matter Departmentally and, eventually, the Government of India appointed Shri Annadhanam under a. 33 (1) of the to investigate into the affairs of the company.
This was done on September 19, 1955.
Dalmia is said to have made a confessional statement to Annadhanam on September 20.
Attempt was made to reimburse the Insurance Company with respect to the short fall in securities.
The matter was, however, made over to the Police and the appellants and a few other persons, acquitted by the Sessions Judge, were proceeded against as a result of the investigation.
Dalmia 's defence, in brief, is that be had nothing to do with the details of the working of the company, that he had authorised Chokhani, in 1953, to purchase and sell securities and that thereafter Chokbani on his own purchased and sold securities.
He had no knowledge of the actual modus operandi of Chokhani which led to the diversion of the funds of the company to the Union Agencies.
He admits knowledge of the losses incurred by the Union Agencies and being told by Chokhani that he would arrange funds to meet them.
He denies that he was a party to what Chokhani did.
Chokhani admits that he carried out the transactions in the form alleged in order to meet the losses of the Union Agencies of which he was an employee.
He states that be did so as he expected that the Union Agencies would, in due course, 265 make tip the losses and the money would be returned to the Insurance Company.
According to, him, he was under the impression that what he did amounted to giving of a loan by the Insurance Company to the Union Agencies and that there was nothing wrong in it.
He asserts emphatically that if he bid known that he was doing, was wrongful, he would have never done it and would have utilised other means to raise the money to meet the losses of the Union Agencies as he had large credit in the business circle at Bombay and as the Union Agencies possessed shares which would be sold to meet the losses.
Vishnu Prasad expresses his absolute ignorance about the transactions which were entered into on behalf of Bbagwati Trading Company and states that what he did himself was under the instructions of Chokhani, but in ignorance of the real nature of the transactions.
Gurha denies that he was a party to the fabrication of false accounts and vouchers in the furtherance of the interests of the conspiracy.
The learned Sessions Judge found the offences charged against the appellants proved on the basis of the circumstances established in the case and, accordingly, convicted them as stated above.
The High Court substantially agreed with the findings of the Sessions Judge except that it did not rely on the confession of Dalmia.
Mr. Dingle Foot, counsel for Dalmia, has raised a number of contentions, both of law and of facts.
We propose to deal with the points of law first.
In order to appreciate the points of law raised by Mr. Dingle Foot, we may now state the charges which were framed against the various appellants.
266 The charge under section 120 B read with section 409, I.P.C., was against the appellants and five other persons and read: "I, Din Dayal Sharma, Magistrate I Class, Delhi, do hereby charge you, R. Dalmia (Ram Krishna Dalmia) s/o etc.
G. L. Chokhani s/o etc.
Bajranglal Chokhani s/o etc.
Vishnu Pershad Bajranglal s/oetc.
R. P. Gurha (Ragbubir Pershad Gurba) s/o etc. 6.
J. section Mittal (Jyoti Swarup Mittal) s/o etc.
7. section N. Dudani (Shri Niwas Dudani) s/o etc. 8.
G. section Lakhotia (Gauri Sbadker Lakbotia) s/o etc.
V. G. Kannan Vellore Govindaraj Kannan S/o etc.
accused as under : That you, R. Dalmia, G. L. Chokhani, Bajrang Lal Chokhani, Vishnu Pershad Bajranglal, R. P. Gurha, J. section Mittal, section N. Dudani, G. section Lakhotia and V. G. Karinan, during the period between August 1954 and September 1955 at Delhi, Bombay and other places in India.
were parties to a criminal conspiracy to do and cause to be done illegal acts ; viz., criminal breach of trust of the funds of the Bharat Insurance Company Ltd., by agreeing amongst yourselves and with others that criminal breach of trust be Committed by you R. Dalmia and G. L. Chokhani 267 in respect of the funds of the said Insurance Company in current account No. 1120 of the said Insurance Company with the Chartered Bank of India, Australia and China, Ltd., Bombay, the dominion over which funds was entrusted to you R. Dalmia in your capacity as Chairman and the Principal Officer of the said Insurance Company, and to you G. L. Chokhani, in your capacity as Agent of the said Insurance Company, for the purpose of meeting losses suffered by you R. Dalmia in forward transaction (of speculation) in shares ; which transactions were carried on in the name of the Bharat Union Agencies Ltd., under the directions and over all control of R. Dalmia, by you, G. L. Chokhani, at Bombay, and by you, R. P. Gurha, J. section Mittal and section N. Dudani at Calcutta; and for other purposes not connected with the affairs of the said Insurance Company, by further agreeing that current account No. R1763 be opened with the Bank of India, Ltd., Bombay and current account No. 1646 with the United Bank of India Ltd., Bombay, in the name of M/s. Bhagwati Trading Company, by you Vishnu Pershed accused with the assistance of you G. L. Chokhani, and Bajranglal Chokhani accused for the illegal purpose of divertin g the funds of the said Insurance Company to the said Bharat Union Agencies, Ltd., by further agreeing that false entries showing that the defalcated funds were invested in Government Securities by the said Insurance Company be got made in the books of 268 accounts of the said Insurance Company at Delhi, and by further agreeing to the making of false and fraudulent entries by you R. P. Gurha, J. section Mittal, G. section Lakhotia, V. G. Kannan, and others, relating to the diversion of funds of the Bharat Insurance Company to the Bharat Union Agencies Ltd., through M/s. Bhagwati Trading Company, in the books of account of the said Bharat Union Agencies, Ltd., and its allied concern known as Asia Udyog Ltd., and that the same acts were committed in pursuance of the said agreement and thereby you committed an offence punishable under section 120 B read with section 409 I.P.C., and within the cognizance of the Court of Sessions.
" Dalmia was further charged on two counts for an offence under section 409 I. P. C.
These charges were as follows : "I Din Dayal Sharma, Magistrate I Class, Delhi charge you, R. Dalmia accused as under : FIRSTLY, that yon R. Dalmia, in Pursuance of the said conspiracy between the 9th day of August 1954 and the 8th day of August 1955, at Delhi.
Being the Agent, in your capacity as Chairman of the Board of Directors and the Principal Officer of the Bharat Insurance Company Ltd., and as such being entrusted with dominion over the funds of the said Bharat Insurance Company, committed criminal breach of trust of the 269 funds of the Bharat Insurance Company Ltd., amounting to Rs. 2,37,483 9 0, by wilfully suffering your co accused G. L. Chokhani to dishonestly misappropriate the said funds and dishonestly use or dispose of the said funds in violation of the directions of law and the implied contract existing between you and the said Bharat Insurance Company, prescribing the mode in which such trust was to be discharged, by withdrawing the said funds from current account No. 1120 of the said Bharat Insurance Company with the Chartered Bank of India, Australia & China, Ltd., Bombay, by means of cheque Nos.
B 540329 etc., issued in favour of M/s. Bhagwati Trading Company, Bombay, and cheque No. B 540360 in favour of F. C. Podder, and by dishonestly utilising the said funds for meeting losses suffered by you in forward transactions in shares carried on in the name of Bharat Union Agencies, Ltd., and for other purposes not connected with the affairs of the said Bharat Insurance Company ; and thereby committed an offence punishable under section 409, 1.
P. C., and within the cognizance of the Court of Sessions; ,SECONDLY, that you R. Dalmia, in pursuance of the said conspiracy between the 9th day of August 1955 and the 30th day of September 1955, at Delhi, Being the Agent in your capacity as Chairman of the Board of Directors and the Principal Officer of the Bharat Insurance Company, Ltd., and as such being entrusted with dominion over the funds of the said Bharat Insurance Company, 270 committed criminal breach of trust of the funds of the Bharat Insurance Company Ltd., amounting to Rs. 55,43,220 12 0, by wilfully suffering your co accused G.L. Chokhani to dishonestly misappropriate the said funds and dishonestly use or dispose of the said funds in violation of the directions of law and the implied contract existing between you and the said Bharat Insurance Company prescribing the mode in which such trust was to be discharged, by withdrawing the said funds from current account No. 1120 of the said Bharat Insurance Company with the Chartered Bank of India, Australia & China, Ltd., Bombay by means of Cheque Nos.
B 564835. issued in favour of M/s. Bhagwati Trading Company Bombay, and, by dishonestly utilising the said funds for meeting losses suffered by you in forward transactions in shares carried on in the name of the Bharat Union Agencies Ltd., and for other purposes not connected with the affairs of the said Bharat Insurance Company, and thereby committed an offence punishable under section 409 1.
P. C., and within the cognizance of the Court of Sessions." Mr. Dingle Foot has raised the following contentions (1) The Delhi Court had no territorial jurisdiction to try offences of criminal breach of trust committed by Chokhani at Bombay.
(2) Therefore, there had been misjoinder of charges.
(3) The defect of misjoinder of charges was 271 fatal to the validity of the trial and was not curable under a. 531 section
537 of the Code.
(4) The substantive charge of the offence under section 409, 1.
P. C., against Dalmia offended against the provisions of a. 233 of the Code; therefore the whole trial was bad.
(5) The funds of the Bharat Insurance Company in the Chartered Bank, Bombay, which were alleged to have been misappropriated were not "property ' within the meaning of sections 405 and 409, I. P. C. (6) If they were, Dalmia did not have dominion over them.
(7) Dalmia was not an agent ' within the meaning of section 409 I. P. C., as only that person could be such agent who professionally carried on the business of agency.
(8) If Dalmia 's conviction for an offence under section 409 I. P. C., fails, the conviction for conspiracy must also fail as conspiracy must be proved as laid.
(9) The confessional statement Exhibit P 10 made by Dalmia on September 20, 1955, was not admissible in evidence.
(10) If the confessional statement was not inadmissible in evidence in view of section 24 of the Indian Evidence Act, it was inadmissible in view of the provisions of cl.
(3) of article 20 of the Constitution.
(11) The prosecution has failed to establish that Dalmia was synonymous with Bharat Union Agencies Ltd. (12) Both the Sessions Judge and the High Court failed to consider the question of onus of proof i.e., failed to consider whether the evidence on record really proved or established the conclusion arrived at by the Courts.
272 (13) Both the Courts below erred in their approach to the evidence of Raghunath Rai.
(14) Both the Courts below were wrong in holding that there was adequate corroboration of the evidence of Reounath Rai who was an accomplice or at least such a witness whose testimony required corroboration.
(15) It is not established with the certainty required by law that Dalmia had knowledge of the impugned transactions at the time they were entered into.
We have heared the learned counsel for the parties on facts, even though there are concurrent findings of fact, as Mr. Dingle Foot has referred us to a large number of inaccuracies, most of them not of much importance, in the narration of facts in the judgment of the High Court and has also complained of the omission from discussion of certain matters which were admittedly urged before the High Court and also of misapprehension of certain arguments presented by him.
We need not, however, specifically consider points No. 12 to 15 as questions urged in that form.
In discussing the evidence of Ragbunath Rai, we would discuss the relevant contentions of Mr. Dingle Foot, having a bearing on Raghunath Rai 's reliability.
Our view of the facts will naturally dispose of the last point raised by him.
Mr. Dingle Foot 's first four contentions relating to the illegalities in procedure may now be deal ,with.
The two charges under section 409, I.P.C., against Chokbani mentioned that he committed criminal breach of trust in pursuance of the said conspiracy.
One of the charges related to the period from August 9, 1954 to August 8, 1955 and the other related to the period from August 9, 1955 to September 30, 1955.
273 This Court held in Purushotam Das Dalmia vs State of West Bengal (1) that the Court having jurisdiction to try the offence of conspiracy has also jurisdiction to try an offence constituted by the overt acts which are committed, in pursuance of the conspiracy, beyond its jurisdiction.
M. Dingle Foot submitted that this decision required reconsideration and we heard him and the learned Solicitor General on the point and, having considered their submissions, came to the conclusion that no case for reconsideration was made out and accordingly expressed our view during the hearing of these appeals.
We need not, therefore, discuss the first contention of Mr. Dingle Foot and following the decision in Purushottam Das Dalmia 's case(1) hold that the Delhi Court had jurisdiction to try Chokhani of the offence under section 409 I.P.C. as the offence was alleged to have been committed in pursuance of the criminal conspiracy with which he and the other co accused were charged.
In view of this opinion, the second and third contentions do not arise for consideration.
The fourth contention is developed by Mr.Dingle Foot thus.
The relevant portion of the charge under section 409 I. P. C., against Dalmia reads: "Firstly, that you Dalmia, in pursuance of the said conspiracy between. being the Agent, in your capacity as Chairman of Board of Directors and as Principal Officer of the Bharat Insurance Company Ltd., and as such being entrusted with dominion over the.
funds of the said Bharat Insurance Company, committed criminal breach of trust of the fund, . by wilfully suffering your co accused G. L. Chokhani to dishonestly misappropriate the said funds and dishonestly use or dispose of the said funds in violations of the directions of law and the implied contract existing between you and the said Bharat Insurance (1) [1962]2S.C.R101. 274 Company prescribing the mode in which such trust was to be discharged. " This charge can be split up into four charges, each of the charges being restricted to one particular mode of committing the offence of criminal breach of trust.
These four offences of criminal breach of trust were charged in one count, each of these four amounting to the offence of criminal breach of trust by wilfully suffering Chokhani (i) to dishonestly misappropriate the said funds; (ii) to dishonestly use the said funds in violation of the directions of law; (iii) to dishonestly dispose of the said funds in violation of the directions of law; (iv) to dishon estly use the said funds in violation of the implied contract existing between Dalmia and the Bharat Insurance Company '.
Section 233 of the Code or Criminal Procedure permits one charge for every distinct offence and directs that every charge shall be tried separately except in the cases mentioned in sections 234, 235, 236 and 239.
Section 234 allows the trial, together, of offences up to three in number, when they be of the same kind and be committed within the space of twelve months.
The contention, in this case is that the four offences into which the charge under section 409 I.P.C. against Dalmia can be split up were distinct offences and therefore could not be tried together.
We do not agree with this contention.
The charge is with respect to one offence, though the mode of committing it is not stated precisely.
If it be complained that the charge framed under s.409 1.
P. C. is vague because it does not specifically state one particular mode in which the offence was committed, the vagueness of the charge will not make the trial illegal, especially when no prejudice is caused to the accused and no contention has been raised that Dalmia was prejudiced by the form of the charge.
275 We may now pass on to the other points raised by Mr. Dingle Foot.
Section 405 I.P.C. defines what amounts to criminal breach of trust.
It reads "Whoever, being in any manner entrusted with property, or with, any dominion over property, dishonestly misappropriates or converts to his own use that propertly, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which be has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust '.
" Section 406 provides for punishment for criminal breach of trust.
Section 407 provides for punishment for criminal breach of trust committed by a carrier, wharfinger or warehouse keeper, with respect to property entrusted to them as such and makes their offence more severe than the offence under section 406.
Similarly, section 408 makes the criminal breach of trust committed by a clerk or servant entrusted in any manner, in such capacity, with property or with any dominion over property, more severely punishable than the offence of criminal breach of trust under section 406.
Offences under ss.407 and 108 are similarly punishable.
The last section in the series is section 409 which provides for a still heavier punishment when criminal breach of trust is committed by persons mentioned in that section.
The section reads : "Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, 276 commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may ex tended to ten years, and shall also be liable to fine." Both Dalmia and Chokhani have been convicted of the offence under section 409 I.P.C. Mr. Dingle Foot contends that no offence of criminal breach of trust has been committed as the funds of the Bharat Insurance Company in the Bank do not come with the expression 'property ' in section 405 I.P.C.
It is urged that the word 'property ' is used in the Indian Penal Code in different senses, according to the context, and that in section 405 it refers to movable property and not to immovable property or to a chose in action.
It is then contended that the funds which a customer has in a bank represent closes in action, as the relationship between the customer and the banker is that of a creditor and a debtor, as held in Attorney General for Canada vs Attorney General for Province of Quebec & Attorneys General for Saskatchewan, Alberta & Manitoba (1) and in Foley vs Hill (2).
Reliance is also placed for the suggested restricted meaning of property in section 405 I.P.C. on the cases Reg.
vs Girdhar Dharamdas (3); Jugdown Sinha vs Queen Empress( 4) and Ram Chand Gurvala vs King Emperor (5) and also on the scheme of the Indian Penal Code with respect to the use of the expressions 'property ' and 'movable property ' in its various provisions.
The learned Solicitor General has, on the other hand, urged that the word 'property ' should (1) (2) ; (3) [1869] 6 Bom.
High Ct.
Rep. (Crown Cases) 33.
(4) (1895)1.L.R.23Cal.372.
(5) A.I.R.1926Lah 385. 277 be given its widest meaning and that the provisions of the various sections can apply to property other than movable property.
It is not to be restricted to movable property only but includes chose in De. action and the funds of a company in Bank.
We are of opinion that there is no good reason to restrict the meaning of the word 'property ' to movable property only when it is used without any qualification in section 405 or in other sections of the Indian Penal Code Whether the offence defined in a particular section of the Indian Penal Code can be committed in respect of any particular kind of property will depend not on the interpretation of the word 'property ' but on the fact whether that particular kind of property can be subject to the acts covered by that section.
It is in this sense that it may be said that the, word property in a particular section covers only that type of property with respect to which the offence contemplated in that section can be committed.
Section 22 I.P.C. defines 'movable property '.
The definition is not exhaustive.
According to the section the words 'movable property ' are intended to include corporeal property of every description, except land and things attached to the earth or permanently fastened to anything which is attached to the earth.
The definition is of the expression ,movable property ' and not of 'property ' and can apply to all corporeal property except property excluded from the definition.
It is thus clear that the word 'property ' is used in the Code in a much wider sense than the expression movable property '.
It is not therefore necessary to consider in detail what type of property will be included in the various sections of the Indian Penal Code.
In Reg.
vs Girdhar Dharamdas (1) it was held that reading sections 403 and 404 I.P.C. together, section 404 (1) (1869) 6 Bom.
High Ct.
Rep. (Crown Cases) 278 applied only to movable property.
No reasons are given in the judgment.
It is to be noticed that though section 403 I.P.C. speaks of dishonestly misappropriating or converting to one 's own use any movable property, section 404 speaks of only dishonestly misappropriating or converting to one 's own use property.
If the Legislature had intended to restrict the operation of section 404 to movable property only, there war, no reason why the general word was used without the qualifying word ,movable '.
We therefore do not see any reason to I restrict the word 'property ' to , 'movable property only.
We need not express any opinion whether immovable property could be the subject of the offence under section 404 I.P.C. Similarly, we do not see any reason to restrict the word 'property ' in section 405 to movable property ' as held in Jugdown Sinha vs Queen Empress (1).
In that case also the learned Judges gave no reason for their view and just referred to the Bombay Case (2).
Further, the learned Judges observed at page 374 : "In this case the appellant was not at most entrusted with the supervision or management of the factory lands, and the fact that he mismanaged the land does not in our opinion amount to a criminal offence under section 408.
" A different view has been expressed with respect to the content of the word property ' in certain sections of the Indian Penal Code, including section 405.
In Emperor vs Bishan Prasad (3) the right to sell drugs was held to come within the definition of the word 'property ' in section 185, I.P.C. which makes certain conduct at any sale of property an offence.
(1) Col. 372.
(2) (1869) 6 Boni.
High Ct.
Rep. (Crown Cases) 33, 3) All. 128.
279 In Ram Chand Gurwala vs King Emperor (1) the contention that mere transfer of amount from the bank account to his own account by the accused did not amount to misappropriation was repelled, it being held that in order to establish a charge of dishonest misappropriation or criminal breach of trust, it was not necessary that the accused should have actually taken tangible property such as cash from the possession of the bank and transferred it to his own possession, as on the transfer of the amount from the account of the Bank to his own account, the accused removed it from the control of the bank and placed it at his own disposal.
The conviction of the accused for criminal breach of trust was confirmed.
In Manchersha Ardeshir vs Ismail Ibrahim it was held that the word 'property ' in section 421 is wide enough to include a chose in action.
In Daud Khan vs Emperor (3) it was said at page 674 : "Like section 378, section 403 refers to movable property.
Section 404 and some of the other sections following it refer to property without any such qualifying description; and in each case the context must determine whether the property there referred to is intended to be property movable or immoveable.
" The case law, therefore, is more in favour of the wider meaning being given to the word 'property ' in sections where the word is not qualified by any other expression like movable '.
In The Delhi Cloth and General Mills Co. Ltd. V. Harnam Singh (4) this court said "That a debt is property is, we think, clear.
It is a chose in action and is heritable (1) A.I.R. 1926 Lah.
(3) A.I.R. 1925 All.
(2) Bom.
(4) ,417.
280 and assignable and it is treated as property in India under the Transfer of Property Act which calls it an actionable claim '.
" In Allchin vs Coulthard (1) the meaning of the expression fund ' has been discussed it is said: "Much of the obscurity which surrounds this matter is due to a failure to distinguish the two senses in which the phrase 'payment out of a fund ' may be used.
The word fund ' may mean actual cash resources of a particular kind (e. g., money in a drawer or a bank), or it may be a mere accountancy expression used to describe a particular category which a person uses in making up his accounts.
The words 'payment out of when used in connection with the word fund ' in its first meaning connote actual payment, e. g., by taking the money out of the drawer or drawing a cheque on the bank.
When used in connection with the word 'fund ' in its second meaning they connote that, for the purposes of the account in which the fund finds a place, the payment is debited to that fund, an operation which, of course, has no relation to the actual method of payment or the particular cash resources out of which the payment is made.
Thus, if a company makes a payment out of its reserved fundan example of the second meaning of the word fund ' the actual payment is made by cheque drawn on the company 's banking account, the money in which may have been derived from a number of sources".
The expression funds ' in the charge is used in the first sense meaning thereby that Dalmia and Chokhani had dominion over the amount credited to the Bharat Insurance Company in the account (1) , 234, 281 of the Bank, inasmuch as they could draw cheques on that account.
We are therefore of opinion that the funds referred to in the charge did amount to 'property ' within the meaning of that term in section 405 I.P.C.
It is further contended for Dalmia that he had not been entrusted with dominion over the funds in the Banks at Bombay and had no control over them as the Banks had not been informed that Dalmia was empowered to operate on the company 's accounts in the Banks and no specimen signatures of his had been supplied to the Bank.
The omission to inform the Banks that Dalmia was entitled to operate on the account may disable Dalmia to actually issue the cheques on the company 's accounts, but that position does not mean that he did not have any dominion over those accounts.
As Chairman and Principal Officer of the Bharat Insurance Company, he had the power, on behalf of the company, to operate on those accounts.
If no further steps are taken on the execution of the plan, that does not mean that the power which the company had entrusted to him is nullified.
One may have dominion over property but may not exercise any power which he could exercise with respect to it.
Non exercise of the power will not make the dominion entrusted to him, nugatory.
Article 116 of the Articles of Association of the Bharat Insurance Company provides that the business of the company shall be managed by the Directors, who may exercise all such powers of the company as are not, under any particular law or regulation, not to be exercised by them.
Article 117 declares certain powers of the Directors.
Clause (7) of this Article authorises them to draw, make, give, accept, endorse, transfer, discount and negotiate 'such bill of exchange, promissory notes and other similar obligations as may be desirable for carrying on the business of the 282 company.
Clause (10) authorizes them to let, mortgage, sell, or otherwise dispose of any property of the company either absolutely.
Clause (12) authorises them to invest such parts of the fund of the company as shall not be required to satisfy or provide for immediate demands, upon such securities or investments as they may think advisable.
It also provides that the funds of the company shall not be applied in making any loan or guaranteeing any loan made to a Director of the company or to a firm of which such Director is a partner or to a private company of which such Director is a Director.
Clause (23) empowers the Director to deal with and invest any Moneys of the company not immediately required for the purposes thereof, in Government Promissory Notes, Treasury Bills, Bank Deposits, etc.
The bye laws of the company entrusting the Chairman with dominion over its property, were revised in 1951.
The Board of Directors, at their meeting held on September 8, 1951, resolved: "The bye laws as per draft signed by the Chairman for identification be and are hereby approved, in substitution and to the exclusion of the existing bye laws of the company." No such draft as signed by the Chairman has been produced in this case.
Instead, K. L. Gupta, P. W. 112, who was the Manager of the Bharat Insurance Company in 1951 and its General Manager from 1952 to August, 1956, has proved the bye laws, Exhibit P. 786, to be the draft revised bye laws approved by the Board of Directors at that meeting.
He states that he was present at that meeting and had put up these draft bye laws before the Board of Directors and that the Directors, while passing these bye laws, issued a directive that they should come into force on January 1, 1952, and that, accordingly, be added in ink in the opening words of 283 the bye laws that they would be effective from January 1, 1952.
When cross examined by Dalmia himself, he stated that he did not attend any other meeting of the Board of Directors and his presence was Dot noted in the minutes of the meeting.
He further stated emphatically: "I am definite that I put up the bye laws P 786 in the meeting of the Board of Directors.
I did not see any bye laws signed by the Chairman.
" There is no reason why Gupta should depose falsely.
His statement finds corroboration from other facts.
It may be that, as noted in the resolution, it was contemplated that the revised bye laws be signed by the Chairman for the purposes of their identity in future, but by over sight such signatures were not obtained.
There is no evidence that the bye laws approved by the Board of Directors were actually signed by the Chairman Dalmia.
Dalmia has stated so.
It is not necessary for the proof of the bye laws of the company that the original copy of the bye laws bearing any mark of approval of the Committee be produced.
The bye laws of the company can be proved from other evidence.
K. L. Gupta was present at the meeting when the bylaws were passed.
It seems that it was not his duty to attend meetings of the Board of Directors.
He probably attended that meeting because he had prepared the draft of the revised bye laws.
His presence was necessary or at least desirable for explaining the necessary changes in the pre existing bye laws.
He must have got his own copy of the revised bye laws put up before the meeting and it is expected that he would make necessary corrections in his copy in accordance with the form of the bye laws as finally approved at the meeting.
The absence of the copy signed by the Chairman.
if ever one existed, does not therefore make the other evidence about the bye laws of the 284 company in admissible.
The fact that Gupta signed each page of Exhibit P. 786 supports his statement.
There was no reason to sign every page of the copy if it was merely a draft office copy that was with him.
He must have signed each page on account of the importance attached to that copy and that could only be if that copy was to be the basis of the future bye laws of the company.
Copies of the bye laws were supplied to '.he
Imperial Bank, New Delhi, and to the auditor.
They are Exhibits P. 897 and P. 15.
Raghunath Rai deposed about sending the bye laws Exhibits P. 897 to the Imperial Bank, New Delhi, with a covering letter signed by Dalmia on September 4, 1954.
Mehra, P. W. 15, Sub Accountant of the State Bank of India (which took over the under taking of the Imperial Bank of India on July 1, 1955) at the time of his deposition, stated that the State Bank of India was the successor of the Imp erial Bank of India.
Notice was issued by the Court to the State Bank of India to produce latter dated September 4, 1954, addressed by Dalmia to the Agent, Imperial Bank of India, and other documents.
Mehra deposed that in spite of the best search made by the Bank officials that letter could not be found and that Exhibit P. 897 was the copy of the bye laws of the Bharat Insurance Company which he was producing in pursuance of the notice issued by the Court.
It appears from his statement in cross examination that the words received 15th September 1954 meant that copy of the byelaws was received by the Bank on that date.
Mehra could not personally speak about it.
Only such bye laws would have been supplied to the Bank as would have been the corrected bye laws.
These bye law Exhibit P. 897 tally with the bye laws Exhibit P. 786.
Raghunath Rai proves the letter Exhibit P. 896 to be a copy of the letter sent along with these bye laws to the Bank and states that 285 both the original and P. 896 were signed by Dalmia.
He deposed: "exhibit P. 786 are the bye laws of the Bharat Insurance Company which came into operation on 1 1 52 I supplied copy of exhibit p. 786 as the copy of the bye laws of the Bharat Insurance Company to the State Bank of India, New Delhi Shri Dalmia thereupon certified as true copies of the resolutions which were sent along with the copy of the bye laws.
He also signed the covering letter which was sent to the State Bank of India along with the copy of the bye laws exhibit p.786 and the copies of the resolutions.
I produce the carbon copy of the letter dated 4 9 54 which was sent as a covering letter with the bye laws of the Bharat Insurance Company to the Imperial Bank of India, New Delhi.
It is exhibit p. 896.
The carbon copy bears the signatures of R. Dalmia accused, which signatures I identify The aforesaid Bank (Imperial Bank) put a stamp over exhibit p. 896 with regard to the receipt of its original.
The certified copy of the byelaws of the Bharat Insurance Company which was sent for registration to the Imperial Bank along with the original letter of which exhibit p. 896 is a carbon copy is Ex.p.
897 (heretofore marked C).
The copy of the bye laws has been certified to be true by me under my signatures.
" Dalmia states in answer to question No. 15 (put to him under section 342, Cr. P. C.) that the signature,,, on exhibit p. 896 appear to be his.
286 Letter Exhibit P. 896 may be usefully quoted here "SEC The Agent, 4 9 54 Imperial Bank of India, New Delhi: Dear Sir, Re : Safe Custody of Govt.
Securities.
We are sending herewith true copies of Resolution No. 4 dated 10th March, 1949, Resolution No. 3 dated 10th March, 1949, and Resolution No. 8 dated 8th September, 1951, along with a certified copy of the Bye laws of the Company for registration at your end.
By virtue of article 12 clause (e) of the Byelaws of the Company I am empowered to deal in Government Securities etc.
The specimen signatures Card of the undersigned is also sent herewith.
Yours faithfully, Encls.
5 Sd/ R. Dalmia Chairman.
" By Resolution No. 4 dated March 10, 1949, Dalmia was co opted Director of the Company.
By Resolution No. 'a dated March 19, 1949, Dalmia was elected Chairman of the Board of Directors.
Resolution No. 8 dated September 8, 1951 was : "Considered the draft bye laws of the Company and Resolved that the Bye laws as per draft signed by the Chairman for identification be and are hereby approved in substitution and to the exclusion of the existing bye laws of the Company.
" 287 The letter Exhibit P. 896 not only supports the statement of Raghunath Rai about the copy of the bye laws supplied to the Bank to be a certified copy but also the admission of Dalmia that he was empowered to deal in Government Securities etc., by virtue of article 12, clause (e), of the bye laws of the company.
There therefore remains no room for doubt that bye laws Exhibit P. 897 are the certified copies of the bye laws of the company passed on September 8, 1951 and in force on September 4, 1954.
We are therefore of opinion that either due to oversight the draft bye laws said to be signed by the Chairman Dalmia were not signed by him or that such signed copy is no more available and that bye laws Exhibits P. 786 and P. 897 are the correct bye laws of the company.
Article 12 of the company 's bye laws provides that the Chairman shall exercise the powers enumerated in that article in addition to all the powers delegated to the Managing Director.
Clause (e) of this article authorises him to negotiate, transfer, buy and sell Government Securities etc., and to pledge, endorse, withdraw or otherwise deal with them.
Article 13 of the bye laws mentions the powers of the Managing Director.
Clause (12) of this article empowers the Managing Director to make, draw, sign or endorse, purchase, sell, discount or accept cheques, drafts, hundies, bills of exchange and other negotiable instruments in the name and on behalf of the company.
Article 14 of the bye laws originally mentioned the powers of the Manager.
The Board of Directors, by resolution No. 4 dated October 6,1952 resolved that these powers be exercised by.
K. L. Gupta as General Manager and the necessary corrections be made.
288 By resolution No. 4 dated August 30, 1954, of the Board of Directors, the General Manager was empowered to make, draw, sign or endorse, purchase, sell, discount or accept cheques, drafts, hundies, bills of exchange and other negotiable instruments in the name and on behalf of the company and to exercise all such powers from time to time incidental to the post of the General Manager of the Company and not otherwise excepted.
By the same resolution, the words 'Managing Director ' in Article 12 of the Bye laws stating the powers of the Chairman, were substituted by the words 'General Manager. ' Thereafter, the Chairman could exercise the powers of the General Manager conferred under the byelaws or other resolutions of the Board.
It is clear therefore from these provisions of the articles and bye laws of the company and the resolutions of the Board of Directors, that the Chairman and the General Manager had the power to draw on the funds of the company.
Chokhani had authority to operate on the account of the Bharat Insurance Company at Bombay under the resolution of the Board of Directors dated January 31, 1951.
Both Dalmia and Chokhani therefore had dominion over the funds of the Insurance Company.
In Peoples Bank vs Harkishen Lal (1) it was ,stated "Lala Harkishen Lal as Chairman is a trustee of all the moneys of the Bank." In Palmer 's Company Law, 20th Edition, is stated at page 517 "Directors are not only agents but they are in some sense and to some extent trustees or in the position of trustees." (1) A.I.R. 1936 Lah.
468, 409. 289 In G. E. Ry.
Co. vs Turner (1) Lord Selborne said : "The directors are the mere trustees or agents of the company trustees of the company 's money and property agents in the transactions which they enter into on behalf of the company.
In Re. Forest of Dean etc.
, Co. (2) Sir George Jessel said: "Directors are called trustees.
They are no doubt trustees of assets which have come into their hands, or which are under their control.
" We are therefore of opinion that Dalmia and Chokhani were entrusted with the dominion over the funds of the Bharat Insurance Company in the Banks.
It has been urged for Chokhani that he could not have committed the offence of criminal breach of trust when he alone had not the dominion over the funds of the Insurance Company, the accounts of which he could not operate alone.
Both Ragbunath Rai and he could operate on the accounts jointly.
In support of this contention, reliance is placed on the case reported as Bindeshwari vs King Emperor (3).
We do not agree with the contention.
Bindeshwari 's Case (3 ) does not support the contention.
In that case, a joint family firm was appointed Government stockist of food grain.
The partners of the firm were Bindeshwari and his younger brother.
On check, shortage in food grain was found.
Bindeshwari was prosecuted and convicted by the trial Court of an offence under section 409 1.
On appeal, the High Court set aside the conviction of Bindeshwari of the offence under (1)L. R. ,152 (2) L. R. ,453, (3) Pat. 703, 715.
290 section 409 I. P. C. and held him not guilty of the offence under that section as the entrustment of the grain was made to the firm and not to him personally.
The High Court convicted him, instead, of the offence under section 403 1.
P. C. This is clear from the observation : "In my opinion, the Government rice was entrusted to the firm of which the petitioner and his younger brother were the proprietors.
Technically speaking, there was no entrustment to the petitioner personally.
" This case clearly did not deal directly with the question whether a person who, jointly with another, has dominion over certain property, can commit criminal breach of trust with respect to that property or not.
On the other hand, a Full Bench of the Calcutta High Court took a different view in Nrigendro Lall Chatterjee vs Okhoy Coomar Shaw (1).
The Court said : "We think the word, of Section 405 of the Penal Code are large enough to include the case of a partner, if it be proved that he was in fact entrusted with the partnership property, or with a dominion over it, and has dishonestly misappropriated it, or converted it to his own use." Similar view was expressed in Emperor vs Jagannath Raghunathdas.
(2) Beaumont C. J.Said at.
But, in my opinion, the words of the section (section 405) are quite wide enough to cover the case of a partner.
Where one partner is given authority by the other partners to collect moneys or property of the firm I think that he is entrusted with dominion over (1) (1874) 21 W. R. (criminal Rulings) 59. 61 ,1521 291 that property, and if he dishonestly misappro priates it, then I think he comes within the Section.
" Barlee J., agreed with this opinion.
The effect of Raghupath Rai 's delivering the blank cheques signed by him to Chokbani may amount to putting Chokbani in sole control over the funds of the Insurance Company in the Bank and there would Dot remain any question of Chokhani 's having joint dominion over those funds and this contention, therefore, will not be available to him.
It was also urged for Chokhani that he bad obtained control over the funds of the Insurance Company by cheating Raghunath Rai inasmuch as he got blank cheques signed by the latter on the representation that they would be used for the legitimate purpose of the company but latter used them for purposes not connected with the company and that, therefore, he could not commit the offence of criminal breach of trust.
This may be so, but Chokhani did not got dominion over the funds on account of Raghunath Rai 's signing blank cheques.
The signing of the blank cheques merely facilitated Chokhani 's committing breach of trust.
He got control and dominion over the funds under the powers conferred on him by the Board of Directors, by its resolution authorising him and Raghunath Rai to operate on the accounts of the Insurance Company with the Chartered Bank, Bombay.
The next contention is that Dalmia and Chokhani were not agents as contemplated by section 409 I. P. C.
The contention is that the word "agent ' in this Section refers ' to a professional agent ' i. e., a person who carried on the profession of agency and that as Dalmia and Chekbani did not carry on such profession, they could not be covered by the expression 'agent ' in his section.
292 Reliance is placed on the case reported as Mahumarakalage Edward Andrew Cooray vs The Queen (1).
This case approved of what was said in Reg.
vs Portugal (2) and it would better to discuss that case first.
That case related to an offence being committed by the accused under section 75 of the Larceny Act, 1861 (24 & 25 Viet. c. 96).
The relevant portion of the section reads.
"Whosoever, having been intrusted, either solely or jointly with any other person, as a banker, merchant, broker, attorney or other agent, with any chattel or valuable security, or any power of attorney for the sale or transfer of any share or interest in any public stock or find. . or in any stock or fund of any body corporate, & c. for safe custody or for any special purpose, without any authority to sell, negotiate, transfer, or pledge, shall, in violation of good faith and contrary to the object or purpose for which such chattel & c., was intrusted to him sell, negotiate, pledge, & c., or in any manner convert to his own use or benefit, or the use or benefit of any person other than the person by whom he shall have been so intrusted. . shall be guilty of a misdemeanor.
The accused in that case was employed by a firm of Railway contractors for commission ' to use his influence to obtain for them a contract for the construction of a railway and docks in France.
In the course of his employment, he was entrusted with a cheque for pound 500/ for the purpose of opening a credit in their name in one of the two specified banks in Paris.
He was alleged to have misappropriated the cheque to his own use fraudulently.
He was also alleged to have fraudulently dealt with another bill for pound 250/ and other securities which had (1) , 419.
(2) 293 been entrusted to him for a special purpose.
He was committed for trial for the offence under section 75.
He, on arrest under an extradition warrant, was committed to prison with a view to his extradition in respect of an offence committed in France.
It was contended on his behalf: "To justify the committal under the Extradition Act, it was incumbent on the prosecutors to offer prima facie evidence that the money and securities which the prisoner was charged with having misappropriated were intrusted to him in the capacity of "agent ', that is, a person who carries on the business or occupation of an agent, and intrusted with them in that capacity, and without any authority to sell, pledge, or negotiate, and not one who upon one solitary occasion acts in a fiduciary character.
" It was held, in view of the section referring to ,banker, merchant, broker, attorney or other agent ', that a. 75 was limited to a class, and did not apply to everyone who might happen to be intrusted as prescribed by the section, but only to the class of persons therein mentioned.
It was further said : "In our judgment, the 'other agent ' mentioned in this section means one whose business or profession it is to receive money, securities or chattels for safe custody or other special purpose; and that the term does not include a person who carries on no such business or profession, or the like.
The section is aimed at those classes who carry on the occupations or similar occupations to those mentioned in the section, and not at those who carry on no such occupation, but who may happen from time to time to undertake some fiduciary position, whether for money or otherwise".
294 This case therefore is authority to this effect only that the term agent ' in that section does not include a person who just acts as ,in agent for another for a particular purpose with respect to some property that is entrusted to him, i. e., does not include a person who becomes an agent as a consequence of what he has been charged to do, and who has been asked to do a certain thing with respect the property entrusted to him, but includes such person who, before such entrustment and before being asked to do something, already carried on snob business or profession or the like as necessitates, in the course of such business etc.
, his receiving money, securities or chattels for safe custody or other special purpose.
That is to say, he is already an agent for the purpose of doing such acts and is subsequently entrusted with property with direction to deal with it in a certain manner.
It is not bold that a person to be an agent within that section must carry on the profession of an agent or must have an agency.
The accused, in that case, was therefore not held to be an agent.
It may also be noticed that he was so employed for a specific purpose which was to use his influence to obtain for his employers a contract for the construction of a railways and docks in France.
This assignment did not amount to making him an agent of the employers for receiving money etc.
In Mahumarakalage Edward Andrew Cooray 's Case (1) the Privy Council was dealing with the appeal of a person who had been convicted under section 392 of the Penal Code of Ceylon.
Sections 388 to 391 of the Ceylon Penal Code correspond to sections 405 to 408 of the Indian Penal Code.
Section 392 corresponds to section 409 1.
It was contended before the Privy Council that the offence under section 392 was limited to the case of one who carried on an agency business and did not comprehend a person who was casually entrusted with money either on one individual (1) 419.
295 occasion or a number of occasions, provided that the evidence did not establish that he carried on an agency business.
Their Lordships were of opinion that the reasoning in Reg.
vs Portugal (1) for the view that section 75 of the Larceny Act was limited to the class of persons mentioned in it, was directly applicable to the case they were considering, subject to some immaterial variations, arid finally said : " 'In enunciating the construction which they have placed on section 392 they would point out that they are in no way impugning the decisions is certain cases that one act of en trustment may constitute a man a factor for another provided he is entrusted in his busi ness as a mercantile agent, nor are they deciding what activity is required to establish that an individual is carrying on the business of an agent".
These observations mean that the view that section 75 was limited to the class of persons mentioned therein did not affect the correctness of the view that a certain act of entrustment may Constitute a person a factor for another provided be was entrusted in his business as a mercantile agent.
It follows that a certain entrustment, provided it be in the course of business as a mercantile agent, would make the person entrusted with a factor, i. e., would make him belong to the class of factors.
The criterion to hold a person a factor, therefore, is that his business be that of a mercantile agent and not necessarily that he be a professional mercantile agent.
Further, their Lordships left it open as to what kind of activity on the part of a person alleged to be an agent would establish that he was carrying on the business of an agent.
This again makes it clear that the emphasis is not on the person 's carrying on the profession of an agent, but on his carrying on the business of an agent.
(1) 296 These cases, therefore, do not support the contention for Dalmia and Chokhani that the term "agent ' in section 409 I. P. C., which corresponds to section 392 of the Ceylon Penal Code., is restricted only to those persons who carry on the profession of agents.
These cases are authority for the view that the word 'agent ' would include a person who belongs to the class of agents, i.e., who carries on the business of an agent.
Further, the accused in the Privy Council Case (1) was not held to be an agent.
In so holding, their Lordships said : "In the present case the appellant clearly was not doing so, and was in no sense entitled te receive the money entrusted to him in any capacity, nor indeed, had Mr. Ranatunga authority to make him agent to hand it over to the bank." To appreciate these reasons, we may mention here the facts of that case.
The accused was the President of the Salpiti Koral Union.
The Union supplied goods to its member societies through three depots.
The accused was also President of the Committee which controlled one of these depots.
He was also Vice President of the Co operative Central Bank which advanced moneys to business societies to enable them to buy their stocks.
The societies repaid the advance weekly through cheques and/or money orders, except when the advance be of small sums.
The Central Bank, in its turn, paid in the money orders, cheques and cash to its account with the Bank of Ceylon.
The accused appointed one Ranatunga to be the Manager of the depot which was managed by the Committee of which he was the President.
The payments to the Central Bank used to be made through him.
The accused instructed this Manager to follow a course other than the prescribed routine.
It was that he was to collect (1) , 419. 297 the amounts from the stores in cash and hand them over to him for transmission to the Bank.
The accused thus got the cash from the Manager and sent his own cheques in substitution for the amounts to the Central Bank.
He also arranged as the Vice President of that Bank that in certain cases those cheques be not sent forward for collection and the result was that he could thus misappropriate a large sum of money.
The Privy Council said that the accused was not entitled to receive the money entrusted to him in any capacity, that is to say as the Vice President of the Cooperative Central Bank or the President of the Union controlling the depots or as the President of the Committee.
It follows from this that he could not have received the money in the course of his duties as, any of these office bearers.
Further, the Manager of the depot had no authority to make the accused an agent for purposes of transmitting the money to the Bank.
The reason why the accused was not held to be an agent was not that he was not a professional agent.
The reason mainly was that the amount was not entrusted to him in the course of the duties he had to discharge as the office bearers of the various institutions.
Learned counsel also made reference to the case reported as Rangamannar Chatti vs Emperor (1).
it is not of much help.
The accused there is said to have denied all knowledge of the jewels which had been given to him by the complainant for pledging and had been pledged and redeemed.
It was said that it was not a case under a. 409 I. P. C.
The reason given was: "There is no allegation that the jewels were entrusted to the accused 'in the way of his business as an agent '.
No doubt he is said to (1) (1935) M.W.M, 649.
298 have acted as the complainant 's agent, but he is not professionally the complainants agent nor was this affair a business transaction.
" The reasons emphasize both those aspects we have referred to in considering the judgment of the Privy Council in Mahumarakalag Edward Andrew Cooray 's Case (1), and we need not say anything more about it.
What section 409 I.P.C. requires is that the person alleged to have committed criminal breach of trust with respect to any property be entrusted with that property or with dominion over that property in the way of his business as an agent.
The expression in the way of his business ' means that the property is entrusted to him in the ordinary course of his duty or habitual occupation or profession or trade '.
He should get the entrustment or dominion in his capacity as agent.
In other words, the requirements of this section would be satisfied if the person be an agent of another and that other person entrusts him with property or with any dominion over that property in the course of his duties as an agent.
A person may be an agent of another for some purpose and if he is entrusted with property not in connection with that purpose but for another purpose, that entrustment will not be entrustment for the purposes of section 409 I.P.C. if any breach of trust is committed by that person.
This interpretation in no way goes against what has been held in Reg.
vs Portugal (2) or in Mahumarakalage Edward Andrew Cooray 's 'Case (1), and finds support from the fact that the section also deals with entrustment of property or with any dominion over property to a person in his capacity of a public servant.
A different expression 'in the way of his business ' is used in place of the expression 'in his capacity, ' to make it clear that entrustment of property in the capacity of agent will not, by itself, be sufficient to make (1) 419.
(2) (188 5) lb Q.B.D. 487.
299 the criminal breach of trust by the agent a graver offence than any of the offences mentioned is sections 406 to 408 I.P.C.
The criminal breach of trust by an agent would be a graver offence only when he is entrusted with property not only in his capacity as an agent but also in connection with his duties as an agent.
We need not speculate about the reasons which induced the Legislature to make the breach of trust by an agent more severely punishable than the breach of trust committed by any servant.
The agent acts mostly as a representative of the principal and has more powers in dealing with the property of the principal and, consequently, there are greater chances of his misappropriating the property if he be so minded and less chances of his detection.
However, the interpretation we have put on the expression 'in the way of his business ' is also borne out from the Dictionary meanings of that expression and the meanings of the words 'business ' and 'way ', and we give these below for convenience. 'In the way of ' of the nature of, belong ing to the class of, in the course of or routine of (Shorter Oxford English Dictionary) in the matter of, as regards, by way of (Webster 's New Inter national Dictionary, II Edition, Unabrid ged) Business ' occupation, work (Shorter Oxford Eng lish Dictionary) mercantile transactions, buying and selling, duty, special imposed or under 300 taken service, regular occupation (Webster 's New Inter national Dictionary, II Editional, Unabrid ged) duty, province, habitual occupation, profession, trade (Oxford Concise Dictionary) 'Way ' scope, sphere, range, line of occupation Oxford Concise Dictionary) Chokhani was appointed agent of the Bharat Insurance Company on January 31, 1951.
He admits this in his statement under section 342, Cr.
P.C. He signed various cheques as agent of this company and he had been referred to in certain documents as the agent of the company.
Dalmia, as a Director and Chairman of the company, is an agent of the company.
In Palmer 's Company Law, 20th Edition, is stated, at page 513 : "A company can only act by agents, and usually the persons by whom it acts and by whom the business of the company is carried on or superintended are termed directors. .
Again, at page 515 is noted : (Directors are, in the eye of the law, agents of the company for which they act, and the general principles of the law of principal and agent regulate in most respects the relationship of the company and its directors.
,, 301 It was held in Gulab Singh vs Punjab Zamindara Bank (1) and in Jasuwant Singh vs V.V. Puri (2) that a director is an agent of the company.
Both Dalmia and Chokhani being agents of the company the control, if any, they had over the securities and the funds of the company, would be in their capacity as agents of the company and would be in the course of Dalmia 's duty as the Chairman and Director or in the course of Chokhani 's duty as a duly appointed agent of the company.
If they committed any criminal breach of trust with respect to the securities and funds of the company, they would be committing an offence under ss.409 I.P.C.
In view of our opinion with respect to Dalmia and Chokhani being agents within the meaning of section 409 I.P.C. and being entrusted with dominion over the funds of the Bharat Insurance Company in the Banks which comes within the meaning of the words 'property ' in section 409, these appellant would commit the offence of criminal breach of trust under section 409 in case they have dealt with this 'property ' in any manner mentioned in section 405 I.P.C.
We may now proceed to discuss the detailed nature of the transactions said to have taken place in pursuance of the alleged conspiracy.
It is, however, not necessary to give details of all the impugned transaction.
The details of the first few transactions will illustrate how the whole scheme of diverting the funds of the Insurance Company to the Union Agencies was worked.
The Union Agencies suffered losses in its shares speculation business in the beginning of August, 1954.
The share brokers sent statements of accounts dated August 6, 1954, to Chokhani and (1) A. I.R. (2) A.I.R. 1951 Pu n. 99. 302 made demand of Rs. 22,25,687 13 0 in respect of the losses, The total cash assets of the Union Agencies in all it,; banks and offices at Bombay, Calcutta and Delhi amounted to Rs. 2,67,857 11 7 only.
The Union Agencies therefore needed a large sum of money to meet this demand and to meet expected future demands in connection with the losses.
At this crucial time, telephonic communications did take place between presumably Dalmia and Chokhani.
The calls were made from Telephone No. 45031, which is Dalmia 's number at 3, Sikandara Road, New Delhi to Bombay No. 33726, of Cho khani.
Two calls were made on August 7, 1954, three on August 8, two on August 11 and one each on August 13 and August 14, respectively.
Of course, there is no evidence about the conversation which took place at these talks.
The significance of these calls lies in their taking place during the period when the scheme about the diversion of funds was coming into operation for the first time, but in the absence of evidence as to what conversation took place, they furnish merely a circumstance which is not conclusive by itself.
On August 7 and 9, 1954, the Punjab National Bank, Bombay, received Rs. 2,00,000 and Rs. 3,00,000 respectively in the account of the Union Agencies, telegraphically from Delhi.
On the same day, Vishnu Prasad, appellant, opened an account with the Bank of India, Bombay, in the name of Bhagwati Trading Company.
He gave himself out as the sole proprietor and mentioned the business of the company in the form for opening account as merchants and commission agents '.
He made a deposit of Rs. 1, 100 said to have been supplied to him by Chokhani.
On August 11, 1954, Vishnu Prasad made another deposit of Rs. 1,100, again said to have 303 been supplied by Chokhani, as the first deposit in the account he opened with the United Bank of India, Bombay, in the name of Bhagwati Trading Company.
The business of the company was described in the form for opening account as merchants, piece goods dealers. ' There is no dispute now that Bhagwati Trading Company did not carry on any business either as merchants and commission agents or as merchants and piece goods dealers.
Vishnu Prasad states that he acted just at Chokhani told him and did not know the nature of the transactions which were carried on in the name of this company.
It is however clear from the accounts and dealings of this company that its main purpose was simply to act in such a way as to let the funds of the Insurance Company pass on to the Union Agencies, to avoid easy detection of such transfer of funds.
Chokhani states that he did this business as the Union Agencies needed money at that time.
He thought that the Union Agencies would make profit after some time and thereafter pay it back to Bhagwati Trading Company for purchasing securities and therefore he postponed the dates of delivery of the securities to the Insurance Company.
He added that in case of necessity be could raise money by selling or mortgaging the shares of the Union Agencies in the exercise of his power of attorney on its behalf.
We may now revert to the actual transaction gone through to meet the demands in connection with the losses of the Union Agencies.
On August 9, 1954, Chokbani purchased 3% 1963 65 securities of the face value of Rs. 22,00,000 on behalf of the Insurance Company from Naraindas and Sons, Security Brokers.
Chokhani entered, into a cross contract with the same firm of brokers 304 for the sale of similar securities of the same face value on behalf of Bhagwati Trading Company.
He informed the brokers that the payment of purchase price would be made by the Insurance Company to Bhagwati Trading Company from whom it would get the securities.
Thus the actual brokers practically got out of the transaction except for their claim of brokerage.
On August 11, 1954, a similar transaction of purchase on behalf of the Insurance Company from the brokers and sale by Bhagwati Trading Company to those brokers, of 3% 1963 65 securities of the face value of Rs. 5,00,000, was entered into by Chokhani.
It may be mentioned, to avoid repetition, that Chokhani always acted in such transaction which may be referred to as usual purchase transactions both on behalf of the Insurance Company and on behalf of Bhagwati Trading Company, and that the same arrangement was made with respect to the payment of the purchase price and the delivery of securities.
The securities were not delivered to the Insurance Company by Bhagwati Trading Company and yet Chokhani made payment of the purchase price from out of the funds of the Insurance Company.
On August 11, 1954, Chokhani got the statement of accounts from the brokers relating to the purchase of securities Worth Rs. 22,00,000.
The total cost of those securities worked out at Rs. 20,64,058 6 9.
Chokhani made the payment by issuing two cheques in favour of Bhagwati Trading Company, one for Rs. 10,00,000 and the other for the balance, i.e., Rs. 10,64,058 6 9.
Needless to say that he utilised the cheques which had already been signed by Raghunath Rai, in pursuance of the arrangement to facilitate transactions on behalf of the Insurance Company.
305 On August 12, 1954, the statement of account with respect to the purchase of securities worth Rs. 5,00,000 was received.
The cost worked out to Rs. 4,69,134 15 9.
Chokhani made the payment by issuing a cheque for the amount in favour of Bhag wati Trading Company.
All these cheques were drawn on the Chartered Bank, Bombay.
On August 12, 1954, Vishnu Prasad drew cheques for Rs. 9,00,000 in the account of Bhagwati Trading Company in the United Bank of India.
The amount was collected by his father Bajranglal.
He drew another cheque for Rs. 9,60,000 in the account of the Bhagwati Trading Company with the Bank of India, Bombay, and collected the amount personally.
The total amount withdrawn by these two cheques viz., Rs. 18,60,000 was passed on to the Union Agencies through Chokhani that day.
Thereafter Chokhani deposited Rs. 7,00,000 in the account of the Union Agencies with the Bank of India, Rs. 7,00,000, in the account of the Union Agencies with the United Bank of India and Rs. 4,40,000 in the account of the Union Agencies with the Punjab National Bank Ltd. The Punjab National Bank Ltd., Bombay, as already mentioned, had received deposits of Rs. 2,00,000 and Rs. 3,00,000 on August 7 and August 9, 1954, respectively, in the account of the Union Agencies from Delhi.
Between August 9 and August 19, 1954, Chokhani made payment to the brokers on account of the losses suffered by the Union Agencies.
He issued cheques for Rs. 9,37,473 5 9 between August 9 and August 13, 1954, on the account with the Punjab National Bank.
On August 13, he issued cheques on the account of the Union Agency with the United Bank of India in favour of the Bombay brokers on account of the losses of the Union Agencies, for Rs. 7,40,088 5 9.
He also issued, between August 13 and August 19., 1954, cheque for Rs. 6,84,833 14 0 on the Bank of India, in favour 306 of the share brokers at Bombay on account of the losses suffered by the Union Agencies.
Chokhani informed the head office at Delhi about these purchase transaction of securities worth Rs. 27,00,000, through letter dated August 16, 1954, and along with that letter sent the contract note and statements of accounts received from the brokers.
No mentioned was made in the letter about the payment being made to Bhagwati Trading Company through cheques or about the arrangement about getting the securities from Bhagwati Trading Company or about the postponement of the delivery of the securities by that company.
On receipt of the letter, Raghunath Rai contacted Dalmia and, on being told that the securities were purchased under the latter 's instructions, made over the letter to the office where the usual entries where made and records were prepared, as had to be done in pursuance of the office routine.
Ultimately, the formal confirmation of the purchases was obtained on August 30, 1954, from the Board of Directors at its meeting for which the office note Stating that the securities were purchase under the instruction of the Chairman (Dalmia) was prepared.
The office note, Exhibit P. 793, with respect to the purchase of these securities worth Rs. 27,00,000 was signed by Chordia, who was then the Managing, Director of the Bharat Insurance Company.
On August 16, 1954, Vishnu Prasad withdrew Rs. 2,200 from the account of the Bhagwati Trading Company with the Bank of India, according to his statement, gave this money to Chokhani in return for the amount Chokhani had advanced earlier for opening accounts for Bhagwati Trading Company with the Bank of India and the United Bank of India.
Thereafter, whatever money was in the account of Bhagwati Trading Company with these Banks was the money obtained through the dealings entered into on behalf of Bhagwati Trading Company, the funds 307 for most of which came from the Bharat Insurance Company.
On August 18,1954, Vishnu Prasad drew a sum of Rs. 50,000 from Bhagwati Trading Company 's account with the Bank of India and passed on the amount to the Union Agencies through Chokhani.
On August 23.
1954, he withdrew Rs. 90,000 from Bhagwati Trading Company 's account with the United Bank of India and Rs. 5,10,000 from its account with the Bank of India and passed on these amounts also to the Union Agencies through Chokhani.
Chokhani then issued cheques to telling Rs. 5,88,380 13 0 from August 23 to August 26,1954, on the account of the Union Agencies with the Chartered Bank, Bombay, in favour of the brokers on account of the losses suffered by that company.
Thus, out of the total amount of Rs. 25,33,193 6.6 withdrawn by Chokhani from the account of the Bharat.
Insurance Company and paid over to Bhagwati Trading Company, Rs. 25,10,000 went to the Union Agencies, which mostly utilised the amount in payment of the losses suffered by it.
The Union Agencies suffered further losses amounting to about Rs. 23,00,000.
Demands for payment by the brokers were received on September 3, 1954, and subsequent days.
The Bharat Insurance Company had no sufficient liquid funds in the Banks at Bombay.
There was therefore necessity to deposit funds in the Bank before they could be drawn ostensibly to pay the price of securities to be purchased.
This time the transactions of sale of securities held by the Insurance Company and the usual purchase transactions relating to certain other securities were gone through.
The details of those transactions are given below.
308 On September 4, 1954, securities of the face value of Rs. 17,50,000 held by the Insurance Company were withdrawn from its Safe custody account with the Imperial Bank of India, New Delhi, by letter Exhibit P. 1351 under the signature of Dalmia.
Securities worth Rs. 10,00,000 were 2 1/40% 1954 securities and the balance were 2 1/2% 1955 securities.
These securities were then sent to Bombay and sold there.
On September 9, 1954, Rs. 6,25,000 were transferred from Delhi to the account of the Insurance Company with the Chartered Bank, Bombay, by telegraphic transfer.
Thus the balance of the funds of the Insurance Company with the Char tered Bank rose to an amount out of which the losses of about Rs. 23,00,000 suffered by the Union Agencies could be met.
The 1954 securities sold were to mature on November 15, 1954.
The 1955 securities would have matured much later.
No ostensible reason for their premature sale has been given.
On September 6, 1954, Chokhani purchased 3% 1959 61 securities of the face value of Rs. 25,00,000 on behalf of the Insurance Company from M/s. Naraindas & Sons, Brokers.
A cross contact of sale of similar securities by Bhagwati Trading Company to the brokers was also entered into.
Steps which were taken in connection with the purchase of securities worth Rs. 27,00,000 in August 1954 were repeated.
On September 9, 1954, Chokhani issued two cheques, one for Rs. 15,00,000 and the other for Rs. 9,20,875 on the account of the Insurance Company with the Chartered Bank, in favour of Bhagwati Trading Company which deposited the amount of the cheques into its account with the Bank of India, Bombay.
Vishnu Prasad passed on Rs. 24,00,000 to the Union Agencies through Chokhani.
This amount was utilised in meeting the losses suffered by the Union Agencies to the extent of Rs. 22,81,738 2 0, A sum of Rs. 75,000 was paid 309 to Bennett Coleman Co. Ltd., of which Dalmia was a director and a sum of Rs. 15,000 was deposited in the Punjab National Bank.
It is again significant to note that telephonic communication took place between Dalmia 's residence at New Delhi at, Chokhani 's at Bombay, between September 4 and September 10, 1954.
There was two communications on September 4, one on September 5, three on September 6 and one on September 10, 1954.
The Union Agencies suffered further losses amounting to about Rs. 10,00,000 in the month of September.
Again, the accounts of the Union Agencies or of the Insurance Company, at Bombay, did not have sufficient balance to meet the losses and, consequently, sale of certain securities held by the Insurance Company and purchase of other securities again took place.
This time, 3% 1957 securities of the face value of Rs. 10,00,000 hold by the Insurance Company in its safe custody deposit with the Chartered Bank, Bombay, were sold on September 21, 1954, and Rs. 9,84,854 5 6, the net proceeds, were deposited in the Bank.
On the same day, Chokhani purchased 3% 1959 61 securities of the face value of Rs. 10,00,000 on behalf of the Insurance Company following the procedure adopted in the earlier usual purchase transactions.
No telephonic communication appears to have taken place between Delhi and Bombay, on receipt of the demand from the brokers on September 17, 1954, for the payment of the losses, presumably because necessary steps to be taken both in connection with the fictitious purchase of securities, in order to pay money to Bhagwati Trading Company for being made over to the Union Agencies when funds were needed and also or providing funds in the Insurance Company 's account with the Chartered Bank, Bombay, in case the 810 balance was not sufficient to meet the losses, had already been adopted in the previous transactions, presumably, after consultations between Dalmia and Chokhani.
This lends weight to the significance of the telephonic communications between Delhi and Bombay in the critical period of August and early September, 1954.
To complete the entire picture, we may now mention the steps taken to cover up the non receipt of securities purchased, at the proper time.
By November, 19, 1954, securities of the facevalue of about Rs. 80,00,000 bad been purchased by Chokhani on behalf of the Insurance Company and such securities bad not been sent to the head office at Delhi.
Raghunath Rai referred the matter to Dalmia and, on his approval, sent a letter on November 19, 1954, to Chokhani, asking him to send the distinctive numbers of those securities.
The copy of the letter is Exhibit P. 805.
The securities referred to were 3% Loan of 1959 61 of the face value of Rs. 35,00,000, 3% Loan of 1963 65 of the face value of Rs. 27,00,000 and 2 3/40/% Loan of 1960 of face value of Rs. 18,00,000.
It was subsequent to this that stock certificates with respect to 3% 1963 65 securities of the face, value of Rs. 27,00,000 arid with respect to 2 3 14% 1960.
Loan securities of the face value of Rs. 18,00,000 were received in Delhi.
We may now refer to the transactions which led to the obtaining of these stock certificates.
The due dates of interest of 3% 1963 65 securities purchased in August 1954 were June 1 and December 1.
It was therefore necessary to procure these securities or to enter into a paper transaction of their sale prior to December 1, as, otherwise, the non obtaining of the income tax deduction certificate from the Reserve Bank would have clearly indicated that the Insurance Company did not hold these 311 securities, Chokhani, therefore, entered into a genuine contract of purchase of 3% 1963 65 securities of the face value of Rs. 27,00,000 on behalf of Bhagwati Trading Company with Devkaran Nanjee, Brokers, Bombay, on November 3, 1954.
He instructed the brokers to endorse the securities in favour of the Insurance Company, even though the securities were being sold to Bhagwati Trading Company.
These securities so endorsed were received on November 24, 1954, and were converted into inscribed stock (Stock Certificate Exhibit P. 920) from the Reserve Bank of India on December 7,1954.
The stock certificate does not mention the date on which the securities were purchased and therefore it existence could prevent the detection of the fact that these securities were not purchased in August 1954 when, according to the books of the Insurance Company, they were shown to have been purchased.
The Insurance Company did not ostensibly pay for the purchase of these shares but partially paid for it through another share purchase transaction.
In order to enable Bhagwati Trading Company to pay the purchase price, Chokbani paid Rs. 16,00,000 to it from the account of the Bharat Union Agencies with the Banks at Bombay, and Rs. 10,08,515 15 0 from the account of the Insurance Company with the Chartered Bank by a fictitious purchase of 2 1/2% 19611 securities of the face value of Rs. 11,00,000 on behalf of the Insurance Company.
These 2 1/2% 1961 securities of the face value of Rs. 11,00,000 were purchased by Chokhani on November 16, 1954.
by taking a step similar to those taken for the purchase of securities in August and September, 1954, already referred to.
Interest on the 2 3/4% Loan of 1960 of the face value of Rs. 18,00,000 was to fall due on January 15, 1955.
Both on account of the necessity for obtaining the interest certificate and also on 312 account of the expected check of securities by the auditors appointed for auditing the accounts of the Insurance Company for the year 1954, it became necessary to procure these securities or to sell them off.
Chokhani purchased, on December 9, 1954, 2 3/4% 1960 securities of the face value of Rs. 18,00,000 on behalf of Bhagwati Trading Company.
The purchase price was paid out of the funds of the Union Agencies and Bhagwati Trading Company.
The securities were, however, got endorsed in the name of the Insurance Company.
Chokhani got the securities sometimes about December 21, 1954, and, therefore, got them converted into stock certi ficates which were then sent to the head office at Delhi.
There still remained 3% 1959 61 securities of face value of Rs. 35,00,000 to be accounted for.
They were purchased in September, 1954, as already mentioned, but had not been received up to the end of December.
On December 27, 1954, Chokhani purchased 2 3/4% 1962 securities of the face value of Rs. 46,00,000, in two lots of Rs. 11,00,000 and Rs. 35,00,000 respectively, on behalf of the Insurance Company.
He also entered into the usual cross contract with the brokers for the sale of those securities on behalf of the Union Agencies.
This was a fictitious transaction, as usual, and these securities were not received from the Union Agencies.
On the same day, Chokhani entered into a contract for the sale of 3% 1959 61 securities of the face value of Rs. 35,00,000 on behalf of the Insurance, Company and also entered into a cross contract on behalf of the Union Agencies for the purchase of these securities from the same brokers.
As these securities did not exist with the Jnsuranco Company, these transactions were also paper transactions.
We need not give details of the passing of money from one concern to the other in connection with these transactions.
For purposes of audit the 1959 61 securities of the face value of 313 Rs.35,00,000 had been sold.
Now securities viz., 2 3/4% 1962 securities of the face value of Rs. 46,00,000 had been ostensibly purchased.
The auditors could demand inspection of these newly purchased securities.
Chokhani therefore entered into another purchase transaction.
This time a genuine transaction for the purchase of 2 3/4% 1962 securi ties of the face value of Rs 46,00,000 was entered into on January It, 1955.
The purchase price was paid by the sale of 3% 1957 securities of the face value of Rs. 46,00,000 which the Insurance Company possessed.
For this purpose , Chokhani withdrew these securities of the face value of Rs. 8,25,000 from the Chartered Bank, Bombay, and Rs. 37,75,000 worth of securities were sent to Bombay from Delhi.
These securities were then converted into inscribed stock.
The Insurance Company was now supposed to have purchased 2 3/4% 1962 securities of the face value of Rs. 92,00,000 having purchased Rs.416,00,000) worth of securities in December 1954 and Rs. 46,00,000 worth of securities in January 1955.
It possessed securities worth Rs. 46,00,000 only and inscribed stock certificate with respect to that could serve the purpose of verifying the existence of the other set of Rs. 46,00,000 worth of securities.
These transactions are sufficient to indicate the scheme followed by Chokhani in the purchase and sale of securities on behalf of the Insurance Company.
It is clear that the transactions were not in the interests of the Insurance Company but were in the interests of the Union Agencies inasmuch as the funds were provided to it for meeting its losses.
It is also clear that the system adopted of withdrawing the funds of the Insurance Company ostensibly for paying the purchase price of securities after the due date of payment of interest and selling the securities off, if not actually recouped from the funds of the Union Agencies or 314 Bhagwati Trading Company prior to the next date of payment of interest, was not in the interests of the Insurance Company.
When, however, the sale price could not be paid out of the funds of the Union Agencies or Bhagwati Trading Company, Chokhani, on behalf of the Insurance Company entered into a fresh transaction of purchase of securities which were not actually received and thus showed repayment of the earlier funds though out of the funds withdrawn from the same company (viz., the Insurance Company) ostensibly for paying the purchase price of newly purchased securities.
Turning to the evidence on record, the main statement on the basis of which, together with other circumstances, the Courts below have found that Dalmia had the necessary criminal intent as what Chokhani did was known to him and was under his instructions, is that of Raghunath Rai, Secretary cum Account of the Bharat Insurance Company.
Mr Dingle Foot has contended firstly that Raghunath Rai was an accomplice of the alleged conspirators and, if not, he was a witness whose testimony should not, in the circumstances be believed without sufficient corroboration which does riot exist.
He has also contended that the Courts below fell into error in accepting the statements made by him which favoured the prosecution case without critically examining them, that they ignored his statements in favour of the accused for the reason that he was under obligation to Dalmia and ignored his statements inconsistent with his previous statement as he was not confronted with them in cross examination.
An accomplice is a person who participates in the commission of the actual crime charged against an accused.
He is to be a particleboard.
There are two cases, however, in which a person has been held to be an accomplice even if he is not a particeps criminis.
Receivers of stolen property 315 are taken to be accomplices of the thieves from whom they receive goods, on a trial for theft.
Accomplices in previous similar offences committed by the accused on trial are deemed to be accomplices in the offence for which the accused is on trial, when evidence of the accused having committed crimes of identical type on other occasions be admissible to prove the system and intent of the accused in committing the offence charged Davies Director of Public Prosecution8 (1).
The contention that Raghunath Rai was an accomplice is mainly based on the facts that (i) Raghunath Rai did not produce the counterfoils of the cheques for the inspection of the auditors, though asked for by them, in spite of the fact that the counterfoils must have come to Delhi during the period of audit; (ii) the alleged scheme of the cons pirators could not have been carried out without his help in signing blank cheques which were issued by Chokhani subsequently.
The mere signing of the blank cheques is hardly an index of complicity when the bank account had to be operated both by Chokhani and Raghunath Rai, jointly.
Raghunath Rai had to sign blank cheques in order to avoid delay in payments and possible occasional falling through of the transactions.
No sinister retention can be imputed to Raghunath Rai on account of his signing blank cheques in the expectation that those cheques would be properly used by Chokhani.
The counterfoils have not been produced and there is no evidence that they showed the real state of affairs, i. e., that the cheques were issued to Bhagwati Trading Company and not to the brokers from whom the securities were purchased.
It is not expected that the name of Bhagwati Trading Company would have been written on the counterfoils of the cheques when its existence and (1) L. R. 316 the part it took in the transactions were to be kept secret from the head office.
When counterfoils were sent for in August, 1955, they were not received from Bombay.
Chokhani states that he did not get that letter.
Moreover, counterfoils reach the head office after a long time and there is no particular reason why Raghunath Rai should notice the counterfoils then.
He does not state in his evidence that he used to look over the counterfoils when the cheque books came to him for further signatures.
We do not therefore agree that Raghunath Rai was an accomplice.
Even if it be considered that Raghunath Rai 's evidence required corroboration as to the part played by Dalmia, the circumstances to which we would refer later in this judgment, afforded enough corroboration in that respect.
Raghunath Rai made a statement.
Exhibit P. 9, before Annadhanam on September 20, 1955.
He made certain statements in Court which were at variance with the statement made on that occasion.
This variation was not taken into consideration in assessing the veracity of Raghunath Rai as he had not been cross examined about it.
The argument of Mr. Dingle Foot is that such variation, if taken into consideration, considerably weakens the evidence of Raghunath Rai.
He has urged that no cross examination of Raghunath Rai was directed to the inconsistencies on any particular point in view of the general attack on his veracity through cross examination with respect to certain matters.
He has contended that in view of section 155 of the Indian Evidence Act, any previous statement of a witness inconsistent with his statement in Court, if otherwise proved, could be used to impeach his credit and that therefore the Courts below were not right 317 in ignoring the inconsistencies in the statement of Raghunath Rai merely on the ground that they were not put to him in cross examination.
On the other hand, the learned Solicitor General contends that section 155 of the Indian Evidence Act is controlled by section 145 and that previous inconsistent statements not put to the witness could not be used for impeaching his credit.
We do not consider it necessary to decide this point as we are of opinion that the inconsistent statements referred to are not of any significance in impeaching the credit of Raghunath Rai.
The specific inconsistent statements are : (i) 'I never of my own accord send securities to Bombay nor am authorised to do so ': In Court Raghunath Rai said that certain securities were sent by him to Bombay on his own accord because those securities were redeemable at Bombay and the maturity date was approaching.
(ii) Before the Administrator, Raghunath Rai had stated: 'I cannot interfere in the matter as, under Board Resolution, Chokhani is authorised to deal with the securities.
Chokhani always works under instructions from the Chairman. ' In Court, however, he stated that there was no resolution of the Board of Directors authorising Chokhani to sell and purchase securities.
The misstatement by Raghunath Rai, in his statement P. 9 to the Investigator made on September 20, 1955.
about Chokhani 's being authorised by a Board resolution to deal with the securities, is not considered by Dalmia to be a false statement as he himself stated, in answer to question No. 21, that such a statement could possibly be made by Raghunath Rai in view of the Board of Directors considering at the meeting the question whether Chokhani be authorised to purchase and sell securities on behalf of the company in order to make profits.
(iii) 'Roughly 1 3/4 chores of securities were sent to Bombay from here during the period from 318 April 1955 to June 1955.
The period was wrong and was really from July to August 1955.
Raghunath Rai admitted the error and said that he had stated to Annadhanam without reference to books.
(iv) 'Securities are sent to Chokhani at Bombay through a representative of Dalmia.
The statement is not quite correct as securities were sent to Bombay by post also.
Raghunath Rai stated that on the receipt of the advice from Chokhani about the purchase or sale of securities, he used to go to Dalmia on the day following the receipt of the advice for confirmation of the contract of purchase or sale of securities and that after Dalmia 's approval the vouchers about the purchase of those securities and the crediting of the amount of the sale price of those securities to the account of the Insurance Company with the Chartered Bank, as the case may be, used to be prepared.
Kashmiri Lal and Ram Das, who prepared the vouchers, describe the procedure followed by them on receipt of the advice but do not state anything about Raghunath Rai 's seeking confirmation of the purchase transactions from Dalmia and therefore do not, as suggested for the appellants, in any way, contradict Raghunath Rai.
It is urged by Mr. Dingle Foot that it was somewhat unusual to put off the entries with respect to advises received by a day, that the entries must have been made on the day the advices were received and that in this manner the entries made by these clerks contradict Raghunath Rai.
A witness cannot be contradicted by first supposing that a certain thing must have taken place in a manner not deposed to by any witness and then to find that was not consistent with the statement made by that witness.
Further, we are of opinion that there could be no object in making consequential entries 319 on receipt of the advice about the purchase of securities if the purchase transaction itself is not approved of and is consequently cancelled.
The consequent entries were to be with respect to the investments of the Insurance Company and not with respect to infructuous transactions entered into by its agents.
It has also been urged that if Dalmia 's confirmation was necessary, it was extraordinary that no written record of his confirming the put chase of securities was kept in the office.
We see no point in this objection.
If confirmation was necessary, the fact that various entries were made consequent on the receipt of advice is sufficient evidence of the transaction being confirmed by Lalmit, as, in the absence of confirmation, the transaction could not have been taken to be complete.
Further, office notes stating that securities had been purchased or sold 'under instructions of the Chairman ' used to be prepared for the meeting of the Board of Directors when the matter of confirming sale and purchase of securities went before it.
The fact that office notes mentioned that the securities had been purchased under the instructions of the Chairman is the record of the alleged confirmation.
The proceedings of the meeting of the Board of Directors with respect to the confirmation of the purchase and sale of securities do not mention that action was taken on the basis of the office notes.
Minutes with respect to other matters do refer to the office notes.
This does not, however, mean that office notes were not prepared.
Confirmation of the purchase and sale of the shares was a formal matter for the Board.
All the office notes, except one, were signed by Raghunath Rai.
The one not signed by him is Exhibit P. 793.
It is signed by Chordia and is dated August 18,1954.
This also mentions under instructions of the Chairman certain shares have been 320 purchased '.
Chordia was a relation of Dalmia and had no reason to write the expression 'Under instructions of the Chairman ' falsely.
Such a note cannot be taken to be a routine note when the power to purchase and sell securities vested in Chordia as Managing Director of the company.
Clause (4) of article 13 of the Bye laws empowered the Managing Director to transfer, buy and sell Government securities.
When Chordia, the Managing Director, wrote in this office note that securities were purchased under the instructions of the Chairman, it can be taken to be a true statement of fact.
It is true that he has not been examined as a witness to depose directly about his getting it from Dalmia that the purchase of securities referred to in that note was Under his instructions.
This does not matter as we have referred to this office note in connection with Raghunath Rai 's statement that office notes used to be prepared after Dalmia 's statement that the particular purchase of shares was under his instructions.
The statements made by Raghunath Rai which are said to go in favour of the accused may now be dealt with.
Raghunath Rai was cross examined with respect to certain letters he had sent to Chokhani.
He stated, in his deposition on July 29, 1958, that Dalmia accepted his suggestion for writing to Chokhani to send him the distinctive numbers of the securities which had been purchased, but not received at the head office, and that when he reported non compliance of Chokhani in communicating the distinctive numbers and suggested to Dalmia to ring up Chokhani to send the securities to the head office, Dalmia agreed.
This took place in November and December 1954.
Dalmia 's approval of the suggestion does not go in his favour.
He could not have refused the suggestion.
Raghunath Rai also stated that in September or October 1954 there was a talk between hier, 321 K. L. Gupta and Dalmia about the low yield of interest on the investments of the Insurance Company and it was suggested that the money be invested in securities, shares and debentures.
Dalmia then said that he had no faith in private shares and debentures but had faith in Government securities and added that he would ask Chokhani to invest the funds of the Insurance Company in the purchase and sale of Government securities.
He, however, denied that Dalmia had said that the investment of funds would be in the discretion of Chokhani, and added that Chokhani was not authorised to purchase or sell securities on behalf of the Insurance Company unless he was authorised by the Chairman.
The statement does not support Dalmia 's authorising Chokhani to purchase and sell securities in his discretion.
Another statement of Raghunath Rai favourable to Dalmia is said to be that according to him he told the auditors on September 9, 1955, that the securities not then available were with Cbokhani at Bombay from whom advices about their purchase had been received.
Annadhanam stated that Raghunath Rai had told him that Dalmia would give the explanation of the securities not produced before the auditors.
There is no reason to prefer Raghunath Rai 's statement to that of Annadhanam.
Annadhanam 's statement in the letter Exhibit P. 2 about their being informed that in March, 1954, after the purchase, the securities were kept in Bombay in the custody of Chokhani refer to what they were told in the first week of January, 1955, and not to what Raghunath Rai told him on September 9, 1954.
Raghunath Rai stated that on one or two occasions be, instead of going to Dalmia, talked with him on telephone regarding the purchase and sale of securities by Chokhani and that Dalmia told him on telephone that be bad instructed for the purchase 322 and sale of securities and that he was confirming the purchases or sales.
This does not really favour Dalmia as Raghunath Rai maintains that Dalmia did confirm the purchase or sale reported to him.
It is immaterial whether that was done on telephone or on Raghunath Rai actually meeting him.
Questions put to the Administrator, Mr. Rao, in cross examination, implied that Raghunatb Rai was a reliable person and efforts to win him over failed.
It was suggested to the Administrator that the reasons for the appointment of Sundara Rajan as the Administrator 's Secretary was that he wanted to conceal certain matters from Raghunath Rai.
His reply indicated different reasons for the appointment.
Another suggestion put to him was that Raghunath Rai offered to retire, but he kept his offer pending because of this case.
This suggestion too was denied.
It was brought out in the cross examination of Raghunath Rai that he was in a position in which he could be influenced by the Administrator.
Raghunath Rai was using the office car.
Its use was stopped by the Administrator in January, 1956.
He was not paid any conveyance allowance.
In April, 1958, he made a representation to the Administrator for the payment of that allowance to him.
The Administrator passed the necessary order in May, 1958, with retrospective effect from January 1956.
The amount of conveyance allowance was Rs. 75 per mensem.
Raghunath Rai could not give any satisfactory explanation as to why he remained silent with regard to his claim for conveyance allowance for a period of over two years, but denied that he was given the allowance with retrospective effect in order to win him over to the prosecution.
Raghunath Rai applied for extension of service in the end of 1956 or in the beginning of 323 1957 and, in accordance with the resolution passed on August 17, 1954, by the Board of Directors, his service was extended up to 1961.
The Administrator forwarded the application to the higher authorities.
This matter had not been decided by July 29, 1958.
The amount of his gratuity and provident fund in the custody of the Insurance Company amounted to Rs. 35,000.
We do not think that the Administrator had any reason to influence Raghunath Rai 's statement and acted improperly in sanctioning oar allowance to him retrospectively and would have so acted with respect to Raohunath Rai 's gratuity if Raghunath Rai had not made statements supporting the prosecution case.
Raghunath Rai stated on July 29, 1958, that in July, 1955, when he informed Dalmia that the bulk of the securities were at Bombay and the rest were at Delhi, Dalmia asked him to write to Chokhani to deposit all the securities in Bombay in the Chartered Bank.
At this he told Dalmia that if the sale and purchase of securities was to be carried on as hithertofore, there was no use depositing them in the Bank and thus pay frequent heavy withdrawal charges, and suggested that the securities could be deposited in the Bank if the sale and purchase of them had to be stopped altogether and that Dalmia then said that the securities should be sent for to Delhi in the middle of December, 1955 for inspection by the auditors.
Raghunath Rai was re examined on July 30 and stated that the aforesaid conversation took place on July 14, 1955, and added that he had, in the same context, a further talk with Dalmia in August, 1955.
The Public Prosecutor, with the permission of the Court then questioned him 324 about the circumstances in which he had to go a second time to Dalmia and talk about the matter.
His reply was that he had the second talk as the securities purchased in May, 1955, and those purchased in July and August, 1955, had not been received at the head office.
He asked Dalmia to direct Chokhani to deposit all the securities in the Chartered Bank or to send them to Head Office.
Dalmia then said that the sale and purchase of securities had to be carried on for some time and therefore the question of depositing those securities in the Bank or sending them to the head office did not arise for the time being and that the securities should be sent for to the head office in December, 1955.
Raghunath Rai thus made a significant change in his statement.
On July, 29,1958, he opposed the direction of Dalmia for writing to Chokhani to deposit the securities in the Bank as that would entail heavy withdrawal charges in case the sale and purchase of securities were not to be stopped while, according to his statement the next day, he himself suggested to Dalmia in August, 1955, that Chokhani be asked to deposit all the securities in the Bank or to send them to the head office.
He denied the suggestion that he made this change in his statement under pressure of the Police.
The cross examination was really directed to show that he had been approached by the police between the close of his examination on July 29 and his further examination on July 30, 1958.
Raghunath Rai admitted in court that after giving evidence he went to the room allotted in the Court building to the Special Police Establishment and that the Investigating Officer and the Secretary to the Administrator of the Insurance Company were there.
He went there in order to take certain papers which he had kept there.
He, however, had not brought any papers on July 30 as, accord 325 ing to him, his main cross examination had been over.
He however denied that he had been dictated notes by the police in order to answer questions in cross examination or that be remained with the police till 9 p. m. or that the Secretary to the Administrator held out a threat about the forfeiture of his gratuity in case be did not make a statement favourable to the prosecution.
We see no Reason for the police to bring pressure on Raghunath Rai to introduce falsely the conversation in August.
Between July 14, 1955, and middle of August, 1955, the head office learnt of the purchase of securities of the face value of Rs. 74,00,000 and again, on or about August 26, of the purchase of securities of the face value of Rs. 40,00,000.
A further conversation in August is therefore most likely as deposed to.
The main fact remains that Dalmia said that the securities be sent for in December, 1955, which implies his knowledge of the transactions in question.
We are of opinion that the discrepancies or contradictions pointed out in Raghunath Rai 's statement are not such as to discredit him and make him an unreliable witness and that he is not shown to be under the influence of the prosecution.
Further, his various statements connecting Dalmia with the crime, find corroboration from other evidence.
Letter Exhibit P. 1351 dated September 4, 1954, was sent to the Imperial Bank of India, Delhi Branch, under the signature of Dalmia as Chairman.
The letter directed the bank to deliver certain securities to the bearer.
Dalmia admits his signatures on this document and also on the letter Exhibit P. 1352 acknowledging the receipt of the securities sent for, thus corroborating Raghunath Rai 's statement that the securities were withdrawn under his instructions.
326 Letters Exhibit D. 3, dated March 16, 1955, and P. 892 dated August 5, 1955, from Raghunath Rai to Chokhani, mentioned that the stock certificates were being sent under the instructions of the Chairman.
They corroborate Raghunath Rai 's statements in Court of the dispatch of these stock certificates under Dalmia 's instructions.
He had no reason to use this expression if he was sending them on his own.
It is true that the date on which the Chairman gave the instruction is not proved, but it stands to reason that the stock certificates must have been despatched soon after the receipt of the instruction from the Chairman.
it cannot be presumed that in such transactions there could be such delay as would make statement in these letters not corroborative evidence under section 157, of the Evidence Act which provides that previous statements made at or about the time a fact took place can be used for corroborating the statement in Court.
Chokhani 's statement that he did not mention the name of Bhagwati Trading Company in his letters to the head office as be did not want Dalmia to know about the dealings with Bhagwati Trading Company, implies that in the ordinary course of business the information conveyed in those letters would be communicated to Dalmia and thus tends to support Raghunatb Rai 's statement that he used to visit Dalmia on receipt of the statement of account and inform him about the purchase or sale of the securities.
Chokhani had been inconsistent about Raghunath Rai 's later knowledge of the existence of Bhagwati Trading Company.
In answer to question No. 66, on November 13, 1958, he stated : "I did not contradict the statement made in Ex xi :P. 813 that cheque No. B564809 327 dated 17 11 54 had been issued in favour of Narain Das and Sons although that cheque had in fact been issued in favour of Bhagwati Trading Company and not in favour of Narain Das and Sons because those at the Head Office did not know anything about Bhagwati Trading Company".
In answer to question No. 149, on November 14, 1958, he stated: "I did not mention the name of Bhagwati Trading Company in my letters addressed to the Head Office of the Bharat Insurance Company as the party with whom there were cross contracts because Raghunath Rai would not have known as to what was Bhagwati Trading Company.
I also did not mention the name of Bhagwati Trading Company in my letters to the Head Office of the Bharat Insurance Company because I did not want Shri Dalmia to know that I was having dealings with Bhagwati Trading Company.
I also want to add that Raghunath Rai must have known that the cross contracts were with Bhagwati Trading Company because the name of Bhagwati Trading Company was mentioned as the payee on the counterfoils of the cheques issued in favour of Bhagwati Trading Company.
" Chokhani seems to have attempted to undo the effect of his statement on November 13, but being of divided mind, made inconsistent statements even on November 14, 1958.
He was in difficult position.
He attempted to show that Dalmia did not know about Bhagwati Trading Company and also to show that Raghunath Rai had reasons to know about it and was therefore in the position of an Accomplice, a stand which is also taken by Dalmia 328 We may now deal first with the case of Chokhani, appellant.
Chokhani has admitted his entering into the various transactions of purchase and sale and to have set up Bhagwati Trading Company for convenience to carry out the scheme of diverting the funds of the Insurance Company to the Union Agencies by way of temporary loan.
His main plea is that he had no attention to cause loss to the Insurance Company and did not know that the way he arranged funds for the Union Agencies from the Insurance Company was against law.
He contends that he had no dishonest intentions and therefore did not commit any of the offences he had been charged with, and convicted of.
Learned counsel for Chokhani has urged two points in addition to some of the points of law urged by learned counsel for Dalmia.
He urged that the transactions entered into by Chokhani were ordinary genuine commercial transactions and that there was no evidence of Chokhani 's acting dishonestly in entering into those transactions.
It is further said that the High Court recorded no finding, on the latter point though it was necessary to record such a finding, even though this point was not seriously urged.
In support of the contention that the purchase and sale transactions were genuine commercial transactions, it is urged that to meet the losses of the Union Agencies Chokhani was in a position to sell the shares held by it or could have raised the money on its credit.
He did not sell the shares as they were valuable and as their sale would have affected the credit of the Union Agencies.
Chokhani had been instructed in September, 1954, that the yield from the investment of the Insurance Company was not good and that the funds of the Insurance Company be invested in securities.
Such instructions are said to have been given when he was authorised by Dalmia to purchase and sell securities 329 on behalf of the Insurance Company.
It is suggested that these instructions were given in 1953 and not in 1954 when Dalmia was going abroad.
In view of this authority, Chokhani decided on a course of action by which he could invest the insurance money in securities and also help the Union Agencies.
It is submitted that it was not necessary to mention Bhagwati Trading Company to the head office as the Insurance Company was going to suffer no loss and was simply concerned in knowing of the sale and purchase transactions.
Chokhani 's payment of the purchase price in anticipation of the delivery of the securities, was bona fide.
We have already expressed the opinion that the transaction in connection with the investment of the funds of the Insurance Company were not bonafide purchase and sale transactions.
They were transactions with a purpose.
They were motivated in the interests of the Union Agencies and not in the interests of the Insurance Company.
The mere fact that on account of the nondelivery of securities within a reasonable time of the payment of the purchase money made the brokers or Bhagwati Trading Company or both of them liable to an action, does not change the nature of the transactions.
That liability can co exist with the criminal liability of Chokhani if the transactions were such which could amount to his committing breach of trust.
In fact, the offence of breach of trust is not with respect to his entering into the sale and purchase transactions.
It is really on the basis of his paying the money out of the Insurance Company 's funds to the Union Agencies through Bhagwati Trading Company, in contravention of the manner in which he was to deal with that money.
These purchase and sale transactions were just a device for drawing on those funds.
We do not believe that Chokhani really intended to purchase the securities though he did purchase 330 some, in certain circumstances, and that the nondelivery of the securities was not a case of just his slightly postponing the delivery of the securities.
No reason is given why such a concession should have been made to the seller of the securities and the period during which such purchased securities remained undelivered is much longer than what can be said to be a reasonable period during which purchased securities for ready delivery should be delivered.
The fact, if true, that the Insurance Company suffered no monetary loss on account of the purchase and sale transactions and the passing of its money to the Union Agencies, does not suffice to make the transaction an honest one.
The gain which the Union Agencies made out of the money it got from the Insurance Company was wrongful gain.
It was not entitled to profit by that money.
One is said to act dishonestly when he does any thing with the intention of causing wrongful gain to one person or wrongful loss to another.
Wrongful gain means gain by unlawful means of property to which the person gaining is not legally entitled and wrongful loss is loss by unlawful means of property to which the person using it is legally entitled.
It is urged that Chokhani 's keeping Bhagwati Trading Company secret from Delhi was not the result of a guilty conscience, but could be due to his nervousness or fear.
We do not agree with this suggestion.
He had nothing to fear when he was acting honestly and, according to him, when he was doing nothing wrong.
It is further submitted that what Chokhani did amounted simply to the mixing of the funds of the Insurance Company and the Union Agencies.
We do not think that this would bethe correct interpretation of what Chokhani did.
It was not a case of mixing of funds but was a case of making 331 over the funds of the Insurance Company to the Union Agencies.
The fact that the Administrator did not cancel any contract entered into on behalf of the Insurance Company under the powers given to him by section 52(c) of the , does not mean that every such contract was in the interest of the Insurance Company.
The Administrator has stated that he did not know the legal position as to whether those contracts stood or not.
Of the points of law urged for Chokhani, we have already dealt with those relating to the jurisdiction of the Delhi Court to try the various offences, to the content of the words 'property ', dominion ' and agency ' in section 409, I. P. C. The only other points raised are that the offence under section 477 A could not be said to be committed in pursuance of the conspiracy and that it was not a case of one conspiracy but of several conspiracies.
The charge under section 477 A, 1.
P. C. is based on the letters written by Chokhani from Bombay to Delhi intimating his entering into the contracts of purchase of securities and indicating that cheques had been issued in payment to the brokers.
It is true that these letters did not specifically state that the cheques had been issued to the brokers, but that is the implication when the letters refer to the contracts and the statements sent along with them and which relate simply to the transactions between the Insurance Company and the brokers and in no way indicate the cross contracts between the brokers and Bhagwati Trading Company.
It is further said that the payment to Bhagwati Trading Company was as an agent of the brokers.
There is no evidence that the brokers appointed Bhagwati Trading Company as their agent for the purpose.
The evidence is that on Chokhani 's representation that the Insurance Company would 332 pay to Bhagwati Trading Company and get the securities from Bhagwati Trading Company that the brokers neither got the price nor delivered the securities.
It is also contended that Chokhani was not a ,servant ' of the Insurance Company and therefore does not come within section 477 A. 1.
P. C. which makes certain conduct of a clerk, officer or servant an offence Chokhani was a servant of the Insurance Company as he was its Agent and received payment for doing work as an agent.
His being a full time servant of the Union Agencies does not mean that he could not be a servant of any other company, or other employer.
We do not agree with the contention that it was a case of several conspiracies, each transaction to meet the losses, as they occurred, giving rise to an independent conspiracy.
The conspiracy was entered into in the beginning of August, 1954, when such circumstance arose that funds had to provided to the Union Agencies to meet its losses.
The conspiracy must have been to continue up to such time when it be possible to anticipate that such a situation would no more arise.
Similar steps to meet the losses were taken whenever the occasion arose.
The identity of purpose and method is to be found in all the transactions and they must be held to have taken place in pursuance of the original conspiracy.
We next come to the case of Vishnu Prasad, appellant.
He was the sole proprietor of Bhagwati Trading Company.
His main defence is that he was ignorant of the various transactions entered into by Chokhani on behalf of Bbagwati Trading Company and that it was Chokbani who kept the books of accounts and entered into those transactions.
The courts below have found that he knew of transactions and the nature of the conspiracy.
333 We agree with this opinion.
There is sufficient material on record to establish his knowledge and part in the conspiracy.
Bhagwati Trading Company came into existence just when the Union Agencies suffered losses and was not in a position to pay them and, consequently, there arose the necessity for Dalmia and Chokhani to devise means to raise funds for meeting those losses.
Vishnu Prasad opened the banking accounts in two banks at Bombay on August 9 and August 11, 1954, depositing the two sums of Rs. 1,100 each in each of the two banks.
He states that he got this money from Chokbani.
The money was, however withdrawn after a short time and paid back to Chokhani and no further contribution to the funds of the Bhagwati Trading Company was made on his behalf.
The Company functioned mainly on the amounts received from the Insurance Company.
Vishnu Prasad, therefore, cannot be said to be quite innocent of the starting of the company and the nature of its business.
He started, in answer to question No. 24: "I started business in the name of Bhagwati Trading Company in 1953, or beginning of 1954.
1 however did no business in the name of that company.
G. L. Chokhani stated that I should do business for the purchase or sale of securities." and in answer to question No. 26 he stated that he had no knowledge about Chokhani 's entering into contracts on behalf of the Bharat Insurance Company for the purchase of securities and his entering into crose contracts with the same firm of brokers for the sale of those securities on behalf of Bhagwati Trading Company but admitted that he knew that Chokhani was doing business for the purchase and sale of securities on behalf of Bhagwati Trading Company.
He expressed ignorance 334 about similar future contracts for purchase of securities on behalf of the Insurance Company and cross contracts for the sale of those securities on behalf of Bhagwati Trading Company.
Vishnu Prasad, however, made a statement at the close of the day when he had made the above statement, and said: "In answer to question No. 24 I want to state that I did not start business of Bhagwati Trading Company in 1953 or the beginning of 1951 but only intended to start that business.
" The latter statement deserves no acceptance and is a clear indication that the implications of his earlier statement worked on his mind and he attempted to indicate that he was not even responsible in any way for the starting of the business of Bhagwati Trading Company.
Bhagwati Trading Company did come into existence and ostensibly did business.
The latter statement therefore cannot be true.
Vishnu Prasad further knew, as his answer to question No. 157 indicates, that Chokhani did shares speculation business at Bombay.
He, however, stated that he did not know on behalf of which company he did that business.
What Vishnu Prasad actually did in connection with the various transactions which helped in the diversion of the funds of the Insurance Company to the Union Agencies has to be looked at in this background.
He cashed a number of cheques issued on behalf of the Insurance Company and made over that money to Chokhani, who passed it on the Union.
Agencies.
He issued cheques on behalf of Bhagwati Trading Company in favour of Bharat Union Agencies after the amounts of the cheques of the Insurance Company in favour of Bhagwati Trading Company had been deposited in the Bank.
Some of 335 these cheques issued in favour of Union Agencies were filled in by Vishnu Prasad himself and therefore he must have known that he was passing on the money to the Union Agencies.
In fact, some of the cheques issued on behalf of Bhagwati Trading Company in favour of the Union Agencies were deposited in the bank by Vishnu Prasad himself It is therefore not possible to believe that Vishnu Prasad did not know that the amounts which his company viz., Bhagwati Trading Company, received from the Insurance Company must have purported to be on account of securities sold to the Insurance Company, as that was the business which Bhagwati Trading Company professed to do and, according to him, he knew to be its business, He knew that most of this amount was passed on to the Union Agencies.
Both these facts must have put him on enquiry even if he did not initially know of the nature of the business which brought in the money to, and took out the money from, Bhagwati Trading Company.
He is expected to knew that the Insurance Company was not likely to purchase securities so frequently.
If he had made enquiries, he would have learnt about the nature of receipts and payments and in fact we are inclined to the view that he must have known of their nature and that it is not reasonable that he would be completely in the dark.
The business of Bhagwati Trading Company is said to have been started as Vishnu Prasad was not taking interest in the other business.
This should indicate that he must have evinced interest in the activities of Bhagwati Trading Company which continued for over a year and which made him receive and dispose of lakhs of Rupees.
Surely, it is not expected that he would have made no effort to know what is required to be know by one earring on business for the purchase and sale of securities, and any attempt to have known this would have 336 necessarily led him to know that securities were being purchased on behalf of the Insurance Company and were not delivered to it and that Bhagwati Trading Company purchased no securities from the Union Agencies and that any payment by it to the latter was for something which B wait Trading Company was not liable to pay.
It follows that he must have known that money was being received from the Insurance Company for nothing which was due to Bhagwati Trading company from that company and that most of that money was being paid to the Union Agencies for payment of which Bhagwati Trading Company had no liability and that the net result of the transactions of receipt of money from the Insurance Company and payment of it to the Union Agencies was that Bhagwati Trading Company was acting to help the diversion of funds from the Insurance Company to the Union Agencies.
We therefore hold that Vishnu Prasad has been rightly found to be in the conspiracy.
We may now deal with the case of Dalmia, appellants The fact that the funds of the Bharat Insurance Company were diverted to Union Agencies by the transactions proved by the prosecution, is not challenged by Dalmia.
His main contention is that he did not know what Chokhani had been doing in connection with the raising of funds for meeting the losses of the Union Agencies.
There is, however, ample evidence to indicate that Dalmia knew of the scheme of the transactions and was a party to the scheme inasmuch as the transactions were carried through under his instructions and approval: The facts which have a bearing on this matter are: (1) Dalmia had the clearest motive to devise means for meeting the losses of the Union Agencies.
337 (2) Dalmia actually looked after the share business of the Union Agencies at Calcutta and Delhi.
He had knowledge of the losses of the Union Agencies.
(3) The frequency of telephonic calls between him and Chokhani during the period when the losses took place and steps were taken to meet them, especially during the early stages in August and September, 1954, when the scheme was being put into operation, and in July and August, 1955, when there bad been heavy and recurring losses.
(4) Dalmia 's informing the Imperial Bank, Delhi, on September 4, 1954, about his powers to deal with securities and actually withdrawing securities that day, which were shortly after sold at Bombay and whose proceeds were utilised for meeting the losses.
(5) The gradually increasing retention of securities in the office of the Insurance Company and consequently the gradually reduced deposit of securities in the Banks.
(6) The transfer of securities held by the Insurance Company from Delhi to Bombay when funds were low there to meet the losses.
(7) The purchase and sale of securities in the relevant period in order to meet the losses were under his instructions.
(8) A larger use of converting securities into inscribed stock certificates which was used for concealing the disclosure of the interval between the date of purchase of the securities which were then not received, and the date when those securities were recouped later.
(9) Dalmia 's annoyance and resentment on September 9, 1955, when the auditors made a surprise inspection of the office of the insurance company and wanted to see the securities, 338 (10) His conduct on September 15, 1955.
(11) His not going to meet Mr. Kaul on September 16, 1955, and instead, sending his relatives to state what was not the full and correct statement of facts which, according to his own statements, were known to him by then.
(12) His confession P. 10 together with the statement Exhibit p. 11 and the statement made to Annadhanam that he carried on his speculative business in shares in the name of the Union Agencies.
One of the main factors urged in support of the contention that Dalmia was in the conspiracy is that the entire scheme of conspiracy was entered into for the sole benefit of Dalmia.
It is not reasonably probable that such a conspiracy would come into existence without the knowledge or consent of Dalmia.
The conspiracy charge framed against Dalmia mentioned the object of the conspiracy as 'meeting losses, suffered by you, R. Dalmia, in forward transactions, of speculation in shares, which transactions were carried on in the name of the Bharat Union Agencies Limited. ' and the charge under section 409 1.
P. C. referred to the dishonest utilisation of the funds of the Insurance Company.
This matter has been considered from several aspects.
The first in that Dalmia is said to have owned the entire shares issued by the Union Agencies, or at least to have owned a substantial part of them and was in a position to control the other shareholders.
To appreciate this aspect, it is necessary to give an account of the share holding in this company.
The Union Agencies was incorporated at Bombay on April 1, 1948, as a private limited company, with its registered office at Bombay.
It also had an office at 10, Daryaganj, Delhi, where the head office of the Bharat Insurance Company was.
Its authorised capital was Rs. 5,00,000.
The total number of shares issued in 1949 Was 2,000, Out of these 339 Dalmia held 1,200 shares, Dalmia Cement & Paper Marketing Company Ltd. (hereinafter called the Marketing Company) 600 shares, Shriyans Prasad Jain, brother of section P. Jain, 100 shares and Jagat Prasad Jain, the balance of 100 shares.
The same position of share holding continued in 1950.
In 1951, Dalmia continued to hold 1,200 shares, but the other 800 shares were hold by Govan Brothers.
The position continued in 1952 as well and, in the first half of 1953, Dalmia increased the number of his shares to 1,800 and Govan Brothers increased theirs to 1,200 and the total shares issued thus stood at 3,000.
This position continued up to September 21, 1954.
On September 22, 1954, 2,000 shares were further issued to section N. Dudani, a nominee of Asia Udyog.
The total shares on that date stood at 5,000 of which Dalmia held 1,800, Govan Brothers 1,200, and Dadani 2,000.
On October 4, 1954, R.P. Gurha and J. section Mittal each got 100 shares from Govan Brothers with the result that thereafter the position of shareholding was: Dalmia 1,800; Govan Brothers 1000; Dudani 2,000; Gurba 10); and Mittal 100, out of the total number of issued shares of 5000.
It is said that Dalmia transferred his 1,800 ,shares to one L. R. Sharma on October 30, 1954.
Sharma 's holding 1,800 shares was mentioned in the return, Exhibit P. 3122 filed by the Union Agencies as regards share capital and shares as on December 31, 1955, in the office of the Register of Companies in January 1956 with respect to the year 1955.
The return showed that the transfer had taken place on January 31, 1955.
It would appear that the alleged sale of shares to Sharma in October 1954 was not mentioned in a similar return which must have been submitted to the Registrar of Companies in January, 1955, and that therefore its transfer was show on January 31, 1955, Probably 340 a date subsequent to the submission of the relevant return for the year 1954.
A brief account of the various share holders may be given.
Dalmia was a Director of Govan Brothers Ltd., and was succeeded, on his resignation, by O. P. Dhawan, who was an Accountant in the Delhi Office of the Union Agencies.
He was also an employee of another company named Asia Udyog Ltd. Another Director of Govan Brothers Ltd. was D. A. Patil, lncome tax Adviser in the concerns of Dalmia.
The share scrips in the Marketing Company standing in the name of Govan Brothers Ltd. and three blank share transfer forms signed by section N. Dudani as Secretary of Govan Brother Ltd., in the column entitled 'seller ' were recovered from Dalmia 's house on search on November 25, 1955.
Dudani was the personal accountant of Dalmia and Manager of the Delhi Office of Bharat Union Agencies.
The inference drawn by the Courts below from these circumstances is that Govan Brothers Ltd. was the concern of Dalmia, and this is reasonable.
No Satisfactory explanation is given why the shares standing in the name of Govan Brothers Ltd. and the blank transfer forms should be found in Dalmia 's residence.
Dudani was the personal accountant of Dalmia and Manager of the Delhi Office of the Union Agencies, and was also Secretary of Asia Udyog Ltd. Asia Udyog appears to be a sister concern of the Union Agencies.
It was previously known as Dalmia Jain Aviation Ltd. It installed a telephone at one of Dalmia 's residences in January, 1953.
Its offices were in the same room in which the offices of the Union Agencies were.
Dhawan, who succeeded Dalmia as Director of Govan Brothers Ltd., was an employee of Asia Udyog.
Gurha was the Accountant of Asia Udyog, in addition to being Director of the Union Agencies.
He bad powers over the staff of both the companies.
J, S, Mittal was Director of 341 Union Agencies and held 100 shares in the Union Agencies as nominee of Govan Brothers Ltd., from October 4, 1954, and 1,000 shares as nominee of Crosswords Ltd., from some time about January 31, 1955.
L. N. Pathak, R. B. Jain and G. L. Dalmia, were authorised to operate on the account of both the Union Agencies, Calcutta, and Asia Udyog Ltd., with the United Bank of India, Calcutta.
The issue and transfer of shares of the Union Agencies in September and October, 1954, seem to be in pursuance of an attempt to meet a contention, as at present urged for the State, that Dalmia was the largest shareholder in it.
The same idea seemed to have led to the transfer of shares to Sharma by Dalmia.
The verbal assertion of the sale having taken place in October, 1954, is not supported by the entry in Exhibit P. 3122 and what may be taken to be the entries in a similar return for the year 1954.
This can go to support the allegation that Dalmia knew about the shady transactions which were in progress from early August, 1954.
The learned Sessions Judge relied on the following circumstances for his conclusion that Dalmia was synonymous with Bharat Union Agencies.
The speculation business of Dalmia Cement and Paper Marketing Co,.
Ltd., the paid up capital of which nearly all belonged to Dalmia was on the liquidation of that company taken over by Bharat Union Agencies and more or less the same persons conducted the business of Bharat Union Agencies who were previously looking after Dalmia Cement & Paper Marketing Company.
Bharat Union Agencies was known and taken to be the concern of Dalmia by its then Accountant Dhawan and by the brokers with whom it had dealings 342 3.
Chokhani, who hold power of attorney on behalf of Dalmia and Bharat Union Agencies, told the brokers at the time he gave business of Bharat Union Agencies to them J. that it was the business of Dalmia.
The salaries of personal and domestic employees of Dalmia were paid by Bharat Union Agencies and those payments were debited to the Salaries Account of the company.
The personal employees of Dalmia were thus treated as the employees of Bharat Union Agencies.
The business done in the name of Dalmia with Jagdish Jagmohan Kapadia was treated as the business of Bharat Union Agencies.
The funds of Bharat Union Agencies were used to discharge an obligation personally undertaken by Dalmia.
The price of the shares purchased in the process in the name of Dalmia was paid out of the funds of Bharat Unio n Agencies and the purchase of those shares was treated in the books of Bharat Union Agencies as part of its investment.
When sister in law of Dalmia wanted money it was lent to her out of the funds of Bharat Union Agencies and in the books of that company no interest was charged from her".
It has been strenuously urged by Mr. Dingle Foot that what certain persons considered to be the nature of the Union Agencies or what Chokhani told them could not be evidence against Dalmia with respect to the question whether he could be said to be identical with the Union Agencies.
We need not consider this legal objection as it is not very necessary to rely on these considerations for 343 the purpose of the finding on this point.
It may be said, however, that prima facie there seems to be no legal bar to the admissibility of statements that Chokhani told certain persons that Union Agencies was the business of Dalmia.
He had authority to represent Dalmia and Union Agencies on the basis of the power of attorney held by him from both.
His statement would thus appear to be the statement of their 'agent ' in the course of the business.
We have considered the reasons given for the other findings by the learned Sessions Judge and accepted by the High Court and are of opinion that the findings are correct and that they can lead to no other conclusion than that no distinction existed between Dalmia and the Union Agencies and that whenever it suited Dalmia or the interests of the Union Agencies such transactions of one could be changed to those on behalf of the other.
We may, however, refer to one matter.
Dalmia admits having purchased shares of Dalmia Jain Airways of the face value of Rs.6,00,000/from Anis Haji Ali Mohammad, on behalf of the Union Agencies, in his own name, though the real purchaser was the Union Agencies and that he did so as the seller and his solicitor did not agree to sell the shares in the name of the latter.
The explanation does not appear to be satisfactory.
The seller had no interest in whose name the sale took place so long as he gets the money for the shares he was selling.
Mr. Dingle Foot has urged that these various considerations may indicate strong association of Dalmia with the Union Agencies but are not sufficient to establish his complete identity with it, as is necessary to establish in view of the charges framed.
Dalmia 's identity with Union Agencies or having great interest in it is really a matter providing motive for Dalmia 's going to the length of entering into a conspiracy to raise funds for Meeting the 344 losses of the Union Agencies by diverting the funds of the Insurance Company and which would amount to Committing criminal breach of trust.
Dalmia admits having given instructions about the business of the Union Agencies in 1954 when he was not a Director of that company, and in 1955 when he was not even a shareholder.
Dalmia 's own statement to Annadhanam on September 20, 1955, goes to support the conclusion in this respect.
He stated to him then that he had lost the moneys in speculation which he did through his private companies and that most of those transactions were through the Union Agencies.
Further, the charge said that he committed criminal breach of trust of the funds of the Insurance Company by wilfully suffering Chokhani to dishonestly misappropriate them and dishonestly use them or dispose of them in violation of the directions of law and the implied contract existing between Dalmia and the Insurance Company prescribing the mode in which such trust was to be discharged.
It was in describing the manner of the alleged dishonest misappropriation or the use or disposal of the said funds in violation of the legal and contractual directions that the charge under section 409 I.P.C. described the Manner to consist of withdrawing the funds from the banks by cheques in favour of Bhagwati Trading Company and by the utilisation of those funds for meeting losses ' suffered by Dalmia in forward transactions in shares carried on in the name of Bharat Union Agencies, and for other purposes not connected with the affairs of the Insurance Company.
Even in this description of the manner, the emphasis ought to be placed on the expression 'for meeting losses suffered by Dalmia in forward transactions in shares carried on in the name of the Bharat Union Agencies and for other purposes not connected with 345 the affairs of the said Bharat Insurance Company ' and not on the alleged losses suffered by Dalmia personally.
We are therefore of opinion that firstly the evidence is adequate to establish that Dalmia and the Union Agencies can be said to be interchangeable and, secondly, that even if that is not possible to say, Dalmia had sufficient motive, on account of his intimate relations with the Union Agencies, for committing breach of trust, and thirdly, that the second finding does not in any way adversely affect the establishment of the offence under section 409 I. P. C. against Dalmia even though the charge described the utilisation of the money in a somewhat different manner.
The entire scheme of the transactions must start at the instance of the person or persons who were likely to suffer in case the losses of the Union Agencies were not paid at the proper time.
There is no doubt that in the first instance it would be the Union Agencies as a company which would suffer in its credit and its activities.
We have found that Dalmia was so intimately connected with this com pany as could make him a sort of a sole proprietor of the company.
He was to lose immensely in case the credit of the Union Agencies suffered, as it was commonly believed to be his concern and he bad connections and control over a number of business concerns and had a high stake in the business world.
His prestige and credit were bound to suffer severely as a result of the Union Agencies losing credit in the market.
There is evidence on record that if the losses are not promptly paid, the defaulter would suffer in credit and may not be able to persuade the brokers to enter into contracts with him.
It is suggested for Dalmia that Chokbani had a greater interest in seeing that Union Agencies does not suffer in credit.
We do not agree.
If the Union Agencies failed on account of its losing credit in the market on its failure to meet the losses, Chokhani 346 may stand to lose his service with the Union Agencies.
That would have meant the loss of a few hundred rupees a month.
In fact, he need not have suffered any loss.
He could have been employed by Dalmia who bad great confidence in him and whom he had been serving faithfully for a long time.
Chokhani, as agent of Dalmia, had certainly credit in the market.
There is evidence of his good reputation, but much of it must have been the result of his association with Dalmia and his concerns.
He really enjoyed reflected glory.
He bad no personal interest in the matter as Dalmia had.
We therefore do not consider this suggestion to be sound and are of opinion that Dalmia was the only person who bad to devise means to meet the losses of the Union Agencies.
Further, Dalmia admits that he used to give instructions with regard to the speculation in shares business of the Union Agencies at Calcutta and Delhi during 1954 and 1955, and stated, in answer to question No. 210 with respect to the evidence that Delhi Office of the Union Agencies used to supply funds for meeting the losses suffered by it in the speculation business at Calcutta and Delhi: " 'It is correct that as the result of shares speculation business at Calcutta and Delhi Bharat Union Agencies suffered losses in the final analysis.
I was once told by R. P. Mittal on telephone from Calcutta that G.L. Chokhani had informed him that the Bombay Office would arrange for funds for the losses suffered by the Calcutta Office of the Bharat Union Agencies.
It was within my knowledge that if the Bombay Office of the Bharat Union Agencies was not in a position to supply full funds for meeting the losses at Calcutta the Delhi Office of the Company would supply those funds." And, in answer to question No. 211 which referred 347 to the evidence about the Delhi Office of the Union Agencies being short of liquid funds from August, 1954, onwards and in 1955, to meet the losses, he said "It was within my knowledge that Bharat Union Agencies was holding very large number of shares.
But I did not know the name of the Companies of which the shares were held by the Bharat Union Agencies and the quantum of those shares.
" Dalmia also admitted his knowledge that Chokhani had entered into contract for the forward sale of Tata Shares at Bombay on behalf of the 'Union Agencies during 1954 and 1955 and that the Union Agencies suffered losses on this business, but stated that he did not know the extent or details of the losses.
Dalmia must be expected not only to know the losses which the Union Agencies suffered, but also their extent.
He is also expected to devise or at least know the ways in which those losses would be met.
A mere vague knowledge, as stated, about the 'Union Agencies possessing a number of shares could not have been sufficient satisfaction about the losses being successfully met.
It is to be noted that he did not deny that the Delhi Office was short of funds and that it used to supply funds to meet the losses.
Further, if Dalmia 's statement about Mittal 's communication to him be correct, it would appear that when the Bombay Office of the Union Agencies was not in a position to meet the losses, Chokhani would not think of arranging, on his own, funds to meet the losses, but would first approach the Delhi Office of the Union Agencies.
The Delhi Office., then, if unable to meet the losses, would necessarily obtain instructions from Dalmia.
It can therefore be legitimately concluded that Dalmia alone, or in consultation with Chokhani, devised the scheme of 348 the transactions which led to the diversion of the funds.
of the Insurance Company to the Union Agencies and carried it out with the help of the other appellants.
It has been contended both for Chokhani and for Dalmia that funds could have been found to meet the losses of the Union Agencies by means other than the diversion of the Insurance Company 's funds.
We need not discuss whether the shares held by the Union Agencies at the time could be sold to raise the funds or whether on the mere credit of Dalmia funds could be raised in no time.
These courses were not adopted.
The selling of the shares which the Union Agencies possessed, might itself affect its credit, and that no business concern desires, especially a concern dealing in sharespeculation business.
Dalmia had been in telephonic communication with Chokhani.
It is significant, even though there is no evidence about the content of the conversations, that there had been frequent calls, during the period of the losses in August and September, 1954, between Dalmia 's telephone and that of Chokhani at Bombay.
That was the period when Dalmia was confronted with the position of arranging sufficient funds at Bombay for the purpose of diverting them to the Union Agencies.
Very heavy losses were suffered in July and August, 1955.
Securities of the face value of Rs. 79,00,000 and Rs. 60,00,000 were purchased in July and August, 1955, respectively.
A very large number of telephone calls took place during that period between Dalmia at Delhi and Chokhani at Bombay.
It is true that during certain periods of losses, the record of telephonic communications does not indicate that any telephonic communication took place.
We have already stated, in considering the transactions, that the pattern of action to be taken had been fully determined by the course adopted in the first few transactions.
349 Chokhani acted according to that pattern.
The only thing that he had to do in connection with further contingencies of demands for losses, was to send for securities from Delhi when the funds at Bombay were low.
Such requests for the transfer of securities could be made in good time or by telephonic communication or even by letters addressed to Dalmia personally.
The fact remains that a number of securities were sent from Delhi to Bombay under the directions of Dalmia when there was no apparent reason to send them other than the need to meet losses incurred or expected.
Dalmia informed the Imperial Bank at Delhi about his power to deal with securities on September 4, 1954, though he had that power from September, 1951, itself.
This was at the early stage of the commencement of the losses of the Union Agencies ,suffered for a period of over a year and the planned diversion of the funds of the Insurance Company to meet the losses of the Union Agencies.
Raghunath Rai states that on the resignation of Chordia it was deemed necessary that the powers of the Chairman be registered with the Bank so that he be in a position to operate on the securities ' safecustody account of the company with the Bank, and that he sent the copy of the bye laws etc.
, without the instructions of Dalmia, though with his knowledge, as he was told that it was necessary for the purpose of the withdrawal of the securities for which he had given instructions.
This was, however, not necessary, as Raghunath Rai bad the authority to endorse, transfer, negotiate and or deal with Government securities, etc., standing in the name of the company.
We are of opinion that Dalmia took this step to enable him to withdraw the securities from the Bank when urgently required and another person authorised to withdraw be not available or be not prepared to withdraw them on his own.
350 The position of the securities may be brifely described on the basis of Appendix 1 of the Investigator 's report Exhibit D. 74.
The amount of securities at Bombay with the Chartered Bank, on June 30, 1953, was Rs. 53,25,000 out of a total worth Rs. 2,69,57,200.
The amount of securities in the Bank continued to be the same till March 31, 1954, even though the total amount of securities rose to Rs. 3,04,88,600.
Thereafter, there had been a depletion of securities with the Chartered Bank at Bombay with the result that on December 31, 1954, it had no securities in deposit.
The amount of securities in the Imperial Bank of India, New Delhi, also fell subsequent to June 30, 1954.
It came down to Rs. 2,60,000 on March 31, 1955, from Rs. 59,11,100 on June 30, 1954.
Securities worth Rs. 52,00,000 were in the two offices on June 30, 1953.
The amount of such securities kept on steadily increasing.
It was Rs. 1,88,47,500 from September, 1953, to March 31, 1954.
Thereafter, it rapidly increased every quarter, with the result that on March 31, 1955, the securities worth Rs. 3,76,50,804 out of the total worth Rs. 3,86,97,204 were in the offices.
The overall position of the securities must have been known to Dalmia.
The saving of Bank charges is no good explanation for keeping the securities of such a large amount, which formed a large percentage of the Company 's holdings, in the offices and not in deposit with a recognized bank.
The explanation seems to be that most of the securities were not really in existence.
Raghunath Rai states that be spoke to Dalmia a number of times, presumably, in July and August, 1955, about the non receipt of the securities of the value of Rs. 81,25,000, Rs. 75,00,000 and Rs. 69,00,000 which were purchased in the months of April May.
July and August 1955 respectively, and Dalmia used 351 to tell him that as the purchase and sale of securities had to be effected at Bombay, Chokhani could send them to the head office only after it had been decided about which securities would be finally retained by the Insurance Company.
This statement implies that Dalmia knew and anticipated the sale of those securities and such a sale of those securities, as already mentioned, could not be in the usual course of business of the company.
The securities were to be sold only if by the next due date for payment of interest they could not be recouped and did not exist with the company.
Such an inference is sufficient to impute Dalmia with the knowledge of the working of the scheme.
Securities were sent to Bombay from Delhi seven times during the relevant period and they were of the face value of Rs. 2,114,82,500.
Securities of the face value of Rs. 17,50,000 were withdrawn from the Imperial Bank, Delhi, on September 4, 1954 vide Exhibit P. 1351.
They were sold at Bombay on September 9, 1954.
Thereafter, 30/ 1957 securities of the face value of Rs. 37,75,000 were sent on January 6, 1955.
Raghunath Rai deposes that he withdrew these from the Imperial Bank, Delhi, under the directions of Dalmia, and that he handed them over to Dalmia.
These securites did reach Bombay.
There is no clear evidence as to how they Went from Delhi to Bombay.
They were sold on January 11, 1955.
Eleven stock certificates of the face value of Rs. 57,72,000 were sent to Bombay on March 16, 1955, vide letter exhibit D. 3.
Thereafter, stock Certificates were sent thrice in July 1955.
Stock certificate in respect of 3% Bombay Loan of 1955, of the face ' value of Rs. 29,75,000 was sent to Bombay on July 15, 1955 vide Exhibit P. 923.
On the next day, i.e., on July 16, 1955, stock certificates of 3% Bombay Loan of 1955 of the face value of Rs. 15,50,000 and stock 352 certificates of 3 % Loan of Government of Madhya Pradesh of the face value of Rs. 60,500 were sent to Bombay vide Exs.
D. 1 and D. 2 respectively.
J. Lastly, stock certificates of 2 3/4% Loan of 1962 of the face value of Rs. 56,00,000 were sent to Bombay on August 5, 1955.
Letters Exhibits D. 3 and P. 892 state that the stock certificates mentioned therein were being sent under instructions of the Chairman '.
Raghunath Rai has deposed that the other stock certificates send with letters Exhibits D. 1, D. 2 and P. 923, were sent by him as the securities with respect to which those certificates were granted were maturing in September and were redeemable at Bombay.
It has been urged that they could have been redeemed at Delhi and that they need not have been sent by Raghunath Rai on his own a couple of months earlier.
We do not consider the sending of the securities a month and a half or two months earlier than the date of maturity to be unjustified in the course of business.
It is to be noticed that what was sent were the stock certificates and it might have been necessary to get the securities covered by those certificates for the purpose of redemption and that might have taken time.
No pointed question was put to Raghunath Rai as to why he sent the securities two months ahead of the date of maturity.
Dalmia denies that he gave any instructions for the sending of the securities.
There seems to us to be no good reason why the expression under the instructions of the Chairman ' would be noted in letters Exhibits D. 3 and P. 892, unless that represented the true statement of fact.
We have already discussed and expressed the opinion, in considering the evidence of Raghunath Rai, that Raghunath Rai was told by 353 Dalmia, when informed of the purchase or sale of securities, that had been done under instructions and that he had confirmed them.
We may further state that there is no resolution of the Board of Directors empowering Chokbani to deal with the Rag securities.
He was, however, empowered by resolutions at the meeting of the Board dated June 29, 1953, to lodge and receive G. P. Notes from the Reserve Bank of India for verification and endorsement on the same and to endorse or withdraw the G. P. Notes on behalf of the company in the capacity of an agent.
Chokbani was also empowered by a resolution dated October 1, 1953, to deposit and withdraw Government securities held in safe custody account by the company.
The aforesaid powers conferred on Chokhani are different from the powers of sale or purchase of securities.
Dalmia has stated that he authorised Chokhani to purchase securities in about October, 1953,when he was to leave for abroad and that thereafter Chokhani had been purchasing and selling securities in the exercise of that authority without consulting him.
It is urged for him that Raghunath Rai 's statement that be used to obtain confirmation of the purchase and sale of the securities from him cannot be true, as there was no necessity for such confirmation.
Chokbani does not appear to have exercised any such authority during the period Dalmia was abroad or till August, 1954, and therefore Dalmia 's statement does not appear to be correct.
Chokhani and Raghunath Rai were authorised to operate upon the Bank account at Bombay on October 1, 1953.
Dalmia states, in paragraph 17 of the written statement dated March 30, 1959, that this was done as Chokhani bad been given 354 the authority for the sale and purchase of securities at the same time.
The Board did not give any such authority to Chokhani and if the system of joint signatures was introduced for the reason alleged, there seems to be no good reason why the Board itself did not resolve that Chokhani be empowered to sell and purchase securities.
The explanation for the introduction of joint signature scheme does not stand to reason.
Even if it be not correct that Raghunath Rai had to obtain confirmation, it stands to reason that he should report such transactions on the part of Chokhani to the Chairman, if not necessarily for his approval, at least for his information, as Chokhani had no authority to purchase and sell securities.
These transactions have to be confirmed by the Board of Directors and therefore confirmation of the Chairman who was the only person authorised to purchase and sell securities was natural.
Raghunath Rai states that when he received no reply to his letter dated November 19, 1954, asking for distinctive numbers of securities not received at headquarters.
Dalmia said that he would arrange for the dispatch of those secu rities from Bombay to the head office.
No action was apparently taken in that connection.
Raghunath Rai further states that on March 23, 1955, when he spoke to Dalmia about the non receipt of certain securities Dalmia told him that he had already instructed Chokhani for the conversion of those securities into stock certificates and that it was in view of this statement of Dalmia that he had written letter Exhibit P. 916 to Chokhani stating therein.
"You were requested for conversion of the above said G. P. Notes into Stock Certificate.
The said certificate As not been received by us 355 as yet.
It may be sent now immediately as it is required for the inspection of the company 's auditors.
" This indicates that Dalmia was in the know of the position of securities and, on his own, gave instructions to Chokhani to convert certain securities into inscribed stock.
Dalmia admits Raghunath Rai 's speaking to him about the non receipt of the securities and his telling him that he would ask Chokhani to send them when he would happen to talk to him on the telephone.
Mention has already been made of securities of the face value of Rs. 17,50,000 being sent to Bombay from Delhi in the first week of September 1954.
At the time securities of the face value of Rs.53,25,000 were in deposit in the Chartered Bank at Bombay.
There was thus no need for sending these securities from Delhi.
Chokhani could have withdrawn the necessary securities from the Bank at Bombay.
This indicates that on learning that there were no liquid funds for meeting the losses at Bombay, Dalmia himself decided to send these securities to Bombay for sale and for thus providing for the liquid funds there for meeting the cost of the intended fictitious purchase of securities to meet the losses of the Union Agencies.
It is not suggested that these securities were sent to Bombay at the request of Chokhani.
Securities withdrawn in January, 1955, and stock certificates sent in March and August, 1955, coincided with the period when the Union Agencies suffered losses and the funds of the Insurance Company at Bombay were low and were insufficient to meet the losses of the Union Agencies.
3% 1957 securities of the face value of Rs. 46,00,000 (Rs. 37,75,000 set from Delhi and 356 Rs. 8,25,000 withdrawn from the Chartered Bank at Bombay) were sold on January 11, 1955, and the proceeds were utilised in purchasing 2 3/4% 1962 securities of the face value of Rs. 46,00,000 in two lots, one of Rs. 35,00,000 and the other of Rs. 11,00,000.
On January 11, 1955, Rs. 3,34,039 15 3, the balance of the sale proceeds was deposited in the accounts of the Insurance Company.
Inscribed stock for these securities worth Rs. '46,00,000 was duly obtained.
Dalmia himself handed over inscribed stock certificate to Raghunath Rai some time in the end of January 1955.
This purchase, though genuine, was not a purchase in the ordinary course of business, but was for the purpose of procuring the inscribed stock certificate to satisfy the auditors, as already discussed earlier, that similar securities purchased in December, 1954 existed.
The auditors were than to audit accounts of 1954 and not of 1955.
In this connection reference may be made to Dalmia 's attitude to the auditors ' surprise inspection on September 9, 1954, on the ground that they could not ask for inspection of securities purchased in 1955.
It may also be mentioned that purchasing and selling securities was not really the business of the Insurance Company.
The Insurance Company had to invest its money and, under the statutory requirements, had to invest a certain portion at least in Government Securities.
The value of Government securities does not fluctuate much.
Dalmia states, in answer to question No. 25 (under a. 342 Cr. P. C.): 'Government securities are gift edged securities and there is very small fluctuation in these. ' The question of purchasing and selling of securities with a view to profit could not therefore be the ordinary business of the Insurance 357 Company.
It has to purchase securities when the statutory requirements make it necessary, or when it has got funds which could be invested.
The Insurance Company had Government of India 3% Loan of 1957 in deposit with the Chartered Bank, Bombay, the face value of the securities being Rs. 53,25,000, from April 6, 1951, onward.
The fact that these securities remained intact for a period of over three years, bears out our view that the purchasing and selling of securities was not the normal business of the Insurance Company, Securities are purchased for investment and are redeemed on the date of maturity.
In this connection, reference may be made to Khanna 's statement in answer to question in cross examination The frequency of transactions relating to purchase and sale of securities depends upon the share market and its trends ? His answer was that was so, but that it also depended on the character of the company making the investment in securities.
It may be said that the trend of the share market will only guide the purchase or sale transactions of securities of a company speculating in shares, like the Union Agencies, but will not affect the purchase and sale by a company whose business is not speculation of shares like the Insurance Company.
Raghunath Rai states that when on September 9, 1955, the auditors wanted the production of the securities, said to be at Bombay, in the next two days, he informed Dalmia about it and Dalmia said that he would arrange for their production after two days.
Dalmia, however, took no steps to contact Chokhani at Bombay, but rang up Khanna instead and asked him to certify the accounts as they had to be laid before the Company by September 30, and told him that everything was in order,.
that he would give all satisfaction later, 358 soon after Chokhani was available and that he did not ask for an extension of time for the filing of the accounts as that would affect the prestige of the company.
On September 10, 1955, when Raghunath Rai handed over the letter Exhibit P. 2 of even date from the auditors asking him to produce a statement of investments as on September 9, 1955, along with the securities or evidence if they were with other persons, by Tuesday, September 13, Dalmia had stated that Chokbani 's mother had died and that he would himself arrange for the inspection of securities direct with the auditors.
Chokhani 's mother died on September 4, 1955.
Dalmia had no reason to tell Raghunath Rai on September 9 that the securities would be produced for inspection in the next two days, unless he believed that he could get them in that time on contacting Chokhani, or did not wish to tell him the real position.
Dalmia states that he contacted Chokhani for the first time on September 15, the last day of the mourning and then learnt from Chokhani that the securities were not in existence, the money withdrawn for their purchase having been lent to the Union Agencies.
The various statements made by Dalmia in these circumstances and his conduct go to show that he had a guilty mind and when he made the statement to Raghunatb Rai that the securities would be produced within two days, he trusted that he would be persuasive enough for the auditors to pass the accounts without further insistence on the production of those securities.
Dalmia 's not going to Mr. Kaul 's Office on September 16, and sending his relations to inform the latter of the shortfall in securities can have no other explanation than that he was guilty and therefore did not desire to have any direct talk about the matter with Mr. Kaul.
There was no need to avoid meeting him and miss the opportunity 359 of explaining fully what Chokhani had done without his own knowledge.
Dalmia has admitted that he sent his relations to Mr. Kaul and has also admitted that what they) stated to Mr. Kaul was under his instructions.
, He states in answer to question No. 450, that after the telephonic talk with Chokhani on the evening, of September 15, he consulted his brother Jai Dayal Dalmia and his son in law section P. Jain about the position and about the action to be taken and that it was decided between them before they left for the office of Mr. Kaul that they would tell him that either the securities would be restored or their price would be paid off as would be desired by the Government and in answer to question No. 451, said that it was correct that these persons told Mr. Kaul that a considerable amount of the securities were missing and that they were to make good the loss.
It is clear that these persons decided not to disclose to Mr. Kaul that the securities were not in stock because they were not actually purchased and the amount shown to be spent on them was lent to the Union Agencies.
was not a case of the securities missing but a case of the Insurance Company not getting those securities at all.
It is a reasonable inference from this conduct of Dalmia that he did not go himself to Mr. Kaul as he was guilty and would have found it inconvenient to explain to him how the shortfall had taken place.
We may now discuss the evidence relating to Dalmia 's making a confession to Annadhanam.
Annadhanam was a Chartered Accountant and partner of the Firm of Chartered Accountants M/s. Khanna and Annadhanam, New Delhi, and he was appointed by the Central Government, in exercise of its powers under section 33(1) of the , on September 19, 1955, to investigate into the affairs of the Bharat Insurance 360 company and to report to the Government on such investigation.
He started this work on September 20.
Annadhanam, having learnt from Raghunath Rai about the missing of a number of Government securities and the amount of their value from the statement prepared by him, called Dalmia to his office that evening in order to make a statement.
Dalmia made the statements Exhibits P. 10 and P. reads : " 'I have misappropriated securities of the order of Rs. 2,20,00,000 of the Bharat Insurance Company Ltd. I have lost this money in speculation.
" Exhibit P. 11 reads: "Further stated on solemn affirmation.
At any cost, I want to pay full amount by requesting my relatives or myself in the interest of the policy holders.
" Dalmia admits having made the statement Exhibit P. 11.
but made some inconsistent statements about his making the statement Exhibit P. 'LO.
It is said that he never made that statement, but in certain circumstances he asked the Investigator to write what he considered proper and that he signed what Annadhanam recorded.
He did not directly state, but it was suggested in cross examination of Annadhanam and in his written statement that he made that statement as a result of inducement and promise held out by either Annadhanam of Khanna (the other partner of M/s. Khanna and Annadhanam, Chartered Accountants, New Delhi) or both.
Dalmia 's contention that Exhibit P. 10 was inadmissible in evidence, it being not voluntary, was repelled by the learned Sessions Judge, but was, in a way, accepted by the High Court which did not consider it safe to rely on it.
The learned Solicitor General urged that the confession Exhibit P. 10 was 361 voluntary and was wrongly not taken into consideration by the High Court.
Mr. Dingle Foot contended that the High Court took the proper view and the confession was not voluntary.
He further urged that the confession was bit by the provisions of el.
(3) of article 20 of the Constitution.
The only witnesses with respect to the recording of the statement Exhibit P. 10. are Annadhanam and Khanna.
The third person who knew about it and has stated about it is Dalmia himself.
He has given his version both in his statement recorded under section 342 Cr.
P. C. and in his written statement filed on October 24, 1958.
We may first note the relevant statement in this connection before discussing the question whether the alleged confession is voluntary and therefore admissible in evidence.
Annadhanam made the following relevant statements: Dalmia came to the office at 6.30 p.m. though the appointment was for 5.30 p.m.
His companion stayed outside the office room.
Annadhanam asked Dalmia the explanation with regard to the missing securities.
Dalmia wanted two hours ' time to give the explanation.
This was refused.
He then asked for half an hour 's time at least.
This was allowed.
Dalmia went out of the office, but returned within ten minutes and said that he would make the statement and it be record.
Annadhanam, in the exercise of the powers under section 33(3) of the , administered oath to Dalmia and recorded the statement Exhibit P. 10.
It was read over to Dalmia.
Dalmia admitted it to be correct and signed it.
Shortly ' after, Dalmia stated that he wanted to add one more sentence to his statement.
He was again administered oath and his further statement, Exhibit P. 11 was recorded.
This was also read over and Dalmia signed it, admitting its accuracy.
362 Annadhanam states that no threat or inducement or promise was offered to Dalmia before he made these statements.
A third statement is also attributed to Dalmia and it is that when Dalmia was going away and was nearing the stair case, Annadhanam asked him whether the speculation in which he had lost the money was carried on by him in the company 's account or in his private account.
Dalmia replied that he had lost that money in his personal speculation business which was carried on chiefly through one of his private companies, viz., the Union Agencies.
This statement was not recorded in writing.
Annadhanam did not consider it necessary, but this was mentioned by Annadhanam in his supplementary interim report, Exhibit P. 13, which he submitted to the Deputy Secretary, Ministry of Finance, on September 21, 1955.
Annadhanan also mentioned about the statement recorded in Exhibit P. 10 in his interim report, Exhibit P. 12, dated September 21, 1955, to the Deputy Secretary, Ministry of Finance.
In cross examination, Annadhanam stated that he did not send for Dalmia to the office of the Bharat Insurance Company where he had examined Raghunath Rai, as he had not made up his mind with respect to the further action to be taken.
He denied that he had any telephonic talk with Mr. Kaul, the Deputy Secretary, Ministry of Finance, prior to the recording of the statements, Exhibits P. 10 and P. II His explanation for keeping Khanna with him during the examination of Dalmia was that Khanna had done the detailed auditing of the accounts of the company in pursuance of the firm Khanna and Annadhanam being appointed auditors for 1954 by the Insurance Company.
He denied that Dalmia told him that he had no personal knowledge ' of the securities and that the only information he had from Chokhani was that the 363 latter had given money on loan to the Union Agencies.
He stated that the statements Exhibits P. 10 and 11 were recorded in the very words of Dalmia.
The statements were not actually read over to Dalmia but Dalmia himself read them over.
Annadhanam denied that he told Dalmia that he would not be prosecuted if he made the statements Exhibit P. 10 and P. 11 and deposited.
the money alleged to have been embezzled and further stated that Khanna did not tell this to Dalmia.
He denied that Exhibit P. 10 was never made by Dalmia and was false and reiterated that statement was made by Dalmia.
He did not consider it proper to reduce to writing every word of what transpired between him and Dalmia from the moment of the latter 's arrival in his office till the time of his departure, and considered it proper ' to reduce in writing the statement which was made with regard to the missing securities.
He further stated that his statement above Dalmia 's making statements Exhibits P. 10 and P. 11 voluntarily was on account of the facts that Dalmia himself volunteered to make those statements and that he himself had offered no inducements or promises.
In cross examination by Mr. T. C. Mathur, he denied that he told Dalmia that as Chairman of the Insurance Company he should own responsibility for the missing securities and that would make him a greater Dalmia because he was prepared to pay for the short fall and further denied that it was on account of the suggested statement that Dalmia had asked for two hours ' time before making his statement.
In cross examination by Dalmia personally, Annadhanam explained the discrepancy in the amount of the securities admitted to be misappropriated.
Exhibit P. 10, mentions the securities to be of the order of Rs. 2,20,00,000/.
In his report 364 Exhibit P. 12, he stated the admission to be with respect to securities of the face value of Rs. 2,22,22,000/ .
The explanation is that in the interim report he worked out the face value of the missing securities to be Rs, 2,22,22,000/ , and he mentioned this figure in his report as Dalmia had admitted the misappropriation of the securities.
Nothing sinister can be inferred from this variation.
Khanna practically supports the statement of Annadhanam, not only with respect to Exhibit P. 10 and P. II, but also with respect to the third statement said to have been made near the staircase.
His statements in cross examination that it was possible that Annadhanam might have asked the companion of Dalmia to stay outside the office as the proceedings were of a confidential nature, does not in any way belie Annadhanam 's statement as this statement itself is not definite.
In answer to the question whether it struck him rather improper that Dalmia made the statement Exhibit P. 10 in view of his previous statement to Khanna that satisfaction would be afforded to the auditors on the points raised by them after Chokhani was available, he replied that his own feeling was that the statements Exhibits P. 10 and P. 11 were the natural culmination of what he learnt in the office of Mr. Kaul on September 16, 1955.
He also denied that be told Dalmia that whoever was at fault, the ultimate responsibility would fall on the Chairman and other Directors as well as the officers of the Insurance Company by way of misfeasance, and that Dalmia should sign the statement which would be prepared by himself and Annadbanam so that the other Directors and the officers of the Insurance Company be not harassed and that if this sugges tion was accepted by Dalmia, he would save every one and become a greater Dalmia.
He denied the suggestion that when Dalmia talked of his charitable disposition in his office on September 20, 1955, it should have been in answer to his (Khanna 's) 365 provocative remarks wherein he had made insinuations regarding Dalmia 's integrity and stated that he was merely a silent spectator of what actually Del: had happened in the office that day.
He further stated that no question arose of Annadhanam 's attacking the integrity of Dalmia on September 20, 1955.
He denied that Mr. Kaul had told him or Annadbanam on September 19, when the order appointing Annadhanam Investigator was delivered, that Dalmia had to be implicated in a criminal case.
Khanna denied that his tone and remarks during the discussion were very persuasive and that told Dalmia that it was very great of him that he was going to pay the amount represented by the short fall of the securities.
He also denied the suggestion that Dalmia told him and Annadhanam on September 20, at their office, that be had no knowledge of the missing securities, that it, appeared that the securities had either been sold or pledged and that the money had been paid to the Union Agencies, which Dalmia did not , like, and that in the interest of the policy holders and the Insurance Company Dalmia was prepared to pay the amount of the short fall of securities, and also that when Dalmia spoke about the securities being sold or pledged.
Khanna and Annadhanam remarked that the securities bad been misappropriated.
He denied that he told Dalmia that if he took personal responsibility in the matter, it would be only then that no action would be taken and stated that he and Annadhanam were nobody to give any assurance to Dalmia.
Dalmia stated, in this statement under section 342 Cr.
P.C. on November 7, 1958, that his companion Raghunath Das Dalmia stayed out because he was not allowed to stay with him inside the office.
He denied that he first spoke about his charitable disposition and piety when asked by Annadhanam to explain about the missing securities and stated that 366 there could be no occasion for him to talk at that time of his piety and charitable disposition when he had been specifically called to explain with regard to the missing securities.
His version of what took place may now be quoted (answer to question No. 471) in his own words: "What actually happened was that I told Shri Annadhanam that I had learnt from G. L. Chokhani that the amount of the missing securities had been lent temporarily on behalf of the Bharat Insurance Company by Shri G. L. Chokhani to Bharat Union Agencies and that the amount had been lost in speculation.
Shri Annadhanam then asked me about the missing securities.
I then told him that I did not know as to whether the securities had been sold or mortgaged.
My replies here being noted by Shri Annadhanam on a piece of paper.
Shri Annadhanam then asked me as to when the securities had been sold or mortgaged I replied that I did not know with regard to the time when the securities had been sold or mortgaged.
Shri Annadhanam then asked me as to what were the places where there were offices of Bharat Union Agencies.
I then told him that the offices were at Bombay and Delhi.
I than remarked that whatever had happened, I wanted to pay the amount of the missing securities as the interest of the policy holders of the Bharat Insurance Company were close to my heart.
During the course of that talk sometimes Shri Annadhanam questioned and sometimes the questions were asked by Shri Khanna.
Shri Khanna then stated that I should forget the events of 9 9 1955.
Shri Khanna further stated. 'We too are men of hearts.
And not bereft of all feelings.
We too have children.
I am very much impressed by your offer of such a huge 367 amount '.
Shri Khanna also remarked that Shri Annadhanam had been appointed under section 33 of the to investigate into the affairs of the Bharat Insurance Company and as such the words of Shri Khanna and Shri Annadhanam would carry weight with the Government.
Shri Khanna also stated other things but I do not remember them.
I however distinctly remember that Shri Khanna stated to me that I should go to Shri C. D. Deshmukb and that Shri Khanna would also help me.
I then replied that I would not like to go to Shri Deshmukh.
Shri Khanna then remarked that the Government attached great importance to the interests of the policy holders and that if the matter got undue publicity it would cause a great loss to the policy holders.
Shri Khanna accordingly stated that if I agreed to his suggestion the matter would be settled satisfactorily and without any publicity.
It was in those circumstances that I asked for two hours ' time to consult my brother and son in law." He further stated that when Annadhanam told him that he could have half an hour 's time and that more time could not be given as the report had to be given to the Government immediately, he objected to the shortness of time as he could not during that interval go to meet his brother and son in law and return to the office after consulting them and further told Annadhanam and Khanna to write whatever they considered proper as he had trust in them.
His reply to question No. 476 is significant and reads: "The statement was read over tome.
I then pointed out that what I had stated had not been incorporated in exhibit P. 10.
I made 368 no mention that the statement exhibit ' P. 10 was correct or not.
Shri Annadhanam then reduced to writing, whatever was stated by me.
That writing if exhibit P. 11 and is in the very words used by me.
" He does not directly answer question No. 479: "It is in evidence that the statement exhibit P. 1 1 was read over to you, you admitted it to be correct and signed it.
Do you want to say anything with regard to that?" and simply stated, 'I did sign that statement '.
He denied the third statement alleged to have been made near the staircase.
Dalmia also stated that he had mentioned some facts about the statements Exhibits P. 10 and 11 in his written statement.
Paragraphs 53 to 59 of the written statement dated October, 24, 1958, refer to the circumstances about the making of the statements Exhibits P. 10.
and P. II.
In paragraph 53 Dalmia states that the recording of his statement in Annadhanam 's office took place as it was only there that Annadhanam and Khanna could get the necessary privacy.
The insinuation is that they did not want any independent person to know of what transpired between them.
Paragraph 54 refers to a very minor discrepancy.
Paragraph 55 really gives the version of what took place in, Annadhanam 's office.
We refer only to such portions of this version as do not find a place either in the suggestions made to Annadhanam and Khanna in their cross examination or in the statement of Dalmia under a. 342 or which be inconsistent with either of them.
Dalmia stated that he told Annadbanam that the 369 money that had been received by Bharat Union Agencies as loan belonged to Bharat Insurance Company and it appeared that the Union Agencies had lost that money in speculation.
He further which tend to impute an inducement on the part of Khanna to him.
These statements may be quoted in Dalmia 's own words: "On this Shri Khanna said that I was a gentleman, that I was prepared to pay such a heavy amount which has never been paid so far by anybody, that I should accept his advice and that I should act according to his suggestion and not involve myself in this dis pute, the Government was not such a fool that they would not arrive at a quiet settlement with a man who thought that his first duty was to protect the policy holders and thus by spoiling the credit of the Bharat Insurance Co. would harm its policy holders.
If the Government did so it would be an act of cruelty to the policy holders, and when I was prepared to pay the money it (Government) would not take any such course by which I may have to face troubles, that my name would go very high, that he advised me as being my well wisher that I should confess that I had taken the securities, that they would help me.
They added that Shri Annadhanam has been appointed as Investigator by the Government and therefore their words carry weight with the Government, that it was my responsibility, being the Chairman and Principal Officer of the Bharat Insurance to pay the money.
At that time I was restless to pay the money.
I was influenced by their talk and anybody in my place would have trusted their words.
I was impressed by their saying to me that Po wise Government or officers would take 370 such action which would harm the policyholders through publicity.
Therefore I took that whatever Shri Khanna and Annadhanam were saying was for my good".
He stated that he asked Annadhanam and Khanna for two hours ' time to consult his brother.
and son in law and that one of them said that they could not give more than half an hour, This is inconsistent with what he stated under section 342.
He further stated : "I told them to write in whatever way they thought best and whatever they wrote I simply signed.
After signing when I read it, I pointed out to them that they had not written that I wanted to pay every pie of the policy holders and then they wrote as I told them and I signed".
The statement referred to is a short one, and it is not possible to believe that he signed it without reading it.
Paragraph 56 makes no reference to the events of that evening, but paragraph 57 refers to the improbability of his writing things which brought trouble to him when just before it he had been talking irrelevantly.
The question in cross examination did suggest that he was forced to make irrelevant talk due to certain provocation.
That does not fit in with the explanation in paragraph 57 that his talk about a temple was invented to support the statement Annadhanam had made to the police about Dalmia 's talking irrelevantly.
His statement 'How could I have acted in such a way without any positive assurances, implies that he did make the statements though on getting assurances.
In para graph 58 he states : "On 20th September Shri Khanna and Annadhanam had put all sorts of questions 371 to Raghunath Rai but let me off after recording my statement in just one or two lines.
Their design had succeeded and therefore they, did not care to record any further question".
This again implies his making the statement P. 10.
Of course, after he had made the statement P. 10 there was no necessity of asking anything further.
His statement explained the missing of the securities.
Reference may now be made to what Raghunath Rai, who was the Secretary of the Bharat Insurance Company, states in reference to the statement made by Dalmia to Annadhanam.
Raghunath Rai states that when he went to Dalmia about 7 p. m. on September 200, 1955, and told him about the recording of his own statement by Annadhanam and the preparation of the statement about Exhibit P. 8 and about his talk regarding the securities at Bombay, Dalmia said : 'I have been myself in the office of the Investigator.
He has recorded my statement wherein I have admitted the short fall of the securities '.
This also points to Dalmia 's making the statement Exhibit P. 10.
Raghunatb Rai did not admit, but simply said that Dalmia did tell him something when he was questioned as to whether Dalmia told him that he had been told by Anadbanam and Khanna that if he had made the statement in accordance with their desire, there would be no trouble.
Dalmia evaded a direct answer to the question put to him under section 342, Cr. P. C.
When question No. 482 was put to him with reference to this statement of Raghunath Rai he simply stated that he had briefly told Raghunath Rai with regard to what bad transpired between him and Khanna and Annadhanam and that he had told Raghhunath Rai that he need not worry.
372 The various statements of Dalmia suggesting that inducement was; held out to him by Khanna have not been believed by the Courts below, and we see no good reason to differ from their view.
There was no reason for Annadhanam to record an incriminating statement like P. 10 and get it signed by Dalmia.
The High Court does not also hold that the confession was the result of some threat extended by Annadhanam.
It did not consider it safe to rely upon it as it considered the confession to be not voluntary in a certain sense.
It said : "In that sense, therefore, it was not a voluntary statement, because although no words of threat or inducement were uttered by Mr. Annadhanam or anyone else, the circumstances had shaped themselves in such a manner that there was an implied offer of amnesty being granted to him if he did not persist in his negative behavior.
He therefore made a statement that he had misappropriated the securities and immediately offered to make good the loss through his relatives".
What are those circumstances which implied an offer of amnesty being granted to him if he did not persist in his negative behaviour, presumably in not giving out full information about the missing securities ? Such circumstances, as can be gathered from the judgment of tile High Court seem to be these : (1) Dalmia, a person of considerable courage in commercial affairs was Dot expected to make a voluntary confession.
(2) He had evaded meeting the issue lull face whenever he could do so and did not appear before Mr. Kaul on September 16, 1955, to communicate to him the position about the securities.
(3) He not only appeared before Annadbanam an hour late, but further asked for two hours ' time before answering a simple question about the missing securities.
(4) He made the 373 statement when he felt cornered on account of the knowledge that Annadhanam had the authority of law to question and thought that, the only manner of postponing the evil consequence of his act was by making the statement which would soften the attitude of the authorities towards him.
We are of opinion that none of these circumstances would make the confession invalid.
Dalmia 'a knowledge that Annadhanam could record his statement under law and his desire to soften the attitude of the authorities by making the statement do not establish that he was coerced or compelled to make the statement.
A person of the position, grit and intelligence of Dalmia could not be so coerced.
A person making a confession may be guided by any considerations which, according to him, would benefit him.
Dalmia must have made the statement after weighing the consequences which he thought would be beneficial to him.
His making the confession with a view to benefit himself would not make the confession not voluntary.
A confession will not be voluntary only when it is made under some threat or inducement or promise, from a person in authority.
Nothing of the kind happened in this case and the considerations mentioned in the High Court 's judgment do not justify holding the confession to be not voluntary.
We are therefore of opinion that Dalmia made the confession Exhibit P. 10, voluntarily.
It was argued in the High Court, for the State, that Dalmia thought it best to make the statement because, by doing so, he hoped to avoid the discovery of his entire scheme of conspiracy which had made it possible for him to misappropriate such a large amount of the assets of the Insurance Company.
The High Court held that even if the confession was made for that purpose, it would not be a voluntary confession.
We consider this ground to hold the confession involuntary unsound, 374 Mr. Dingle Foot has contended that the statement, Exhibit P. 10, is not correct, that Annadhanam and Mr. Kaul colluded and wanted to get a confession from Dalmia and that is why Annadhanam extracted the confession and that various circumstances would show that the confession was not voluntary in the sense that it was induced or obtained by threat.
He has also urged that Annadhanam was 'a person in authority ' for the purpose of section 24 of the Indian Evidence Act.
These circumstances, according to him, are that Dalmia 's companion was not allowed to stay in the office, that only balf an hour was allowed for Dalmia to make consultations, that there had been a discussion before the recording of Exhibit P. 10, that no record on the discussion was maintained, that Annadhanam, as Investigator, was a public servant, that section 176, 1.
P. C. was applicable to Dalmia if he had not made the statement and that the statement on oath really amounted to an inquisition.
It was further contended that if the confession was not inadmissible under section 24 of the Evidence Act; it was inadmissible in view of cl.
(3) of article 20 of the Constitution.
Mr. Dingle Foot has further contended That the statement, exhibit P. 10, is not correct inasmuch as it records: 11 have misappropriated securities of the order of rupees two crones, twenty lakhs of the Bharat Insurance Company Ltd. ', that it could not be the language of Dalmia and that these facts supported Dalmia 's contention that be simply signed what Annadhanam had written.
The public prosecutor had also questioned the correctness of this statement inasmuch as the actual misappropriation was done by Chokhani and Dalmia had merely suffered it and as the accurate statement would have been that there was mis appropriation of the money equivalent of the Securities.
375 We are of opinion that any vagueness in the expression could have been deliberate.
The expression used was not such that Dalmia, even if he had a poor knowledge of English, could not have used.
The statement was undoubtedly very brief.
It cannot be expected that every word was used in that statement in the strict legal sense.
The expression 1 misappropriated the securities ' can only mean that he misappropriated the amount which had been either spent on the purchase of the securities which were not in existence, or realised by the sale of securities, and which was shown to be utilised in the fictitious purchase of securities.
The main fact is that Dalmia did admit his personal part in the loss of the amount due to the shortfall in the securities.
There is nothing on record to justify any conclusion that Annadhanam and Mr. Kaul bad colluded and wanted to get a confession from Dalmia.
It is suggested that Annadhanam war, annoyed with Dalmia on account of the latter 's resentment at the conduct of Annadhanam and Khanna in conducting a surprise inspection of the accounts and securities on September 9, 1955.
Raghunath Rai protested saying that they had already verified the securities and that they, as auditors for the year 1954, had no right to ask for the inspection of securities in the year 1955.
At their insistence, Raghunath Rai showed the securities.
After their return to the office, Dalmia rang them up and complained that they were unnecessarily harassing the officers of the Bharat Insurance Company and had no right to inspect the securities.
Dalmia was not satisfied with their assertion of their right to make a surprise inspection.
There was nothing in this conduct of Dalmia, which should have annoyed Annadbanam or Khanna.
They did 376 what they considered to be their duty and,., successfully met the opposition of Raghunath Rai.
If there could be any grievance on account of their inspection, it would be to Dalmia who, as a result, would not be easily induced by them to make the confession.
Mr. Kaul, as Deputy Secretary, Ministry of Finance, did take part in the bringing of the matter to a bead, not on account of any personal animus against Dalmia such animus is not even alleged but on account of his official duties, when be heard a rumour in Bombay that Dalmia had incurred heavy losses amounting to over two crores of rupees through his speculative activities and had been drawing upon the funds of the Insurance Company of which he was the Chairman to cover his losses.
He asked Dalmia on September 14, 1955, to see him on the 15th in connection with the securities of the Insurance Company.
When Dalmia met him on the 15th in the presence of Mr. Barve, Joint Secretary, he asked whether he had brought with him an account of the securities of the Bharat Insurance Company.
Dalmia expressed his inability to do so for want of sufficient time and promised to bring the account on September 16.
On the 16th, Dalmia did not go to Mr. Kaul 's office; instead, his relations section P. Jain and others met Mr. Kaul and made certain statements.
Mr. Kaul submitted a note, exhibit D. 67, to the Finance Minister or September 18, 1955, and in his note suggested that of all the courses of action open to the Government, the one to be taken should be to proceed in the matter in the legal manner and launch a prosecution as the acceptance of section P. Jain 's offer would amount to compounding with a criminal offender.
Mr. Kaul stated that he did not consider it necessary to make any enquiry because the merits of the case against Dalmia remained unaffected whether the loss was rupees two crores or a few lakhs, more or less, On the basis of the aforesaid suggestion of 377 Mr. Kaul and his using the expression 'courses against Shri Dalmia it is urged that criminal action was contemplated against Dalmia and that there must have been some understanding between Mr. Kaul and Annadhanam about securing some sort of confession from Dalmia for the purpose of the case which was contemplated.
We consider this suggestion farfetched and not worthily of acceptance.
As a part of his duty, Mr. Kaul had to consider the various courses of action open to the Government in connection with the alleged drawing upon the funds of the Insurance Company to cover his losses in the speculative activities.
Mr. Kaul did not know what bad actually transpired with respect to the securities.
He had heard something in Bombay and then he was told about the short fall in the securities of the Bharat Insurance Company and.
naturally.
, he could co template that the alleged conduct could amount to a criminal offence.
In fact, ,according to Mr. Kaul, a suggestion had been made to him by section P. Jain that on the making up of the short fall in securities no further action be taken which might affect the position of Dalmia and his other associates in business and of various businesses run by them.
The fact that Annadhanam knew that there had been a short fall of over rupees two crores prior to Dalmia 's making the statement Exhibit P. 10 cannot justify the conclusion that Annadhanam and Mr. Kaul were in collusion.
Annadhanam does not admit he had ordered Dalmia 's companion to stay out of the office.
Even if he did, as stated by Dalmia, that would not mean that Annadhanam did it on purpose, the purpose being that he would act unfairly towards Dalmia and that there be not any witness of such an attempt.
Similarly, the non maintenance of the record of what conversation took place between Dalmia and the Investigator, does not point out to any sinister purpose on the part of Annadhanam.
It was 378 Annadhanam 's discretion to examine a person in connection with the affairs of the insurance Company.
He put simple question to Dalmia and that required him to explain about the missing securities.
So long as Dalmia did not make a statement in that connection, it was not necessary to make any record of the talk which might take place between the two.
In fact, Annadhanam had stated that the word discussion used by him in his supplementary interim report Exhibit P. 13, really be read as "recording of the statement of Shri Dalmia and the talk he had with when he came to Annadhanam 's office and which he had with him while going to the staircase '.
This explanation seems to fit in with the context in which the word discussion ' is used in Exhibit P. 13.
The interval of time allowed to Dalmia for consulting his relations might have been considered to be insufficient considering for confession voluntary in case that was the time allowed to a confessing accused produced before a Magistrate for recording a confession.
But that was not the position in the present case.
Annadhanam was not going to record the confession of Dalmia.
He was just to examine him in connection with the affairs of the Insurance Company and had simply to tell him that he had called him to explain about the missing securities.
There was therefore no question of Annadhanam allowing any time to Dalmia for pondering over the pros and cons of his making a statement about whose nature and effect he would have had no idea.
We do not therefore consider that this fact that Dalmia was allowed half an hour to consult his relations can point to compelling Dalmia to make the statement.
We do not see that examination of Dalmia on oath be considered to be an inquisition.
Sub section (3) of section 33 of the empowers the Investigator to examine on oath any manager, managing director or other officer of the insures in relation to his business.
, Section 176 of the Indian 379 Penal Code has no application to the examination of Dalmia under section 33 of the .
Section 176 reads: "Whoever, being legally bound to give any notice or to furnish information on any subject to any public servant, as such, inten tionally omits to give such notice or to furnish such information in the manner and at the time required by law, shall be punished with simple imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both.
or, if the notice or information required to be given respects the commission of an offence or is required for the purpose of preventing the commission of an offence, or in order to the apprehension of an offender, with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both; or, if the notice or information required to be given is required by an order passed under sub section (1) of section 56.5 of the Code of Criminal Procedure, 1898, with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees.
or with both.
" For the application of this section, it is necessary that Annadhanam, as Investigator, be a public servant.
Annadhanam cannot be said to be a servant.
He was not an employee of Government.
He was a Chartered Accountant and had been directed by the order of the Central Government to investigate into the affairs of the Insurance Company and to report to the Government on the investigation made by him.
of course, he was to get 380 some remuneration for the work he was entrusted with. 'Public servant ' is defined in section 21 of Indian Penal Code.
Mr. Dingle Foot has argued that Annadhanam was a public servant in view of the ninth clause of section 21.
According to this clause, every officer in the service or pay of the Government or remunerated by fees or commission for the purpose of any public duty would be a public servant.
A person who is directed to investigate into the affairs of an Insurance Company under section 33(1) of the , does not ipso facto become an officer.
There is no office which he holds.
He is not employed in service and therefore this definition would not apply to Annadhanam.
The making of a statement to the Investigator under section 33(3) of the does not amount to furnishing information on any subject to any public servant as contemplated by a. 176 I. P. C., an omission to furnish which would be an offence under that section.
This section refers to information to be given in statements required to be furnished under some provision of law.
We are therefore of opinion that a. 176.
I. P. C. did in no way compel Dalmia to make the statement Exhibit P. 10.
We believe the statements of Annadhanam and Khanna about Dalmia 's making the statement Exhibit P. 10 without his being induced or threatened by them.
Their statements find implied support from the statement of Raghunath Rai with respect to what Dalmia told him in connection with the making of the statement to Annadhanam, and from certain statements of Dalmia himself in his written statement and in answers to questions put to him under section 342, Cr. P. C. We therefore hold the statement Exhibit P. 10 is a voluntary statement and is admissible in evidence.
381 We also hold that it is not inadmissible in view of cl.
(3) of article 20 of the Constitution.
It was not made by Dalmia at a time when he was accused of an offence, as is necessary for the application of that clause, in view of the decision of this Court in The State of Bombay vs Kathi Kalu Oghad (1) where the contention that the statement need not be made by the accused person at a time when he fulfilled that character was not accepted.
Dalmia was not in duress at the time he made that statement and therefore was not compelled to make it.
It was said in the aforesaid case : " "Compulsion ', in the context, must mean what in law is called duress. .
The compulsion in this sense is a physical ob jective act and not the state of mind of the person making the statement, except where the mind has been so conditioned by some extraneous process as to render the making of the statement involuntary and, therefore, extorted." The various circumstances preceding the making of the statement Exhibit P. 10 by Dalmia have all been considered and they fall far short of proving that Dalmia 's mind had been so conditioned by some extraneous process as to render the making of this statement involuntary and therefore extorted.
We believe the statement of Annadhanam that Dalmia had told him near the staircase that he had lost the money in his personal speculation business which was carried on chiefly through one of his private companies, viz. the Union Agencies.
The later part of his confession, Exhibit P. 10, is an admission of Dalmia 's losing the (1) ; , 35. 382 money in speculation.
His further statement was only an amplification of it as to the name under which speculation was carried on.
the statement finds support from the facts established by other evidence that the speculation business carried on by the Union Agencies was really the business of Dalmia himself though, ostensibly, it was the business of the company of which there were a few shareholders other than Dalmia.
Mr. Dingle Foot has urged that adverse inference be drawn against the prosecution case on account of the prosecution not producing certain documents and certain witnesses.
We have considered the objection and are of opinion that there is no case for raising such an inference against the prosecution.
The prosecution did not lead evidence about the persons holding shares in Asia Udyog Ltd., and in Govan Brothers Ltd. Such evidence would have, at best, indicated how many shares Dalmia held in these companies.
That was not necessary for the prosecution case.
The extent of shares Dalmia held in these companies had no direct bearing on the matter under inquiry in the case.
The prosecution led evidence about the telephonic calls up to August 31, 1955, and did not lead evidence about the calls between September 1 and September 20. 1955, It is urged that presumption be raised that Dalmia and Chokhani had no telephonic communication in this period.
Admittedly, Dalmia had telephonic communication with Chokhani on September 15.
The prosecution has not impugned any transaction entered into by Chokhani during this period.
It is not therefore essential for the prosecution to have led evidence of telephonic calls between Dalmia and Chokhani during this period.
Another document which the prosecution is 383 said not to have produced is the Dak Receipt.
Register.
The Register could have at best shown on which dates the various advices received from Bombay about the transactions were received.
On that point there had been sufficient evidence led by the prosecution.
The production of the Register was there fore not necessary.
The accused could have summoned it if he had particular reason to rely on its entries to prove his case.
Lastly, complaint is made of the non production of certain documents in connection with the despatch of certain securities from Delhi to Bombay.
Again, there is oral evidence with respect to such despatch of securities and it was not essential for the prosecution to produce the docu ments in that connection.
Of the witnesses who were not produced, complaint is made about the prosecution not examining Mr. Barve, Joint Secretary, Ministry of Finance, who was present at the interview which Dalmia had with Mr. Kaul on September 15,1954, and of the non production of the Directors of the Insurance Company.
It was quite unnecessary to examine Mr. Barve when Mr. Kaul has been examined.
It was also not necessary to examine the Directors of the company who are not alleged to have had any first hand knowledge about the transactions.
They could have spoken about the confirmation of the sale and purchase transactions and about the passing of the bye laws and other relevant resolutions at the meeting of the Board of Directors.
The minutes of the proceedings of the Board 's meetings served this purpose.
It is admitted by Dalmia that there was no ,resolution of the Board of Directors conferring authority on Chokhani to purchase and sell securities.
Certain matters have been referred to at 384 pages 206 210 of Dalmia 's statement of came, which, according to Dalmia, could have been proved by the Directors.
, All these matters are such which were not necessary for the unfolding of the prosecution case and could be proved by the accused examining them if considered necessary.
We therefore see no force in this contention.
It is urged for Dalmia that he could not have been a party to a scheme which would cause loss to the Insurance Company, because he was mainly responsible for the prosperity of the company.
The Union Agencies has assets.
The Government was displeased with Dalmia.
The company readily agreed to the appointment of M/s. Khanna and Annadhanam as auditors.
There was the risk of detection of the fraud to be committed and so Dalmia would have acted differently with respect to such affairs of the Union Agencies as have been used as evidence of Dalmia being synonymous with it.
We are of opinion that these considerations are not such which would off,set the inferences arrived at from the proved facts.
It cannot be it matter of mere coincidence that frequent telephonic conversations took place between Dalmia and Chokhani when the Union Agencies suffered losses, that the usual purchase transactions by which the funds of the Insurance Company were diverted to the Union Agencies took place then, that such purchases should, recur several times during the relevant period, that such securities which could not be recouped had to be shown as sold and when the Union Agencies or Bhagwati Trading Company could not pay for the sale price which had to be credited to the account of the Insurance Company, a further usual purchase transaction took place.
We are therefore satisfied from the various facts considered above that the transactions which 385 led to the diversion of funds of the Insurance Company to the Union Agencies were carried through under the instructions and approval of Dalmia.
It is clear that he had a dishonest intention to cause at least temporary loss of its funds to the Insurance Company and gain to the Union This could be achieved only as a result of the conspiracy between him and Chokhani.
Vishnu Prasad was taken in the conspiracy to facilitate diversion of funds and Gurha to facilitate the making up of false accounts etc.
in the offices of the Union Agencies and Asia Udyog Ltd., as would be discussed hereafter.
We may now turn to the charges against Gurha, appellant.
He was charged under section 120 B read with section 409 I. P. C. and also on three counts under section 477 A for making or abetting the making of false entries in three journal vouchers Nos. 98, 106 and 107 dated January 12, 1955, of the Union Agencies.
It is necessary to give a brief account of how these vouchers happened to be made.
Gurha was a Director of the Union Agencies and looked after the work of its office at Delhi.
He was also the Accountant of Asia Udyog Ltd. At Delhi there was a ledger with respect to the account of the transactions by the Bombay Office of the Union Agencies.
Under the directions of Chokhani who was an agent of the Union Agencies at Bombay and also held power of attorney on its behalf.
Kanna used to send a cash statement and a journal to the Bombay Office and the Union Agencies at Delhi.
These documents used to be sent to Gurha personally.
Now, the cash statement from Bombay showed correctly entries of the amounts received from Bhagwati Trading Company.
Such amounts were noted to the credit of Bbagwati Trading Company.
When the Union Agencies made Payment to Bhagwati 386 Trading Company, an entry to that effect was noted in the cash statement to the debit of Bhagwati Trading Company.
On receipt of these cash statements in 1955, it is alleged, Gurha used to get the genuine cash statement substituted by another fictitious cash statement in which no mention was made of Bhagwati Trading Company.
Entries to the credit of Bhagwati Trading Company used to be shown to be entries showing the receipt of those moneys from the Delhi Office of the Union Agencies through Chokhani.
The debit entry in the name of Bhagwati Trading Company used to be shown as a debit to the Delhi Office of the Union Agencies.
This substituted cash statement was then made over to one Lakhotia, who worked in the Delhi Office of the Union Agencies on behalf of the Bombay Office of the company.
He was also prosecuted, but was acquitted.
Lakhotia issued credit advices on behalf of the Bombay Office of the Union Agencies to the Delhi Office of the Union Agencies in reference to the entry in the cash statement which, in the original statement, was in respect of the amount received from Bhagwati Trading Company, intimating that amount had been credited by the Bombay Office to the account of the Delhi Office.
A debit advice on behalf of the Bombay Office to the Delhi Office was issued intimating that the amount had been debited to the account of the Delhi Office when in fact, the original entry debited that amount to the account of Bhagwati Trading Company.
Lakhotia also made entries in the ledger of the Bombay Office which was maintained in the Delhi Office of the company.
In its column entitled 'folios ' reference to the folio of the cash statement was given by writing the letter 'C ' ' and the number of the folio of the cash statement from which the entry was posted.
On receipt of such advices from Lakhotia on behalf of the Bombay Office, Dhawan, P. W,19, 387 Accountant of the Delhi Office of the Union Agencies used to prepare the journal voucher.
In the case of the credit advices, the amount was debited to the Bombay Office of the Union Agencies and credited to Asia Udyog Ltd. In the case of the debit advices, the amount was debited to Asia Udyog Ltd., and credited to the Bombay Office of the Union Agencies.
According to the statement of Dhawan, he did so under the instructions of Gurha.
Gurha used to sign these vouchers and when he fell ill,, they were signed by another Director, J. section Mittal.
Corresponding entries used to be made in the account of the Bombay Office and the Asia Udyog Ltd., in the ledger of the Delhi Office of the Union Agencies.
After Dhawan had prepared these vouchers he also used to issue advices to Asia Udyog Ltd. intimating that the amount mentioned therein had been credited or debited to its account.
Thus the name of Bhagwati Trading Company did not appear in the various advises, vouchers and the ledgers prepared at Delhi.
In the office of Asia UdyogLtd., on receipt of the credit advice, a journalvoucher crediting the amount to the Bombay Officeand debiting it to the Delhi Office of the Union Agencies was prepared.
A journal voucher showing the entries in the reverse order was prepared on the receipt of the debit advices.
Asia Udyog Ltd., issued advice to the Bombay Office intimating that the amount had been credited or debited to the Bombay Office of the Union Agencies in the case of vouchers relating to the credit or debit advice from that Office.
All such vouchers in Asia Udyog Ltd. were signed by Gurha even during the period when he was ill and was not attending the office of the Union Agencies.
The result of all such entries in the vouchers Was that on paper it appeared in the case of credit 388 advices that the Delhi Office of the Union Agencies advanced money to the Bombay Office which paid the money to Asia Udyog Ltd., which in its turn, paid the money to the Delhi Office of the Union Agencies, and in the case of debit advices, the Bombay Office debited the amount to Delhi Office of the Union Agencies and that debited it to Asia Udyog Ltd., which in its turn debited it to the Bombay Office.
All these entries were against facts and they must have been done with a motive and apparently it was to keep off the records any mention of Bhagwati Trading Company.
No explanation has been given as to why this course of making entries was adopted.
The genuine cash statements are on record.
The alleged fictitious statements are not on the record.
It is not admitted by Gurha that any fictitious cash statement was prepared.
It is not necessary for our purposes to bold whether a fictitious cash statement in lieu of the genuine cash statement received from Bombay was prepared under the directions of Gurha or not.
The fact remains that the entries in the various advices prepared by Lakhotia on the basis of the cash statements received, did not represent the true entries in the genuine cash statements and that journal vouchers prepared by Dhawan also showed wrong entries and did not represent facts correctly.
Of the journal vouchers with respect to which the three charges under section 477 A, 1. P. C. had been framed, two are the vouchers prepared by Dhawan crediting the amounts mentioned the rein to Asia Udyog Ltd., and debiting them to the Bombay Office of the Union Agencies.
They are Exhibits P. 2055 and P. 2060.
Each of them is addressed to Asia Udyog Ltd. and states that the amount mentioned therein was the amount received by the former, i. e. the Bombay Office from Chokhani on account of the latter, i, e., Asia Udyog Ltd., on 389 January 7 and January 10, 1955,respectively and adjusted.
One Exhibit P.2042 debits the amount to Asia Udyog Ltd, and credits it to the Bombay Office of Union Agencies and states the amount mentioned therein to have been paid by the latter, i.e., Bombay Office to Chokhani on account of the former, i.e Asia Udyog Ltd., and adjusted.
Other facts which throw light on the deliberate preparation of these false vouchers are that there had been tampering of the ledger of the Bombay Office in the Delhi Office of the Union Agencies and also in the journal statement of that office.
The letter "C ' in the folio column of the ledger had been altered to 'J ' indicating that entry referred to an entry in the journal statement received from Bombay.
Sheets of the journal statement on which corresponding entries are noted have also been changed.
These two documents remained in the possession of the Union Agencies till November 12, 1955, though the advices and vouchers in the Delhi Office were seized by the Police on September 22, 1955, and therefore interested persons could make alterations in them.
It has been suggested for Gurha that the alterations were made by the Police.
The suggestion has not been accepted by the learned Sessions Judge for good reasons.
The changed entries did not in any way support the prosecution case and therefore the police had no reason to get those entries concocted.
The entries did show the receipt of the amounts from Bhagwati Trading Company, but the prosecution case was that the amount was received in cash and not through transfers which transactions had to be adjusted.
The learned Sessions Judge, did not, however, believe the statement of Sri Kishen Lal who investigated the case that he had noticed these alterations earlier than his statement in Court Which was some time in 1958, for the reason that 390 Dhawan was not questioned by the prosecution in this regard and no reference was made by Sri Kishen Lal in the case diary about his questioning Dhawan about the alterations.
The learned Sessions Judge appears to have overlooked the statement of Sri Kishen Lal to the effect: "I made a note in the case diary about myself having put the overwriting to Lakhotia and about having asked his explanation about that." The Court could have verified the fact from the case diary.
It is too much to suppose that Sri Kishen Lal would make a wrong statement whose inaccuracy could be very easily detected.
However, the learned Session Judge himself has given good reasons for not accepting the suggestion that the over writing of the letter 'C ' by the letter 'J ' and the changing of the journal papers were made by the police.
The part that Gurha played in getting these false entries prepared is deposed to by Dhawan, P.W. 19, who used, occasionally, to approach Gurha for instructions.
Further, Gurha, as the accountant of Asia Udyog Ltd., must have known that Asia Udyog Ltd., bad neither advanced any amounts to ' the Bombay Office of the Union Agencies nor received any amounts from the Bombay Office of the Union Agencies.
He however signed all the vouchers prepared in the office of Asia Udyog Ltd., in connection with these transactions.
He did so even during his illness (May, 1955, to July, 1955, which, according to the statement of Gurha, in answer to question No. 134 was from March 15 to August 12, 1955, during which period he did not attend the office of the Union Agencies).
He signed them deliberately to state false facts, 391 Dhawan particularly stated that on receipt of the advice, Exhibit P. 2041, on the basis of which journal entry No. 98 was prepared by him, he went ' to Gurha to consult as it was not clear from that advice to whom the amount mentioned in it had ' been paid.
Gurha, on looking up the Journal state ment received from the Bombay Office told him to debit that amount to Asia Udyog Ltd. Dhawan prepared journal voucher P. 2042, accordingly, and Gurha initialed it.
It may be mentioned that this debit advice was addressed to M/s. Delhi Office and therefore could be taken to refer either to the Delhi Office of the Union Agencies or the Delhi Office of ' Asia Udyog Ltd., both these offices being in the ' same building and being looked after by Gurha.
Gurha admits in his statement under s.342, Cr P. C., that Dhawan referred this matter to him and that he asked him to debit the amount to Asia Udyog Ltd., The journal statement of the Bombay Office at the relevant time could have no reference to this item which was really entered in the cash statement and Gurha 's conduct in looking up the journal was a mere ruse to show to Dhawan that was giving instructions on the basis of the entries and not on his own.
Gurha stated, in answer to question No. 45, that he remembered to have seen an entry relating to this amount of Rs. 4,61,000 which is the amount mentioned in exhibit P. 2042 in the cash statement of the Bombay Office of the Union Agencies when O.P. Dhawan referred an advice relating to that amount to him.
In answer to questions Nos. 217 and 218, in connection with his advising Dhawan about the debiting of this amount to Asia Udyog Ltd., he stated that he gave that advice after tracing the relevant entry in the journal statement of the Bombay Office.
This answer is not consistent with his earlier answer to question No. 45 as entry with respect to the same amount could not have existed 392 simultaneously both in the cash statement and the journal statement of the Bombay Office.
If his later answer is correct, his referring to the journal would have been just a ruse as already stated.
If his earlier answer is correct that would indicate that either Gurha had supplied the office with the fictitious cash statement of the Bombay Office as alleged by the prosecution or that seeing in the journal cash statement that the entry related to Bhagwati Trading Company, deliberately told Dhawan, in accordence with the scheme, to debit that amount to Asia Udyog Ltd. In either view of the matter, this conduct of Gurha in advising Dhawan to debit the amount to Asia Udyog Ltd., is sufficient to indicate his complicity in the whole scheme, as otherwise, he had no reason to behave in that manner.
Gurba, among the accused, must have been chosen for the purpose of the conspiracy because he had connection both with the Union Agencies and with Asia Udyog Ltd. He had been in the employ of a Dalmia concern from long before.
He was the Accountant of the Dalmia Cement and Paper Marketing Company from 1948 till its liquidation in 1953.
Gurha, as Director of the Union Agencies, knew that it had suffered losses as a result of sharespeculation business in 1954 55 and that the Delhi Office was short of liquid funds to meet these losses.
He must have known how the funds to meet the losses were being secured from the funds of the Insurance Company through Bhagwati Trading Company.
He must have also known that this was wrong.
It is only with such knowledge that he could have been a party to the making of false ad vices and vouchers.
There could be DO other reason.
It could not have been possible for the prosecution to lead direct evidence about Gurha 's knowledge with respect to the full working of the scheme to provide for the losses of the Union Agencies from the funds of the Insurance Company.
It is further 393 not, necessary that each member of a conspiracy must know all the details of the conspiracy.
Mr, Kohli, for Gurha, has urged that Gurha could have had nothing to do with the diversion of the funds of the Insurance Company to the Union Agencies, even though he was a Director of the latter as he never issued instructions regarding the activities of the Union Agencies, had no knowledge of the passing of money from the funds of the Insurance Company to the Union Agencies as he had nothing to do with the movement of the securities held by the Insurance Company or the receipt of cash or the other transactions, his role having begun, according to the prosecution, after the offence under section 409 1.
P. C. had been actually commit ted, i.e., after Chokhani had issued cheques on the bank accounts of the Insurance Company with the Chartered Bank in favour of Bhagwati Trading Company, and therefore could know nothing regarding the diversion of funds and the desirability of falsifying the accounts and papers of the Office; he had to deal with.
Great reliance is placed on the letter, Exhibit B. 956 in submitting that Gurha did not know about the whole affair and simply knew, as stated by him, that Chokhani had borrowed money for the Union Agencies to pay its losses, from Bhagwati Trading Company.
This letter is of significance and we quote it in full "Girdharilal Chokhani Times of India Building, Horn by Road, Bombay 1.
CONFIDENTIAL 17th September 55.
Bharat Union Agencies Ltd., Delhi.
Mr. R. P. Gurha Dear Sir, I have to inform you that the various a mounts 394 arranged by me as temporary loans to Bharat Union Agencies Ltd., Bombay Office from time to time in the name of Bbagwati Trading Company, actually represented the monies relating to the undernoted securitiesbelonging to Bharat Insurance Company Limited.
Face Value 2 1/2% 1961 Rs. 56,00,000 3% 1963 65 Rs. 79,00,000 3% 1966 68 Rs. 60,00,000 Rs. 1,94,00,000 I have now to request you to please arrange at your earliest to pay about Rs. 1,80,00,000 in cash or purchase the a fore said securities (or their equivalent) and deliver the same to Bharat Insurance Company Ltd., 10, Daryaganj, Delhi on my behalf, debiting the amount to the credit standing in the books of the Company 's Bombay Office in the name of M/s Bbagwati Trading Company.
Any debit or credit balance left thereafter in the said account would besettled later on.
I am getting this letter also signed by Vishnuprasad on behalf of Bhagwati Trading Company although he had neither any knowledge of these transactions nor had any connection with these affairs.
Yours faithfully, For: Bbagwati Trading Company Sd/ G. L. Cho khani Sd.
Illegible Vishnuprasad Bairanglal Proprietor.
" We are of opinion that this is a letter written for the purpose of the case and was, as urged for 395 the State,.
ante dated.
There is inherent evidence in this letter to support this view.
The letter makes a reference to Vishnu Prasad 's having no knowledge of the transactions and having no connection with the affairs.
Mention of these facts was quite out of place in a letter which Chokhani was addressing to Gurha in the course of business for his immediately arranging for the payment of Rs. 1,80,00,000 in cash or.
securities to Bharat Insurance Company.
Further, the opening expression in the letter does not necessarily mean that Gurha was being informed for the first time that the temporary loans arranged by him for the Union Agencies Ltd., in the name of 'Bhagwati Trading Company actually represented the moneys belonging to the Bharat Insurance Company.
If it meant so, that must have been done so by design, just as the concluding portion of the letter was, as already mentioned, put in by design to protect Vishnu Prasad 's interest.
The letter is dated September 17, 1955, and thus purports to have been written a few days before the formal complaint was made to the police.
Even if it was written on September 17, it was written at a time when the matter of securities had come to the notice of the authorities and Dalmia was being pressed to satisfactorily explain the position of the securities.
Chokhani could have written a letter of this kind in that setting.
Another fact relied upon by the learned Sessions Judge in considering this letter to be antedated is that it does not refer to one kind of securities which were not in the possession of the Insurance Company even though they had been ostensibly purchased.
It does not mention of the securities worth Rs. 26,25,000 which were really supplied to the Insurance Company on September 23, 1955.
This letter should have included securities of that amount and should have asked Gurha to make up 396 for that amount to the Insurance Company.
This is a clear indication that this letter was written after September 23, 1955.
Mr. Kohli has, however, urged that the contract for the purchase of these securities had taken place on September 16, 1955, and that therefore Chokhani did not include those securities in this letter.
Reference is made to the statement of Jayantilal, P.W. 6, a partner of the Firm Devkaran Nanjee, Brokers in Shares and securities.
He states that Bhagwati Trading Company wanted to purchase for immediate delivery 3% 1966 68 securities of the face value of Rs. 21,25,000 and that a contract about it was entered into.
Securities of this amount were not available in the market.
Securities worth Rs. 1,75,000 were available and were delivered to Chokhani that day.
They had to purchase securities of the face value of Rs. 20,00,000, from the Reserve Bank of India in order to effect delivery and had to sell some other securities of that value.
The result was that the required securities were received by them on September 22, 1955.
Even this statement does not account for not including securities of the value of Rs. 4,50,000 in this letter exhibit P. 956.
It was further urged in the alternative that Chokhani had very extensive powers in all the alleged concerns of Dalmia and so could get anything done due to his influence without divulging secrets.
That was not the position taken by Gurha in his statement.
Ho did not say that he deliberately got false documents prepared due to directions from Chokhani and which he could not disregard.
Even if it be so, that means that Gurha got false documents made deliberately.
Another submission for Gurha is that the case held proved for convicting him is different from the case as sought to be made out in the police chargesheet submitted to the Court under section 173 of the 397 Code of Criminal Procedure.
The charge sheet is hardly a complete or accurate thesis of the prosecution case.
Clause (a ) of sub section
(1) of section 173, Cr. P.C., requires the officer in charge of the police station to forward to the Magistrate empowered to take cognizance of the offence on a police report, the report in the prescribed form setting forth the names of the parties, the nature of the information, and the names of the persons who appear to be acquainted with the circumstances of the case.
Nothing further need be said on this point.
Further, it is submitted that the prosecution case has changed from stage to stage.
This can only mean that facts came on the record which were not known before and therefore the complexion of the allegations against Gurha 's conduct varied.
Even if this is so, he can have no grievance against it unless he bad been unable to meet it in defence.
No such inability has been expressed.
It is however stated that the prosecution based its ultimate case against him on the allegation that the cash statement received from Bombay was suppressed and another false cash statement was prepared at Delhi under the directions of Gurha.
We have already dealt with this matter.
There was no such allegation on the basis of the statement of any prosecution witness.
This way really a suggestion to explain how despite certain entries in the cash statements received from Bombay different entries were made in the advices issued by Lakhotia which advices ought to have been in accordance with the entries in the cash statement.
The suggestion may be correct or may not be correct.
It cannot, however, be said on its basis that there has been such a change in the prosecution case as would make the prosecution case reasonably doubtful.
In the same connection, a grievance has been made that Gurha was not questioned about the 398 allegation that the cash statement had been suppressed and substituted by another fictitious one.
No such question could have been put to him when there was no evidence about it.
An accused is questioned under section 342 Cr. P. C., to explain any circumstances appearing in the evidence against him.
It is not necessary to ask him to explain any inference that a Court may be asked to draw and be prepared to draw from the evidence on record.
Another point stressed for Gurha is that the cash statements would not have mentioned Bhagwati Trading Company when the prosecution case is that Chokhani took deliberate steps to keep the Delhi Office of the Insurance Company in the dark about it.
The fact is that the cash statement sent from Bombay did mention Bhagwati Trading Company.
They were sent to Gurha personally.
In the circumstances the reasonable conclusion can be that they mentioned Bhagwati Trading Company as that represented the true state of affairs and Chokhani had to inform the Delhi Office of the Bharat Union Agencies about the source of the money he was receiving for the Union Agencies to meet its losses.
Chokhani did not disclose the true source, but disclosed a source fictitiously created to conceal the real source.
There was no harm in disclosing Bhagwati Trading Company to the office of the Union Agencies at Delhi.
With the same frankness it could not have been disclosed to the Insurance Company Office at Delhi both because that would required the complicity of the entire staff of the Insurance Company in the conspiracy and because otherwise, it would at once disclose to the Insurance Company and those who had to check its working that its funds were being miscued.
Disclosure of Bhagwati Trading Company to the Union Agencies was necessary and there was no harm in any way in informing Gurha confidentially about it.
After Gurha had got possession of the cash 399 statement it was for him how to direct the necessary entries to be made in the advices prepared by Lakhotia on behalf of the Bombay Office at Delhi and on the basis of which journal vouchers were to be prepared by Dhawan and entries were to be made in the accounts of the Union Agencies at Delhi.
We therefore do not consider that this contention in any way favours the appellent.
The fact that the account of the Asia Udyog Ltd., in the ledger Exhibit P. 2226 is not alleged to be fictitious and records in the column folio ' the letter 'J ' is of no help as the entries in that ledger must have been made on the basis of the journal vouchers issued by Dhawan.
In fact once it is alleged that the advices issued by Lkhotia were fictitious any entry which can be traced to it must also be fictitious.
It is argued that the alleged scheme of making the circuitious entries could not have worked in keeping the source of money concealed as the Income tax Authorities could have detected by following the entries in the Bank records with respect to the source of payment of money (by cheques issued by Bhagwati Trading Company) to the Union Agencies at Bombay.
They could have thus known only about Bhagwati Trading Company and, as already stated, it was not necessary to keep Bhagwati Trading Company secret from the Union Agencies.
What was really to be kept secret was that the money came from the Insurance Company.
The various circuitous entries were not really made to keep Bhagwati Trading Company unknown, but were made to make it difficult to trace that the money really was received from the Insurance Company.
A suggestion has been made by Mr. Kohli that Chokhani might have showed the same amount both in the cash statement and in the journal statement.
No such case, however, seems to have been 400 raised in the Courts below and has been made in the appellant 's statement of case.
It has been contended that an offence under section 477A 1. P. C. has not been established against the accused as it is not proved that he falsified any book, papers, etc., in the possession of his employer with intent to defraud and that the intention to defraud should be to defraud someone in future and should not relate to an attempt to cover up what had already happened.
It is submitted that an intent to defraud connotes an intention to deceive and make the person deceived ,suffer some loss, that the entries made in the journal vouchers did not make anyone suffer and therefore the entries could not be said to have been made with intent to defraud.
The expression intent to defraud ' is not defined in the Penal Code but section 25 defines 'fraudulently ' thus: "A person is said to do a thing fraud.
ulently, if he does that thing with intent to defraud and not otherwise.
" The vouchers were falsified with one intention only and that was to let it go unnoticed that the Union Agencies bad got funds from the Insurance Company.
If they had shown the money received an( paid to Bhagwati Trading Company, it was possible to trace the money back to the Insurance Company through Bhagwati Trading Company which received the money from the Insurance Company through cross cheques as well.
Whoever would have tried to find out the source of the money would have been deceived by the entries.
The Union Agencies mad wrongful gain from the diversion of the Insurance Company 's funds to it through Bhagwati Trading Company and the Insurance Company suffered loss of funds.
The false entries were made to cover 401 up the diversion of funds and were thus to conceal and therefore to further the dishonest act already committed.
We agree with respect with the following observation in Emperor vs Ragho Ram (1) at page 788: "If the intention with which a false document is made is to conceal a fraudulent or dishonest act which had been previously com mitted, we fail to appreciate how that inten tion could be other than an intention to commit fraud.
The concealment of an already committed fraud is a fraud.
" And, again, at page 789: "Where, therefore, there is an intention to obtain an advantage by deceit there is fraud and if a document is fabricated with such intent, it is forgery.
A man who deliberately makes a false document in order to conceal a fraud already committed by him is undoubtedly acting with intent to commit fraud, as by making the false document he intends the party concerned to believe that no fraud had been committed.
It requires no argument to demonstrate that steps taken and devices adopted with a view to prevent persons already defrauded from ascertaining that fraud had been perpetrated on them, and thus to enable the person who practiced the fraud to retain the illicit gain which he secured by the fraud, amount to the commission of a fraud.
An act that is calculated to conceal fraud already committed and to make the party defrauded believe that no fraud had been committed is a fraudulent act and the person responsible for the act acts fraudulently within the meaning, of section 25 of the Code." (1)1933J 1 L. R. 55 All.
783, 788, 789, 402 We agree, with this observation, and repel the contention for the appellant.
It, has then been submitted that the falsification should have been necessarily connected with the commission of the breach of trust.
There is no question of immediate or remote connection with the commission of breach of trust which is sought to be covered up by the falsification, so long as the falsification is to cover that up.
In the present case, introduction of Bhagwati Trading Company in the transactions was the first step to carry out deception about the actual payment of money out of the funds of the Insurance Company to the Union Agencies.
The second step of suppressing the name of Bhagwati Trading Company in the papers of the Union Agencies Delhi, made it more difficult to trace the passing of the money of the Insurance Company to the Union Agencies and therefore the falsification of the journal vouchers related back to the original diversion of the Insurance Companys moneys to the Union Agencies and was with a view to deceive any such person in future who be tracing the source of the money received by the Union Agencies.
A grievance is made of the fact that certain witnesses were not examined by the prosecution.
Of the persons working for the Union Agencies, five were accused at the trial, Kannan, Lakhotia, Gurha, Mittal and Dudani.
Only Gurha among them was convicted.
The others were acquitted. 'The remaining persons were Krishnan, Panohawagh and the clerks O. D. Mathur and Attarshi.
Of the persons connected with Asia Udyog, one R. section Jain of the Accounts Branch was not examined.
Panchawagh who was an Accountant of the Union Agencies and had custody of the cash statements and journal was given up by the prosecution on the ground that 403 he was won over.
We do not consider that it was necessary to examine him for the unfolding of the prosecution case against Gurha.
Similarly it was not necessary to examine the others for that purpose.
A mere consideration that they might have given a further description of how things happened in those offices would not justify the conclusion that the omission to examine them was an oblique motive and could go to benefit the accused.
A grievance was made that the High Court did not deal with the question whether the police tampered with the cash statement and the journal.
It is not clear whether such a point was raised in the High Court.
It was however not mentioned in the grounds of appeal.
The trial Court did deal with the point and held against the appellant Gurha.
In fact, paragraph 22 of the grounds of appeal by Gurba simply said that no value should have been attached to the said cuttings when it was not proved on the record as to who made the said cuttings and when they were not calculated to conceal the true facts or the further interest of the conspiracy.
We are therefore of opinion that Gurha has been rightly held to have been in the conspiracy and to have abetted the making of the false journal vouchers.
In view of the above, we are of opinion that the appellants have been rightly convicted of the offences charged.
It has been urged for Chokhani that his sentence be reduced to the period already undergone as he made no profit for himself out of the impugned transactions, that he is 59 years old and had already been ten days in jail.
We do not consider these to justify the reduction of the sentence when 404 he was the chief person to carry out the main work of the conspiracy.
We also do not consider Dalmia 's sentence, in the circumstances of the case, to be severe.
We therefore dismiss these appeals.
Appeals Dismissed.
|
Appellant Dalmia was the Chairman of the Board of Directors and Principal Officer of the Bharat Insurance company and appellant Chokhani its agent in Bombay.
Appellant Vishnu Prasad, nephew of Chokhani, was the nominal owner of Bhagwati Trading Company but its business was entirely conducted by Chokhani.
Gurha, the other appellant, was a Director of Bharat Union Agencies, a company dealing in for ward transactions of speculation in shares, and owned for all practical purposes by Dalmia.
This Company suffered heavy losses in its business during the period August, 1954, to September, 1955.
The prosecution case against the appellants in substance was that in order to provide funds for the payment of those losses in due time, they entered into a conspiracy, along with five others, to divert the funds of the Insurance company to the Union Agencies through the Bhagwati Trading Company and to cover up such unauthorised transfer of funds, the various steps for such transfer and the falsification of accounts of the Insurance Company and the Union Agencies and its allied concern and committed offences under section 120B read with section 409 of the Indian Penal Code.
Dalmia made a confession before Mr. Annadhanam, a Chartered Accountant, who was appointed Investigator under s.33(1) of the , which was as follows: "I have misappropriated securities of the order of Rs. 2,20,00,000 of the Bharat Instirance Company Ltd. I have lost this money in speculation.
" 254 "At any cost, I want to pay full amount by requesting by relatives or myself in the interest of the policy holders".
The prosecution primarily depended upon the evidence of Raghunath Rai, the Secretary cum Accountant of the Insurance Company, and it was contended on behalf of the appellants that he was an accomplice.
The Sessions judge convicted all the appellants under section 120B read with section 409 of the Indian Penal Code, and further convicted Dalmia and Chokhani for substantive offences under section 409, Chokhani under section 477A read with section 110 and Gurha under section 477A of the Indian Penal Code.
He however acquitted the others.
The High Court in substance agreed with the findings of the Sessions judge, except that it did not rely on the confession of Dalmia.
Held, that the Delhi Court had jurisdiction to try Chokhani for the offence under section 409 of the Indian Penal Code, committed beyond its jurisdiction in pursuance of the alleged conspiracy with which he and the other co accused were charged.
Purushottam Das Dalmia vs State of West Bengal, [1962] 2 section C. R. 101, followed.
The charge against Dalmia under section 409 of the Indian Penal Code was not hit by section 233 of the Code of Criminal Procedure.
The charge framed was not for four distinct offences.
It was really with respect to one offence though the mode of committing it was not precisely stated.
Any objection as to the vagueness of the charge on the score could not invalidate the trial since no prejudice had been caused to the accused nor any contention raised to that effect.
The word property used in section 405 of the Indian Penal Code could not be confined to movable property since the section itself did not so qualify it.
The word 'property ' was much wider than the expression In lovable property ' defined in section 22 of the Code.
The question whether a particular offence could be committed in respect of any property depended not on the meaning of the word 'property ' but on whether that property could be subjected to that offence. 'Property ' in a particular section could, therefore, mean only such kind of property with respect to which that offence could be committed, The funds of the Bharat Insurance Company referred to in the charge amounted to property within the meaning of section 405 of the Indian Penal Code.
255 Reg.
Girdhar Dharamdas (1869) 6 Bom.
High Ct.
Rep. (Crown Cases) 33, and Jugdown Sinha vs Queen Empress (1895) 1.
L. R. , disapproved.
Emperor vs Bishan Prasad, All. 128, Ram Chand Gurvala vs King Emperor A. 1.
R. , Manchersha Ardeshir vs Ismail Ibrahim, Bom.
706, Daud Khan vs Emperor A. I. R. 1925 All.
672 and The Delhi Cloth and General Mills Co. Ltd. vs Harnam Singh, , referred to.
The relevant articles and bye laws of the Insurance Company and the resolutions passed by its Board of Directors established that both Dalmia and Chokhani were entrusted with dominion over the funds of the company in the Banks within the meaning of section 409 of the Indian Penal Code.
Peoples Bank vs Harkishan Lal, A. I. R. , G. E, Ry.
Co. vs Turner, L. R. and Re.
Forest of Dean Etc.
Co., L. R. refer red to.
The offence of Criminal breach of trust could be committed by Chokhani even though he alone could not operate the Bank account and could do so jointly with another.
Bindeshwari vs King Emperor Pat.
703, held inapplicable.
Nrigendro Lall Chatterjee vs Okhoy Coomar Shaw, (1874) (Cr.
Rulings) 59 and Emperor vs Jagannath Ragunathdas, , referred to.
The expression 'in the way of business as agent ' occurring in section 409 of the Indian Penal Code meant that the property must have been entrusted to such agent in the ordinary course of his duty or habitual occupation or profession or trade.
He should get the entrustment or dominion in his capacity as agent and the requirements of the section would be satisfied if the person was an agent of another and that person entrusted him with the property or with dominion over the property in the course of his duties as an agent.
A person might be an agent of another for some purpose and if he was entrusted with property not in connection with that purpose but for another purpose, that would not be entrustment within the meaning of section 409 of the Code.
Mahumarakalage Edward Andrew Cooray vs Queen.
[1953] A. C. 407 and Reg.
vs Portugal, , considered.
256 Both Dalmia and Chokhani were agents of the Bharat Insurance Company within the meaning of section 409 of the Code.
Gulab Singh vs Punjab Zamindara Bank, A. I. R. , referred to.
Raghunath Rai was not an accomplice as he did not participate in the commission of tile actual crime charged against the accused.
An accomplice must be a particeps criminal, except where he was a receiver of stolen property or an accomplice in a previous similar offence committed by the accused when evidence of the accused having committed crimes of identical type on other occasions was admissible to prove the system and intent of the accused committing the offence charged.
Davies vs Director of Public Prosecutions, referred to.
Chokhani was a servant of the Insurance Company within the meaning of section 477A of the Indian Penal Code.
He was a paid Agent of the company and as such was its servant even though he was a full time servant of the Bharat Union Agencies.
Each transaction to meet the losses of the United Agencies, was not an independent conspiracy by itself.
There was identity of method in all the transactions and they must be held to originate from the one and same conspiracy.
Since the confession made by Dalmia had not been shown to have been made under any threat or inducement or promise from a person in authority, it could not be anything but voluntary even though it might have been made for the purpose of screening the scheme of the conspiracy and the High Court was in error in holding that it was otherwise.
A person appointed an Investigator under section 33(1) of the did not ipso facto become a public servant within the meaning of section 21, Ninth, of the Indian Penal Code and section 176 of the Indian Penal Code could have no application to an examination held under section 33(3) of the Act.
The confession of Dalmia was not hit by article 20(3) of the Constitution since it was not made by him at a time when he was accused of an offence.
State of Bombay vs Kathi Kalu Oghad, R. ; , referred to.
The expression 'with intent to defraud ' in section 477A of the Indian Penal Code did not mean intention to defraud someone in the future and could relate to an attempt to cover up what had already happened.
257 Emperor vs Ragho Ram, I. L. R. (1933) 55 All.
783, approved,
|
N: Criminal Appeal No. 175 of 1974.
Appeal by special leave from the judgment and order dated the 18th October, 1973 of the Allahabad High Court in Crl.
Appeal Nos.
1307 and 1966 of 1973.
AND Criminal Appeal Nos.
367 369 of 1974.
Appeals by special leave from the judgment and order dated the 18th October, 1973 of the Allahabad High Court in Criminal Appeal No. 1307 of 1973 connected with Crl.
Appeal Nos.
1287 and 1566 of 1973.
47 Rajendra Singh, R.K. Garg B.P. Singh and Ranjit Kumar for the Appellant.
O.P. Rana and M.V. Goswami for the Complainant.
Dalveer Bhandari for the Respondent.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
These four Criminal Appeals are by special leave.
Criminal Appeal No. 175 of 1974 is by the four appellants Maqsoodan, Madan Mohan, Prayagnath and Nando who have been convicted under Sections 302/34 and 307/34 Penal Code.
The material facts may be briefly stated as follows: On 8 6.1972 at about 5.45 or 600 a.m, when Sulley (P.W. 1) along with his brother, Jadon (deceased), his son, Rajendra (C.W. 1) and his nephew Vijay Kumar (P.W. 3) were going from their house in Neem Gali, Mathura, to their Dharamshala in Mohalla Bengali Ghat, via Vishram Ghat and reached the area called Shyam Ghat, they were waylaid by the twelve persons accused in the case and were assaulted.
According to the prosecution, the accused persons were variously armed with Ballams, phrases and lathis.
Another group of twelve or thirteen persons who were associates of the accused was standing at Vishram Ghat and some one was constantly inciting the accused persons with the expression, "kill, kill" whereupon the accused persons attacked and assaulted Jadon, Vijay Kumar, Rajendra and Sulley.
Jadon and P.W. 3 were severely injured.
The condition of Jadon was very precarious.
After the assault, the miscreants left.
P.W. 1 arranged for a lorry belonging to one Vishnu Chaubey and carried the injured persons to the District Hospital.
The driver of the lorry was one Than Singh.
Jadon and P.W. 3 were removed to the operation theatre.
Thereafter, P.W. 1 proceeded to the Police Station, Kotwali at Mathura and submitted a written First Information Report (FIR) about the incident.
The FIR was written by his nephew, Prakash Chandra Chaturvedi (P.W. 8).
The FIR was lodged at 6.30 a.m. at the Police Station and has been proved in this case as exhibit "Ka 16".
After lodging the FIR, P.W. 1 came back to the hospital where the injuries of all the four injured persons were examined by Dr. B.S. Babbar.
As the condition of the injured persons was serious, intimation was sent to Shri U.C. Tripathi (D.W. 7), Sub Divisional 48 Magistrate, Sahabad, for recording their statements.
The Magistrate came and recorded the statements of P.W. 3 and C.W. 1 at 9.15 a.m. and 9.20 a.m. respectively.
Jadon was operated upon and his condition was such that he could not make any statement.
In fact, he succumbed to the injuries the next day, namely, 9.6.1972 at 3.25 p.m.
The post mortem examination was conducted on the dead body of Jadon by Dr. B.S. Babbar on 10.6.1972 at 10.00 a.m. 3.
The police after investigation submitted charge sheet against the twelve accused persons, all of whom pleaded not guilty.
The First Additional Sessions Judge, Mathura, who tried the case, convicted eleven out of the twelve accused persons and acquitted accused No. 12, Kanhaiya.
Appellant Maqsoodan was convicted under Section 302 I.P.C. and sentenced to death.
The other ten accused persons were convicted under Sections 302/149 and 307/149 I.P.C. and sentenced to imprisonment for life, each under Section 302/149 Penal Code.
Accused Parmatma was convicted under Section 147 I.P.C. and the rest were convicted under Section 148 I.P.C. They were sentenced to various terms of imprisonment.
The sentences of imprisonment were directed to run concurrently.
There was also a reference for the confirmation of the death sentence imposed on Maqsoodan.
The convicts filed several appeals before the High Court of Allahabad.
The High Court altered the convictions of Maqsoodan, Madan Mohan, Prayagnath and Nando, from under Sections 302/149 and 307/149 to ones under Sections 302/34 and 307/34 Penal Code.
The sentence of death imposed on Maqsoodan was reduced to imprisonment for life.
All of them were acquitted of the offences under Section 147 or Section 148 I.P.C. The convictions and sentences as against the other six accused persons were set aside and they were acquitted.
The acquittal of Kanahaiya was affirmed.
Criminal Appeals No. 367, 368 and 369 of 1974 have been filed by the State against the acquittal of the eleven accused persons of the offences under Sections 147 and 148, Penal Code; S.L.P. No. 766 of 1974 is by the State against the acquittal of Kanahaiya.
All these appeals will be disposed of by this common judgment.
Shri Rajendra Singh, learned counsel appearing for the appellants in Criminal Appeal No. 175 of 1974, first submits that 49 the conviction of the four appellants is unsustainable in law; he submits that the evidence of the four witnesses, namely, P.W. 1, Sulley, C.W. 1, Rajendra, P.W. 3, Vijay Kumar and P.W. 2, Jagdish, cannot form the basis of the conviction as only one witness, namely, P.W. 2, Jagdish, out of five witnesses named in the FIR has been examined; the eye witnesses examined are interested and their evidence cannot be safely relied on.
The High Court has found that the testimony of the eye witnesses, namely, P.Ws 1, 2, 3 and C.W. 1 "suffer from numerous infirmities".
It, therefore, sought support to their testimony from the two earlier statements erroneously called dying declarations, Exhibits Ka 22 and Ka 23 made by P.W. 3 Vijai Kumar and P.W. 2 Jagdish respectively.
The infirmities referred to by the High Court consisted in, according to the High Court, improvements made by the witnesses and variations in their earlier and latter statements.
In our opinion, on that ground alone, the testimony of P.Ws. 1, 2, 3 and C.W. 1 cannot be held to be infirm.
It is the duty of the court to remove the grain from the chaff.
These four witnesses are the injured witnesses having received the injuries during the course of the incident.
Their presence at the time and place of the occurrence cannot be doubted; in fact it has not been challenged by the defence.
As both the parties were inimical for a long time, it will be prudent to convict only those persons whose presence and participation in the occurrence have been proved by the prosecution beyond reasonable doubt.
We agree with the finding of the High Court that the presence and participation of appellants Maqsoodan, Madan Mohan, Prayagnath and Nando, who are appellants in Criminal Appeal No. 175 of 1974 has been proved beyond reasonable doubt, despite the improvements and variations in their evidence.
Shri Rajender Singh has submitted that it is not safe to rely on the testimony of P.Ws. 1, 2, 3 and C.W. 1 as the prosecution has not examined all the witnesses named in the FIR except Jagdish, nor has the prosecution examined any of the neighbours.
It is not the number of witnesses examined nor the quantity of evidence adduced by the prosecution that counts.
It is the quality that counts.
Learned counsel has not pointed out to us that any witness better or more creditable has been omitted by the prosecution.
As stated above, the eye witnesses examined in this case were the best and natural witnesses.
Learned counsel also has criticized that during the course of evidence, prosecution alleged that Maqsoodan 50 gave two blows but that fact was not mentioned in the FIR.
He has also criticised that the injured witnesses do not say who injured whom.
This, on the contrary, shows that the witnesses examined were not tutored and they gave no parrot like stereotyped evidence.
It may be remembered that P.W. 1 who lodged the FIR received as many as seven incised wounds, one of them being on the left chest; he took Jadon, who had received sd serious injuries and who later on succumbed lo them, and C.W. 1, who received five incised injuries and P.W. 3, who has also seriously injured, to the hospital.
He lodged the FIR thereafter.
The condition of his mind and disposition can easily be imagined.
There were bound to be some errors in the FIR.
It may also be remembered that the FIR was lodged within half an hour of the occurrence.
There was little time lost.
The occurrence took place at about 6.00 a.m. on 8.6.1972 It is nobody 's case that the witnesses were unable to recognise the real culprits.
The accused persons were well known to the witnesses from before.
They did not have any reason to omit the real culprits and implicate falsely the accused persons.
The evidence of P.Ws. 1, 2, 3 and C.W.1 could have been accepted even without corroboration.
Even so, the High Court rightly pressed into service the earlier statements of P.W. 3 and C.W.1 (exhibit Ka 22 and Ka 23) respectively.
Ka 22 and Ka 23 have been wrongly called dying declarations.
The statement written or verbal, of relevant facts made by a person who is dead, is called a dying declaration; it is relevant under Section 32 of the Evidence Act, when the statement is made by the person as to the cause of his death, or as to any of the circumstances of the transaction which resulted in his death, in case, in which that person 's death comes into question.
When a person who has made a Statement, may be in expectation of death, is not dead, it is not a dying declaration and is not admissible under Section 32 of the Evidence Act.
In the instant case, the makers of the statements exhibit Ka 22 and Ka 23, are not only alive but they deposed in the case.
Their statements, therefore,, are not admissible under Section 32; but their statements however are admissible under Section 157 of the Evidence Act as former statements made by them in order to corroborate their testimony in the Court.
In the instant case, exhibit Ka 22 and Ka 23 respectively corroborate the testimony in Court of P.W. 3 and C.W. 1 respectively.
The High Court has found that the witness later on improved the story and roped in some other persons.
As a rule of 51 caution, the High Court has found that the participation of the four appellants in the offence has been proved beyond reasonable doubt and the presence and participation of the other eight accused persons named by them have not been proved beyond doubt.
We do not find valid reason to interfere with this finding of fact of the High Court, in these appeals under Article 136 of the Constitution.
As the number of accused persons present and participating in the occurrence have not been proved to be five or more, the High Court has rightly held that the common object necessary for constituting an unlawful assembly has not been proved, and therefore in the facts and circumstances of the case, the High Court correctly held that common intention has not been proved and as such the four appellants were rightly acquitted of the offence under section 302 read with section 149 I.P.C., and also rightly acquitted all the other accused persons of the offences under Sections 147 and 148 I.P.C. 10.
Shri Rajinder Singh next submits that if any offence at all has been committed by the appellants of Criminal Appeal No. 175 of 1974, the offences may be under Section 326 I.P.C. depending on the medical evidence and circumstances of the case and that Section 34 I.P.C. cannot apply as no common intention has been proved.
We cannot accept this submission.
Dr. B.S. Babbar, P.W .
3, who held the post mortem examination on the dead body of Jadon found a number of wounds out of which the following were serious: 1.
Incised wound 2" x 1/4" x scalp deep on head.
Incised wound 3" x 1/4" x scalp deep on the head 3.
Stiched wound with draining tube 3" towards upper portion of the stomach on right side.
Stiched wound 1.1/2" on the upper portion of the left side of the stomach.
In his opinion, death was due to cyncope following shock and Haemorrhage as a result of the injuries.
According to him, injuries No. 1 & 2 separately was sufficient to cause death in the ordinary course of nature.
It, therefore, cannot be argued that the offence committed was not murder.
52 Common intention is a question of fact.
It is subjective.
But it can be inferred from facts and circumstances.
In this case, the appellants were related.
All of them were armed with deadly weapons.
They were together.
There was an order by some one, "kill, kill", when all of them simultaneously attacked the deceased and P.Ws. 1, 2, 3, and C.W. 1.
After the occurrence, they left together; they were later arrested from the same place.
The High Court therefore rightly held that the appellants caused the injuries with the common intention, and was justified in convicting the appellants under Section 302/34 of the Penal Code.
We, therefore, affirm the conviction and sentences inflicted by the High Court on Maqsoodan, Madan Mohan, Prayagnath and Nando, appellants in Criminal Appeal No. 175 of 1974 and dismiss the appeal.
As held above that the High Court rightly held that the prosecution failed to prove the common object and therefore it rightly acquitted all the accused persons of the offences under Sections 147 and 148.
In the result, the State appeals are also dismissed.
P. B. R. Appeal dismissed.
|
The prosecution case against the 12 accused persons was that, armed with deadly weapons, they waylaid and assaulted the deceased and three others accompanying him, and that someone among another group of 12 of their associates standing at some distance constantly incited the accused with the words "kill, kill".
The deceased received serious injuries and died on the following morning.
While the appellant was convicted under section 302 Indian Penal Code and sentenced to death, ten other accused were convicted and sentenced variously.
One of them was acquitted.
On appeal the High Court reduced the sentence of death passed on the appellant to imprisonment for life.
Convictions of four of the 11 accused were altered from under section 302/149 and section 307/149 to one under sections 302/34 and 307/34 I.P.C.
All of them were however acquitted of the offences under section 147 or section 148 I.P.C. The convictions and sentences against the other six accused were set aside and they were acquitted.
It was contended on behalf of the appellants that their conviction was unsustainable in law because the evidence of the eye witnesses, who were interested parties, could not be safely relied upon.
Dismissing the appeal, ^ HELD: The High Court erred in stating that the testimony of the four eye witnesses suffered from numerous infirmities, that they made improvements in their testimony and that there were variations in their earlier and later statements.
On that count alone their testimony could not be held to be infirm.
It is the duty of the Court to remove the grain from the chaff.
[49 C D] 46 The parties were inimical for a long time.
The four witnesses were the injured persons and therefore, their presence at the time and place of occurrence could not be doubted.
The presence of all the four accused in the scene of occurrence and their participation in the crime had been proved beyond reasonable doubt despite the improvements and variations in the evidence of witnesses.
[49 E F] In a case of this kind it is not the number of witnesses examined or the quantity of evidence adduced by the prosecution that counts.
It is the quality that counts.
Eye witnesses, examined in the case were the best and natural witnesses.
The accused persons were known to the witnesses and they did not have any reason to omit the real culprits and implicate falsely accused persons.
[49 G H; 50 C] A statement, written or verbal, of relevant facts made by a person who is dead, is called a dying declaration and is admissible in evidence under section 32 of the Evidence Act.
But when a person who has made a statement, even if it be in expectation of death but is not dead, it is not a dying declaration.
It is not admissible under section 32 of the Evidence Act.
[50 E F] In the instant case the two witnesses whose statements were erroneously called dying declarations by the High Court were alive and deposed in the case.
Such statements are admissible under section 157 of the Evidence Act as former statements made by them to corroborate their testimony in the Court.
[50 F G] Common intention is a question of fact and is subjective.
It can be inferred from facts and circumstances.
In the instant case the appellants who were related to one another were armed with deadly weapons when they waylaid and attacked the deceased and his companions, someone incited them to "kill", and after the assault they left the scene of occurrence together and they were arrested from the same place.
There was the therefore common intention and the High Court was justified in convicting them under section 302/34, IPC.
[52 A C]
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Civil Appeal No. 1983 of 1970 From Judgment and Decree dated 29 7 69 of the Punjab & Haryana High Court in F.A.O. No. 35/66.
568 Naunit Lal, K. Vasdev and Ms. V. Grover for the appellant.
V.M. Phadke and Harbans Singh for the respondent.
The Judgment of the court was delivered by MISRA, J.
The present appeal by special leave is directed against the judgment and order dated 29th July, 1969 of the High Court of Punjab and Haryana at Chandigarh.
The dispute in this appeal centres around a religious institution in village Ramgarh (also known a Bhagtuana), tehsil Faridkot, district Bhatinda.
This village was previously in the erstwhile Nabha State which merged with Pepsu and after the reorganisation of the States, became a part of the Punjab State in 1956.
Sixty five persons claiming to be members of the Sikh community moved an application before the State Government under section 7 (1) of the Sikh Gurdwara Act, 1925 (hereinafter referred to as the Act), as amended by the Amendment Act I of 1959, to have the institution declared to be a Sikh Gurdwara.
The State Government notified the said application in the Punjab Gazette in terms of section 7 (3) of the Act on 18th October, 1963.
Upon this the appellant made an application under sections 8 and 10 of the Act claiming that the institution was not a Sikh Gurdwara but an Udasi institution known as Dera Bhai hagtu.
This application was referred by the State Government to the Sikh Gurdwara Tribunal for adjudication.
It was contended by the appellant that throughout its long history the institution has been an Udasi institution.
This institution was not established for use by Sikhs for public worship.
nor was it founded in the memory of a Sikh Martyr, saint or a historical person.
It has never been used for public worship by the Sikhs.
The institution was the Dera of Udasi Bhekh and the objects of worship are idols of Gola Sahib and of Baba Srichand, and the various samadhs.
The petition was resisted by the respondent Shiromani Gurdwara Prabandhak Committee on three grounds: (1) that the appellant was not competent to move the petition under s.7 of the Act because he was not a hereditary office holder, (2) that the provisions of the Act are not ultra vires the Constitution, and (3) that the institution in dispute was a Sikh Gurdwara.
On the pleadings of the parties the Tribunal framed three issues: whether the provisions of the Act are ultra vires the Constitution, 569 (2) whether the appellant was a hereditary office holder, and (3) whether the institution in dispute was a Sikh Guradwara.
Issue No. 1 was not pressed and, therefore, the Tribunal in conformity with the previous decisions held the provisions of the Act to be intra vires the Constitution.
On the second issue the Tribunal recorded a finding in favour of the appellant.
On the third issue, the Tribunal held that the disputed institution was a Sikh Gurdwara.
The appellant feeling aggrieved by the judgment of the Tribunal took up the matter in appeal to the High Court and the High Court in its turn confirmed the findings of the Tribunal and dismissed the appeal by the impugned judgment.
The appellant has now come to his Court on obtaining special leave and the only issue that survives for consideration by this Court is issue No.3, that is, whether the institution in dispute is a Sikh Gurdwara.
Before dealing with the points urged by the counsel for the parties it would be appropriate at this stage to know the distinctive features of Sikhism and Sikh temples.
Although for the purpose of historical research and analysis on such subject, the forum of a court of law is not ideal yet if the statute enjoins the Court to decide such questions, the Court has got to discharge the responsibility.
Section 16 (1) of the Act provides: "16 (1).
Notwithstanding anything contained in any other law in force if in any proceeding before a tribunal it is disputed that a gurdwara should or should not be declared to be a Sikh Gurdwara, the tribunal shall, before enquiring into any other matter in dispute relating to the said gurdwara, decide whether it should or should not be declared a Sikh Gurdwara in accordance with the provisions of sub section (2).
" One of the most fascinating aspects of Sikhism is the process which began with human Gurus, continued during the period of duality in which there were human Gurus and a collection of sacred writings and ended with the present situation in which full authority is enjoined by the scripture.
In every respect the scripture is what the Gurus were.
Both the Gurus and the Book deserve respect, which they are accorded because of the Bani which they express, the word of divine truth.
Therefore, it was possible for Guru Arjan, the fifth in the human line, to bow before the collection which he had compiled and installed 570 in the newly built Darbar Sahib in 1604 for he was acknowledged the higher authority of the Banidue to the personal importance and significance which he possessed as Guru.
The Sikh Gurus have much in common with other preceptors in Indian tradition but their history and contribution is distinctive.
They were not Brahmins, they did not see their calling to be that of expounding Vedas, they taught in vernacular not Sanskrit and their message was for everyone.
They were ten in number each remaining faithful to the teachings of Guru Nanak, the first Guru and when their line was ended by a conscious decision of Guru Gobind Singh, the last Guru, succession was invested in a collection of teachings which was given the title of Guru Granth Sahib.
This is now the Guru of the Sikhs.
An important characteristic of the teachings of the Sikh Gurus is their emphasis upon the message, the Bani.
It is this stress which made possible the transfer of Guruship to the scripture.
The human Gurus were the instruments through whom the voice of God became audible.
The holiest book of the Sikhs is Guru Granth Sahib compiled by the Fifth Master, Guru Arjan.
It is the Bible of Sikhs.
After giving his followers a central place of worship, Hari mandir, he wanted to give them a holy book.
So he collected the hymns of the first four Gurus and to these he added his own.
Now this Sri Guru Granth Sahib is a living Guru of the Sikhs.
Guru means the guide.
Guru Granth Sahib gives light and shows the path to the suffering humanity.
Wherever a believer in Sikhism is in trouble or is depressed he reads hymns from the Granth.
When Guru Gobind Singh felt that his worldly sojourn was near, he made the fact known to his disciples.
The disciples asked him as to who would be their Guru in future.
The Guru immediately placed five pies and a coconut before the holy Granth, bowed his head before it and said "The Eternal Father willed, and I raised the Panth.
All my Sikhs are ordained to believe the Granth as their preceptor.
Have faith in the holy Granth as your Master and consider it.
The visible manifestation of the Gurus.
He who hath a pure heart will seek guidance from its holy words".
571 The Guru repeated these words and told the disciples not to grieve at his departure.
It was true that they would not see his body in its physical manifestation but he would be ever present among the Khalsas.
Whenever the Sikhs needed guidance or counsel, they should assemble before the Granth in all sincerity and decide their future line of action in the light of teachings of the Master, as embodied in the Granth.
The noble ideas embodied in the Granth would live for ever and show people the path to bills and happiness.
Temples are found almost in every religion but there are some difference between the Sikh temples and those of other religions.
The sikh Gurdwaras have the following distinctive features: 1.
Sikh temples are not the place of idol worship as the Hindu temples are.
There is no place for idol worship in a Gurdwara.
The central object of worship in a Gurdwara is Sri Guru Granth Sahib, the holy book.
The pattern of worship consists of two main items: reading of the holy hymns followed by their explanation by some learned man, not necessarily a particular Granthi and then singing of some passages from the Holy Granth.
The former is called Katha and the second is called Kirtan.
A Sikh thus worships the Holy Words that are written in the Granth Sahib, the Words or Shabada about the Eternal Truth or God.
No idol or painting of any Guru can be worshipped.
2 Sikh worship in the Gurdwara is a congregational worship, whereas Hindu temples are meant for individual worship.
A Sikh does the individual worship at home when he recites Gurbani daily.
Some scriptures meant for this purpose are Japji, Jaap, Rehras, Kirtan Sohila.
Sangat is the collective body of Sikhs who meet every day in the Gurdwara.
Gurdwara is a place where a copy of Guru Granth Sahib is installed.
The unique and distinguishing feature would always be the Nishan Sahib, a flagstaff with a yellow flag of Sikhism flying from it.
This serves as a symbol of the Sikh presence.
It enables the travellers, whether they be Sikhs or not to know where hospitality is available.
There may be complexity of rooms in a Gurdwara for the building may also serve as a school; or where children are taught the rudiments of Sikhism as well as a rest centre for travellers.
Often there will.
be a kitchen where food can be prepared though langar itself might take place in the yawning.
Sometimes the Gurdwara will also be used as a clinic.
But its Pivotal point is the place of worship and the main room 572 will be that in which the Guru Granth Sahib is installed where the community gathers for diwan.
The focal point in this room will be the book itself.
From the foregoing discussion it is evident that the sine qua non for an institution being a Sikh Gurdwara is that there should be established Guru Granth Sahib and the worship of the same by the congregation, and a Nishan Sahib as indicated in the earlier part of the judgment.
There may be other rooms of the institution meant for other purposes but the crucial test is the existence of Guru Granth Sahib and the worship thereof by the congregation and Nishan Sahib.
It is not necessary that there must be a granthi in a Gurdwara.
Any learned person can read Guru Granth Sahib and explain to the congregation.
With this preliminary about the distinctive features of a Sikh temple we proceed to deal with the contentions of the counsel for the parties.
Shri Naunit Lal, counsel for the appellant contended that the High Court has misread the evidence and that has vitiated its finding.
He referred to the material portions of the judgment and the evidence of the parties to support his contention.
on perusal of the judgment and the relevant evidence we do not find any misreading of evidence by the High Court.
This contention, therefore, has no force.
We, however, find that the High Court proceeded on the assumption that admittedly Bhai Bhagtu was a Sikh saint and that the disputed institution was established in his memory.
This would be evident from the following observation made by he High Court.
"On an overall consideration of this aspect we are inclined to accept the contention of Mr. Shant that admittedly Bhai Bagtu was a Sikh saint and this institution was established in his memory and as such the case of the respondent would also come within the ambit of section 16(2) (iv) of the Sikh Gurudwara Act".
But this observation is not warranted from the pleadings or the evidence of the parties.
Pritam Dass, the appellant, as P.W.S. in his deposition has categorically stated: "Bhai Bhagtu was an Udasi Fahir".
In the pleadings also the appellant set up that Bhai Bhagtu was an Udasi saint and the institution was a Dera of the Udasi sect, 573 while the respondent, on the other hand, in its reply stated that Bhai Bhagtu was a Sikh saint and the institution was established in the memory of that Sikh saint.
In this state of pleadings and the evidence adduced by the parties it will not be correct to say that admittedly Bhai Bhagtu was a Sikhsaint and that this institution was established in his memory.
Rather this was the only disputed question to be decided by the Court.
Thus while holding that there is no misreading of evidence we find that there is misreading of the pleadings of the parties.
It was next contended for the appellant that the appellant of udasi set being incharge of the institution in question, the succession to the institution being from Guru to Chela, the institution being recorded as Dera of Udasi sect in some of the revenue records, the existence and worship of various idols and samadhs within the precincts of the institution and the absence of a granthi in the institution are all in compatible with the institution being a Sikh Gurdwara.
Shri M. N. Phadke appearing for the respondent on the other hand has contended that (1) the points which were never urged in the courts below could not be allowed to be raised for the first time in this Court; (2) in any case the existence of samadhs and idols within the precincts of the institution and the worship thereof, and the absence of a granthi and the succession to the institution from guru to chela are not destructive of the institution being a Sikh Gurdwara; (3) the finding of the High Court that the institution in question is a Sikh Gurdwara is fully warranted by the evidence on record, and (4) the nature of the institution has to be decided in the light of sub section
(2) of section 16 of the Sikh Gurdwara Act.
The Court has been called upon to decide whether the institution in question is a Sikh Gurdwara.
While considering this question the Court has to take into consideration all the circumstances which favour or militate against the institution being a Sikh Gurdwara.
In the very nature of things and in view of the requirements of sub section
(2) of section 16 it becomes necessary to consider whether the institution being in charge of an Uadasi saint, the existence of samadhs of Udasi saints and worship thereof, or the existence of the idols and absence of a granthi and succession to the institution from guru to chela are all relevant considerations and the Court has to consider them if there is evidence on the record.
In the instant case evidence has been adduced on behalf of the appellant about the existence of samadhs and the various idols, the absence of a granthi and succession to the institution 574 from guru to chela.
We see no reason why the appellant be prevented from urging the aforesaid circumstances.
On the question whether the existence of samadhs and of the idols and the absence of a granthi or succession to the institution from guru to chela militates against the institution being a Sikh Gurdwara the counsel for the parties have adduced evidence in support of their respective contentions.
The counsel for the parties have also cited cases in support of their respective contentions.
The counsel for the appellant relied on Hem Singh & Ors.
vs Basant Das & Anr(1).
In that case the question for consideration was whether Udasis are Sikhs.
The court held that Udasis are not Sikhs for the purposes of Sikh Gurdwara Act.
Although Guru Nanak founded Sikhism as a new religion by sweeping away idolatry and polytheism, Sri Chand, the son of Guru Nanak, the founder of the Udasis, was himself not a Sikh but a Hindu.
No reconciliation between the Sikhs and the Udasis ever took place.
The Udasis are in consequence not Sikhs, but schismatics who separated in the earliest days of Sikhism and never merged with the followers of the Gurus.
Reliance was next placed upon Bawa Ishar Dass & ors.
vs Dr. Mohan Singh & ors (2) The Court held: ". it has been established that the Mahants have all along been Udasis, that the institution was an Udasi monastery, that the Guru Granth Sahib was read there by the Udasi Mahant and that Sikhs may have attended these readings but that all other ceremonies, observed by Udasis and Hindus, were performed at the institution.
It cannot be held from the mere fact that the Udasis also read the Guru Granth Sahib a book which they do venerate, that the Sikhs should be associated in the management of this genuine Udasis institution.
It was held by a Division Bench of this Court in that the Udasi order constitutes a separate sect, distinct from the orthodox Sikhs and that though they have retained many Hindu beliefs and practices, yet in the wider sense of the term they may also be Sikhs.
They occupy an intermediate position between strictly orthodox Sikhs and Hindus.
The Udasis are in fact a monastic 575 Order in their origin and are followers of Bawa Siri Chand, son of the first Guru though they worship smadhs, etc.
they do reverence the Granth Sahib without completely renouncing Hinduism.
They are often in charge of the village Dharamsala or Gurdwara, which is a Sikh institution but in other cases the Sadh and his chelas constitute a monastery or college.
Owing to their intermediate positions, it is possible for Udasis to be in charge of a Sikh Gurudwara properly so called, but it does not follow that that institution is a sikh Gurudwara and not a true Udasi institution merely because the Granth Sahib is read".
In Harnam Singh vs Gurdial Singh on an analysis of various decisions this Court held: "These decisions clearly indicate the principle that though the Sikh Guru Granth Sahib is read in the shrines managed by the by the members of the Udasi Sect, that was not enough to hold that those shrines were Sikh Gurdwaras.
In the case before us, the more fact that at some stage there was a Guru Granth Sahib in this Dera cannot thus lead to any conclusion that this institutions was meant for, or belonged to, the followers of the Sikh religion.
Clearly, the Dera was maintained for an entirely distinct sect known as the Nirmala Sadhs who cannot be regarded as Sikhs and consequently, in their mere capacity of followers of Sikhs religion residing in village Jhandawala, the plaintiffs/respondents could not be held to have such an interest as could entitled hem to institute the suit under section 92 of the Code of Civil Procedure." Shri Phadke appearing, for the respondent on the other hand his cited Mahant Dharam Das etc.
vs State of Punjab & Ors (2).
Dealing with the tenets of the Sikhs this Court observed: "The Sikhs believe in the ten Gurus the last of whom was Guru Gobind Singh.
They further believe that there is no other Guru after Guru Gobind Singh who enjoined on his followers that after him they should Consider Guru Granth Sahib as the Guru.
They do not subscribe to idol worship and polytheism, nor do they have any Samadhi in their shrines.
The teaching of Sikhs was against asceticism.
They believe in Guru Granth Sahib, which is a Rosary of sacred poems, exhortations, etc.
576 During the time of the Sikh Gurus the Gurdwaras were under their direct supervision and control or under their Masends or missionary agents.
After the death of Guru Gobind Singh the Panth is recognised as the corporate representative of the Guru on earth and thereafter they were managed by the Panth through their Granthis and other sewadars who were under direct supervision of the local Sangat or congregation The position of the Gurdwaras changed during British regime.
The mahants who were in charge of the Sikh Gurdwaras could either be a Sikh Mahant or Udasi Mahant.
Though there was no reconciliation between the Sikhs and Udasis, it did not matter if the Mahant of a Sikh Gurdwara was not a Sikh Mahant because the Panth or Sangat exercised control over the Gurdwaras".
Next reliance was placed o Sohan Das vs Bela Singh & Ors.(2) Dealing with section 16(2) of the Sikh Gurudwara Act the Court observed: "The documentary evidence therefore establishes that the dharamsala has been a place of public worship since 1853, and that such worship has been connected with the Granth Sahib I am prepared to accept the evidence of the objectors that the existence of a samadh dates only from recent times, more than probably after the Sikh Gurdwara controversy had become acute and he importance of a samadh had been realized by the Udasi Mahants.
I hold therefore that the evidence supports the conclusion of the majority of the Tribunal that this institution falls within s.16 (2) (iii) of the Act".
In view of the divergent cases cited by the counsel for the parties we have to take into consideration the distinctive features of a Sikh Gurdwara as discussed in the earlier part of the judgment.
So viewed, the existence an worship of Guru Granth Sahib and the existence of Nishan Sahib are the determinative factor.
The Tribunal did not take into consideration the oral evidence adduced by the parties.
Eight witnesses were produced on behalf of the appellant while six witnesses were produced on behalf of the respondent.
The High Court also did not give a proper deal to the oral evidence adduced by the appellant.
The only consideration given by the High Court to the oral testimony of the witnesses on behalf, of the appellant was in the following terms: 577 "As regards the oral testimony on the point that the institution was a Dera of an Udasi Sadhu, the same is obviously interested, and hardly credible.
The Tribunal has not attached any weight to the same and we are wholly in agreement with the finding of the Tribunal on that point.
" The witnesses on either side have come to depose on oath.
The grounds on which the evidence adduced on behalf of the appellant has been discarded may equally apply to the evidence adduced on behalf of the respondent.
The Court should have considered the worth of the evidence of each witness and should have given reasons for disbelieving the same on merit.
A bald observation that the witnesses produced on behalf of the appellate are interested must be deprecated.
Even otherwise the courts below have not approached the case from the correct angle.
(The Courts had to decide the question in view of the provisions of sub section
(2) of section 16 of the Act and they had to record a positive finding in the light of sub s.(2) of section 16,) which reads: "16 (2) If the tribunal finds that the gurdwara (i) was established by, or in memory of any of the Ten Sikh Gurus, or in commemoration of any incident in the life of any of the Ten Sikh Gurus and was used for public worship by Sikhs, before and at the time of the presentation of the of the petition under sub section (1) of section 7; or (ii) owing to some tradition connected with one of the Ten Sikh Gurus, was used for public worship predominantly by Sikhs, before and at the time of the presentation of the petition under sub section (I) of section 7; or (iii) was established for use by Sikhs for the purpose of public worship and was used for such worship by Sikhs, before and at the time of the presentation of the petition under Sub section (I) of section 7; or (iv) was established in memory of a Sikh martyr, saint or historical person and was used for public worship by Sikhs, before and at the time of the presentation of the petition under sub section (I) of section 7; or 578 (v) owing to some incident connected with the Sikh religion was used for public worship predominantly by Sikhs, before and at the time of the presentation of the petition under sub section (I) of section 7; the tribunal shall decide that it should be declared to be a Sikh Gurdwara, and record an order accordingly".
Unless the claim falls within one or the other of the categories enumerated in sub section (2) of section 16, the institution cannot be declared to be a Sikh Gurdwara.
The Court had, therefore, first to consider as pleaded by the parties, as to whether Bhai Bhagtu was a Udasi saint or a Sikh saint, and then to decide on the basis of evidence whether the institution in question is one or the of the types indicated.
This was the only question for consideration before the High Court but unfortunately it assumed what was to be proved.
On the foregoing discussion we are satisfied that the High Court has not given a proper deal to the matter and has not considered the oral evidence adduced on behalf of the parties.
Nor has it approached case from the correct perspective of law.
Ordinarily, in a situation as here the matter should have gone back to the High Court for recordings findings on the basis of appreciation of evidence but we are not inclined to remand the matter as it is a very old dispute.
We are, therefore , prepared to take that burden ourselves and finally decide the dispute.
As would appear, parties were aware of the nature claim and the evidence to be led and, therefore, parties concentrated their attention on the aspects which would be, decisive of the points in dispute.
It is unfortunate that the Tribunal and the High Court did not Keep the proper perspective in view whiles dealing with the matter.
On behalf of the appellant Ram Saran Dass, P W 1, Charan Dass, PW 2, Bishan Dass, PW 3, Jagraj Singh, PW 4, Chajju Ram, PW 5, Zora Singh Patwari, PW 6, Surjit Singh, PW 7 and the appellant, PW 8, were examined.
On behalf of the respondent, Hardev Singh, RW 1, Bachan Singh, RW 2, Balbir Singh, RW 3, Balwant Singh, RW 4, Hazura Singh, RW 5, and Gurdial Singh, RW 6, were examined as witness.
579 The finding of the High Court as extracted hereinbefore clearly show that the four important and most relevant aspects of the case as disclosed in the evidence were completely overlooked or side tracked by the High Court, They are: (i) there are Samadhs on the premises of the institution ;(ii) there are idols and photos of Hindu deities; (iii) Bhai Bhagtu was a Udasi Saint; and (iv) succession was from Guru so Chela.
The petition filed by the appellant under s.8 of the Act contained a clear averment that the institution had been set up by Bhai Bhagtu who was a Udasi Saint and the presence of three Samadhs of (I) Bhai Bhagtu, (2) Baba Paras Ram Ji and (3) Mahant Sahib Dass Ji, was also asserted.
In the written statement the respondent, after a vague denial, had admitted the institution to have been founded by Bhai Bhagtu.
PW 1, Ram Saran Dass stated that there was an idol of Baba Srichand in the institution and there were pictures of Lord Krishna and other Hindu deities.
This statement was elicited in cross examination made by the respondent.
PW 2 has stated that there is an idol of Baba Srichand and Gola Sahib in the institution and they are objects of worship.
PW 3, Bishan Dass, referred to the idol of Baba Shrichand.
PW 4, Jagral stated that there were three or four samadhs on the premises of the institution and those are objects of worship There was no challenge to this statement in examination in chief by cross examination.
PW 5 was asked in cross examination whether there were Samadhs on the premises of the institution and his answer is revealing.
He stated that there are three Samadhs on the premises of the institution and there is a dome over the Samadhs of Bhai Bhagtu.
He added that there are other pictures of Hindu deities and Hindu Festivals are celebrated in the institution.
PW 7, Surjit Singh, the local Sarpanch stated that the institution was of Udasi Fakirs.
He also stated that there is a Samadh of Bhai Bhagtu on the premises of the institution and it is an object of worship.
He indicated that the Samadh of Bhai Bhagtu was worshipped in a grand scale while the other two Samadhs were not treated on equal basis.
There was no cross examination of this witness on this aspect.
Pritam Dass, the appellant did support his case.
Ordinarily his evidence would have been treated as interested as he happens to be the party but his assertions have well corroborated.
Coming to the respondent 's side, the first witness Hardev Singh in his examination in chief stated that there is a Samadh of Bhai Bhagtu in the institution and another Samadh of his mother.
On the basis of this admission of the principal witness of the respondent there can be 580 on doubt that Samadhs exist within the institution.
At the hearing counsel had pointed out that this witness was a member of the Communist Party.
We do not think that would at all be a proper way of appreciating the evidence of the witnesses.
He was a witness called by the respondent and was not declared hostile, if he made admissions in his examination in chief.
On the other hand, the fact that he does not belong to the groups of either party and is a Communist would lend credence to his evidence as coming from an impartial source.
The next witness, RW 2, Bachan Singh admitted the existence of the Samadhs but denied that the Samadh of Bhai Bhagtu was an object of worship.
RW 3, Balbir Singh, admitted the presence of Samadh of Bhai Bhagtu as also of his mother.
It is in the evidence of this witness that he also belongs to the Communist Party.
What we have said about RW 1 equally applies to this witness.
RW 4, Balwat Singh admitted the presence of Bhai Bhagtu 's Samadh; while RW 5, Hazura Singh stated that there were two Samadhs on the premises one of Bhai Bhagtu and the other of his mother.
The last witness, RW 6, Gurdial Singh in his evidence admitted the existence of the two, Samadhs of Bhai Bhagtu and his mother.
This analysis of the evidence clearly indicates that it has been unquestionably established without the slightest shadow of a doubt that there are at least two Samadhs on the premises of the institution one being of Bhai Bhagtu and the other of his mother.
The existence of the idol of Baba Srichand, the founder of the Udasi sect in the premises also seems to have been fully established.
As already stated, Sikhs would not permit the idol of Baba Srichand in a Gurdwara, while Udasis would ordinarily install such an idol to perpetuate the memory of the founder of their sect.
What emerges from this discussion is that as found by the Tribunal, the succession was from Guru to Chela; that Bhai Bhagtu was a Udasi Saint and there are Samadhs on the premises one of Bhai Bhagtu and the other of his mother.
Evidence shows that there are photos of Hindu deities in the institution.
These three facts, without anything more, would be sufficient to reject the case of the respondent that the institution is a Sikh Gurdwara.
We would like to reiterate that existence of Samadhs and succession from Guru to Chela would clearly be destructive of character of the institution as a Sikh Gurdwara because they are inconsistent with the tenets of the Sikh 581 religion.
The issue before the High Court as also the Tribunal was whether the institution Dera Bhai Bhagtu was a Sikh Gurdwara.
Reference to another aspect would be relevant here.
Counsel for the respondent emphasized the feature that there was evidence to show that Guru Granth Sahib was recited and read in this institution.
It is well established that Udasis are mid way between Sikhs on the one hand and Hindus on the other.
Srichand, son of Guru Nanak, the founder of the Sikhism, had, as already indicated, broken away and set up the Udasi sect.
Udasis while venerating Guru Granth Sahib, retained Hindu practices and also showed their veneration to the Samadhs.
From the very fact that Guru Granth Sahib was recited in this institution, no support can be drawn for the claim that the institution was a Sikh Gurdwara.
On the materials on record, we are of the view that the findings recorded by the Tribunal as also the High Court are wholly unsupportable to satisfy the tests indicated in law for determining the character of the institution.
We allow the appeal, reverse the decision of the Tribunal as upheld by the High Court and declare that Dera Bhai Bhagtu is not Sikh Gurdwara.
In the circumstances of the case there would be no order as to costs.
S.R. Appeal allowed.
|
Sixty five persons claiming to be members of the Sikh community moved an application before the State Government under Section 7(1) of the Sikh Gurudwara Act, 1925 to have a religious institution in village Ramgarh (also known as Bhagtuana of Faridkot tehsil, declared to be a Sikh Gurudwara.
The State Government notified the said application in the Punjab Government Gazette in terms of Section 7(3) of the Act on 18th October, 1963.
Upon this the appellant made an application under Section 8 and 10 of the Act claiming that the institution was not a Sikh Gurudwara but an Udasi institution known as Dera Bhai Bhagtu.
The application was referred to the Sikh Gurudwara Tribunal for adjudication.
The petition was resisted by the respondent Shiromani Gurudwara Prabandhak Committee on three grounds: (i) that the appellant was not competent to move the petition under section 7 of the Act as he was not a hereditary office holder, (ii) that the provisions of the Act are not ultravires the Constitution; and (iii) that the institution in dispute was a Sikh Gurudwara.
The Tribunal held against the respondent and in favour of the appellant on contention(1).
Since the second contention was not pressed and the third question was the only issue, the Tribunal held that the institution was a Sikh Gurudwara.
In appeal, the Punjab and Haryana High Court confirmed the Tribunal 's findings.
Hence the appeal by Special Leave of the Court.
Allowing the appeal, the Court ^ HELD: 1.1.
The religious institution, Dera Bhai Bhagtu is not Sikh Gurudwara.
On the materials on record, the findings recorded by the Tribunal as well as the High Court are wholly unsupportable to satisfy the tests indicated in law for determining the character of the institution.
[581D] 1.2.
The findings of the High Court clearly show that the four important and most relevant aspects of the case as disclosed in the evidence were completely overlooked or side tracked by the High Court.
They are: (i) there are Samadhs on the premises of the institution; (ii) there are idols and photos of Hindu deities; (iii) Bhai Bhagtu was a Udasi Saint; and (iv) succession was from Guru to Chela.
565 The petition filed by the appellant under s.8 of the Act contained a clear averment that the institution had been set up by Bhai Bhagtu who was a Udasi Saint and the presence of three Samadhs of (1) Bhai Bhagtu, (2) Baba Paras Ram Ji, and (3) Mahant Sahib Dass Ji, was also asserted.
In the written statement the respondent, after a vague denial, had admitted the institution to have been founded by Bhai Bhagtu.
Pritam Dass, the appellant did support his case.
Ordinarily his evidence would have been treated as interested as he happens to be the party but his assertions have been well corroborated.
The same is strengthened by the evidence of all respondent 's witnesses.
The evidence of witnesses clearly indicates: (i) that there are atleast two samadhs in the premises of the institution one being of Bhai Bhagtu and the other of his mother; (ii) the existence of the idol of Baba Srichand, the founder of the Udasi Sect in the premises.
Clearly the Sikhs would not permit the idol of Baba Srichand in a Gurudwara while Udasis would ordinarily install such an idol to perpetuate the memory of the founder of their sect; (iii) the succession was from Guru to Chela; and (iv) there are photos of Hindu deities in the institution.
These facts without anything more would be sufficient to reject the case of the respondent that the institution is a Sikh Gurudwara.
[579A C; G; 580G H] 1.4.
From the very fact that Guru Granth Sahib was recited in the institution no support can be drawn for the claim that the institution was a Sikh Gurudwara.
It is well established that Udasis are midway between Sikhs on the one hand and the Hindus on the other.
Srichand son of Guru Nanak, the founder of Sikhism, had broken away and set up the Udasi sect.
[581B C] 2.1.
Although for the purpose of historical research and analysis on the subject like Sikhs and Sikh temples, the forum of a court of law is not ideal, yet, if the statute enjoins the court to decide such questions, the court has got to discharge the responsibility.
[569D] 2.2.
The court has been called upon to decide whether the institution in question is a Sikh Gurudwara.
While considering this question the Court has to take into consideration all the circumstances which favour or militate against the institution being a Sikh Gurudwara.
In the very nature of things and in view of the requirements of sub s.(2) of section 16 it becomes necessary to consider whether the institution being in charge of a Udasi saint, the existence of samadhs of Udasi saints and worship thereof, or the existence of the idols and absence of a granthi and succession to the institution from guru to chela are all relevant considerations and the Court has to consider them if there is evidence on the record.
In the instant case evidence has been adduced on behalf of the appellant about the existence of samadhs and the various idols, the absence of a granthi and succession to the institution from guru to chela.
The appellant cannot, therefore, be prevented from urging the aforesaid circumstances.
[573F H; 574A] 2.3.
Courts cannot discard the evidence of witnesses of one side by simply saying that the oral testimony is interested and hardly any credible, when witnesses on either side have come to depose on oath.
Here, the grounds on which the evidence adduced on behalf of the appellant has been discarded may equally apply to the evidence adduced on behalf of the respondent.
The Court should have considered the worth of the evidence of each witness and should have given reasons for disbelieving the same on merit.
A bald observation that the witnesses produced on behalf for the appellant are interested must be deprecated.
The courts had to decide the 566 question in view of the provisions of sub s.(2) of s.16 of the Act and they had to record a positive finding in the light of sub s.(2) of s.16.
Unless the claim falls within one or the other of the categories enumerated in sub section(2) of s.16, the institution cannot be declared to be a Sikh Gurudwara [577B D; 578C] 3.1.
One of the most fascinating aspects of Sikhism is the process which began with human Gurus, continued during the period of duality in which there were human Gurus and a collection of sacred writings and ended with the present situation in which full authority is enjoined by the scripture.
In every respect the scripture is what the Gurus were.
[569G] Both the Gurus and the Book deserve respect, which they are accorded because of the Bani which they express, the word of divine truth.
Therefore, it was possible for Guru Arjan, the fifth in the human line, to bow before the collection which he had complied and installed in the newly built Darbar Sahib in 1604 for he was acknowledged the higher authority of the Bani due to the personal importance and significance which he possessed as Guru.
[569H; 570A] The Sikh Gurus have much in common with other preceptors in Indian tradition but their history and contribution is distinctive.
They were not Brahmins, they did not see their calling to be that of expounding Vedas, they taught in vernacular not Sanskrit and their message was for everyone.
They were ten in number each remaining faithful to the teachings of Guru Nanak, the first Guru and when their line was ended by a conscious decision of Guru Gobind Singh, the last Guru, succession was invested in a collection of teachings which was given the title of Guru Granth Sahib.
This is now the Guru of the Sikhs.
[570B C] An important characteristic of the teachings of the Sikh Gurus is their emphasis upon the message, the Bani.
It is this stress which made possible the transfer of Guruship to the scripture.
The human Gurus were the instruments through whom the voice of the God became audible.
[570D] The holiest book of the Sikhs is Guru Granth Sahib complied by the Fifth Master, Guru Arjun.
It is the Bible of Sikhs After giving his followers a central place of worship, Hari Mandir, he wanted to give them a holy book.
So he collected the hymns of the first four Gurus and to these he added his own.
Now this Sri Guru Granth Sahib is a living Guru of the Sikhs.
Guru means the guide.
Guru Granth Sahib gives light and shows the path to the suffering humanity.
Wherever a believer in Sikhism is in trouble or is depressed he reads hymns from the Granth.
Whenever the Sikhs needed guidance or counsel, they should assemble before the Granth in all sincerity and decide their further line of action in the light of teachings of the Master, as embodied in the Granth.
The noble ideas embodied in the Granth would live for ever and show people the path to blisss and happiness.
[570E F; 571B] 3.2.
Temples are found almost in every religion but there are some differences between the Sikh temples and those of other religions.
The Sikh Gurudwaras have the following distinctive features: [571C] 1.
Sikh temples are not the place of idol worship as the Hindu temples are.
There is no place for idol worship in a Gurudwara.
The central object of worship 567 in a Gurudwara is Sri Guru Granth Sakib, the holy book.
The pattern of worship consists of two main items: reading of the holy hymns followed by their explanation by some learned man, not necessarily a particular Granthi and then singing of some passages from the Holy Granth.
The former is called Katha and the second is called Kirtan.
A Sikh thus worships the Holy Words that are written in the Granth Sahib, the words or Shabada about the Eternal Truth or God.
No idol or painting of any Guru can be worshipped.
[571C D] 2.
Sikh worship in the Gurudwara is a congregational worship, whereas Hindu temples are meant for individual worship.
A Sikh does the individual worship at home when he recites Gurbani daily.
Some scriptures meant for this purpose are Japji, Jaap, Rehras, Kirtan Sohila.
Sangat is the collective body of Sikhs who meet every day in the Gurudwara.
[571E F] 3.
Gurudwara is a place where a copy of Guru Granth Sahib is installed.
The unique and distinguishing feature would always be the Nishan Sahib, a flagstaff with a yellow flag of Sikhism flying from it.
This serves as a symbol of the Sikh presence.
It enables the travellers, whether they be Sikhs or not, to know where hospitality is available.
There may be complexity of rooms in a Gurudwara for the building may also serve as a school, or where children are taught the rudiments of Sikhism as well as a rest centre for travellers.
Often there will be a kitchen where food can be prepared though langar itself might take place in the yawning.
Sometimes the Gurudwara will also be used as a clinic.
But its pivotal point is the place of worship and the main room will be that in which the Guru Granth Sahib is installed where the community gathers for diwan.
The focal point in this room will be the book itself.
[571G H; 572A] 3.3.
The sine qua non for an institution being a Sikh Gurudwara is that there should be established Guru Granth Sahib and the worship of the same by the congregation, and a Nishan Sahib as indicated in the earlier part of the Judgment.
There may be other rooms of the institution meant for other purposes but the crucial test is the existence of Guru Granth Sahib and the worship thereof by the congregation and Nishan Sahib.
It is not necessary that there must be a granthi in a Gurudwara.
Any learned person can read Guru Granth Sahib and explain to the congregation.
[572B C] Hem Singh and Others vs Basant Das & Anr.
(1935 36) L.R. 631 IA 180; Bawa Ishar Dass & Others vs Dr. Mohan Singh and Others, Arjan Singh vs Inder Das ; Harnam Singh vs Gurdial Singh ; Mahant Dharam Das etc.
vs State of Punjab & Ors.
; Sohan Das vs Bela Singh & Ors.
AIR 1934 Lah.
180 referred to,
|
Civil Appeal No. 263 of 1982.
Appeal by special leave from the Judgment and order dated the Ist September, 1980 of the Andhra Pradesh Administrative Tribunal Hyderabed in Transferred Petition No. 1663 of 1976.
A. Subba Rao for the Appellant.
P.P. Rao and G.N. Rao for Respondent No. 1.
T. V. R. Tatachari, and A. V. V. Nair for the Respondents, 406 The Judgment of the Court was delivered by DESAI, J.
This appeal by special leave is directed against the decision in Writ Petition No. 1021 of 1975 filed in the Andhra Pradesh High court at Hyderabad which came to be transferred under para 14 (1) of the Andhra Pradesh Administrative Tribunal order 1975 and which was numbered as Transferred Writ Petition No. 1663 of 1976, by which Andhra Pradesh Administrative Tribunal (Tribunal ' for short) allowed the writ petition and quashed the orders permanently absorbing respondents 2 to 10 in the various posts in the office of Deputy Chief Accounts officer, Nagarjuna Sagar Project.
Respondents 2 to 10 in the High Court are the appellants in the present appeal, and original petitioners are respondents 2 to 108.
Deputy Chief Accounts officer is respondent No. 1.
Nagarjuna Sagar Control Board was constituted in the year 1955 charged with a duty to implement N.S. Project.
The Board had the power to recruit required ministerial staff on purely temporary basis.
On August 1, 1959, a decision was taken by the Andhra Pradesh Government to disband the autonomous Board and to convert it into a department of the Government.
On the conversion of the set up of the Board into a department of the Government it became necessary to devise ways and means to absorb the employees recruited by the board.
Number of controversies surfaced and to some extent the present one is one such controversy.
There was an office styled as: The office of the Chief Engineer, N.S. Dam with the Chief Engineer as Head of the Department.
Appellants were serving in the office of the Chief Engineer, N.S Dam Unit.
By the order dated February 8, 1964 appellants were transferred to the office of the Pay and Accounts officer, N.S. Project.
At the time of transfer, appellants were officiating as UDC and were directed to report to the Deputy Chief Accounts officer, N.S. Project to be posted as UDCs.
Since then appellants have been working in the office of the Dy.
CAO and some of them have been even promoted, may be temporarily, to the post of Superintendent.
By the G.O.Ms.
No. 27 PWD dated February 3, 1972, the State Government accorded sanction to the permanent retention of the posts set out in the order with effect from 1.4.1967 in the office of Dy.
Amongst other 38 posts of UDCs were thus made permanent by this order.
The aforementioned order further provided that the posts so made permanent shall be filled in by personnel already working in the Accounts organisation.
It appears that some of the appellants made 407 a representation to the Dy.
CAO for the permanent absorption in A his office.
Ultimately by various orders made in February 1975, appellants were permanently absorbed as UDCs in the establishment of Dy.
CAO and they were given seniority as provided in Rule 27 of Andhra Pradesh Ministerial service Rules The respondents 2 to 108 who were petitioners before the Tribunal were working as UDCs or LDCs since the inception of their career in the office of Dy.
They were initially recruited as LDCs during the period 1959 65.
Some of them were promoted as UDCs from 1961 onwards.
They were aggrieved by the permanent absorption of the present appellants who were respondents in the High Court.
They accordingly filed the writ petition from which this appeal arises, contending that the appellants were holding substantively post of UDC in the office of the Chief Engineer and they were not transferred but sent on deputation in the Pay and Accounts office as per the order dated February 8, 1964 and other like orders by the Chief Engineer, N.S. Dam and they had a permanent lien in the parent department and therefore, they could not be absorbed in the office of the Dy. CAo.
It was, therefore, contended that they may be repatriated to the parent department but in any event even if these are not to be repatriated they could not claim to be absorbed permanently over the respondents who have been since the inception of their career working in the office of Dy.
The specific contention was that the Dy.
CAO not being the Head of the Department, the provision contained in Rule 3 (2) of Andhra Pradesh Ministerial Service Rules, 1961 would not be attracted and therefore the appellants could not be said to have been recruited by transfer and therefore, could not have been absorbed and they had no right to either claim any permanent post or promotion in the office of the Dy. CAO.
The submission was that the permanent retention and absorption of the appellants adversely affected the promotional prospects of the present respondents and the retention and absorption and consequent seniority being contrary to relevant rules must be struck down as invalid The learned member of the Tribunal held that the Dy.
had not the powers of the Head of a Department.
It was not therefore, within his competence to absorb and retain the appellants in his office and confirm them against the posts made permanent by the G.O.Ms. No. 27 dated February 3, 1972.
As a corollary it was held that the various orders made in February 1975 permanently 408 transferring, absorbing and retaining and consequently granting seniority to the appellants were violative of the rules and were struck down.
Hence this appeal by the original respondents 2 to 10 Appellants indisputably were working as UDCs for a period of more than 3 years before they came to be transferred by the Chief Engineer to the office of Dy.
CAO in February 1964.
This order clearly shows that the transfer was for administrative convenience.
No where the orders recite that the transfer was at the request of the transferred personnel The order is the usual short cryptic government order which recites that the UDCs whose names were set out in the order were transferred to P.A.O. 's office, N.S. Project.
The order directs all the transferred UDCs to report for duty to Dy.
CAO, N.S. Project immediately on their relief.
The language of this order leaves no room for doubt that the head of the department under whom the appellants were working transferred them for administrative reasons and for exigencies of service.
Complying with this order, the appellants reported for duty to the Dy.
CAO and since then, except appellant No. 9, the rest of them have been continuously working as UDC and have earned temporary promotion as Superintendent.
So far there is no controversy.
The Tribunal nowhere examined the power of the Chief Engineer, N.S. Dam Project to transfer persons working under him to the office of Dy.
It must therefore, be assumed that he had the power to transfer appellants to the office of the Dy. CAO.
It does not transpire from the record that the transfer was at the request of transferees.
lt does not appear that these persons held the lien in the parent department.
It does not transpire from the record that they were given any proforma promotions in the parent department.
Virtually, since the transfer, they have been treated as part and parcel of the establishment of Dy.
The appellants were holding the post of UDC for a period of more than 3 years prior to their transfer from the offices of the Chief Engineer to the office of the Dy. CAO.
Indisputably, therefore, when they were transferred and occupied the identical post in the office of the Dy. CAO, some of the respondents working in the office of the Dy.
CAO would have been adversely affected because in the absence of the appellants, if it became necessary to have more posts in the 409 category of UDC, obviously some of the LDCs working in the office of the Dy.
CAO could have been promoted.
This becomes manifest from the judgment of a Division Bench of the Andhra Pradesh High Court in Writ Appeal No. 96 of 1970.
After the appellants were transferred, their services were regularised by the Chief Engineer as per his proceedings dated August 11, 1968.
This proceeding was challenged by some of the persons similarly situated like the present respondents on the ground that the present appellants had come on deputation and not on transfer and they cannot be given seniority over those who joined service in N.S. Dam Unit from the inception of their career.
The learned Single Judge dismissed the petition holding that the present appellants were transferred on administrative ground; that the temporary posts which they filled in were converted into permanent posts and the appointments of the appellants in those posts were regularised.
It was held that the transfer was on administrative ground, and therefore, their length of service in the parent department had to be taken into account for the purpose of determining their seniority.
On this finding, the writ petition was dismissed, and the appeal met with the same fate.
Thus the first challenge failed.
Appellants were thus given seniority over respondents in the office of the Dy. CAO.
We have serious doubts whether the Tribunal had jurisdiction to reopen the settled question about the status of the present appellants in the office of the Dy. CAO, which would incidentally be the effect of the judgment of the Tribunal.
We would presently examine the contention which has found favour with the Tribunal and which in our opinion is wholly untenable.
After reciting the various contentions, the Tribunal addressed itself to the question which in its view was a primary question whether the Dy.
CAO was the Head of the Departments.
The Tribunal observed that it is only if it is held to be office of Head of a Department that the transfer of the present appellants in one out of 4 vacancies of UDC under Rule 3 (2) can be justified.
Frankly we are of the opinion that this question hardly arises in this case, in view of the earlier decision of Andhra Pradesh High Court determining the status of the appellants in the establishment of Dy.
However, keeping aside for the time being the decision of the High Court, we would proceed to examine the contention which found favour with the Tribunal on merits 410 The question of ascertaining whether Dy.
CAO was the Head of the Department arises in view of the provision contained in Rule 3 (2) of the Andhra Pradesh Ministerial Rules 1961.
Before we extract rule 3 (2), it may be mentioned that rule 4 provides for recruitment by promotion.
Rule 3 (2) provies that 'besides promotion as provided in Rule 4 the first vacancy out of every four successive substantive vacancies of Upper Division Clerks in the offices of Heads of Department and Directorates shall be reserved to be filled only from among the suitable Upper Division Clerks working in the subordinate offices of the concerned Head of the Department or Directorate. ' There is a proviso which provided that: 'where any Head of the Department or Directorate has no subordinate office under its administrative control, the vacancy shall be filled by a suitable Upper Division Clerk working in the office of any other Head of the Department or Directorate or any other subordinate office, as the case may be, in this service. ' The Tribunal after referring to this rule took notice of the recital in the impugned order dated February 28, 1975 wherein the Dy.
CAO purported to exercise the power under Rule 3 (2) of the Andhra Pradesh Ministerial Service Rules.
The Tribunal therefore, concluded that apart from any other consideration unless all the conditions for attracting Rule 3 (2) are satisfied, the order must fail.
Undoubtedly, before Rule 3(2) could be attracted.
it must be shown that the vacancies in which appellants were absorbed were in the cadre of UDC and were in the office of the Head of the Department.
If it be so, then out of 4 successive substantive vacancies, the first one is to be reserved to be filled in either from amongst suitable Upper Division Clerks working in the subordinate office or if there is no such office, then according to the proviso, from the office of the other Head of the Department of Directorate.
To ascertain whether Dy.
CAO is the Head of the Department, the Tribunal has referred to the definition of the expression 'Head of a Department ' as set out in Article 6 Chapter Ir of the Andhra Pradesh Financial Code Volume 1, which provided that 'Head of a Department ' means 'any authority specially declared by the Government to be the head of a department '.
Assuming that the definition of the expression 'Head of a Department ' 411 in the Financial Code which is relevant to ascertain the financial A powers of a Head of department, holds good for all other powers conferred on a Head of a Department under other rules, this definition merely provides that any one would be a Head of a Department who is specially declared by the Government to be the Department.
The declaration if and when made under the Financial Code would be confined to the Financial Code and unless expressly provided, it cannot be extended to comprehend the Head of Department under other rules.
With this limitation let us examine whether Dy.
CAO is the Head of the Department.
To begin with the Tribunal records a concession by the learned Government Pleader appearing for the Dy.
CAO that no order has been issued declaring the office of the Deputy Chief Accounts officer, Nagarjuna Sagar organisation as Head of Department, we are a little surprised at the stand taken on behalf of the Dy.
CAO in the High Court and in this Court.
In the High Court an affidavit was filed contesting the writ petition filed by the present respondents meaning thereby justifying the order in favour of the appellants.
After the Tribunal quashed the orders and respondents 2 to 10 filed the present appeal, an affidavit has been filed by one Shri T. Venkatanarayana, styling himself as Director of Accounts which seems to be the new designation for the former designation of Dy.
CAO opposing the appeal of the present appellants.
He desires the present appeal to be dismissed on the ground that original transfer orders were only for one year and there was no order extending the period of transfer.
He also stated that R. vs Surya Rao one of the appellants left the organisation of Dy.
CAO on February 9, 1977 and was again taken in the year 1975 at his request.
The stand appears to be self contradictory and it has left us guessing about this volute face.
Out of abundant caution we have decided to keep aside the stand of the Dy. CAo in this behalf.
More so because there is inexplicable silence on the point whether the Dy. CAo was not the Head of the Department.
It is therefore, necessary to independently examine whether Dy.
CAo virtually enjoys the powers of the Head of a Department, so as to be treated as Head of the Department for the purpose of Rule 3 (2).
When the appellants came to be transferred by the Chief Engineer on February 8, 1964, it appears that the office of Dy.
CAO was administratively subordinate to the Chief Engineer, 412 N. section Dam Project.
If it were otherwise, the Chief Engineer could not have transferred the appellants who were borne on his establishment to the office of the Dy. CAO.
As pointed out earlier, the transfers were on administrative ground and certainly not at the request of the appellants.
Further the transferred personnel could not have been considered as on deputation because if a government servant is sent outside his office on deputation, there are certain benefits to which he would be entitled, which in this case are not shown to have been made available to the appellants.
They were transferred from the post of UDC to the corresponding post of UDC.
In 1964 it atleast appears that Dy.
CAO was not the Head of the Department On, May 3, 1966 by G.O.Ms.
No. 178, it was, inter alia, direct that the staff working in the office of Deputy Chief Accounts officer and Pay and Accounts offices may be treated as Ministerial Service and will be given the scales of pay applicable to the staff in the offices of the Heads of Departments.
lt appears that there was difference in the pay scales available to the staff in the office of the Head of the Department and in subordinate offices.
By this G.O. the ministerial staff in the office of Dy.
CAO was held eligible for scales applicable to the staff in the office of the Head of the Department.
This will impart a flavour to the Dy.
CAO as being the Head of Department.
The Governor of Andhra Pradesh made what are styled as ad hoc rules for the temporary posts of ministerial staff in the offices of the Deputy Chief Accounts officer and Pay and Accounts officers under Financial Adviser and Chief Accounts officer 's organisation, Nagarjuna sagar Project, in exercise of the power conferred by the proviso to article 309 of the Constitution.
By Rule 1, the General and special Rules commonly applicable lo the holders of the permanent posts of the respective categories in the Public Works Department in the Andhra Pradesh Ministerial Service were made applicable to the holders of the temporary posts at Superintendents, UDCs, and Typists and Steno typists in the office of the Deputy Chief Accounts officer and Pay and Accounts officers subject to the modifications set out in the subsequent rules.
One such modification worth noticing is that Dy.
CAO was constituted as appointing authority for the aforementioned staff in his office.
Further the Financial Adviser and Chief Accounts officer, 413 under whom Dy.
CAO was directly working, were declared in 1966 A Secretariat Department.
Accordingly Dy.
CAO came directly under the Secretariat Department, and was invested with power of appointing authority which comprehended the power to appoint persons who would for pay scales applicable to staff in the offices of the Heads of Departments.
R It was however contended that G.O.Ms.
No. 335 dated November 1, 1974 would leave no room for doubt that Dy.
CAO is not the Head of the Department.
The preamble of this G.O. reads as under: "In the circumstances stated by the Financial Adviser and Chief Accounts officer, N.S. Project in the N.O. Note read above, the Dy.
Chief Accounts officer, N.S. Project in is delegated with the following powers instead of declaring him as the Head of the Department.
The extent of delegation of power is irrelevant.
It was submitted that the recitals herein extracted would put the matter beyond the pale of controversy that Dy.
CAO was not only not the Head of the Department but as he lacked powers of the Head of the department certain powers had to be specifically conferred upon him.
On the contrary this would justify the belief that 'Head of department ' for Financial Code and for service rules are not terms of co extensive connotation and the have different meaning in different context For example, for service rules the Dy.
CAO is declared an appointing authority, the power usually enjoyed by Head of a department.
But such Head of Department may not be so declared for the Financial Code.
In the G.O. dated November 1, 1974, it was considered unnecessary to declare him Head of a department for Financial Code and, therefore, certain powers had to be conferred upon him.
A perusal of powers would reveal that they were financial powers one can be a Head of the Department but whose financial powers.
may be curtailed under the Financial Code.
Alternately, one may not be a Head of a Department for other purposes and yet may enjoy full financial control if declared to be 'Head of the Department ' for Financial Code.
We are concerned in this case with the meaning of the expression 'Head of a department ' in Rule 3 (2).
In this connection if the Dy.
CAO is shown to be directly working under a secretariat department without intervention 414 of any higher office and if it is declared an appointing authority and the scales admissible to the ministerial service in its office are those admissible to the staff in the office of the Heads of Department, there is no escape from the conclusion that for purposes of Rule 3 (2), he would be the Head of the Department.
We are fortified this conclusion from U. O. Note dated June 11, 1969 of the office of Financial Adviser and Chief Accounts officer which is the secretariat Department under which Dy.
CAO is directly working.
The Relevant portion of the Note may be extracted.
It reads as under: "Hitherto, recruitment to the post of L.D. Clerks, U.D. Clerks, in Deputy Chief Accounts officers organisation, Nagarjun sagar Project was done based on the allotment of candidates who passed Group II.
Services examination of the Andhra Pradesh Public Service Commission, since, the offices of the Deputy Chief Accounts officer and Pay and Accounts officers, N section Project were considered to enjoy the status of the Heads of the Department offices.
In G. O. Ms. No. 178 PWD, Projects Wing, dated 3.5.1966 orders were issued that the office of the Financial Adviser and Chief Accounts officer Nagarjuna sagar Project may be treated as Secretariat and that the staff working in the offices of the Deputy Chief Accounts officers and Pay and Accounts officer may be treated as Ministerial Service and will be given scale of pay applicable to staff in the offices of the Heads of Departments.
Further the adhoc rules issued in G. O. Ms No. 337 PWD Projects Wing dated 24.9.1968 stipulate that the Deputy Chief Accounts officer, Nagarjuna sagar Project is the appointing authority up to the leavel of Superintendents in his organisation.
If there was any lurcking doubt whether the Dy.
CAO is the Head of the Departments, it stands wholly removed by the Note extracted herein above.
It may be recalled that the power to deaclare Head of the Department as defined in the Financial Code vests in the Government and the Government acts on the advise of the concerned Secretariat Department.
The concerned department is of Financial Adviser and Chief 415 Accounts officer, which is declared as the Secretariat Department.
And this note shows that the Secretariat Department meaning thereby the Government treated the Dy.
CAO as the Head of the Department.
Therefore.
for the purpose of Rule 3 (2), there is no room for doubt that Dy.
CAO was the Head of the Department.
If Dy, CAO was the Head of the Department then in view of Rule 3 (2) with regard to the recruitment in the cadre of UDC first out of every four successive substantive vacancies is to be filled in from the subordinate offices and according to the proviso to Rule 3 (2), if there is no subordinate office, from any other office of the Head of the Departments or Directorate.
There is a recital to that effect in the impugned order which was questioned on the short that Dy.
CAO was not the Head of the Department.
Once that ground is out of the way.
The contention of the respondents must fail.
Briefly, we may point out that this very conclusion can be reached by a slightly different process of reasoning.
Appellants were transferred to the office of Dy.
CAO in 1964.
The judgment of the High Court of Andhra Pradesh.
practically inter partes, affirms the position that appellants were transferred and their appointments by transfer were valid.
Their services were regularised and the High Court held regularisation valid and legal.
They were given seniority over respondents in that orgaoisation.
If appellants have been working for so many years, they were entitled to be absorbed, if there was no legal bar against absorption.
Their entry in office has been held by the Andhra Pradesh High Court in the earlier judgment as valid and regular and they having rendered service for 11 long years before the impugned action was , taken, they were entitled to be absorbed in he department.
Now the present dispute arose when by G. O. dated February 3, 1972, 38 posts in the cadre of UDC were made permanent.
That very G.O. provided that the posts made permanent shall be filled in by the personnel already working in the Accounts organisation.
Appellants were working in the Accounts organisation since 1964.
Their services were regularised.
They were given seniority.
Therefore, at the relevant time in 1975 they were working in Accounts organisation.
They could therefore, be absorbed without reference to Rule 3 (2).
The controversy arose because Dy.
CAO referred to Rule 3 (2) in the impugned order.
In our opinion that 416 was unnecessary.
They could claim to be absorbed according to senitority in the posts made permanent.
And therefore, also the impugned orders were valid but as the Dy.
CAO proceeded to exercise power under Rule 3 (2), we would uphold the validity for the reasons mentioned in the earlier portion of the judgment.
Before we conclude, we must advert to one contention, that as the appellants came at their own request, their seniority would be governed not by the first proviso to Rule 36 (e) but by the second proviso.
The relevant provisos to Rule 36 (e) cater to the method of determining seniority of persons transferred on administrative ground or at the request of Government servant from one department to any other department.
If the transfer was on administrative ground from one department or office to another, the seniority of the transferred Government servant shall be fixed with reference to the date of his first appointment in the former department or office from where he is transferred.
If on the other hand, the transfer is at the request of the concerned Government servant, his seniority will be determined with reference to the date of his appointment in the department to which he is transferred.
After referring to these provisos, it was urged that the appellants were transferred at their re quest and therefore, their seniority has to be determined with reference to the date on which they came to be transferred to the organisation of Dy.
In fact, this contention is concluded by the earlier decision of the Andhra Pradesh High Court.
Even apart from that there is no merit in the contention.
Appellants were transferred in February 1964 and we have referred to the transfer order more than once.
There is not the slightest whisper of transfer on request in that order.
But it was urged that initially transfer was for a period of one year only and the subsequent continuation in the office of the Dy.
CAO does not prescribe the period of transfer.
However, the respondents placed reliance on a corrigendum issued on March 3, 1964 by which following sentence was added to the order of transfer dated Feb. 8, 1964.
The addition reads as under: "The above transfers will be for a period of one year in the first instance.
" It was then pointed out that in the subsequent order the expression used is not 'period of transfer ' but 'period of deputation ' and an inquary was made whether the further extension of period was necessary.
This appears to us to be quibeling.
Except for appellant 9 R.V. Surya Rao, all the appellants have been working in the 417 Office of the Dy.
CAO since 1964 and it is too late in the day now to contend that the subsequent extension was at the request of the appellants Therefore, the seniority would be governed by the first proviso to Rule 36 (e) and not the second proviso and that having been done no question arises for interfering with the same.
As we are of the opinion that the Tribunal was in error in holding that the Dy.
CAO was not the Head of the Department, the decision of the Tribunal is unsustainable and must be quashed and set aside.
Accordingly this appeal is allowed, and the decision of the Andhra Pradesh Administrative Tribunal, Hyderabad in Transferred Writ Petition No. 1663176 dated September 1, 1980 is quashed and set aside and the Writ Petition field by the respondents in the Andhra Pradesh High Court is dismissed with no order as to costs.
S.R. Appeal allowed.
|
The appellants, who were serving in the office of the Chief Engineer Nagarjuna Unit as officiating Upper Division Clerks, were transferred to the office of Deputy Chief Accounts officer,.
N.S. Project by an order dated February 8, 1964.
Respondents 2 to 108 were initially recruited as Lower Division Clerks during the period 1959 65 and some of them were promoted as Upper Division Clerks from 1961 onwards.
After their transfer, their services were regularised by the Chief Engineer, as per his proceedings dated August 11, 3 1968.
This was challenged by some of the persons similarly situated like the present respondent and the High Court dismissed the Writ Petition as well as the writ appeal, holding that the transfer was on administrative grounds and therefore their length of service in the parent department had to be taken into account for the purpose of determining their seniority.
By its order G.O.M.S. 27 P.W.D. dated February 3,1972, the State Government accorded sanction to the permanent retention of the posts set out in the order with effect from 1 4.1967 in the office of the Deputy Chief Accounts officer.
Among other, 38 posts of the Upper Division Clerks were thus made permanent by this order with a further provision that the posts so made permanent shall be filled in by personnel already working in the Accounts organisation.
The appellants, whose services were already regularised were now made permanent by the Deputy Chief Accounts officer.
Feeling aggrieved by the said orders the respondents filed a writ petition before the High Court of Andhra Pradesh which was transferred to the A.P. Administrative Tribunal.
The Tribunal allowing the petition held that the Deputy Chief Accounts officer had not the powers of the Head of a Department and was, therefore, not competent to absorb and retain the appellants in his office and confirm them against the posts made permanent.
Hence the appeal by special leave.
405 Allowing the appeal, tho Court ^ HELD: 1:1.
The Deputy Chief Accounts officer DOW redesignated as Director of Accounts is the Head of Department for the purpose of Rule 3(2) of Service Rules and, therefore, the confirmation of the appellants against the permanent posts of Upper Division Clerk is in order.
[411 E, 415 A B] 1:2.
The Deputy Chief Accounts officer is shown to be directly working 8 under a secretariat department without intervention of any higher office.
When the office of the Financial Adviser and Chief Accounts officer under whom the Dy.
C.A.O. was directly working, was declared in 1966 as Secretariat department, the Dy.
C.A.O. was invested with power of appointing authority which comprehended the power to appoint persons who would be eligible for pay scales applicable to the staff in the offices of the Heads of Department.
The unofficial note dated June 11, 1969 of the F.A. and C.A.O. makes the position clear.
[412 G; 413 A B] 1:3.
Even without reference to Rule 3(2), tho appellants could be absorbed, in tho instant case.
Appellants were transferred to tho office of Dy.
C.A.O. in 1964.
Their regularisation was held as valid and regular by an earlier decision of the A.P. High Court They having rendered service for eleven long years in the Accounts organisation before the impugned action was taken, they were entitled to be absorbed in the department by virtue of tho proviso in G.O.M.S. 27 dated 3rd February 1972.
[415 D,E,F H, 416 A] 2.1 The inter se seniority of the appellants and the respondents would be governed by the first proviso to Rule 36(e) and not by the second proviso thereto.
This position not only stands concluded by tho earlier decision of the A.P. High Court but also by the very orders of transfer.
[417 A B] 2:2.
The transfers were on administrative grounds and certainly not at the request of the appellant.
Further tho transferred personnel could not have been considered as on deputation because if a Government servant is sent outside his office on deputation, there are certain benefits to which be would be entitled which in this case are not shown to have been made available to the appellants.
[412 A B]
|
Civil Appeal No. 1537 of 1970.
Appeal by special leave from the judgment and order dated the 10/30th June, 1969 of the Bombay High Court, Nagpur Bench, Nagpur in Appeal No. 90 of 1962.
1178 U. R. Lalit and A. G. Ratnaparkhi, for the Appellant.
section section Khanduja for the Respondent.
The respondent filed a suit in the Court of the Second Joint Civil Judge, Amrawati alleging that the house situated near Saraf Bazar in Amrawati had been purchased by her in 1950 for Rs. 4,000 and thereafter improvements had been affected by her to the property.
Being in need of money, she entered into an agreement with the appellant for a loan of Rs. 2,000 and it was decided that simultaneously she should execute a nominal document of sale and a rent note.
These documents were executed on January 7, 1953.
She alleged that the documents were never intended to be acted upon, and that the rent paid by her represented in fact interest at 18% on the loan.
She continued in possession of the house property throughout and, it is said, carried on repairs from time to time.
It was stated that the appellant was attempting to enforce the document as a sale deed by filing suits in the Court of Small Causes for recovery of rent.
As two suits had resulted in decrees, she considered it necessary to file the present suit for a declaration that she was, and continued to be, owner of the house property.
In defence, the appellant maintained that the sale deed represented a genuine, transaction, and ownership of the house property had passed to the appellant.
It was pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction.
Reliance was also placed on section 92 of the Indian Evidence Act.
The trial court held that the sale deed was never intended to be acted upon and decreed the suit.
The appellant appealed to the District Court, Amravati, but the learned District Judge did not accept the case that a sale had taken place.
He held, however, that the transaction between the parties constituted a mortgage.
He modified the trial court decree to conform to that finding.
The High Court of Bombay, in second appeal, did not agree with the finding of the lower appellate court that the transaction was a mortgage and affirmed the findings of the trial court that the sale deed and rent note were sham documents, that the decrees of the 1179 Court of Small Causes did not operate as res judicata and that section 92 of the Indian Evidence Act did not prevent the respondent from establishing the true nature of the transaction.
Accordingly, the High Court set aside the decree of the lower appellate court and resorted that of the trial court.
When this appeal was heard by us, it appeared that the parties may settle the dispute by negotiated compromise.
It seems, however, that no compromise has been possible.
Accordingly, we proceed to dispose of the appeal on its merits.
Two points have been raised before us.
The appellant urges that the Small Causes Court decrees, in view of the general principles of res judicata, precluded the trial of the question whether the sale transaction was a genuine transaction.
The other point concerns the operation of section 92 of the Evidence Act.
The successive suits were filed by the appellant against the respondent in the Court of Small Causes for recovery of arrears of rent.
In each suit the appellant contended that she was owner of the property and the respondent was her tenant.
The tenancy was alleged on the basis of the document dated January 7, 1953 which on its terms purported to be a sale deed by the respondent in favour of the appellant.
The respondent resisted the suits.
The court decreed the suits on the finding that the document was a sale deed, and therefore the respondent was not the owner of the property but merely a tenant of the appellant.
The question is whether this finding operates as res judicata in the instant suit.
The High Court repelled the plea of res judicata on the ground that section 11 of the Code of Civil Procedure governed the case, and that as a Court of Small Causes is not competent to try a suit for a declaration of title to immovable property, the court which passed the decrees relied on by the appellant was not competent to try the present suit and therefore an imperative condition of section 11 was not satisfied.
It is contended before us on behalf of the appellant that the High Court erred in applying the statutory provisions of section 11 of the Code, and should have invoked instead the general principles of res judicata.
On that, it is submitted, all that was necessary to find was whether the Court of Small Causes was competent to try the two earlier suits and decide the issues arising therein.
We have been referred to Gulabchand Chhotalal Parikh v, State of Bombay where 1180 this Court has taken the view that the provisions of section 11 of the Code are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit, and that on the general principles of res judicata, any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their case by a Court competent to decide it, will operate as res judicata in a subsequent regular suit.
It is not necessary, it was said, "that the Court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter".
The observations were made in considering the question whether decisions on matters in controversy in writ petitions under Article 32 or Article 226 of the Constitution could operate as res judicata in subsequent regular suits on the same matters in controversy between the same parties.
A number of other cases have been cited on behalf of the appellant in support of the plea of res judicata.
We have considered them and we do not think that they help the appellant.
In Muhammad Abdul Ghafur Khan vs Gokul Prasad and others the Allahabad High Court limited itself to observing that a Court of Small Causes possessed a discretion on whether to return the plaint under section 23, Provincial Small Cause Courts Act on a finding that the relief claimed depended on proof of title.
The same High Court in Madan Kishor and Another vs Mahabir Prasad and others merely observed that it was for the Court of Small Causes to decide under section 23 of the Provincial Small Cause Courts Act whether a question of title was involved in the suit and on finding so it was open to it to return the plaint.
That was also the view expressed by it in Ram Dayal Sonar vs Sukh Mangat Kalwat.
So also in Ganga Prasad vs Nandu Ram, the Patna High Court said that the Court of Small Causes had power under section 23 to return the plaint where it was of opinion that the question of title raised was so intricate that it should not be decided summarily.
To the same effect was the view expressed by the Lahore High Court in Ganesh Das vs Feroze Din. 1181 In Puttangowda Mallangowda Patil vs Nikanth Kalo Deshpande, the Bombay High Court declared that a Court of Small Causes could render a finding on an issue as to title to immovable property but only in a suit which did not ask for that relief and merely for payment of a sum of money.
Our attention was drawn to Asgarali Roshanalli and another vs Kayumalli Ibrahimji, but we find nothing there of assistance to the appellant.
Reliance was placed on the decision of the Allahabad High Court in Lala Jageshwar vs Shyam Behari Lal.
There a learned Single Judge took the view that as a Court of Small Causes is a Court of exclusive jurisdiction the restrictive conditions imposed by s 11 of the Code of Civil Procedure requiring "two fold competency" of the Court whose decision is to operate as res judicata cannot be invoked.
It was sufficient, he observed, that the decision had been rendered by a court of competent jurisdiction and it was not necessary that that court should also be competent to decide the subsequent suit.
The judgment was brought in appeal to this Court but while disposing of the appeal, Shyam Behari Lal vs Lala Jageshwar Prasad, this Court declined to decide whether a Court of Small Causes could be regarded as a Court of exclusive jurisdiction.
We find, however, that the view taken by the High Court in Lala Jageshwar Prasad (supra) was expressly overruled by a Full Bench of the High Court in Manzurul Haq and another vs Hakim Mohsin Ali and it was laid down that a Court of Small Causes could be described as a court of "preferential jurisdiction" but not as court of "exclusive jurisdiction".
It was also held by the Full Bench that a decision rendered by a Court of Small Causes in a suit for arrears of rent would not operate as res judicata in a subsequent suit filed in the Court of the Munsif for recovery of arrears of rent for a different period and for ejectment.
That the principle of res judicata could not be availed of where a decision given by a Court of Small Causes was relied on in a subsequent regular civil suit was the view also taken by the Punjab High Court in Pateshwar Parshad Singh vs A. section Gilani.
It seems to us that when a finding as to title to immovable property is rendered by a Court of Small Causes res judicata cannot 1182 be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property.
In order to operate as res judicata the finding must be one disposing of a matter directly and substantially in issue in the former suit and the issue should have been heard and finally decided by the court trying such suit.
A matter which is collaterally or incidentally in issue for the purposes of deciding the matter which is directly in issue in the case cannot be made the basis of a plea of res judicata.
It has long been held that a question of title in a Small Cause suit can be regarded as incidental only to the substantial issue in the suit and cannot operate as res judicata in a subsequent suit in which the question of title is directly raised.
Poholi Mullick vs Fukeer Chunder Patnaik, Chet Ram and others vs Ganga, Anwar Ali vs Nur Ul Haq and Another, Khandu valad Keru vs Tatia valad Vithoba.
See also Mohd. Yusuf and another vs Abdul Wahid and S.A.A. Annamallai Chettiar vs Molaiyan and others.
Our attention has been drawn to Explanation VIII to section 11 in the Code of Civil Procedure recently inserted by the Code of Civil Procedure (Amendment) Act, 1976.
Section 97(3) of the Amendment Act declares that the new provision applies to pending suits, proceedings, appeals and applications.
In our opinion the Explanation can be of no assistance, because it operates only where an issue has been heard and finally decided in the earlier suit.
Accordingly, we hold that the finding rendered by the Court of Small Causes in the two suits filed by the appellant that the document executed by the respondent is a sale deed cannot operate as res judicata in the present suit.
The next contention on behalf of the appellant is that sub s.(1) of section 92 of the Evidence Act bars the respondent from contending that there was no sale and, it is submitted, the respondent should not have been permitted to lead parole evidence in support of the contention.
Section 91 of the Evidence Act provides that when the terms of contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the 1183 terms of such contract, grant or other disposition of property, or of such matter, except the document itself.
Sub section
(1) of section 92 declares that when the terms of any contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms And the first proviso to section 92 says that any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contradicting party, want or failure of consideration, or mistake in fact or law.
It is clear to us that the bar imposed by sub section
(1) of section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction.
In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms.
The sub section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham.
Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever.
For that purpose oral evidence is admissible to show that the document executed was never intended to operate as an agreement but that some other agreement altogether not recorded in the document, was entered into between the parties.
Tyagaraja Mudaliyar and another vs Vedathanni.
The Trial Court was right in permitting the respondent to lead parole evidence in support of her plea that the sale deed dated January 7, 1953 was a sham document and never intended to be acted upon.
It is not disputed that if the parole evidence is admissible, the finding of the court below in favour of the respondent must be accepted.
The second contention on behalf of the appellant must also fail.
In the result, the appeal is dismissed with costs.
S.R. Appeal dismissed.
|
Being in need of money, respondent entered into an agreement with the appellant for a loan of Rs. 2,000 and it was decided that simultaneously she should execute a nominal document of sale and rent note, of her house situated near Sarafa Bazar in Amravati.
These documents were executed on January 7, 1953.
The respondent continued in the possession of the house property throughout and carried on repairs from time to time.
Since the appellant was attempting to enforce the document as a sale deed by filing suits in the Court of Small Causes for recovery of rent and the said suits had resulted in a decree, the respondent filed a suit for declaration that she was and continued to be owner of the house property.
The documents executed on January 7, 1953, it was said, were never intended to be acted upon.
In defence, the appellant maintained that the sale deed represented a genuine transaction, and ownership of the house property had passed to her.
It was further pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction.
Reliance was also placed on section 92 of the Indian Evidence Act.
Dismissing the appeal by special leave, the Court ^ HELD: 1:1.
When a finding as to title to immovable property is rendered by a Court of Small Causes res judicata cannot be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property.
In order to operate as res judicata the finding must be one disposing of a matter directly and substantially in issue in the former suit and the issue should have been heard and finally decided by the court trying such suit.
A matter which is collaterally or incidentally in issue for the purpose of deciding the matter which is directly in issue in the case cannot be made the basis of a plea of res judicata.
A question of title in a Small Cause suit can be regarded as incidental only to the substantial issue in the suit and cannot operate as res judicata in a subsequent suit in which the question of title is directly raised.
[H81 G 1182A C] 1177 1:2.
Explanation VIII to section 11 of the Code of Civil Procedure operates only where an issue has been heard and finally decided in the earlier suit.
[1182 D E] 1:3.
In the instant case, the finding rendered by the Court of Small Causes in the two suits filed by the appellant that the document executed by the respondent is a sale deed cannot operate as res judicata.
[1182 E] Poholi Mullick vs Fukeer Chunder Patnaik, (1874) 22 Suth W.R. 349; Chet Ram and Others vs Ganga, 1886 Allahabad Weekly Notes; Anwar Ali vs Nur Ul Haq and Another, ; Khandu Valad Keru vs Tatia valad Vithoba, (1871) 8 Bombay H.C.R.A.C. 23(24) (DB); Mohd. Yusuf and another vs Abul Wahid, A.I.R. 1948 All.
296 and S.A.A. Annamalai Chettiar vs Molaiyan and others, A.I.R. 1970 Mad. 396, approved.
Muhammad Abdul Ghafur Khan vs Gokul Prasad and others, A.I.R. 1914 All.
527; Gulabchand Chhotalal Parikh vs State of Bombay, ; Madan Kishor and Another vs Mahabir Prasad and others, A.I.R. 1929 All. 816; Ram Dayal Sonar vs Sukh Mangal Kalwar, A.I.R. 1937 All. 676; Ganga Prasad vs Nandu Ram, A.I.R. 1916 Patna 75; Ganesh Das vs Feroze Din, A.I.R. 1934 Lahore 355, Puttangowda Mallangowda Patil vs Nikanth Kalo Deshpande, XV Bombay Law Reporter 773; Asgarali Roshanalli and another vs Kayumalli Ibrahimji, A.I.R. 1956 Bombay 236: Lala Jageshwar Prasad vs Shyam Behari Lal, A.I.R. 1967 All. 125; Shyam Behari Lal vs Lala Jogeshwar Prasad, ; Manzural Haq and another vs Hakim Mohsin Ali, A.I.R. 1970 All. 604; Pateshwari Parshad Singh vs A. section Gilani, A.I.R. 1959 Punjab 420, referred to and dissented from.
The bar imposed by sub section (1) of section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction.
In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms.
The sub section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham.
Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever.
For that purpose oral evidence is admissible to show that the document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties.
[1183 C F] Tyagaraja Mudaliyar and another vs Vedathanni, A.I.R. 1936 Privy Council 70, followed.
|
ivil Appeal No. 729 of 1983.
From the Judgment and order dated 20.11.1987 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. F/A No. 1325/83 D (Order No. 920/87 D).
WITH Civil Appeal No. 2479 of 1987.
From the Judgment and Order dated 28.2.1986 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED(SB) (T) 155/7 I C (Order No. 18 1/1986 C).
A.K. Ganguli, Hemant Sharma and Mrs. Sushma Suri for the Appellant in C.A. No. 729188.
Soli J. Sorabjee for the Appellant in C.A. No. 2479 of 1987.
Harish N. Salve, Ravinder Narain, P.K. Ram, D.N. Misra and section Ganesh for the Respondents.
The Judgment of the Court was delivered by: SABYASACHI MUKHARJI, J.
This is an appeal under section 35 L of the Central Excises & Salt Act, 1944 (hereinafter referred to as 'the Act ') from the order of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as 'CEGAT ').
The respondent M/s Jayant Oil Mills Pvt. Ltd.; Hyderabad, manufactures hydrogenated rice bran oil which was sold to industrial consumers.
The said hydrog enated rice bran oil is used as raw material in the manufac ture of soap.
The respondents, M/s Jayant Oil Mills Pvt. Ltd. filed a classification list dated 20th May, 1981 in respect of the said goods classifying the same under Tariff Item 12 for approval and claimed exemption under notifica tion No. 9/60 dated 20th February, 294 1960.
The Assistant Collector of Central Excise, Hyderabad III Division by an order dated 16th June, 1981 (held that the hydrogenated rice bran oil was classifiable under Tariff Item 68 of the Central Excise Tariff (hereinafter referred to as 'CET '), because hydrogenated rice bran oil is solid at the ordinary temperature and therefore should be considered as fat and not as oil.
The Assistant Collector observed that there was one opinion that the said goods could not fall under Tariff Item 12 as it was unfit for human consumption.
The Assistant Collector observed that the said goods was new product after manufacture, having a distinct name, character and .use and as such it fell under Tariff Item 68 CET.
The respondent on the other hand maintained before the Assistant Collector that the said goods was semi solid and still vegetable non essential oil failing under Tariff Item 12 CET.
Being dissatisfied with the order dated 16th June, 1981, the respondent appealed before the Appellate Collector of Central Excise, Madras.
By an order dated 30th November, 1981, the Appellate Collector held that hydrogenated rice bran oil is classifiable under Tariff Item 12 CET and there fore ordered for consequential relief to the respondent.
The order of the Appellate Collector holding that the said products are classifiable under Item 12 CET had not been reviewed by the Central Government under section 36(2) of the Act.
The appellate Collector was therefore of the view that even after the superhardening or hydrogenation vegetable oil did not cease to be oil even it became solid .
The Central Government, Ministry of Finance, Department of Revenue, being of the view that the order of the Appel late Collector was not proper, legal and correct, issued a show cause notice dated 12th May, 1982 to the respondent.
The Central Government informed the respondents in the show cause notice that it appeared to the Government that the hydrogenation of rice bran oil is a process of manufacture which brings into existence a new product known as hydroge nated rice bran oil in commercial parlance having a distinct name, character and use and this end product would have been classified under Item 13 had it been fit for human consump tion It was further observed in the said show cause notice by the Government that as the melting point of the hydroge nated rice bran oil is more than 45degree C it was of the nature of extra hardened, vegetable product which was unfit for human consumption and since it was distinct from vegeta ble 295 non essential oil it would prima facie be classifiable under the residuary item 68 CET.
The respondents were, therefore, called upon to show cause as to why the order of the Appellate Collector should not be set aside and that of the Assistant Collector re stored.
The matter came up before the CEGAT.
The CEGAT noted in its impugned order that the appeal was concluded by the judgment of the five member Bench of the Tribunal in the case of M/s Tata Oil Mills Co. Ltd. (1986 Vol.
and held that the order dated 30th November, 1981 of the Appellate Collector was correct and dismissed the appeal of the appellant.
It is necessary, therefore, to refer to the order of the CEGAT.
The CEGAT noted that vide order dated 16th June, 1981 the Assistant Collector classified the hydrogenated rice bran oil manufactured by the respondents, M/s Jayant Oil Mills Ltd. under Item 68 CET.
The question, therefore, that was urged before this Court was whether the CEGAT was in error in holding that the hydrogenated rice bran oil was a process of manufacture which brought into existence a new product, i.e., hydrogenated rice bran oil.
Indubitably hydrogenation of rice bran oil is a process.
But all processes need not be manufacture.
It must be such a process which transforms the old articles into a goods and changes the identity, use and the purpose of use of the goods undergone by the process.
By the process which can be considered to be manufacture a new identifiable good, in the sense known in the market as such must come into being.
But that is one part of the view.
It appears, however, that the melting point of the hydrogenated rice bran oil is 45degree C and it is in the nature of extra hardened vegetable proc ess which is unfit for human consumption.
It was taken to be classifiable under Tariff Item 68 CET.
Similar are the facts in Civil Appeal No. 2479 of 1987 before us in the matter of Collector of Central Excise, Madras vs M/s Tara Oil Mills Co. Ltd. There also, the CEGAT allowed the appeal of the respondents and held that the extra hardened rice bran oil continued to remain as oil classifiable under Item 12 CET.
It is necessary to decide in both these matters the nature of the product.
Rice bran oil is extracted out of rice bran by solvent extraction method.
After such extraction, rice bran oil obtained is in liquid form.
296 The parties purchase rice bran oil from the market and process it.
The process is reported to be as follows.
The oil is heated to above 80degree C and the impurities are removed by adding exalic acid and caustic lye.
The purified oil is then bleached by heating it to 85degree C to 100degree C and thereby treating with fullers earth.
The processed oil is then hardened by passing it through hydro gen gas.
During hydrogenation, the oil absorbs two atoms of hydrogen and the unsaturated fatty acid present in the oil becomes saturated.
The oil is then in a semi solid condition and its melting point is raised to 45degree C or more.
In the hardened state, the oil looks like vanaspati (or vegeta ble product, to use the Central Excise terminology) but there is a difference in the degree of hydrogenation of the two.
The melting point of vanaspati, which is commonly used as cooking medium, does not exceed 37degree C while the melting point of hardened rice bran oil in dispute before us is between 45 degree C 52 degreeC. At such high melting point, the oils are no longer edible by human beings.
In order to differentiate between edible hydrogenated oils (vanaspati) and super hydrogenated vegetable oils, the latter are referred to as extra hardened oil or super hard ened oil.
The record before us shows that they are also known as 'vegetable tallow ' or 'hard lump ' or 'hardened technical oil of industrial hard oil ' or just 'hardened oil '.
This hardening of oil is necessary for soap making; otherwise, the soap, on coming into contact with water, is likely to become soggy.
The respondent use the hardened oil for soap making within their factories.
Besides its use in soap making, the extra hardened oil is also put to various other industrial uses, such as for application as grease.
The dispute started when the appellants filed their classification list containing the following entry at section No. 3: "3.
Rice Bran Oil processed In barrels exempted *33/63 CE dated 1.3.1963 as amended (*Rule 56A procedure to be followed for out side despatches).
" The Assistant Collector approved the classification under item 12 CET (Vegetable non essential oils, all sorts) with benefit of full exemption from duty under notification No. 33/63 CE dated 1st March, 1963 as claimed by the appel lants for soap making.
The Collector, however, was tenta tively of the opinion that the Assistant Collector 's order was not correct.
In exercise of his power of revision under the then section 35A of the Act, the Collector called upon the appellant to show cause as to why the hardened oil should not be subjected to two stage duty.
After hearing the appellants, the 297 Collector passed the orders by which he confirmed the two stage duty.
Being aggrieved by the Collector 's order, the appellants filed a revision application before the Central Government which, on transfer of the proceedings to the Tribunal, was transferred to the Tribunal.
The matter was heard by a three member Special Bench.
It was resolved that a larger bench should be constituted and a larger bench had been constituted.
It was noted by the Bench that irrespective of the fact whether extra hardened rice bran oil produced by the parties was classified under Item 12 CET of Item 68 CET, it would remain fully exempt.
On behalf of the parties, the respondents herein, it was argued before the Tribunal that hydrogenation or hardening was a process in the course of manufacture of a soap.
The extra hardened oil came into existence during soap manufacture at an intermediary stage and such oil was not a new product by itself.
Secondly, it was urged that even if the extra hard ened oil was considered as a new product, its character still remained that of oil.
It was the same oil though in a hardened or semi solid form.
The form was not material as it only meant that by application of heat at 45degree C or more, it would again turn into liquid oil.
As such, the oil, even in its hardened form, continued to remain under Item 12 CET as it still was essentially oil only.
The process of hydrogenation was intended to make the oil fit for soap making.
Only that part of hydrogenated oil as was fit for human consumption fell under item 13 (vegetable product); the rest remained under item 12 "vegetable non essential oils, all sorts . . " Reference may be made to the decision of this Court in Tungabhadara Industries Ltd. vs The Commercial Tax Offi cer, Kurnool; , There the appellant purchased groundnuts out of which it had manufactured groundnuts oil.
It also refined the oil and hydrogenated it converting it into Venaspati.
It sold the oil in the three states.
Under the Madras General Sales Tax Act, 1939, and the Turnover and Assessment Rules, for determining the taxable turnover the appellant was entitled to deduct the purchase price of the groundnuts from the proceeds of the sale of all groundnut oil.
The High Court, in that case, held that the appellant was entitled to the deduction in respect of the sales of unrefined and refined groundnut oil but not in respect of the sales of hydrogenated oil on the ground that the vanas pati was not "groundnut oil" but a product of groundnut oil.
This Court, however, held that appellant was entitled to the deduction in respect of the sales of hydrogenated groundnut oil also.
The hydrogenated groundnut oil continued to be "groundnut oil", notwithstanding the processing which was merely for the purpose of rendering the 298 oil more stable.
To be groundnut oil two conditions had to be satisfied: it must be from groundnut and it must be "oil".
The hydrogenated oil was from groundnut and in its essential nature it remained an oil.
It continued to be used for the same purposes as groundnut oil which had not under gone the process.
A liquid state was not an essential char acteristic of a vegetable oil; the mere fact that hydrogena tion made it semi solid did not alter its character as an oil.
In our opinion, the same principle would be applicable to the facts and the problem herein.
In this connection, reference may be made to the obser vations of this Court in Charapaklal vs State of Gujarat, AIR 1980 SC 1889 though it was a criminal case, this Court observed therein that vanaspati was essentially an oil although it was a different kind of oil than that oil (be it rapeseed oil, cotton seed oil, groundnut oil, soyabean oil or any other oil) which forms its basic ingredient.
Oil would remain oil if it retained its essential properties and merely because it had been subjected to certain processes would not convert it into a different substance.
In other words, although certain additions had been made to and operations carried out on oil, it would still be classified as oil unless its essential characteristics had undergone a change so that it would be misnomer to call it oil as under stood in ordinary parlance.
Such change was not supported by the evidence in that law.
The Tribunal found so and it is a question of fact that the hydrogenated rice bran oil still remained oil.
On behalf of the interveners, it was further submitted before the Tribunal that Item 12 CET which dealt with vege table non essential oils, all sorts, was a specific, exhaus tive and all pervasive entry and it continued to cover the extra hardened oil.
Our attention was drawn to the different degree of hydrogenation.
It may be appropriate to refer to the relevant Items in the First Schedule to the Central Excise Tariff.
Item 12 provides as follows: "12.
Vegetable non essential oils, all sorts, in or in relation to the manufac ture of which any process is ordinarily car ried on with the aid of power.
" Item 13 provides as follows: "13.
Vegetable Product: 299 'Vegetable Products ' means any vegetable oil or fat which, whether by itself .or in admix ture with any other substances, has by hydrog enation or by any other process been hardened for human consumption.
" The Tribunal, therefore, in our opinion, was right on a conspectus of the relevant factors in coming to the conclu sion that edible rice bran oil falling under Tariff Item 12 CET would even after extra hardening continue to fall under Tariff Item 12 and not fall under Tariff Item 68 because it would be vegetable non essential oils, all sorts, in or in relation to the manufacture of which any process is ordi narily carried on with the aid of power.
In that view of the matter, it would not come within Tariff Item 68.
The Tribu nal, it appears, to us, has considered the technical side of it, the manner of its production, and in view of the princi ple laid down by Tungbhadara Industries Ltd. 's case (supra) which in our opinion was essentially applicable to the facts of this case.
The Tribunal, in our opinion, came to the correct conclusion.
Justice Pendse of the Bombay High Court in IVP Ltd. and Anr.
vs Union of India & Ors., had occasion to consider some aspects of this problem.
It was held by the learned Judge that the plain reading of Item 13 CET indicated that the vegetable products which fell 'under that item must be one for human consumption.
It was not in dispute in that case that the product manufactured by the petitioners was used only for the industrial purposes and not for human consumption and, therefore, Tariff Item 13 could not be attracted.
Whether Tariff Item 12 or Item 68 would be applicable to the products manufactured by the petitioners, it is well settled that resort could not be had to the residuary item if the product comes within the ambit of any other tariff item.
It is, therefore, necessary to ascertain whether Item 12 is applicable for levy of excise duty in respect of hardened vegetable oil.
Tariff Item No. 12 brings in its sweep "vegetable non essential oils of all sorts" and the expression "all sorts" would bring in its ambit hydrogenated oil.
There is hardly any distinction between vegetable oil in liquid form and the hydrogenated oil which is hardened with a melting point higher than 41 C. Apart from the distinction in the physical appearance, there is no distinction between oil and hydrogenated oil which is well supported by the decision of this Court in Tungbhadra 's case (supra) where this Court held that several oils are viscous fluids but those do harden and .
assume semi solid condition on the lowering of the temperature.
300 Therefore, it is obvious that hydrogenated oil is nothing but hardened vegetable oil which would fall within Item 12 CET for the purpose of central excise duty.
Our attention was drawn to Encyclopaedia Britannica, 1968, Vol.
19 p. 302 where preparation of rice is indicated.
It states as follows: "The Kernel of rice as it leaves the thresher is enclosed by the hull, or husk and is known as paddy or rough rice.
Rough rice is used for seed and feed for livestock, but most of it is milled for human consumption by removing the hulls.
Rice is a good energy food, and is consumed in vast quantities in the Orient.
In the Western Hemisphere, however, rice is not the staple cereal food, except in certain Caribbean islands.
" Our attention was also drawn to certain obserVations of the Tribunal in Vital & Vital Oil Pvt. Ltd. vs Collector of Central Excise, Bombay, where the Tribunal observed that the department advocates assessment of hard ened technical oil under item 68.
This item is only for goods not specified anywhere else.
According to Department, "all other goods not specified elsewhere" is more specific than "vegetable non essential oils, all sorts".
But it has to be borne in mind that the basic rule of construction is that a more specific item should be preferred to one less so.
It does not take much to see whether "goods not speci fied elsewhere" is more specific than "vegetable non essen tial oils" for a product that has an oily nature, is pro duced from an oil has the uses of an oil, and indeed looks like an oil, and is quite commonly accepted and spoken of as an oil and is so related to oil, that it has a little or no chemical.
If hydrogenated oil can harden, so can many oils if subjected to heat loss (in winter or by chilling).
It appears to us, therefore, that Item 12 is more specific than Item 68, for all hardened technical oil not fit for human consumption and such would cover under this category.
In the aforesaid view of the matter, we are of the opinion that the Tribunal particularly emphasised that the hardened technical oil is the same thing as the oil from which it is made.
It is clearly akin to the oil in homo logue, a product of scientific modification but unaltered in its essential character.
Therefore, in our opinion, the Tribunal was right in the conclusion it arrived at.
301 The Tribunal in both the appeals had taken into consid eration all relevant and material factors, and market par lance and borne in mind the correct legal principles.
The decision of the Tribunal, therefore, cannot be assailed.
In the premises, as both the appeals deal with the same facts, these. are dismissed.
There will, however, be no order as to costs.
Y. Lal Appeals dis missed.
|
The question that arises for determination in the ap peals is whether the hydrogenated rice bran oil manufactured by the Respondents, could, as claimed by them, be classified under Tariff Item No. 12.
Respondent herein manufacture hydrogenated rice bran oil, which is used as raw material in the soap making and in other industries.
The Respondent flied a classification list classifying the said product under Tariff Item No. 12 and claimed exemption from payment of excise duty.
The Asstt.
Collector of Central Excise, who dealt with the matter held that the said Roods was a new product after manufacture, having a distinct name, Character and use and u such it fell under Tariff Item 68 CET and not Item 12.
The Respondent preferred an appeal before the Appellate Collec tor of Central Excise, Madras.
The Appellate Collector reversed the order of the Asstt.
Collector and held that hydrogenated rice bran oil is classifiable under Tariff Item 12 CET and granted the consequential relief.
The order of the Collector was confirmed by the Customs, Excise and Gold (Control) Appellate Tribunal.
Hence the appeal under Section 35 L of the Central Excises & Salt Act by the Department.
Dismissing the appeals, the Court, HELD: Indubitably hydrogenation of rice bran 011 Is a process.
But all processes need not be manufacture.
It must be such a process which transforms the old articles Into goods and changes the identity, use and the purpose of use in the goods undergone by the process.
By 292 the process of manufacture a new identifiable goods, in the market as such must come into being.
[295E F] The melting point of the hydrogenated rice bran oil is 45degree C and it is in the nature of extra hardened vegeta ble process which is unfit for human consumption.
It was taken to be classifiable under Tariff Item 68 CET.
[295F] Rice bran oil is extracted out of rice bran by solvent extraction method.
After such extraction rice bran oil obtained is in liquid form.
The parties purchase rice bran oil from the market and process it.
The process is as fol lows.
The oil is heated to above 80degree C and the impuri ties are removed by adding oxalic acid and caustic lye.
The purified oil is then bleached by heating it to 85xC to 100xC and thereby treating with fullers earth.
The processed oil is then hardened by passing it through hydrogen gas.
During, hydrogenation, the oil absorbs two atoms of hydrogen and the unsaturated ferry acid present in the oil becomes saturated.
The oil is then in a semi solid condition and its melting point is raised to 45xC or more.
In the hardened state, the oil looks like Vanaspati (or vegetable product, to use the Central Excise terminology) but there is a difference in the degree of hydrogenation of the two.
[295H; 296A C] In order to differentiate between the edible hydrogenat ed oils (Vanaspati) and super hydrogenated vegetable oils, the latter are referred to as extra hardened oil or super hardened oil.
[296C D] This hardening of oil is necessary for soap making, otherwise, the soap, on coming into contract with water is likely to become soggy.
The Respondents use the hardened oil for soap making in their factories.
Besides its use in soap making, the extra hardened oil is also put to various other industrial uses, such as for application as greases.
[296D E] It is obvious that hydrogenated oil is nothing but hardened vegetable oil which would fail within Item 12 CET for the purpose of Central Excise duty.
[300A] Item 12 is more specific than Item 68, for all hardened technical oil not fit for human consumption and as such, would be covered under this category.
[300G ] Tungabhadara Industries Ltd. vs The Commercial Tax Officer, 293 Kurnool; , , followed.
Champaklal vs State of Gujarat, AIR 1980 SC 1889; IVP Ltd. and Anr.
vs Union of India & Ors., and Vital & Vital Oil Pvt. Ltd. vs Collector of Central Excise, Bombay, , referred to.
|
Civil Appeal No. 3527 of 1979.
Appeal by Special leave from the Judgment and order dated the 15th JaNuary, 1979 of the Karnataka High Court in Executive Second Appeal No. 89 of 1974.
Dr. Y.S. Chifale, R. B. Datar and Miss Madhu Mool Chandani for the Appellants.
section C. Javali, Ranjit KtJmar and B. P. Singh for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The respondent Dakshyani sued to recover a sum of RS.
7,324.86 paise from Narayana Swami, husband of the first appellant and father of the rest of the appellants.
The suit was decreed with costs and, in execution of the decree, certain property situated in Bangalore City was brought to sale.
The decree holder purchased the property at the execution sale held on August 19, 1969, for a sum of Rs. 28,000.
Narayana Swami having died in the meanwhile, his legal representatives, the present appellants, filed an application under the provisions of order 21 Rule 90 for setting aside the sale on various grounds.
The Executing Court dismissed the application on March 28, 1973 but on an appeal preferred by the appellants the sale was set aside on July 31, 1974.
The respondent filed a second appeal to the High Court of Karnataka.
At the hearing of the second appeal the parties entered into a compromise with the leave of the Court, such leave being necessary since mally of the present appellants were minors then 469 and are minors even now.
The Court granted leave and made an order in terms of the compromise.
The term of the compromise which we are concerned is that the present appellants agreed to deposit and the present respondent agreed to receive a sum of Rs. 60,000/ in full and final settlement of the decree.
If the deposit was made on or before November 30, 1976, the sale which though confirmed by the Trial Court but set aside by the Appellate Court was to stand set aside and the second appeal of the respondent was to stand dismissed.
If the amount of Rs. 60,000/ was not deposited on or before November 30, 1976 the second appeal was to stand allowed and the sale was to stand confirmed.
Time was stated to be the essence of the contract between the parties.
The applellants were permitted under the compromise, to raise funds by sale, mortgage etc.
Of the property in question.
The appellants failed to deposit the amount in terms of the compromise.
It appeaIs that they were unable to raise the necessary funds as they could not evict the tenant who was in occupation of the property.
Finally the appellants filed an application purporting to be under sections 148 and 151 of the Civil Procedure Code to extend the time for depositing the sum of Rs. 60,000 in terms of the compromise dated June 24, 1976.
The High Court dismissed the application on the ground that the Court could not extend time where time had been stipulated by the parties themselves in the compromise arrived at between them.
The High Court purported to rely upon the decision of this Court in Hukumchand vs Bansilal and Ors.(l) Shri R. B. Datar Learned Counsel for the appellants urged that there was no limitation on the power of the Court to extend time under section 148, c. P. c. and that where a compromise had been made an order of the Court, it was certainly open to the Court to extend time under section 148 c. P. c.
He relied upon the decision of the High Courts of Bombay and Calcutta in Marketing and Advertising Associates Pvt. Ltd. vs Telerad Pvt.
Ltd.(2) Jadabendra Nath Mishra vs Manorama Debya(3).
He distinguished the decision of this Court in Hukum Chand vs Bansilal.
Shri Javali Learned Counsel for the respondent, on the other hand urged that time should not be extended by the Court, 470 in law and on principle, where the parties themselves had agreed upon the time within which the amount was to be deposited.
In Hukamchand vs Bansilal the real question which was considered was, if a mortgaged property was sold in execution of a mortgage decree and if the application to set aside the sale under order 21 Rule 90 was dismissed but time was granted by consent of parties for depositing the decretal amount etc.
could time be extended for depositing the decretal amount etc.
to avert the confirmation of sale under order 34 Rule S, except with the consent of the parties.
The answer was 'no '.
Court said on the dismissal of an application under order 21 Rule 90, confir mation of sale under order 21 Rule 92 had to follow as a matter of course.
Order 34 Rule S merely permitted the deposit to be made at any time before confirmation of the sale and there could be no question of extending the time for such deposit.
If parties agreed to have the con firmation of sale postponed, further postponement would be possible by agreement of parties only.
The Court would have no say in the matter.
148 C. P. C. would have no application.
The position was clarified by the Court thus : "The judgment debtor mortgagor had the right to de posit the amount at any time before confirmation of sale within 30 days after the sale or even more than 30 days after the sale under order XXXIV, Rule (S) (l) so long as the sale was not confirmed.
If the amount had been deposited before the confirmation of sale, the judgment debtors had the right to ask for an order in terms of order XXXlV, Rule 5 (1) in their favour.
In this case an application under order XXI Rule 90 had been made and, therefore, the sale could not be confirmed immediately after 30 days which would be the normal course; the confirmation had to await the disposal of the application under order XXl, Rule 90.
That application was disposed of on October 7, 1958 and was dismissed.
It is obvious from the order sheet of October 7, 1958 that an oral compromise was arrived at between the parties in court on that day.
By that compromise time was granted to the respondents to deposit the entire amount due to the decree holder and the auction purchaser by November 471 21, 1958.
Obviously, the basis of the compromise was A that respondents withdrew their application, under order XXI, Rule 90 while the decree holder society and the auction purchaser appellant agreed that time might be given to deposit the amount upto November, 21,1958.
If this agreement had not been arrived at and if the application under order XXI, Rule 90 had been dismis sed (for example, on merits) on October 7, 1958, the court was bound under order XXI, Rule 92 (1) to confirm the sale at once.
But because of the compromise between the parties by which the respondents were given time upto November 21, 1958 the court rightly postponed the question of confirmation of sale till that date by consent of parties.
But the fact remains that the application under order XXI, Rule 90 had been dismissed on October 7, 1958 and thereafter, the court was bound to confirm the sale but for the compromise between the parties giving time upto November 21, 1958".
The Court then referred to the refusal of the Court to extend time by a fortnight on November 22, 1958 and further observed : "The executing court refused that holding that time upto Nov. 21, 1958 had been granted by consent and it was no longer open to it to extend that time.
The executing court has not referred to order XXI, Rule 92 in its order, but it is obvious that the executing court held that it could not grant time in the absence of an agreement between the parties because order XX[, Rule 92 required that as the application under order XXI, Rule 90 had been dismissed the sale must be confirmed.
We are of the view that in the circumstances it was not open to the executing court to extend time without consent of parties, for time between October 7, 1958 to November 21, 1958 was granted by consent of parties.
Section 148 of the Code of Civil Procedure would not apply in these circumstances, and the executing court was right in holding that it could not extend time.
Thereafter, it rightly confirmed the sale as required under order XXI, Rule 92 there being no question of the appli 472 cation of order XXXIV, Rule S for the money had not been deposited on November 22, 1958 before the order J of confirmation was passed.
Tn this view of the matter, we are of opinion that the order of the executing court refusing grant of time and confirming the sale was correct".
In the case before us, the situation Is totally different.
Unlike the case of Hukam Chand vs Bansilal where there was a statuory compulsion to confirm the sale on the dismissal OF the application under order XXI Rule 90 and, therefore, postponement and further postponement of the confirmation of the sale could only be by the consent of the parties in the case before us, there was no statutory compulsion to dismiss the application under order XXI, Rule 90 in the absence of an agreement between the parties.
The court would have then decided the appeal arising out of the application on the merits.
The parties, however, entered into a compromise and invited the court to make an order in terms of the compromise, which the court did.
The time for deposit stipulated by the parties became the time allowed by the court and this gave the court the jurisdiction to extend time in appropriate cases.
Of course, time would not be extended ordinarily, nor for the mere asking.
It would be granted in rare cases to prevent manifest injustice.
True the court would not rewrite a contract between the parties but the court would relieve against a forfeiture clause; And, where the contract of the parties has merged in the order of the court, the court 's freedom to act to further the ends of justice would surely not stand curtailed.
Nothing said in Hukamchand 's case militates against this view.
We are, therefore, of the view that the High Court was in error in; thinking that they had no power to extend time.
Even so, Shri Jawali submitted that this was not an appopriate case for granting any extension of time.
We desire to express no opinion on that question.
The High Court will decide that question.
We accordingly, set aside that judgment dated 15th January, 1979, of the High Court and direct the High Court to dispose of I. A. No. VIII in Execution Second Appeal No. 89/74 in accordance with law.
The parties will bear their own costs.
P.B.R. Appeal allowed.
|
The respondent 's suit for the recovery of money from the first appellant 's husband was decreed and in the execution of the decree certain property of the appellant was brought to sale.
The decree holder purchased that property.
The appellant 's husband having died in the meanwhile his legal representatives filed an application under order XXI, Rule 90 of the C.P.C. for setting aside the sale.
That application was dismissed by the executing court.
On the appellant 's appeal, the sale was set aside.
At the stage of second appeal filed by the respondent the parties entered into a compromise with the leave of the court which after granting leave made an order in terms of the compromise.
Under a term of the compromise, the appellants agreed to deposit, and the respondent agreed to receive a sum of Rs. 60,000/ in full and final settlement of the decree.
It was also stated that if the deposit was not made on or before the stipulated date, the sale was to stand confirmed and the second appeal of the respondent was to stand.
Having found it difficult to deposit the money in terms of the compromise, the appellants filed an application under Ss. 148 and 151 of the C.P.C. praying that the time for depositing the money in terms of the compromise be extended.
The High Court dismissed this application on the ground that the Court could not extend time where time had been stipulated by the parties in the compromise arrived at between them.
In appeal to this Court it was contended on behalf of the appellants that where a compromise had been made the order of the Court, it was open to the Court to extend the time under section 148 C.P.C.
Allowing the appeal and remanding the case to the High Court to dispose of the execution second appeal afresh in accordance with the law. ^ HELD: As there was no statutory compulsion to dismiss the application under order XXI, Rule 90, C.P.C, in the absence of an agreement between the parties, the Court would have decided the appeal arising out of tho application 468 on the merits.
The parties in the instant case however entered into a compromise and invited the court to make an order in terms of the compromise, which the Court did.
The time for deposit stipulated by the parties became the time allowed by the Court and this gave the Court the jurisdiction to extend time in appropriate cases.
Time would not be extended ordinarily, nor for the mere asking but would be granted in rare cases to prevent manifest injustice.
Where the contract of the parties has merged in the order of the Court the Court 's freedom to act to further the ends of justice would not stand curtailed.
The High Court was in error in thinking that they had no power to extend time.
[472 B F] Hukumchand vs Bansilal and ors.
; , , held inapplicable.
|
N: Criminal Appeals Nos. 54 &55 of 1974.
Appeals by Special leave from the Judgment and Order dated the 21st September, 1973 of the Allahabad High Court in Criminal Appeal Nos.
1923 & 1918 of 1969 respectively.
Frank Anthony and K B. Rohtagi for the Appellants in Crl.
54 of 1974.
Frank Anthony, S N. Singh and T.N. Singh for the Appellants in Crl.
55 of 1974 S.M.Jain, H.M. Singh and Dalveer Bhandari for the Respondent in both Appeals.
Devendra N. Goburdhan and D. Goburdhan for the complainant in both the Appeals.
The Judgment of the Court was delivered by VARADARAJAN J.
These appeals by special leave are directed against the dismissal of Criminal Appeals Nos. 1918 and 1923 of 1963 by a Division Bench of the Allahabad High Court.
Those appeals in the High Court were filed against the conviction of nine accused persons, Om Prakash (A 1), Anoop Singh (A 2), Sheo Gopal (A 3), Raj Narain (A 4), Chandra Prakash (A 6), Mool Chand (A 12), Beni Singh (A 16) Ram Pal (A 17) and Lajjar Ram alias Raja Ram (A 18)under section 396 I.P.C. and the sentence of imprisonment for life awarded to them by the learned Sessions Judge, Kanpur Etawah at Kanpur in Sessions Trial No. 172 of 1969, in which in all 18 accused persons were tried.
The trial Court acquitted the other nine accused, Bhoop Singh (A 5), Virendra (A 7), Ramadhin (A 8), Ranjit (A 9), Chhotay Lal (A 10), Chunni Lal (A 11), Bhanu Prakash (A 13), Dhani Ram (A 14) and Ram Gopal (A 15) in the alleged dacoity with murder at the house of Mauji Lal,Pradhan in Makhauli village, at about 1.A.M. in the night of 16/17.2.1968.
In that incident Mauji Lal died and his wife Ram Shree (P.W.2), Parasuram (P.W.7) and P.W.2 's brother Ram Shankar (P.W.8) are stated to have sustained injuries.
The case of the prosecution was this: There was enmity between the deceased Pradhan Mauji Lal and his brother Baij Nath (P.W.1) on one hand and the appellants on the other ever since the 568 deceased Mauji Lal, fought an election battle in 1955 with Mauji Lal, the father of Om Prakash (A 1) and Bhagwati Prasad, the father of Raj Narain (A 4).
There were several cases between the parties.
About a month before this occurrence, Mauji Lal had reported by Exh.
Ka 7 dated 22.1.1968 that accused persons Om Prakash (A 1) and Sheo Gopal (A 3) had committed theft of timber belonging to the village school managed by him.
A few days later on 26.1.1968 Mauji Lal had complained before the Sub Divisional Magistrate, Ghatampur that Mool Chand (A 12) forcibly occupied Gaon Sabha land.
In 1967 there was rioting in the village, to which the prosecution party and accused belong.
In that rioting one Ran Sanahi was murdered on one side and Kanwar Lal was murdered on the other side, and two cases were registered, and Om Prakash (A 1), Sheo Gopal (A 3), Raj Narain (A 4), Ranjit (A 9), Chhotay Lal (A 11), Mool Chand (A 12), Bhoop Singh (A 5), Rampal (A 17), Lajjar Ram (A 18) and other are accused in one case while in the other case the deceased Mauji Lal and 14 others including Mauji Lal 's brother Baij Nath (P.W.1) are accused and those cases were pending even on the date of the occurrence in this case.
Om Prakash (A 1), Anoop Singh (A 2), and Sheo Gopal (A 3) are brothers.
Raj Narain (A 4), Bhoop Singh (A 5) Virendra (A 7) and Chandra Prakash (A 6) are brothers.
Mool Chand (A 12) and Bhanu Prakash (A 13) are brothers, Beni Singh (A 16) nephew of Dhani Ram (A 14) and Ram Gopal (A 15), Ram Pal (A 17) and Lajjar Ram alias Raja Ram (A 18) are cousins.
On the moon lit night of 16/17.2.1968 deceased Mauji Lal who was Pradhan of the village and his wife Ram Shree (P.W.2) and their children were sleeping in their house in Makhauli village, Mauji Lal in the western kotha and PW 2 and her children in the eastern kotha, between which there is a barotha.
There was a lighted lantern hanging from a peg at a height of 6 feet from the floor on the eastern wall of the eastern kotha.
Ram Shankar (P.W.8) the brother of Ram Shree (P.W.2) who was assisting his deceased brother in law Mauji Lal in the cultivation of his lands was sleeping in a tin shed situate west of the western kotha.
The deceased Mauji Lal and his wife Ram Shree (P.W.2) woke up on hearing some commotion when the miscreants who entered the eastern kotha of the house were breaking open the northern door P.W.2 raised the wick of the lantern, material Exh.
III, which had been lowered previously, and there was sufficient light in the kotha for recognising the miscreants.
Mauji Lal had come 569 into the eastern kotha before its northern door was broken open by the miscreants.
Om Prakash (A.1), Sheo Gopal (A 3), Anoop Singh (A 2), Raj Narain (A 4), Chandra Prakash (A 3), Mool Chand (A 12), Beni Singh (A 16), Ram Pal (A 17) and Lajjar Ram alias Raja Ram (A 18) entered the eastern kotha after breaking open the northern door with a kulhari, Om Prakash armed with a pistol and the others armed with Kanta, ballams, kulhari lathi and pistol.
A Pistol shot was fired through the opening in the door before the miscreants entered the eastern kotha.
These nine accused persons, Om Prakash (A 1), Anoop Singh (A 2), Sheo Gopal (A 3), Raj Narain (A 4), Chandra Prakash (A 6), Mool Chand (A 12), Beni Singh (A 16), Ram Pal (A 17) and Lajjar Ram alias Raja Ram (A 18) severely assaulted Mauji Lal who died at the spot as a result of the injuries sustained by him.
Sheo Gopal (A 3), Chandra Prakash (A 6), Beni Singh (A 16), Ram Pal (A 17) and Lajjar Ram alias Raja Ram (A 18) assaulted P. W.2 severely and ransacked the house for about 15 or 20 minutes and took away from that eastern kotha and the adjacent box room of the house ornaments, cash, clothes etc., valued at Rs. 2,700/ .
Ram Shankar (P.W.8) who was sleeping in the tin shed, as stated above, woke up on hearing the shouts and sound of gun fire and saw accused Virendra (A 7) and Ramadhin (A 8) standing near his cot armed with lathis and they inflicted lathi blows on him.
When he got an opportunity, Ram shankar (P W.8) entered the house and concealed himself by the side wall near the door connecting the eastern kotha and the barotha and witnessed what was happening inside the eastern kotha.
P.Ws. 2 and 8 could see the miscreants in the light of the lantern material Exh.
Baij Nath (P.W.1), Parasuram (P.W.7) and others of the village woke up on hearing sound of gun shot, and proceeded towards the house of the deceased Mauji Lal and stood under a neem tree in front of one Banwari Lal 's house and concealed themselves in the chappra of one Motilal situate east of the deceased Mauji Lal 's house.
They saw the miscreants when they were departing from the scene, with the moonlight.
The miscreants standing on the roof of Sham Lal 's house earlier shot at Parasuram (P.W.7) while he was standing in front of that house and he sustained gun shot injuries.
About one and a half hours after the miscreants left the place, P.W. 1 who went inside the house and found Mauji Lal lying dead with injuries and P.Ws. 2 and 8 having injured, got the report, Exh.
Ka 1 written by one Shankar Singh.
He thereafter proceeded to 570 the Police Station at Mooa Nangar situate six miles away from the village, and handed it over to the Head Constable Ram Kishore Panday (P.W.9).
On the basis of that report a formal FIR was registered at the Police Station at 6.05 AM on 17.2.1968.
Tiwari, the Sub Inspector of Police (P.W. 11) took up investigation and reached the village at 8 AM on 17.2.1968 when PW 2 handed over to him a list of properties which had been looted from her house.
P.W. 11 found the dead body of Mauji Lal in the eastern kotha and the lantern material Exh.
III hanging from a peg in the eastern wall of the kotha and boxes broken open and the locks thrown in the verandah.
Autopsy on the body of Mauji Lal was conducted by Dr. Sharma (P.W. 3), Civil Surgeon, Kanpur at 2 PM on 18.2.1968.
He found six incised wounds, two lacerated wounds and three abrasions on the body of the deceased.
The left eye was found black.
The sculpt bones were found cut through and through under three incised wounds.
The doctor (P.W.3) was of the opinion that the incised wound might have been caused by some sharp edged weapons like kanta and axe, that the lacerated wounds could have been caused with lathi, that the abrasions might have been caused by coming into contact with some rough object, that the blackening of the eye might be due to clotting of blood due to the head injury and that all the injuries together were sufficient in the ordinary course of nature to cause instantaneous death.
exhibit Ka 2 is the post mortem certificate issued by P.W.3.
The injured witnesses P.Ws. 2, 7 and 8 were examined between 6 PM and 7.30 PM on 17.2.1968 by Dr. Mukherjee of Chattarpur Dispensary, who could not be examined as a prosecution witness on account of difficulty due to his non availability.
The wound certificates, Exh.
Ka 18 20, issued by that Doctor in respect of P.Ws.2, 7 and 8 have been proved by the Compounder Vishamber Nath (P.W. 13).
P.W. 2 had sustained 19 injuries consisting of one lacerated wound on the left side of the head and a number of contusions and abrasions on various parts of her body, all caused by blunt weapons.
P.W. 7 had sustained six gun shot injuries.
P.W. 8 had sustained a contusion on the top of his shoulder joint and an abrasion on the lower aspect of the right clavicular region, all caused by blunt weapons such as lathis.
That fact the there was enmity between the two parties and that Mauji lal was murdered and property worth about Rs. 2,700/ from his house was looted in the night of 16 17.2.1968 and that in 571 that incident Mauji Lal 's wife (P.W. 2) and brother in law (P.W.8) were injured and P.W. 7 who came near the scene of occurrence had received six gun shot injuries, was not doubted or disputed before the learned Sessions Judge by the learned counsel for the defence.
But all the accused denied in their statement their presence and participation in the occurrence.
The suggestion made on behalf of the accused was that an armed gang of dacoits, not known to the prosecution witnesses, committed the crime and that the accused have been falsely implicated on account of enmity.
No defence witnesses were examined.
The prosecution examined.
PWs 1,2,7 and 8 as eye witnesses to speak about the participation of the accused in the occurrence.
P.W. 1 implicated all the 18 accused persons as having been present at the time of the occurrence.
P.W. 2 implicated only the nine appellants, namely A 1 to 4,6,12 and 16 to 18 as those who entered the house and attacked her and her husband and committed dacoity.
P.W. 7, implicated fourteen accused, namely Anoop Singh (A 2), Raj Narain (A 4), Bhoop Narain (A 5), Chandra Prakash (A 6), Virendra (A 7), Ramadhin (A 8), Ranjeet (A 9), Chhote alias Ram Swarup (A 10), Chunni Lal (A 11), Mool Chand (A 12), Bhanu Prakash (A 13),Dhani Ram (A 14), Ram Gopal (A 15) and Rampal (A 17) as some of the miscreants who were present at the house of P.W. 2.
P.W. 8 also implicated these nine appellants besides Virendra (A 7) and Ranjit (A 8).
The learned Sessions Judge found that the FIR (Exh. ka 1) had been lodged at the Police Station without any inordinate delay and that there was nothing on the record to show that there was any oblique motive for concocting a false story of the occurrence.
But he was of the opinion that the evidence of P.Ws. 1 and 7 does not inspire confidence, that it could not be believed beyond all reasonable doubt that those two witnesses had seen the occurrence, that P.W. 1 would have been fired at if he had been present at the chappar as claimed by him and that the probability is that as soon as P.W. 7 received the six gun shot injuries in front of Narbada 's house, he would have either fallen down there or returned to his house.
He was further of the opinion that in any case P.Ws. 1 and 7 could not have had sufficient "glimpse of the miscreants" so as to be able to identify them.
He rejected the evidence of P.W. 8 about the participation of Virendra (A 7) and Ramadhin (A 8) in the occurrence as not inspired sufficient confidence and was of the opinion that the evidence 572 Of P.Ws. 1, 7 and 8 about the participation of the acquitted accused 5, 7 to 11 and 13 to 15 in the crime was not acceptable.
As regards the participation of the appellants in the crime he accepted the evidence of P.Ws. 2 and 8.
The evidence of P.W. 2 is that she saw the appellants in the light of the lantern that was hanging in the eastern wall of the eastern kotha as soon as they entered her kotha and also while they were attacking her husband and causing injuries to her and carrying away the properties from the house.
The evidence of P.W. 8 is that he saw Om Prakash (A 1) when he was escaping from the tin shed where he was sleeping earlier to the western kotha and that he saw the other appellants from behind the door of the western kotha when they were attacking deceased and P.W. 2 and looting the properties from the house.
The learned Sessions Judge accepted the evidence of P.Ws. 2 and 8 about their presence in the house at the time of the occurrence, and also the fact that they received the injuries at the hands of the miscreants and could see what had taken place in the light of the lantern as well as of the moon.
Accordingly, he acquitted accused 5, 7 to 11 and 13 to 15 and convicted the appellants and sentenced them as mentioned above.
The learned Judges of the High Court agreed with the trial court in not relying upon the evidence of P.Ws. 1 and 7.
They were not prepared to doubt the presence of P.W. 8 in the tin shed of the house of the deceased Mauji Lal and P.W. 2 in view of the fact that he has received injuries at the hands of the miscreants.
But they found it difficult to believe that on finding an opportunity to move away from the tin shed, he would have entered the house and taken shelter there when the miscreants were in the house and beating the deceased and P.W. 2.
They were of the opinion that P.W. 8 could have been of more help to his sister P.W. 2 by running to the village abadi for help so that on the arrival of the villagers the offenders may run away and not cause undue havoc in the house.
P.W. 2 had not mentioned P.W. 8 as one of the persons who came into the kotha after the miscreants left the place though, he had mentioned the names of many other persons who came into the kotha.
According to the learned Judges, P.W. 8 could have seen only some of the offenders but he has intentionally made improvements in his version.
For these reasons the learned Judges of the High Court thought it not safe to rely on any part of the evidence of P.W. 8.
But they were of the opinion that the incident could have been witnessed only by P.W. 2.
and her children and that there is no substance in the criticism that independent witnesses have not been called to depose about the occurrence as eye witnesses.
They were of the opinion that P.W.2 573 has given straight forward evidence without any attempt at making any improvement to fit in with the testimony of the other prosecution witnesses.
They accepted the evidence of P.W. 2 as wholly reliable and confirmed the convictions of the appellants and the sentence awarded to them and dismissed the appeals.
The learned counsel for the appellants submitted that the F.I.R. Exh.
Ka 1 is ante timed.
He drew our attention to section 157 of the Code of Criminal Procedure and submitted that the time of despatch of Exh.
Ka 1 is not entered there on.
Section 157 only states that the first information report should be despatched forthwith and does not say that the time of despatch must be noted thereon.
The learned Sessions Judge has observed in his judgment that Exh Ka 1 seems to have been lodged at the Police Station without any inordinate dely and that there is nothing on record to show that there was any oblique motive for concocting a false story of the occurrence itself in that first information report.
The learned counsel for the appellants invited our attention to the evidence of Shiv Poojan Tiwari Sub Inspector of Moosa Nagar Police Station who had been examined as C.W. 1.
The evidence of CW. 1 is that while he was raiding Numain Purwa village in a murder case of his Police Station at about 2.00 A.M. in the night of 16/17 2 1968 he heard noise coming from the side of Makhauli village situate 3 miles north of Numain Purwa village and went there along with some armed police guard at about 4.00 A.M. and was informed that Mauji Lal had been murdered in his house and property had been looted from his house by dacoits and that his brother and certain other persons had gone to the police station for lodging a report.
He has also stated that he went to the house of Mauji Lal and found his dead body lying inside the house and that he stayed in the village until the Sub Inspector of the Police Station concerned (P.W. 11) arrived at the spot and started investigation.
The learned counsel for the appellants commented on the basis of the evidence of C.W. 1 that he had not noted the names of the assailants in the general diary entry made by him in his police station that the names of the 18 accused including those of the appellants have been mentioned in the first information report Exh.
Ka 1 only as an after thought.
The relevant portion of Exh.
Ka 1 may be extracted in order to appreciate the contention of the learned counsel for the appellants.
P.W. 1 the author of exhibit Ka 1 who does not claim to have seen the incident which took place in the eastern kotha of the house of the deceased has stated in that report thus : 574 "Today my brother Mauji Lal was sleeping inside his house in the night as usual.
A lantern was burning in the house.
Ram Shree (P.W. 2) was also inside the house.
Shri Ram Shankar s/o Manni Lal (P.W.8) was sleeping under the tin shed.
In the night intervening between 16th and 17th of February 1968, at about 1.00 O ' clock, the accused persons, having armed themselves with kantas, ballams, lathis, axes, guns and pistols came and surrounded the house of my brother Mauji Lal.
They cut open the door and entered the house.
They inflicted injuries upon my brother Mauji Lal and caused his instantaneous death.
They also caused injuries to my bhabhi.
My bhabhi raised alarm.
Ram Shankar was also assaulted with lathis.
He too, raised alarm.
On hearing the shouts and the sounds of guns and pistols I and Prasu Ram s/o Hira Lal (P.W. 7), Ram Adhar, Ram Kumar, Ram Prasad Sachan, Banwari Lal s/o Ram Lal, residents of my village, Beta Lal Sachan of Damodarpur, and several other persons, reached the spot, saw the occurrence, and challanged the accused persons.
They recognised them in the light of the moon.
My bhabhiji and Ram Shankar have also recognised the accused persons in the light of the moon and lantern.
Parasu Ram has also received injuries from the shots of the gun.
There are several injuries on the person of my brother.
After committing the assault, the accused persons looted away the articles kept in the boxes in the house, ornaments, clothes and cash etc.
The accused persons kept coming and going outside inside and on the roof.
Out of the accused persons, Anup Singh was armed with an axe, Dr. Om Prakash with a pistol, Raj Narian and Mool Chand with kantas, Ram Gopal and Dhani Ram with guns and Bhoop Narain and Ranjeet with ballams.
The remaining persons were armed with lathis.
" The actual part played by either any of the appellants or any of the acquitted accused has not been mentioned in this report.
It must be remembered in this connection that while P.W. 1 has named all the 18 accused mentioned in Exh.
P.W. 2 has named only the 9 appellants, P.W. 7 has named the 9 appellants as also accused 7 and 8 and P.W. 8 has named 14 accused persons.
If Exh.
Ka 1 was ante timed as submitted by the learned counsel for the appellants it is not probable that the police would have obtained that report from 575 P.W. 1 who was not one of the residents of the house of Mauji Lal where the occurrence had taken place but was admittedly living in his own house situate at some distance from the house of the deceased and was admittedly attracted to the scene of occurrence only by shouts and the sounds of guns and pistols.
If the police had intended to obtain a concocted first information report it is not probable that instead of obtaining it from P.W. 8 who was indisputably one of the residents of the house in which the occurrence had taken place they would have obtained it from P.W. 1.
The evidence shows that on the basis of this first information report a formal F.I.R. was recorded to the Police Station situate six miles away from the scene of occurrence at 6.05 A.M. on 17.2.1968.
The evidence of P.W. 1 is that he left for the police station about 1 or 11/2 hours after the culprits left the place and gave the report which he had got written by one Shankar Singh.
The Sub Inspector of Police, P.W. 11 has stated that he thereafter took up investigations of the case and reached the village at 8.00 A.M. and found the dead body of Mauji Lal in the eastern kotha and obtained a list of the looted properties from P.W. 2.
In these circumstances we are of the opinion that the submission of the learned counsel for the appellants that the first information report Exh.
Ka 1 is ante timed is not well founded.
The learned counsel for the appellants next submitted that having regard to the size of the eastern kotha of the house of the deceased it is not probable that these 9 appellants with arms such as guns, pistols, axe and lathis could have been in the kotha together at the same time at the time of the occurrence.
The evidence of P.W. 2 is that the kotha is 19 or 20 cubits north south, 41/2 cubits east west and 10 ' in height The evidence of P.W. 11 shows that the eastern kotha is 7 1/2, in height.
It is stated in the first information report Exh.
Ka 1 that the culprits were moving in and out of the house of the deceased at the time of the occurrence.
Therefore, it is quite not unlikely that all the 9 appellants were in the eastern kotha of the house at the same time and it is not improbable that these appellants were seen by P.W. 2 at different times during the occurrence which must have gone on for some length of time during which P.W. 2 has received as many as 19 injuries.
The deceased and P.W. 8 also received injuries, and P.W. 7 who was near about the house of the deceased at the time of the occurrence has also received as many as 6 gun shot injuries.
In these circumstances we are of the opinion that the submission of the learned counsel for the appellants that having regard to the size of the eastern kotha it is not probable that 576 the appellants armed with various weapons could not have been present in that kotha is not acceptable.
The learned counsel for the appellants next submitted that Dr. Mukherjee who was in charge of the Primary Health Centre, Ghatampur on 17 2 1968 and had examined P. Ws. 2,7 and 8 on that day and issued the wound certificates Exh.
Ka 18 to Ka 20, has not been examined and that only the compounder of that Primary Health Centre, P.W. 13 has been called to prove those certificates.
The reason given by the prosecution for the non examination of Dr. Mukherjee is that he was not available and could not be examined without difficulty.
The explanation for the non examination of Dr. Mukherjee is no doubt not quite satisfactory.
The learned Public Prosecutor should have taken steps to procure the attendance of Dr. Mukherjee for giving evidence about the injuries noted by him as per Exh.
Ka 18 to Ka 20 on the persons of P.Ws. 2,7 and 8.
But the fact that these three witnesses had sustained injuries during the occurrence in this case was not and could not be disputed.
Those witnesses have stated in their evidence that they sustained injuries during the occurrence.
Therefore, the non examination of Dr. Mukherjee for proving the injuries noticed by him on the bodies of P.Ws. 2, 7 and 8 as per the wound certificates Exh.
Ka 18 to Ka 20 is not fatal to the prosecution.
The learned counsel for the appellants next submitted that no property out of the properties looted from the house of the deceased and P,W. 2 has been recovered from any of the appellants and that it is, therefore, not probable that any of these appellants was responsible for the occurrence in this case.
But, as stated earlier, the fact that Mauji Lal was murdered and property from his house was looted on the night of 16/17 2 1968 and in that occurrence Mauji Lal 's wife P.W. 2 and his brother in law P.W, 8 were injured in the house and P.W. 7 sustained 6 gun shot injuries when he was standing near the scene of occurrence had not been disputed before the learned Sessions Judge by the learned counsel for the defendants.
The suggestion made on behalf of the accused was that an unknown armed gang of dacoits committed the crime and that the accused have been falsely implicated in this case on account of enmity.
Having regard to the availability of other incriminating evidence against the appellants, it is not possible to agree with the learned counsel for the appellants that from the mere fact that none of the looted properties has been recovered from any of the appellants it could be held that the appellants are not the culprits in this case.
577 The learned counsel for the appellants next submitted that the lantern material Exh.
III has not been put to or identified by P.W. 2 as the one which was burning in the eastern kotha at the time of the occurrence.
Here again it is unfortunate that the learned Public Prosecutor has not got the lantern identified by P.W. 2.
But Sub Inspector of Police P.W. 11 who had seized that lantern has stated in his evidence that it was found hanging on a peg on the eastern wall of the eastern kotha of the house of the deceased and P.W. 2 and that it was in working condition.
The presence of the lantern in the eastern kotha at the time of the occurrence as well as of moon light at the time of the occurrence has been mentioned in the first information report Exh.
Ka 1 by P.W. 1 who is a brother of the deceased Mauji Lal and a resident of the same village and could be naturally expected to have gone into the house of the deceased soon after the culprits left the place.
P.W. 2 has stated in her evidence that it was moon lit night and the lantern was burying in the eastern kotha where it had been hung on a peg fixed at a height of 6 ' from the ground on the eastern wall and that when she heard the sound of some persons in the court yard she got up immediately and raised the wick of the lantern which was until then giving dim light.
She has stated in her cross examination that the lantern used to be hung daily on the same peg, that there was no blackness on the wall near the peg and that she had scratched it off about 8 days prior to the date of her examination in the Court.
It is significant to note that it has not been suggested to P.W. 2 that there was no lantern at all in the room in which she was sleeping with her children and that her husband Mauji Lal whose dead body was found by the Sub Inspector P.W. 11 in that kotha had not come to that kotha at all.
It is seen from the almanac that the night of 16/17.2.1968 was the third night after the full moon and that the moon arose at Delhi at 8.43 P.M. on that day.
It has not been suggested to P.M. 2 or P.W. 7 or any other witness examined by the prosecution that the night was cloudy and visibility was poor for that or any other reason.
It is not improbable that the lantern was burning in the eastern kotha where P.W. 2 and her children were sleeping during the night and that P.W. 2 had raised the wick of the lantern when she heard some commotion in the court yard of her house before the culprits broke open the eastern door of her kotha and entered the same.
Therefore, there must have been sufficient light in the eastern kotha for P.W. 2 to note the presence of the appellants who belong to the same village and were not strangers and for P.W. 8 also to note the presence of the culprits.
578 There was sufficient moon light for P.W. 1 and P.W. 7 to see the culprits who are stated to have been moving in and out of the deceased and P.W. 2 during the occurrence.
Therefore, it could not be stated that P.Ws 1, 2, 7 and 8 could not have been in a position to identify any of the culprits.
The learned counsel for the appellants invited our attention to the fact that the learned Sessions Judge has disbelieved the evidence of P. Ws 1 and 7 and the learned Judges of the High Court have not relied on the evidence of P.W. 8 and submitted that P.W. 2 has modulated her evidence to fit in with the case of prosecution and that the evidence of P.W. 2 should not, therefore, be relied upon for basing the conviction of the appellants in this case.
We were taken through the evidence of P.W. 2 by the learned counsel for the appellants, and we are of the opinion that the submission that P.W. 2 has modulated her evidence to fit in with the case of the prosecution is not well founded.
P.W. 2 has stated thus in her evidence : "Raj Narain (A 4), Om Parkash (A 1), Mool Chand (A 6), Anup Singh (A 3), Ram Pal (A 7), Beni Singh (A 9), Raja Ram (A 8), Shiv Gopal (A 2) and Chandra Prakash (A 5) cut the northern door of my Kotha with small hatchets and immediately came in my kotha.
I saw and indentified them in the light of lantern.
I know them from before.
All of them were armed with kanta and spears etc.
Out of them Rampal (A 7), Beni Singh (A 9), Lajjar Ram (A 8), Shiv Gopal (A 2) and Chandra Prakash (A 5) assaulted me with lathis as a result of which I received several injuries.
My husband Mauji Lal had come in my kotha before the entery of the accused persons.
The aforesaid accused persons carried out brutal assault on Mauji Lal with lathis, small hatchets and kanta so much so that he expired.
My brother Ram Shankar (P.W. 8) was sleeping in a verandah having the tin shed.
Some persons had reached there as well.
They were assaulting him.
His voice was audible at my kotha.
The nine accused persons who entered my kotha had started looting my articles and they looted several ornaments and clothes belonging to me.
After having stayed for about 15 20 minutes inside the house of the accused persons went away outside through the northern door of my kotha.
During the mur 579 der and loot I did not hear any alarm from the maidan outside from the atari on the upper storey.
Some accused person fired a gunshot also inside my kotha from a hole of the door before cutting the same.
The pellet of that shot hit the wall but it did not hit me or my husband.
Om Prakash (A 1) had a pistol in his hand.
* * * * * * * * A sufficiently loud noise came out as a result of firing shots with a gun and a pistol. . 2 or 3 minutes after the accused persons went away, My Dewar (husband 's brother) Baijnath (P.W.1) came in my kotha first of all and along with him Ramadhar, Ram Kumar, Banwari and Parasuram (P.W. 7) also came".
P.W.2 has denied the suggestion that unknown persons came to commit dacoity inside the house and that she has falsely implicated the appellants because she could not recognise the real culprits.
We do not see any reason whatsoever for not accepting the evidence of P.W.2 who undoubtedly was in the eastern kotha where the main part of the occurrence has taken place and must have had sufficient opportunity to indentify, with the help of the lantern which was burning, the appellants who were previously known to her and not strangers and she has received as many as 19 injuries during the course of the occurrence which had gone on for about 15 20 minutes.
The noise created during the occurrence had attracted the attention of the Sub Inspector of police C.W.1 who belonged to some other police station and was in another village situate a couple of miles away from the one in which the scene of occurrence is situate.
It is, therefore, not improbable that P.Ws. 1,7 and others had got up on hearing the noise and that P.W.1 had moved near about the house of his brother Mauji Lal where the occurrence was taking place.
P.W. 1 has named all the 18 accused in his evidence as well as in the first information report Exh.
Ka 1 given by him at the police station at about 6.05 A.M on 17.2.1968.
The suggestion made to P.W.1 in cross examination is that as soon as Parsuram (P.W.7) received injuries they became afraid and did not advance ahead and that he did not reach the spot and did not see the occurrence with his own eye.
He had emphatically denied that suggestion.
The learned Sessions Judge has rejected the evidence of P.W. 1 mainly because he had not mentioned the name of 580 any of the accused to any of the villagers who entered the house of the deceased soon after the miscreants left the place and also because he has not sustained any injury and he would not have been left unharmed by the accused if he was anywhere near the scene of occurrence.
Merely because P.W.1 had not sustained any injury during the occurrence and had not mentioned the name of any of the accused to other villagers who entered the house of the deceased soon after the culprits left the place it is not possible to reject the evidence of P.W.1 altogether.
The learned Sessions Judge disbelieved the evidence of P.W.7 having regard to the fact that it is admitted by P.W.1 that P.W.7 belonged to the party of the deceased and that it was "doubtful" whether P.W.7 could have had a sufficient "glimpse" of the miscreants so as to be in a position to identify them.
The learned Sessions Judge has further observed that as soon as P.W.7 received the six gun shot injuries in front of Narbada 's house he would have either fallen down there or returned to his house.
There was sufficient moon light at the time of the occurrence and it is not improbable that P.W.7 who had undoubtedly come near the scene of occurrence would have seen any of the culprits and could not identify them.
Therefore, it is not possible to agree with the learned Sessions Judge that no reliance could be placed on the evidence of P.Ws. 1 and 7.
The learned judges of the High Court have observed in their judgement that P.W. 8 who was undoubtedly present in the house in the tin shed at the time of the occurrence could have seen some of the offenders and that his evidence could not be relied upon because he has intentionally made improvements in his version about the occurrence.
They have also observed that P.W.8 would have helped his sister P.W.2 better if he had run into the abadi and informed other villagers.
We are of the opinion that the reasons given by the learned Judges of the High Court for rejecting the evidence of P.W.8 altogether are not convincing.
We are further of the opinion that there is no reason whatsoever for rejecting the evidence of P.W.s. 1, 7 and 8 of whom P.Ws.7 and 8 are injured witnesses to the extent that their evidence is corroborated by the evidence of P.W. 2 who has been believed by not only the learned Sessions Judge but also by the learned Judges of the High Court.
The evidence of P.Ws. 1, 7 and 8 in so far as it goes to prove the presence of the appellants lends assurance to the evidence of P.W. 2 that the appellants entered the house and assaulted her husband fatally and that some of them caused injuries to her and committed dacoity by looting properties worth about Rs 2,700/ from her house.
581 Thus on consideration of the evidence of P.W.2 and of P.Ws.1, 7 and 8 to the extent that it is corroborated by evidence of P.W.2 and the other circumstances of the case, namely that the door of the eastern kotha of the house of the deceased was found broken open, that the dead body of Mauji Lal was found lying in the eastern kotha of the house and that the boxes had been found broken open and the locks were found lying nearby in the verandah of the house, we are of the opinion that prosecution has proved the case against the appellants satisfactorily and beyond all reasonable doubt and that the conviction of the appellants for the offence under section 396 I.P.C. and the sentence awarded to them by the learned Sessions Judge and confirmed by the learned Judges of the High Court are correct.
We accordingly confirm the conviction and sentence and dismiss the appeals.
P.B.R. Appeals dismissed.
|
The prosecution case against the accused was that on the night of the occurrence, which was a moonlit night, the deceased was sleeping in the western room of his house while his wife and children were sleeping in the eastern room, between the two of which there was a barotha.
In the room in which the wife was sleeping there was a lighted lantern hanging from a peg on the eastern wall of that room about 6 feet high from the floor.
P.W.8.
the brother in law of the deceased was sleeping in a tin shed situate to the west of the western room.
Sometime late in the night the deceased and his wife woke up on hearing some commotion.
They found that a number of armed men entered the eastern room and started breaking open the northern door whereupon the wife of the deceased raised the wick of the lantern to see what was happening.
By the time the deceased entered the eastern room the accused who were armed with pistols and other deadly weapons had entered the room after breaking open the northern door.
The 9 accused persons.
severely assaulted the deceased who as a result of the injuries fell down dead.
The accused also assaulted the wife of the deceased (P.W.2) and her brother (P.W. 8) and ran away with ornaments, cash and clothes.
In the meantime, some of the prosecution witnesses, who heard the commotion went towards the house of the deceased and saw in the moon light the assailants leaving the scene of occurrence.
The first information report was lodged by P.W. 1 in the police station which was six miles away from the village at 6.05 a.m.
On that day.
Before the Sessions Judge the accused contended that the dacoity was committed by an armed gang not known to the prosecution witnesses but that they had been falsely implicated on account of enmity between them and the deceased.
The Sessions Judge found that the first information report had been lodged at the police station without any inordinate delay or that there was 565 nothing on record to show that there was any oblique motive for concocting a false story of the occurrence.
He, however, doubted the veracity of the evidence of P.Ws. 1 and 7, that these witnesses could not have had sufficient glimpse of the miscreants to be able to identify them.
He also disbelieved the evidence of P.W. 8, the brother in law of the deceased.
He, however, believed the evidence of the wife of the deceased (P.W. 2) that she saw the accused in light of the lantern hanging on the eastern wall both when they entered her room as well as when they attacked her husband and thereafter carrying away properties from the house.
The Sessions Judge also accepted the evidence that P.Ws. 2 and 8 were present in the house at the time of the occurrence and since they had received injuries at the hands of the assailants they could see what had taken place and that the light of lantern and moon light were sufficient to identify the assailants.
He, therefore, acquitted some of the accused and convicted the appellants and sentenced them to undergo imprisonment for life.
On appeal the High Court did not think it safe to rely on any part of the evidence of P.W. 8 but believed the evidence of P.W. 2 on the ground that she had given straight forward evidence without an attempt at making any improvements to fit it with the testimony of the other prosecution witnesses.
the High Court confirmed the conviction and sentences awarded to the appellants.
Dismissing the appeals, ^ HELD: There is no substance in the contention that the first information report was ante timed; nor is there any requirement in section 157 of the Code of Criminal Procedure that the first information report should be despatched forthwith or that the time of despatch must be noted thereon.
The Sessions judge found that the first information report had been lodged at the police station without any inordiate delay and that no oblique motive for concocting a false story of the occurrence in the first information report had been established.
If the police had intended to obtain a concocted report, it is more likely that they would have obtained it from P.W. 8, who was in the house at the time of occurrence than take it from P.W. 1 who went there on hearing shouts and sounds.
[573 B D; 575 B] The evidence on record shows that the formal first information report was recorded in the police station at the earliest on the morning of the occurrence, that is, at 6.05 a.m.
This had been corroborated with the evidence of P.W. 11, Sub Inspector of Police, who reached the village which is about 6 miles away at 8 a.m. and immediately took up the investigation.
[575 B D; 575 B] There is no substance in the contention that, having regard to the size of the eastern room in which the dead body was found, it was not probable that the 9 appellants armed with various weapons could have all been present in it at the same time.
The room was sufficiently big and the first information report stated that the culprits were moving in and out of the house at the time of the occurrence.
It was not likely that all of them were in the room at 566 the same time and it was not improbable that they were seen by P.W. 2 at different times during the occurrence which went on for some time.
[575 F H] Although the explanation of the prosecution for its failure to examine the doctor who attended the injured persons was not satisfactory the fact that the witnesses had stated that they sustained injuries during the occurrence was not disputed.
Therefore, more non examination of the doctor for proving the injuries is not fatal to the prosecution case.
[576 C E] From the mere fact that none of the looted properties had been recovered from any of the appellants it could not be said that they were not the culprits in the case.
On the contrary, there is enough incriminating evidence against them.
[576 G H] There is no substance in the contention that there was no sufficient light in the room to identify the assailants.
Though, the prosecution had not got the lantern identified by P.W. 2, P.W.11 testified that the lantern was hanging on a peg on the eastern wall of the room and was in working condition.
This fact was mentioned in the first information report.
P.W.2 woke up on hearing the noise and raised the wick of the lantern.
It was a moon lit night.
All this apart it was not the case of the appellants that there was no lantern in the room at all.
Nor was it suggested that the night was cloudy and visibility was poor.
[577 H; B F] The submission that P.W.2 had modulated her evidence to fit in with the prosecution case is not well founded.
She had denied the suggestion that unknown persons came to commit decoity inside the house and that she had falsely implicated the appellants because she could not recognise the real culprits.
She was undoubtedly in the eastern room which was the scene of the occurrence and had sufficient opportunity to recognise the assailants, who were known to her.
During the occurrence she herself sustained many injuries.
[579 D E] Merely because P.W. I had not sustained any injury during the occurrence and had not mentioned the names of any of the accused to the villagers who entered the house soon after the occurrence, it is not possible to reject his evidence altogether.
[580 A B] The Sessions Judge erred in rejecting the evidence of P.Ws. 1 and 7 and the High Court erred in rejecting the evidence of P.W. 8.
There is no reason whatsoever for rejecting the evidence of these witnesses to the extent that their evidence was corroborated by the evidence of P.W. 2 whose evidence had been believed by both the courts below.
The evidence of P.Ws. 1, 7 and 8 in so far as it goes to prove the presence of the appellants at the scene of the occurrence lends assurance to the evidence of P.W.2 that the appellants entered the house and assaulted her husband fatally and that some of them caused injuries to her and committed decoity.
The prosecution had proved the case against the appellants beyond all reasonable doubt.
[580 D H] 567
|
ION: Civil Appeal No. 38(NCE) of 1981.
Appeal by Special leave from the judgment and Order dated the 1st January, 1980 of the Madras High Court in Application No. 4309 of 1980 in Election Petition No. 17 of 1980.
AND Special Leave Petition (Civil) No. 1580 of 1981 From the Judgment and Order dated the 13th January, 1981 of the Madras High Court in Election Petition No. 13 of 1980, 633 AND Special Leave Petition (Civil) No. 5178 of 1981.
From the Judgment and Order dated the 8th July, 1981 of the Madras High Court in Application No. 1967 of 1981 in Election Petition No. 14 of 1980.
AND Civil Appeal No. 4216(NCE) of 1982.
Appeal by Special leave from the Judgment and Order dated the 22nd October, 1982 of the Madras High Court in Application No. 265 of 1981 in Election Petition No. 5 of 1980.
AND Civil Appeal No. 1170 of 1981.
Appeal by Special leave from the Judgment and Order dated the 4th February, 1981 of the Madras High Court in Application No. 189 of 1981 in Election Petition No. 7 of 1980.
IN CIVIL APPEAL NO.
38/81 G. Ramaswamy, K. Rajendra Chowdhury, N.A. Subhramanyam and Mahabir Singh for the Appellant.
N.T. Vanamalai, R.K. Garg, V.J. Francis and Bhaskar Shankar for the Respondent.
A.V. Rangam for Respondent No. 10.
A.T.M. Sampath for the intervener.
IN SLP (C) NO.
1580 OF 1981 C.S. Vaidyanathan for the Petitioner.
A.T.M. Sampath for Respondent No. 1.
A.V.Rangam for Respondent No. 2. 634 IN SLP(C) NO. 5178 of 1981 K.R. Nambiar for the Petitioner.
P.N. Ramalingam for the Respondent.
IN C.A. NO. 1170 of 1981 G. Ramaswamy and A.S. Nambiar for the Appellant.
A.T.M. Sampath for Respondent No. 1.
A.V. Rangam for Respondent No. 2.
IN CA.
4216 of 1980 A.S. Nambiar and P. Parmeswaran for the Appellant.
A.T.M. Sampath for Respondent.
A.V. Rangam for Respondent.
The Judgment of the Court was delivered by SEN J.
These appeals by special leave and the connected special leave petitions from the judgment and orders of the High Court of Madras raise the same question and therefore they are disposed of by this common judgment.
In Civil Appeal No. 38 (NCE) of 1981, there is a further question involved.
The facts are more or less similar in all these appeals, except that in Civil Appeal No. 38(NCE) of 1981 there are certain additional facts.
It will suffice for our purposes to set out the facts giving rise to that appeal.
At the last general election to the State Legislative Assembly of Tamil Nadu from the Anna Nagar Assembly Constituency No. 8 held in May 1980, the appellant, M. Karunanidhi, leader of the Dravida Munnetra Kazhagam party, contested as a candidate of that party and secured 51290 votes.
As against this, the respondent Dr. H.V. Hande sponsored as a candidate by the All India Anna Dravida Munnetra Kazhagam secured 50591 votes.
On June 1, 1980 635 the appellant, M. Karunanidhi, was consequently declared elected by a margin of 699 votes.
The last date for filing an election petition to challenge his election was July 16, 1980.
On July 14, 1980 the respondent, Dr. H.V. Hande, filed an election petition under section 81 read with section 100 of the Representation of People Act 1951 (for the sake of brevity hereinafter referred to as 'the Act ') challenging the election of the appellant on various grounds.
The election petition was accompanied by a pre receipted challan prepared by the Accounts Department of the High Court on the basis of a lodgment schedule initialled by the Assistant Registrar II, High Court, showing that a sum of Rs. 2,000 had been credited on July 11, 1980, to the account of the Registrar, High Court, Madras, in the Reserve Bank of India, Madras, as security for costs along with the lodgment schedule signed by the Assistant Registrar II.
The respondent pleaded, inter alia, in paragraph 18 of the petition that the appellant was guilty of corrupt practice under sub s.(6) of section 123 of the Act by incurring or authorising expenditure in contravention of section 77.
It was alleged that he had failed to disclose certain items of expenditure in his statement of election expenses filed by him in connection with the election as detailed in subparagraphs (a) to (e) of paragraph 18 of the petition.
The allegation in paragraph 18(b) related to an expenditure of about Rs 50,000 in erecting fancy banners throughout the constituency and it was alleged that there were such fancy banners about 50 in number, the cost of each banner being not less than Rs 1,000 It was averred in paragraph 18(b) that a photograph of one such banner was filed along with the petition.
Admittedly, though the respondent had filed with the election petition a photograph of one such banner, a copy of the photograph was not annexed to the copy of the petition furnished to the appellant.
On October 30, 1980 the appellant filed his written statement.
He pleaded, inter alia, that the election petition was liable to be dismissed in limine under sub section
(1) of section 86 due to non compliance with the requirements of sub s.(1) of s.117 of the Act read with rule 8 of the Madras High Court (Election Petitions) Rules, 1967, for the reason that there was no deposit of Rs. 2,000 in cash in the High Court as security for costs, and also for non compliance with the requirements of sub s.(3) of section 81 of the Act as the copy of the election petition served on the appellant was not accompanied by a copy of the photograph of the alleged fancy banner annexed to the 636 petition, as alleged in paragraph 18(b) of the petition.
The appellant accordingly raised a preliminary objection as to the maintainability of the election petition.
The High Court by its order dated December 1, 1980, overruled both the preliminary objections.
In regard to the objection based on sub s.(1) of section 117 of the Act read with Rule 8 of the Madras High Court (Election Petitions) Rules, 1967 (for short 'the Election Petitions Rules '), the High Court held that a sum of Rs. 2,000 as security amount had been deposited by the respondent in the Reserve Bank of India to the credit of the Registrar, High Court, at the instance of the High Court, and in accordance with the procedure followed for deposit of amounts in court.
In reaching that conclusion, the High Court relied upon the lodgment schedule presented by K. Subramaniam, counsel for the respondent, which had been prepared in the Registry by the Assistant Registrar II, and the challan in triplicate prepared by the Accounts Department of the High Court and signed by the official referee specifying the amount and the date within which it had to be deposited.
It held that the requirements of sub s.(1) of section 117 of the Act read with rule 8 of the Election Petitions Rules for the making of the deposit of Rs. 2,000 as security for costs in the High Court were mandatory but the manner of making such deposit was directory and as the amount of Rs. 2,000 had, in fact, been deposited to the credit of the Registrar, High Court, within the time allowed therefor, there was substantial compliance with the requirements of sub section
(1) of section 117 of the Act.
As regards the objection based on the non supply of a copy of the photograph of the fancy banner adverted to in paragraph 18(b), the High Court relying upon the decision of this court in Sahodrabai Rai vs Ram Singh Aharwar,(1) held that the banner could not be treated to be an integral part of the election petition but was merely a piece of evidence as to the nature and type of fancy banners erected by the appellant and therefore failure to supply a copy of the photograph to the appellant did not amount to a breach of the provisions contained in sub s.(3) of section 81 of the Act.
These findings were reached by the High Court on the basis of the affidavits filed by the parties and the material on record.
The High Court had also before it a report from the Registry as to the procedure followed with regard to Court deposits: 637 "Any person desirous of paying money into Court shall present a lodgement schedule, duly vouched by the concerned Section regarding the quantum and the time limit, and initialled by the Officers of Original Side or Appellate side as the case may be, to the Accounts Department for the issue of a Challan to enable the party to make the payment into Reserve Bank of India, Madras to the credit of the case concerned.
On the presentation of the Lodgement Schedule to the Accounts Department a Challan in triplicate specifying the amount and the date within which it should be paid will be issued by the Accounts Department to the person, desirous of making such payment, who will deliver the Challan to the Bank.
The Bank in turn after deposit deliver one part of the Challan duly signed to the person making the payment.
On the production of the Challan, the Accounts Department will make necessary credit entries in the ledgers and the receipt registers.
The remaining two parts of the Challan are sent by Reserve Bank of India, Madras to Pay and Accounts Office, which in turn sends one part of it to this Office.
Sometimes it takes about one or two months to receive the said Challan from the Pay and Accounts Office.
In cases where advocates do not produce one part of Challan in Accounts Department, credit entries are made on the strength of the Challan from Pay and Accounts Office and the pass book from the Reserve Bank of India, Madras.
Official receipt for such deposits are issued under the signature of the Assistant Registrar (Original Side) for Original Side Deposits and of the Deputy Registrar for Appellate Side Deposits to such of those parties who produce one part of the Challan and make a request for official receipt to that effect.
It is also submitted that Accounts Department will not receive cash without specific orders to that effect.
This is the procedure that is being followed by the Accounts Section of High Court with regard to Court Deposits.
" It is against this order of the High Court that this appeal was filed.
The appeal was first heard in April 1981, and this Court by 638 its order dated April 2, 1981, remitted back the issue with regard to the alleged non compliance with the requirements of sub s.(1) of section 117 read with rule 8 of the Election Petitions Rules to the High Court for a decision afresh, as it was felt that the point raised was primarily a matter of evidence, but the parties had unfortunately not led any evidence on the point.
It accordingly directed the High Court to record the evidence that may be adduced as regards the practice and procedure followed by the High Court in regard to the making of an election petition under section 81 of the Act and the manner in which the security amount of Rs. 2,000 was deposited in the High Court in compliance with the requirements of sub s.(1) of section 117 of the Act read with rule 8 of the Election Petitions Rules.
After the issue was remitted, the High Court allowed the parties to lead their evidence both oral as well as documentary and has recorded its findings dated July 20, 1981.
The High Court adhered to its earlier view that on a construction of sub section
(1) section 117 of the Act, the factum of making of deposit of Rs. 2,000 as security for costs in the High Court was mandatory but the manner of making such deposit was directory and further held that although there was no strict or literal compliance with the requirements of rule 8 of the Election Petitions Rules, there had been substantial compliance with the requirements of sub s.(1) of s.117 of the Act, in that the requisite amount of Rs. 2,000 had actually been deposited to the credit of the Registrar, High Court, in the Reserve Bank of India on July 11, 1980, that is, before the election petition was filed on July 14, 1980, and the same was available for payment of costs.
In the connected cases also, the High Court reached the same conclusion after taking evidence of the respective parties.
It appears from the evidence adduced in all these cases that after the general elections to the State Legislative Assembly of Tamil Nadu, the then Chief Justice Ismail, C.J., nominated K.S. Natarajan (P.W. 4) Assistant Registrar II, to deal with all election petitions filed under section 81 of the Act.
The evidence of P.W. 4 shows that he met the officer in charge of the Accounts Department of the High Court and ascertained the procedure to be followed for making the security deposit of Rs. 2,000/ in cash in the High Court.
He was informed by the officer in charge that the party filing the election petition should bring the lodgment schedule duly filed and that P.W.4 should initial it and then the lodgment schedule had to 639 be taken to the Accounts Department.
He was told that the Accounts Department would prepare a challan in triplicate and hand over the same to the party for depositing the money in the Reserve Bank of India in the name of the Registrar, High Court, and that the duplicate challan must be filed along with the election petition.
He deposed that the same procedure was adopted in all the cases.
The lodgment schedule, Ex P 2B, prepared by K. Subramaniam (P.W.6), counsel for the respondent, had been initialled by him and that he had also put the date July 14, 1980 by which date the deposit had to be made K. Subramaniam (P.W.6), counsel for the respondent, stated that the respondent had given him the amount of Rs. 2,000 in the first week of July 1980, and accompanied by an authorised representative of the respondent, he took the lodgement schedule exhibit P 2B to K.S. Natarajan (P.W.4), Assistant Registrar II, who initialled the same and indicated the date by which the deposit was to be made.
He then took the lodgment schedule to the Accounts Department where section Seturaj (P.W.1) working as challan issuing clerk, prepared the challan in triplicate.
Thereafter, he took the challan in triplicate to the Reserve Bank of India and deposited the amount of Rs. 2,000 in cash in the name of the Registrar, High Court, and the duplicate copy of the challan was handed over to him.
The duplicate copy of the challan, exhibit P 2C, bears the seal of the Reserve Bank of India, with the endorsement 'received in cash ' and is dated July 11, 1980.
The duplicate copy of the challan Ex P 2C, was filed along with the election petition.
At this point, it is necessary to refer to the entries of the duplicate copy of the challan.
Column 1 of the challan bears the heading "By whom paid and name (or designation) and address of the person on whose behalf money is paid" and the entry reads "Registrar, High Court, Madras" and bears the seal of the High Court.
Column 2 reads "On what account with authority, if any" and the entry bears the name of the counsel for the election petitioner and mentions that the amount was deposited as security deposit for the election petition.
Column 3 bears the heading "Amount" and the amount deposited in each case is entered as Rs. 2,000.
The last column bears the heading "Head of account" and gives the head as "P.D.A/c, Registrar, High Court, Madras".
A bare reading of the challans would show that the amount of Rs. 2,000 as security for costs was received by the High Court and credited to its own account.
When the High Court asked the counsel for the election 640 petitioner to credit the amount in the Reserve Bank along with the pre receipted challan, it must be deemed that the Reserve Bank was acting as an agent of the High Court.
All the challans bear the seal of the Reserve Bank of India with the endorsement "received in cash".
Article 329(b) of the Constitution provides that no election to either House of Parliament or to the House or either House of the Legislature of the State shall be called in question except by an election petition presented to such authority and in such manner as may be provided by or under any law made by the appropriate Legislature.
The Representation of the people Act, 1951 is a law made by Parliament under article 327 of the Constitution to provide for adjudication of disputes regarding such elections.
Part VI of the Act is headed "Disputes regarding elections ' and Chapter II in that Part deals with the presentation of election petitions to the High Court.
Section 80 provides that no election shall be called in question except by an election petition presented in accordance with the provisions of Part VI.
Section 80A provides that the Court having jurisdiction to try an election petition shall be the High Court.
In N.P. Ponnuswami vs Returning Officer, Namakkal,(1) this Court restated the principle that the right to vote or stand as a candidate for election is not a civil right but is a creature of statute or special law and must be subject to the limitations imposed by it.
The Court having regard to the non obstante clause in article 329 (b) held that the Act having furnished a complete Code for challenging an election, the election must be challenged in the manner provided.
The Court relied upon the dictum of Wiles, J. in Wolverhampton New Water Works Company vs Hawkesford(2) which has become classical.
It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of.
As observed by this Court in Jagan Nath vs Jaswant Singh & Ors.
,(3) an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the Court possesses no common law power.
It also added that: "It is a sound principle of natural justice that the success of a candidate who has won at an election should not be 641 lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law.
" At the same time, the Court added a note of caution: "It is always to be borne in mind that though the election of a successful candidate is not to be lightly interfered with, one of the essentials of that law is also to safeguard the purity of the election process and also to see that people do not get elected by flagrant breaches of that law or by corrupt practices.
In cases where the election law does not prescribe the consequence or does not lay down penalty for non compliance with certain procedural requirements of that law, the jurisdiction of the tribunal entrusted with the trial of the case is not affected.
" There are two questions that fall for determination.
The first is whether the election petition filed by the respondent under section 81 read with s.100 of the Representation of the People Act, 1951 was liable to be dismissed in limine under sub section
(1) of s.86 on the ground that there was non compliance with the requirements of sub section
(1) of section 117 of the Act read with r. 8 of the Election Petitions Rules.
The second is whether the election petition is also liable to be dismissed under sub section
(1) of s.86 of the Act inasmuch as the copy of the election petition furnished to the appellant was not accompanied by a copy of the photograph of the fancy banner referred to in paragraph 18(b) of the petition as required by sub section
(3) of s.81 of the Act.
In view of the arguments addressed to us, it is necessary to set out a few of the relevant provisions which bear upon the points raised.
S.81 deals with presentation of election petitions.
It runs: "81.
(1) An election petition calling in question any election may be presented on one or more of the grounds specified in sub section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within forty five days from, but not earlier than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two dates.
642 Explanation In this sub section, 'elector ' means a person who was entitled to vote at the election to which the election petition relates, whether he has voted at such election or not.
(3) Every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
" Section 82 which is the next section lays down who shall be parties to an election petition.
We need not refer to this section in detail since we are not concerned with it.
S.83 is however material and it provides what shall be the contents of an election petition.
It reads: "83 (1) An election petition (a) shall contain a concise statement of the material facts on which the petitioner relies; (b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908) for the verification of pleadings: Provided that where the petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof.
(2) Any schedule or annexure to the petition shall also be signed by the petitioner and verified in the same manner as the petition.
" The next chapter which is Chapter III deals with the trial of election petitions but here we are concerned only with sub section
(1) of 643 section 86 which interdicts that the High Court shall, in certain circumstances, dismiss an election petition in limine.
Sub section (1) of section 86 provides as follows: "86 (1) The High Court shall dismiss an election petition which does not comply with the provisions of section 81 or section 82 or section 117.
Explanation: An order of the High Court dismissing an election petition under this sub section shall be deemed to be an order made under clause (a) of section 98.
" Sub section
(1) of section 117 which is important for our purposes is in these terms: "117.
Security for costs (1) At the time of presenting an election petition, the petitioner shall deposit in the High Court in accordance with the Rules of the High Court a sum of two thousand rupees as security for the costs of the petition.
" Rule 8 of the Madras High Court (Election Petitions) Rules, 1967 framed by the High Court under article 225 of the Constitution which is also important for the purposes of these cases provides as follows: "8.
An Election Petitioner before presenting his Election Petition shall deposit in the High Court in cash a sum of two thousand rupees towards security for costs as provided for under Section 117 of the Act and shall produce the receipt of the Registrar for the same at the time of presentation of the petition.
" Rule 12 of the Election Petitions Rules is also relevant and reads: "12.
Subject to the foregoing rules and to the extent they are not inconsistent with the provisions of the Act the Rules of the High Court, 1956 (Original Side) shall, as far as practicable, be observed in all Election Petitions and all applications taken in respect of them.
" 644 Taking up the contentions in the order in which they were advanced, we shall first deal with the submission that there was non compliance with the mandatory requirements of sub section
(1) of section 117 of the Act read with r.8 of the Election Petitions Rules framed by the High Court, which is common to all these cases.
The factum of deposit of Rs. 2000/ in each of these cases on the strength of pre receipted challans issued by the Accounts Department of the High Court in the Reserve Bank of India to the credit of the Registrar, High Court, Madras as security for costs well within the period of limitation for filing the election petition is not in dispute and the controversy turns on the question whether the deposit of the security amount was in accordance with the rules of the High Court.
There are different sets of rules framed by different High Courts under article 225 of the Constitution regulating the practice and procedure to be observed in all matters coming before the High Court in exercise of its jurisdiction under s.80A of the Act.
The words "in accordance with the rules" must therefore connote "according to the procedure prescribed by the High Court".
The mode of making deposit must necessarily be an internal matter of the concerned High Court.
In support of this appeal, learned counsel for the appellant contends that the provisions of sub section
(1) of section 117 of the Act are mandatory, non compliance of which will entail dismissal of the election petition in limine under sub section
(1) of s.86 of he Act.
It is urged that no distinction can be drawn between the requirement as to the making of a security deposit in the High Court under sub section
(1) of section 117 and the manner of making such deposit and sub section (1) of section 117 cannot be dissected into two parts, one part being treated as mandatory and the other as directory.
It is further urged that the words "in accordance with the rules of the High Court under sub section
(1) of section 117" were as much a mandatory requirement as the requirement that the election petitioner shall, at the time of presenting an election petition, deposit in the High Court a sum of Rs. 2000/ as security for the costs of the petition.
There is therefore no warrant for the view taken by the High Court that the factum of deposit of the security amount of Rs.2000/ in the High Court was mandatory and not the manner in which the security deposit was made.
It is also urged that r.8 of the Election petitions Rules framed by the High Court under article 225 to regulate the mode of making deposit must be read as forming part of sub s.(1) of s.117 by incorporation and therefore the only manner prescribed is by 645 making deposit in cash with the Registrar.
When a statute requires that something shall be done in a particular manner or from expressly declaring what shall be the consequence of non compliance with it, the requirement must be regarded as imperative.
Having regard to the definite stand taken by the respondent that he had complied with the requirements of r.8, it is not permissible to fall back on the provisions contained in order 31 of the Madras High Court Rules relating to deposit of suitors ' money.
The last submission is that in view of the finding reached by the High Court that there was no strict or literal compliance of r.8, the election petition must be dismissed.
Even if the rule of substantial compliance applies, it is clear on evidence that there has been no compliance at all much less any substantial compliance.
There is intrinsic evidence to show that there has been tampering with the documents.
We are afraid, the contention that there was no compliance of sub section (1) of s.117 of the Act cannot prevail in the light of the well settled principles.
The submissions advanced by learned counsel for the appellant cannot be accepted as they proceed on the assumption that no distinction can be drawn between the requirement as to the making of a deposit in the High Court under sub section
(1) of s.117 and the manner of making such deposit.
There was considerable emphasis laid by learned counsel that sub section
(1) of s.117 cannot be dissected into two parts, one part being treated as mandatory and the other as directory.
The contention is wholly misconceived and indeed runs counter to several decisions of this Court.
It is always important to bear the distinction between the mandatory and directory provisions of a statute.
Sub section
(1) of s.117 is in two parts.
The first part of sub section
(1) of s.117 provides that at the time of presenting an election petition, the petitioner shall deposit in the High Court a sum of Rs. 2000/ as security for the costs of the petition, and the second is that such deposit shall be made in the High Court in accordance with the rules of the High Court.
The requirement regarding the making of a security deposit of Rs. 2000/ in the High Court is mandatory, the non compliance of which must entail dismissal in limine of the election petition under sub section
(1) of s.86 of the Act.
But the requirement of its deposit in the High Court in accordance with the rules of the High Court is clearly directory.
As Maxwell on the Interpretation of Statutes, 12th edn.
at p.314 puts it: "An absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled 646 substantially.
" The rule of construction is well settled and we need not burden the judgment with many citations.
It is well established that an enactment in form mandatory might in substance be directory and the use of the word "shall" does not conclude the matter.
The general rule of interpretation is well known and it is but an aid for ascertaining the true intention of the Legislature which is the determining factor, and that must ultimately depend on the context.
The following passage from Crawford on 'Statutory Construction ' at p.516 brings out the rule: "The question as to whether a statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed.
The meaning and intention of the legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other.
" This passage was quoted with approval by the Court in State of U.P. vs Manbodhan Lal Srivastava,(1) The State of Uttar Pradesh & Ors.
vs Babu Ram Upadhya(2) and Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur.(3) The Court in Manbodhan Lal 's case, (supra) where article 320 (3) (c) of the Constitution was held to be directory and not mandatory, relied upon the following observations of the Privy Council in Montreal Street Railway Company vs Normandih(4): "The question whether provisions in a statute are directory or imperative has very frequently arisen in this country, but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at.
The cases on the subject will be found collected in Maxwell on Statutes, 5th ed., p.596 and following pages.
When the provisions of a statute relate to the performance of a public duty and the case is such 647 that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done." In Manbodhan Lal 's case, (supra) the contention was that the reduction in rank after departmental inquiry was invalid for noncompliance with the requirements of article 320 (3) (c) of the Constitution which read literally made it obligatory for the Government of India or a Government of a State to consult the Union Public Service Commission or the State Public Service Commission in all disciplinary matters affecting a person in service of the State.
In turning down the contention it was observed by this Court: "The use of the word "shall" in a statute, though generally taken in a mandatory sense, does not necessarily mean that in every case it shall have that effect, that is to say, that unless the words of the statute are punctiliously followed, the proceeding, or the outcome of the proceeding, would be invalid.
" Following the principle laid down by the Privy Council in Montreal Street Railway Company 's case, (supra) the Court held that article 320 (3) (c) itself contemplates three grounds, and the word "shall" appeared in almost every paragraph and every clause or sub clause of that Article.
If it were held that the provisions of Art, 320 (3) (c) were mandatory in terms, the other clauses or sub clauses of that Article would have to be equally held to be mandatory.
If they were so held, any appointments made to the public services without observing strictly the terms of these sub clauses in cl.
(3) of article 320 would adversely affect the person so appointed to a public service, without any fault on his part and without his having any say in the matter and this could not have been contemplated by the makers of the Constitution.
The Court held that if the Article were construed as mandatory, it would cause serious general inconvenience and injustice to persons who had no control over those entrusted with the duty.
As the Privy Council itself pointed out, the question whether provisions in a statute are directory or mandatory cannot be decided 648 by laying down a general rule and in every case the object of the statute must be looked at.
In Raza Buland Sugar Co. Ltd. 's case, (supra) the question for consideration was whether the whole of sub s.(3) of s 131 of the U.P. Municipalities Act, 1916 was mandatory, or the part of it requiring publication in the manner laid down in sub s.(3) of s.94 was merely directory.
Per majority, the Court held that sub s.(3) of section 131 could be divided into two parts the first one providing that the proposal and draft rules for a tax intended to be imposed should be published for the objections of the public, if any, and the second laying down that the publication must be in the manner laid down in sub section
(3) of section 94.
Considering the object of the provisions for publication, namely, to enable the public to place its view point, the Court found it necessary to hold that the first part of the section was mandatory, for to hold otherwise would be to render the whole procedure prescribed for the imposition of tax nugatory.
The second part of the section was however held to be merely directory.
In that case, there was no regularly published local Hindi newspaper but the publication was made in Hindi in a local paper which on the evidence seemed to have good circulation in Rampur.
There was, in the circumstances, substantial compliance with the provisions of sub s.(3) of section 94 of that Act.
There was quite some discussion at the Bar as to the legality and propriety of the procedure adopted in the Madras High Court as to the making of a security deposit under sub section
(1) of s.117 of the Act.
The objection is to the manner of such deposit being made on the strength of pre receipted challan prepared by the Accounts Department on the basis of the lodgment schedule into the Reserve Bank of India to the credit of the Registrar, High Court, Madras.
It was submitted that this was in complete violation of r.8 of the Election Petitions Rules.
It is said that r. 8 must be read as forming part of sub s.(1) of section 117 and the only manner prescribed is by making deposit in cash with the Registrar and obtain his receipt therefor.
It was urged that it is paradoxical to say that deposit of money into the Reserve Bank to the credit of the Registrar, High Court, Madras is a sufficient compliance of sub s.(1) of s.117 when r. 8 provides that the money should be deposited in the High Court in cash, and that is the only mode prescribed under sub s.(1) of section 117.
We are afraid we are unable to accept this line of argument.
649 A literal and mechanical interpretation of r.8 would lead to manifest absurdity as it would imply that in every case the election petitioner shall have to pay to the Registrar a sum of Rs. 2,000 in cash towards security for costs as required by sub s.(1) of s.117 of the Act and obtain a receipt from him therefor.
Rule 8 is silent as to how the cash is to be handled.
It cannot ordinarily be expected that the Registrar of a High Court would accept the amount of security deposit in cash.
The procedure adopted by II Assistant Registrar in directing that the money be deposited to the credit of the Registrar of the High Court in the Reserve Bank of India was in conformity with the requirements of r.8 of the Election Petitions Rules.
Inasmuch as r. 8 does not lay down the procedure regulating the manner of deposit of cash, the matter falls to be governed by r.2 of Order 31 of the Madras High Court (Original Side) Rules, 1956 by reason of r. 12 of the Election Petitions Rules.
Although Order 31, r. 2 does not in terms apply because Order 31 relates to "Payment into court of moneys to the credit of civil court deposits and account of suitor 's money", and though no lodgment schedule can be prepared under r.2 except in pursuance of a decree or order passed by the High Court i.e. in relation to some proceeding pending, or disposed of, by the High Court, still by virtue of r. 12 of the Election Petitions Rules that is the procedure to be adopted for deposit of Rs. 2000 in the High Court in cash i.e. by crediting the amount on the strength of a pre receipted challan prepared by the Accounts Department on the basis of a lodgment schedule.
That was the only procedure applicable and there was nothing wrong in the procedure adopted in making the deposit.
When the amount was so deposited with a pre receipted challan issued by the Accounts Department to the credit of the Registrar of the High Court and the Reserve Bank of India made the endorsement "Received in Cash", it must be regarded that the payment was made in the High Court and the pre receipted challan bearing the endorsement of the Reserve Bank of India must be treated as the receipt of the Registrar in terms of r. 8, the Reserve Bank acting as an agent of the High Court.
We are informed that the same practice and procedure has been followed during the relevant period in all the election petitions filed in the Madras High Court and there was no separate receipt of the Registrar except in one case where the election petition was not tried.
We need not dilate on the point any further.
It must accordingly be held that there was due compliance with the requirements of sub s.(1) of section 117 of the Act read with r. 8 of the Election Petitions Rules.
650 The matter is no longer res integra.
The submission runs counter to the decision of this Court in the well known case of K.Kamaraja Nadar vs Kunju Thevar & Ors.(1) That was a case under the old section 117 of the Act as it stood prior to its amendment by Act 47 of 1966.
It read: "The petitioner shall enclose with the petition a Government Treasury receipt showing that a deposit of one thousand rupees had been made either in a Government Treasury or in the Reserve Bank of India in favour of the Secretary to the Election Commission as security for the costs of the petition." In that case, the petitioner enclosed a Government Treasury receipt showing a deposit of Rs.1000 as security for costs in the State Bank of India, Ranchi Branch, but it did not show that the deposit had been made in favour of the Secretary to the Election Commission.
A question arose whether the election petition was liable to be dismissed summarily under s.85 or sub s.(3) of s.90 as the requirements of section 117 of the Act had not been complied with.
The Court analyzed section 117 and observed that it consisted of three parts, viz: (1) The Government Treasury receipt must show that such deposit had actually been made in a Government Treasury or in the Reserve Bank of India.
(2) It must show that it had been made in favour of the Secretary to the Election Commission.
And (3) it must further show that it had been made as security for the costs of the petition.
The question then arose whether the words "in favour of the Secretary to the Election Commission" were mandatory in character so that if the deposit had not been made in favour of the Secretary to the Election Commission as therein specified, the deposit even though made in a Government Treasury or in the Reserve Bank of India and as security for costs of the petition, would be invalid and of no avail.
This Court held that these words in section 117 were directory and not mandatory in their character and that the essence of the provision contained in section 117 was that the petitioner should furnish security for the costs of the petition and should enclose along with the petition a Government Treasury receipt showing that a deposit of Rs. 1000/ had been made by him either in a Government Treasury or in the Reserve Bank of India to be at the disposal of the 651 Election Commission to be utilized by it in the manner authorized by law and was under its control and payable on a proper application being made in that behalf to the Election Commission or to any person duly authorized by it to receive the same, be he the Secretary to the Election Commission or any one else.
If this essential requirement was complied with, no literal compliance was at all necessary with the words "in favour of the Secretary to the Election Commission".
Though therefore the making of the deposit and the presentation of the receipt thereof along with the petition was held to be mandatory, this Court held that the form in which the deposit should be made was only directory.
This Court rejected the contention that the election petition was liable to be dismissed in limine under section 85 or sub s.(3) of section 90 for non compliance with the requirements of section 117 of the Act and observed: "It would be absurd to imagine that a deposit made either in a Government Treasury or in the Reserve Bank of India in favour of the Election Commission itself would not be sufficient compliance with the provisions of section 117 and would involve a dismissal of the petition under section 85 or section 90(3).
The above illustration is sufficient to demonstrate that the words "in favour of the Secretary to the Election Commission" used in s.117 are directory and not mandatory in their character.
What is of the essence of the provision contained in section 117 is that the petitioner should furnish security for the costs of the petition, and should enclose along with the petition a Government Treasury receipt showing that a deposit of one thousand rupees has been made by him either in a Government Treasury or in the Reserve Bank of India, is at the disposal of the Election Commission to be utilised by it in the manner authorised by law and is under its control and payable on a proper application being made in that behalf to the Election Commission or to any person duly authorised by it to receive the same, be he the Secretary to the Election Commission or any one else." The same question was dealt with in Chandrika Prasad Tripathi vs Siv Prasad Chanpuria & Ors.(1) In that case, security deposit of Rs. 1000/ had been made, but not, in terms, in the name of the Secretary 652 to the Election Commission; instead, the deposit was made "refundable by order of the Election Commission of India, New Delhi".
The Court held that the objection based on the peculiar wording of the deposit was purely technical.
To the same effect are the decisions of this Court in Om Prabha Jain vs Gian Chand & Anr.(1) and Budhi Nath Jha vs Manilal Jadav.(2) The Court in all these cases followed the decision in Kamaraja Nadar 's case, (supra) that section 117 of the Act should not be strictly or technically construed and that substantial compliance with its requirements should be treated as sufficient.
In contrast, the decisions in Charan Lal Sahu vs Nandkishore Bhatt & Ors.(3) and Aeltemesh Rein vs Chandulal Chandrakar & Ors.(4) were cases where the petitioners made no security deposit before filing their election petitions.
In Charan Lal Sahu 's case, supra, the petitioner applied to the High Court for being absolved from making any security deposit or to reduce the amount required to be deposited under the Act.
This Court referred to article 329 (b) of the Constitution and held that the petitioner had no right to file an election petition except in the manner provided by the Act.
There being no provision to absolve the petitioner from payment of security for costs, this Court held that the Madhya Pradesh High Court was right in rejecting the election petition under sub section
(1) of s.86 of the Act.
In Aeltemesh Rein 's case, supra, it was stated in the petition that a security amount of Rs. 2000 was being deposited, but in fact no deposit was made.
The Madhya Pradesh High Court dismissed the election petition.
On appeal, the petitioner contended that sub section
(1) of s.117 of the Act was ultra vires article 329 (b) of the Constitution and therefore the High Court was in error in dismissing the election petition on the ground of non compliance of the provisions of sub section
(1) of s.117.
This Court repelled the contention and expressed the view that the words "in such manner" in article 329(b) could not be limited in their operation to procedural requirements.
The Court held : "The provision of law which prescribes that an election petition shall be accompanied by the payment of security amount pertains to the area covered by the manner of the 653 making of the election petition and is therefore within the authority of Parliament." Adverting to the dismissal of the election petition by the High Court, this Court held that the High Court had no option but to dismiss the petition as it was not accompanied by payment of the security deposit for sub section
(1) of s.86 of the Act clearly provides that the High Court shall dismiss an election petition which did not comply with the provisions of s.81, or 82 or 117 of the Act.
The remaining part of the case is not free from difficulty.
There are two questions that arise, namely: (1) Whether the photograph referred to in paragraph 18(b) was a schedule or annexure within the meaning of sub section
(2) of s.83 and therefore formed an integral part of the election petition and thus the failure to furnish the appellant with a copy of the photograph along with a copy of the election petition amounted to a non compliance of sub section
(3) of s.81 (2) Whether the High Court was right in relying upon the decision of this Court in Sahodrabai Rai vs Ram Singh Aharwr(1) in holding that the photograph was merely a document filed along with the election petition as a piece of evidence in proof of the allegation contained in paragraph 18(b) and therefore there was no need for the respondent to supply the appellant with a copy of the photograph.
To bring out the points in controversy, the averments in paragraph 18(b) may be set out ; "18.
The Petitioner submits that the first Respondent is guilty of the corrupt practice under Section 123(6) of the Act by incurring and authorising expenditure in excess of the limit of Rs. 35,000/ fixed under Section 77 of the Act.
The first Respondent has submitted a statement of election expenses disclosing a total of Rs. 10,125.75 only.
A true photostat copy of the Return filed by him is filed herewith as Annexure V. He has, however, failed to disclose the following amount incurred by him in connection with the election, between the date of his nomination and the date of the declaration of the result thereof.
(b) The first Respondent erected fancy banners throughout the constituency and the number of such 654 banners is about 50.
A photograph of one such banner is filed herewith.
The cost of each such banner will be not less than Rs. 1000.
The expenditure involved in erecting these fifty banners is about Rs. 50,000.
It is submitted that the first Respondent has incurred the above said expenditure which added to the amount disclosed in the Return of Election Expenses exceeds the amount fixed under Section 77 (3) of the Act thus amounting to a corrupt practice under Section 123(6) of the Act.
" Admittedly, a copy of the photograph was not furnished to the appellant along with a copy of the election petition, The averment contained in paragraph 18(b) would be incomplete without a copy of the photograph being supplied with a copy of the election petition.
The averment therein is that the appellant committed a corrupt practice under sub s.(6) of s.123 of the Act by incurring or authorising expenditure in contravention of s.77.
It is alleged that the appellant had set up fancy banners throughout the constituency and the number of such banners was about 50, the cost of each such banner being not less than Rs. 1000 and therefore the expenditure involved in erecting these 50 banners was not less than Rs. 50,000/ , but that the appellant had not disclosed the amount in the return of the election expenses and thus committed a corrupt practice under sub s.(6) of s.123 of the Act.
It is not possible to conceive of the dimension of the large fancy banner unless one has a look at the photograph.
The photograph filed with the election petition gives a visual description of the fancy banner, the cost of which at a mere look would show that the expenditure in setting up each such banner would be Rs. 1000 or more.
The photograph depicts two election banners.
One of them is a huge fancy banner or a hoarding on the left side of the road and the other on the right is a smaller election banner.
The fancy banner depicts two groups, and the appellant is present in both.
On the left hand top there is a large picture of the appellant with the late Sri Annadurai and at the right hand below there is a smaller picture of the appellant with Smt.
Indira Gandhi.
The fancy banner shown in the photograph contains an election slogan in Tamil appealing to the electorate to vote for the appellant.
This has been translated for us into English and it reads: 655 "To The Electorate in Anna Nagar Constituency I request you to mark on the Rising Sun and ensure success to enable service to you.
Always your affectionate, Kalaignar M. Karunanidhi Polling Date 31.5.80" It is true that paragraph 18(b) must be read in conjunction with the opening part of paragraph 18.
Though the words "in connection with" do not appear in paragraph 18(b), these words are there in paragraph 18 and therefore it must be taken that the fancy banners were set up in connection with the election.
Nevertheless, without being furnished with a copy of the photograph, the averments in paragraph 18(b) would be incomplete as regards the allegation of the corrupt practice committed by the appellant.
We are driven to this conclusion by the mandatory requirement of sub section
(3) of section 81 of the Act which is in two parts.
The first part of sub section
(3) of s.81 provides that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and the second part relates to the manner in which such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
It has already been stated that mandatory provisions must be fulfilled exactly whereas it is sufficient if directory provisions are substantially fulfilled.
In Ch.
Subbarao vs Member, Election Tribunal, Hyderabad,(1) this Court held that (1) if there is a total and complete non compliance of the provisions of sub s.(3) of s.81 the election petition might not be "an election petition presented in accordance with the provisions of this Part" within the meaning of s.80 of the Act, and (2) by the expression "copy" in sub section
(3) of s.81, it was meant not an exact copy but only one so true that nobody can possibly misunderstand it being not the same as the original.
In Ch.
Subbarao 's case, supra, there was no attestation at the foot of the copies that they were true copies.
It was held that the absence in the copy of a note to the effect that it was a 'true copy ' 656 could not detract the copy from being a true copy.
The facts and circumstances of the case therefore showed that there had been a substantial compliance with the requirements of sub s (3) of s.81 of the Act.
The wider question whether sub section
(3) of section 81 or a part thereof is mandatory or directory was left open.
On the facts of that case the Court held that if there was substantial compliance with the requirements of sub section
(3) of s.81, the election petition could not be dismissed.
It was submitted on behalf of the appellant that there was total and complete non compliance of the requirements of sub section
(3) of section 81 and therefore the election petition was liable to be dismissed in limine under sub section
(1) of s.86.
The argument to the contrary advanced on behalf of the respondent was that the photograph filed along with the election petition had to be treated as a document in proof of the allegations contained in paragraph 18(b) and not as a part of the election petition.
The submission is that there is a distinction 'between a schedule or annexure to the petition referred to in sub section
(2) of section 83" and "a document which is merely evidence in the case which is annexed to the election petition" and to such a document sub section
(3) of s.81 is not attracted.
The preliminary issue and the appeal turn on a short point of construction.
The question that arises is whether the words "copies thereof" in sub section
(3) of s.81 comprehend the election petition proper or do they also include a schedule or annexure annexed thereto.
The controversy whether the photograph was a schedule or annexure in terms of sub section
(2) of s.83 or merely a document only in proof of the allegations in paragraph 18(b) must turn on a construction of sub section
(3) of s.81 read with sub s.(2) of s.83.
It now appears to be well settled by Sahodrabai 's case (supra) that sub section
(2) of s.83 applies only to a schedule or annexure which is an integral part of the election petition and not to a document which is produced as evidence of the election petition.
In dealing with sub section
(2) of s.83 of the Act it was observed: "We are quite clear that sub section
(2) of s.83 has reference not to a document which is produced as evidence of the averments of the election petition but to averments of the election petition which are put, not in the election petition but in the accompanying schedules or annexures.
We can give quite a number of examples 657 from which it would be apparent that many of the averments of the election petition are capable of being put as schedules or annexures.
For example, the details of the corrupt practice there in the former days used to be set out separately in the schedules and which may, in some cases, be so done even after the amendment of the present law.
Similarly, details of the averments too compendious for being included in the election petition may be set out in the schedules or annexures to the election petition.
The law then requires that even though they are outside the election petition, they must be signed and verified, but such annexures or schedules are then treated as integrated with the election petition and copies of them must be served on the respondent if the requirement regarding service of the election petition is to be wholly complied with.
But what we have said here does not apply to documents which are merely evidence in the case but which for reasons of clarity and to lend force to the petition are not kept back but produced or filed with the election petitions.
They are in no sense an integral part of the averments of the petition but are only evidence of those averments and in proof thereof.
The pamphlet therefore must be treated as a document and not as a part of the election petition in so far as averments are concerned.
" The High Court rests its conclusion on the decision of this Court in Sahodrabai 's case, supra, but that decision, in our opinion, is inapplicable to the facts and circumstances of the present case.
In Sahodrabai 's case (supra) an election petition was filled together with a pamphlet as annexure thereto.
A translation in English of the pamphlet was incorporated in the body of the election petition and it was stated that it formed part of the petition.
A preliminary objection was raised that a copy of the pamphlet had not been annexed to the copy of the petition served on the returned candidate and therefore the election petition was liable to be dismissed under sub s.(1) of s.86 of the Act.
The Madhya Pradesh High Court sustained the preliminary objection and dismissed the election petition.
On appeal, this Court held that the words used in sub section
(1) of section 81 are only "the election petition" and there was no mention of documents accompanying the election petition.
Since the election petition itself reproduced the whole of the pamphlet in translation 658 in English, it could not be said that the averments with regard to the pamphlet were themselves a part of the petition and therefore the pamphlet had in fact been served on the returned candidate although in a translation and not in the original.
The Court then stated that even if it were not so, sub section
(2) of s.83 of the Act has reference not to a document which is produced as evidence of the averments of the election petition but to averments of the election petition which are put, not in the election petition but in the accompanying schedules or annexures.
It was observed that the details of averments may be too compendious for being included in the petition and may be set out in the schedule or annexure to the election petition.
The Court then gave examples on which it would be apparent that many of the averments of the election petition are capable of being put as schedules or annexures.
It then went on to say that such annexures or schedules are treated as integrated with the election petition and copies of them must be served on the returned candidate if the requirement regarding service of the election petition is to be wholly complied with.
But that this rule was not applicable to documents which are merely an evidence in the case but which, for reasons of clarity and to lend force to a petition, are not kept back but are produced or filed with the election petition.
The Court added: "They are in no sense an integral part of the averments of the petition but are only evidence of those averments and in proof thereof." In that view of the matter the Court held that the pamphlet in question had to be treated as a document and not as a part of the election petition so far as the averments were concerned.
It said: "It would be stretching the words of sub section
(2) of s.83 too far to think that every document produced as evidence in the election petition becomes a part of the election petition proper.
In this particular case we do not think that the pamphlet could be so treated.
" It follows as a necessary corollary that if the pamphlet had not been incorporated in the body of the election petition, the decision of the Court in Sahodrabai 's case, supra, would have been otherwise.
That precisely is the case here.
659 In this connection, we may next refer to the decisions of this Court in Jagat Kishore Prasad Narayan Singh vs Raj Kumar Poddar & Ors.
(1) and Satya Narain vs Dhuja Ram & Ors.
(2) In Jagat Kishore Prasad Naryan Singh 's case, supra, there were serious discrepancies between the original election petition filed in the Court and the copies supplied to the contesting candidates.
This Court dismissed the election petition on the ground of non compliance of sub section
(3) of s.81 as the copies furnished to the contesting respondents were not true copies and there was divergence between the allegations made in the petition and the allegations made in the copies, and that such divergence was bound to mislead the contesting candidates and prejudice their defence, particularly in a case where the returned candidate is charged with corrupt practice.
That is because he must know the nature of the charge against him, so that he may prepare his defence.
It was observed: "The law requires that a true copy of an election petition should be served on the respondents.
That requirement has not been either fully or substantially complied with.
" The next case in point is Satya Narain vs Dhuja Ram & Ors.(supra) where the election petition was not accompanied by the requisite number of spare copies for service on the respondent and no schedules were filed along with the petition.
When the petition came up for scrutiny, the Deputy Registrar of the High Court asked the election petitioner to remove the defects.
Before the date refixed the spare copies were filed and the defect removed.
The question before the Court was whether the petition was liable to be dismissed in limine under sub section
(1) of s.86 of the Act for non compliance of sub section
(3) of s.81.
The importance of the decision in Satya Narain 's case (supra) lies in the fact that the Court laid down that the first part of sub section
(3) of s.81 which required that the election petition should be accompanied by as many copies thereof as there were respondents mentioned in the petition, was mandatory in character and non compliance with it was fatal to the petition in view of sub section
(1) of s.86.
The decision in Kamalam vs Dr. V.A. Syed Mohamad(3) may also be referred.
What had happened in that case was this.
The signature of the election petitioner by way of authentication appeared 660 at the foot of the copy of the affidavit but there was no such signature separately appended at the foot of the copy of the election petition.
There was a preliminary objection raised that since the copy of the election petition had not been attested by the petitioner under her own signature to be a true copy, there was no compliance with sub s.(3) of s.81 of the Act and hence the petition was liable to be dismissed in limine under sub section
(1) of s.86 of the Act.
In repelling the contention, the Court observed that the second part of sub s.(3) of s.81 had been complied with upon the view that the copy of the petition and the affidavit filed along with it as required by law constituted one single document and the signature in original of the petitioner in proof of the affidavit satisfied the requirements of sub s.(3) of s.81 of the Act.
In explaining as to what constitutes an election petition for purposes of sub section
(3) of s.81, it was observed: "Now, the first question which arises is as to what constitute an election petition for the purpose of section 81, sub section (3).
Is it confined only to election petition proper or does it also include a schedule or annexure contemplated in sub section (2) of section 83 or a supporting affidavit referred to in the proviso to section 83, sub section (1)? To answer this question, we must turn to section 83 which deals with contents of an election petition.
Sub section (1) of that section sets out what an election petition shall contain and provides that it shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 for the verification of pleadings.
The proviso requires that where the petitioner alleges any corrupt practice, prescribed form in support of the allegation of such corrupt practice the election petition shall also be accompanied by an affidavit in the and the particulars thereof.
The context in which the proviso occurs clearly suggests that the affidavit is intended to be regarded as part of the election petition.
Otherwise, it need not have been introduced in a section dealing with contents of an election petition nor figured as a proviso to a sub section which lays down what shall be the contents of an election petition.
Sub section (2) also by analogy supports this inference.
It provides that any schedule or annexure to an election petition shall be signed by the petitioner and verified in the same manner as an election petition.
It is now established by the decision of this Court in Sahodrabai Rai vs 661 Ram Singh Aharwar that sub section (2) applies only to a schedule or annexure which is an integral part of the election petition and not to a schedule or annexure which is merely evidence in the case but which is annexed to the election petition merely for the sake of adding strength to it.
" The test to be applied in determining whether the photograph referred to in paragraph 18(b) is an integral part of the election petition or was merely a piece of evidence in proof of the allegations contained therein, depends on whether it is a part of the pleadings.
Upon the view that the photograph was not merely a document accompanying the election petition but was a part and parcel of the pleading contained in paragraph 18(b), it is unnecessary for us to deal with the submission based on order VII, r.14 of the Code of Civil Procedure, 1908.
Our attention was drawn to the passage in Sahodrabai 's case, supra, at p.18 of the Report.
The Court observed that under order VII, r.14 where a plaintiff sues upon a document in his possession or power, he is required to file only one copy of the document and not as many copies as there are defendants and therefore a copy of the document is not expected to be deliberate with the copy of the plaint to the answering defendants when summons is served on them and that it would be too strict a reading of the provisions of sub section
(3) of s.81 and sub section
(2) of s.83 to lay down that the election law provides anything different.
These observations cannot, in our opinion, be read out of context.
The decision in Sahodrabai 's case, supra, was that since the election petition itself reproduced the whole of the pamphlet in a translation in English, the pamphlet filed along with the petition had to be treated as a document and not as a part of the election petition and that being so, the Court observed that it would be stretching the words of sub section
(3) of s.81 and sub section
(2) of s.83 too far to think that every document produced as evidence in the election petition becomes a part of the election petition proper.
We would add for the sake of completeness that we have been referred to the decision of this Court in Sharif ud din vs Abdul Gani Lone (1) but that decision is not directly in point.
One of us (Venkataramiah, J.) had occasion to deal with the corresponding sub section
(3) of s.89 of the Jammu & Kashmir Representation of the people Act, 1957 which reads: 662 "Every election petition should be accompanied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the petitioner under his own signature to be true copy of the petition.
" In that case, both the copies of the election petition contained the endorsement "Attested true copy, Piyare Lal Handoo, Advocate".
The question arose whether there was a sufficient compliance with the provisions of sub section
(3) of s.89 of that Act.
The Court pointed out that sub section
(3) of s.89 consists of two parts.
The first part requires that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and the second part requires that every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
The first part of the section has been held to be a mandatory requirement by this Court in Satya Narain 's case (supra) The Court held the second part also to be mandatory and observed: "It is true that sub s.(3) of s.89 of the Act was purely procedural in character and that ordinarily procedural law should not be given that primacy by courts as would defeat the ends of justice.
But if a law even though it may be procedural in character insists that an act must be done in a particular manner and further provides that certain consequences should follow if the act is not done in that manner, the Courts have no option but to enforce the law as it is." Upon that view it was held that the attestation of the copies by counsel for the election petitioner as true copies was not a sufficient compliance with the provisions of sub section (3) of s.89 of that Act as it required attestation by the election petitioner himself.
The decision is an application of the rule that mandatory provisions must be fulfilled exactly.
It is obvious that photograph was a part of the averment contained in paragraph 18 (b).
In the absence of the photograph the averment contained in paragraph 18 (b) would be incomplete.
The photograph referred to in paragraph 18 (b) was therefore an integral part of the election petition.
It follows that there was total non compliance with the requirements of sub section
(3 of s.81 of the Act by failure to serve the appellant with a copy of the election petition.
In 663 Ch.
Subbarao 's case, supra, the Court held that if there is a total and complete non compliance with the provisions of sub section
(3) of s.81, the election petition could not be treated an "election petition presented in accordance with the provisions of this Part" within the meaning of s.80 of the Act.
Merely alleging that the appellant had put up fancy banners would be of no avail unless there was a description of the banner itself together with the slogan.
The conclusion is irresistible that the words "copies thereof" in sub s.(3) of s.81 read in the context of sub s.(2) of s.83 must necessarily refer not only to the election petition proper but also to schedules or annexures thereto containing particulars of any corrupt practice alleged therein.
That being so, we are constrained to reverse the judgment of the High Court insofar as it holds that the photograph of the fancy banner adverted to in paragraph 18 (b) could not be treated to be an integral part of the election petition but was merely a piece of evidence as to the nature and type of fancy banner erected by the appellant and therefore failure to supply a copy of the photograph to the appellant did not amount to a violation of the provisions of sub section
(3) of s.81 of the Act.
For these reasons, all the appeals and special leave petitions except Civil Appeal No. 38 (NCE) of 1981 must fail and are dismissed.
Civil Appeal No.38(NCE) of 1981 partly succeeds and is allowed.
The judgment of the High Court holding that the amount of Rs. 2000 having been deposited to the credit of the Registrar, High Court in the Reserve Bank of India on the strength of pre receipted challans issued by the Accounts Department on the basis of a lodgement schedule, there was substantial compliance of the requirements of sub section
(1) of s.117 of the Act, is upheld.
But the judgment of the High Court is set aside insofar as it holds that the failure to supply a copy of the photograph of the fancy banner referred to in paragraph 18 (b) along with a copy of the election petition to the appellant did not amount to a breach of the provisions contained in sub section
(3) of s.81 of the Act, and instead we hold that the failure to do so amounted to non compliance of sub section
(3) of s.81 inasmuch as the photograph of the fancy banner was an integral part of the election petition and therefore the election petition must be dismissed summarily under sub section
(1) of s.86 of the Representation of the People Act, 1951.
We further direct that the High Court shall permit the appellant to withdraw the recrimination petition filed by him under s.97 of the Act in terms of the undertaking given by learned 664 counsel for the appellant during the course of the hearing of the appeal.
The costs throughout shall be borne by the parties as incurred.
H.S.K Civil Appeal No. 38/81 partly by allowed.
Petitions & Civil Appeal Nos.
4216/82 and 1170/81 dismissed.
|
Respondent No. 1 in C.A. 38 of 1981 filed an election petition under the Representation of the People Act challenging the election of the appellant to the State Legislative Assembly on various grounds.
The petition was accompanied by a pre receipted challan prepared by the Accounts Department of the High Court on the basis of the lodgment schedule initialled by the Assistant Registrar II, showing that a sum of Rs. 2000/ had been credited to the account of the Registrar, High Court, Madras, in the Reserve Bank of India, Madras, as security for costs.
The facts are more or less similar to all the appeals.
In C.A. 38/81, which has additional facts, the respondent pleaded, inter.
alia, that the appellant was guilty of corrupt practice under sub s.(6) of section 123 of the Act.
He alleged that the appellant had erected about 50 fancy banners each costing not less than Rs. 1000/ and if this expenditure of Rs. 50,000/ was added to the amount already disclosed by him in his return of election expenses it would exceed the prescribed limit thus amounting to a corrupt practice.
The respondent filed a photograph of one such fancy banner with the election petition but did not annex a copy of this photograph to the copy of the election petition furnished to the appellant.
The appellant raised two preliminary objections as to the maintainability of the petition on the ground of non compliance with sub s.(1) of section 117 read with r. 8 of the Election Petitions Rules, and with sub s.(3) of section 81.
High Court overruled both the objections and held: (1) there was substantial compliance with sub section
(1) of section 117: and (2) the banner could not be treated as an integral part of the election petition but was merely a piece of evidence as to the nature and type of the fancy banners erected by the appellant and therefore failure 630 to supply a copy of its photograph to the appellant along with the copy of the election petition did not amount to a breach of sub s.(3) of of section 81.
On appeal, this Court by its order dated April 2, 1981 remitted back the issue with regard to non compliance of sub section (1) of section 117 read with r. 8 for a decision afresh on the basis of the evidence to be led by the parties.
After considering the evidence, the High Court adhered to its earlier view.
The appellant contended in this Court: (1) the provisions of sub section
(1) of section 117 were mandatory; there was no distinction between the requirement as to the making of security deposit and the manner of making such deposit; the words "in accordance with the rules of the High Court" in sub section 117 were mandatory; r. 8 must be read as forming part of sub section
(1) of section 117 by incorporation; in view of the definite stand taken by the respondent t at he had complied with r. 8 it was not possible to fail back on Order 31 of the Madras High Court (Original Side) Rules, 1956.
There was no compliance with r. 8 as the security amount was not deposited with the Registrar in cash.
(2) There was no compliance with the requirements of sub section
(3) of section 81 as the copy of the election petition served on him was not accompanied by a copy of the photograph of the fancy banner.
Dismissing all the appeals and special leave petitions except C.A. 38/81 which partly succeeds and is allowed.
^ HELD: 1(a).
Sub section
(1) of section 117 is in two parts.
The first part provides that at the time of presenting an election petition, the petitioner shall deposit in the High Court a sum of Rs. 2000 as security for the costs of the petition, and the second is that such deposit shall be made in the High Court in accordance with the rules of the High Court.
The requirement regarding the making of a security deposit of Rs. 2000 in the High Court is mandatory, the non compliance of which must entail dismissal in limine of the election petition under sub section (1) of section 86 of Act.
But the requirement of its deposit in the High Court in accordance with rules of the High Court is clearly directory.
The essence of sub.s.
(1) of section 117 is that at the time of filing an election petition the petitioner should furnish security for the costs of the petition.
Section 117 should not be strictly or technically construed and substantial compliance with its requirements should be treated as sufficient.
[645 F, 651 E, 652 B] 1(b).
A literal and mechanical interpretation of r. 8.
of the Election Petitions Rules would lead to manifest absurdity as it would imply that in every case the election petitioner shall have to pay to the Registrar a sum of Rs. 2000 in cash towards security for costs and obtain a receipt from him there for.
Rule 8 is silent as to how the cash is to be handled.
Inasmuch as r. 8 does not lay down the procedure regulating the manner of deposit of cash, the matter falls to be governed by r. 2 of Order 31 of the Madras High Court (Original Side) Rules, 1956 by reason of r. 12 of the Election Petitions Rules.
Although Order 31, r. 2 does not in terms apply because Order 31 relates to " payment into court of moneys to the credit of civil court deposits and account of suitors ' money", and though no lodgment schedule can be prepared under r. 2 except in pursuance of a decree or order passed by the High Court i.e. in relation to some proceeding pending, or disposed of, by the High Court, still 631 by virtue of r. 12 of the Election Petitions Rule that is the procedure to be adopted for deposit of Rs. 2000 in the High Court in cash i.e. by crediting the amount on the strength of a pre receipted challan prepared by the Accounts Department on the basis of a lodgment schedule.[649 A E] In the present case the Assistant Registrar II, Madras High Court, directed that the money be deposited to the credit of the Registrar of the High Court in the Reserve Bank of India.
The election petitioner deposited Rs. 2000 with a pre receipted challan issued by the Accounts Department to the credit of the Registrar of the High Court and the Reserve Bank of India made the endorsement "received in cash".
It must be regarded that the payment was made in the High Court and the pre receipted challan bearing the endorsement of the Reserve Bank must be treated as the receipt of the Registrar in terms of r. 8, the Reserve Bank acting as an agent of the High Court.
The procedure adopted by Assistant Registrar II, was in conformity with r.8.
There was due compliance with the requirements of sub section
(1) of section 117 of the Act read with r. 8 of the Election Petitions Rules.
[649 B, E H] K. Kamaraja Nadar vs Kunju Thevar & Ors., ; Chandrika Prasad Tripathi vs Siv Prasad Chanpuria & Ors.
, ; ; Om Prabha Jain vs Gian Chand Jadav, ; Charan Lal Sahu vs Nandkishore Bhatt & ors., [1974]1 SCR 294; Aeltemesh Rein vs Chandulal Chandrakar & Ors., ; , referred to. 2(a).
Sub section
(3) of section 81 of the Act is in two part.
The first part provides that every election petition shall be accompanied by as many copies there of as there are respondents mentioned in the petition and the second part relates to the manner In which such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
The first part is mandatory in character and non compliance with it was fatal to the petition in view of sub section
(1) of section 86.
E, 659 F] 2(b).
The words "copies thereof" in sub section
(3) of section 81 read in the context of sub section
(2) of section 83 must necessarily refer not only to the election petition proper but also to schedules or annexures thereto containing particulars of any corrupt practice alleged therein.
Sub section
(2) of section 83 applies only to a schedule or annexure which is an integral part of the election petition and not a document which is produced as evidence of the averments of the election petition.
[663 B C, 656 F G] In the instant case, the test to be applied in determining whether the photograph referred to in the election petition is an integral part of the election petition or was merely a piece of evidence in proof of the allegations contained therein, depends on whether it is a part of the pleadings.
The photograph which gives a visual description of the fancy banner, the cost of which at a mere look would show that the expenditure in setting up each such banner would be Rs. 1000/ or more, was not merely a document accompanying the election petition but was a part and parcel of the pleading contained therein.
The averment contained in the election petition would be incomplete as regards the allegation of the corrupt practice committed by the appellant without a 632 copy of the photograph being supplied with a copy of the election petition.
Merely alleging that the appellant had put up fancy banners would be of no avail unless there was a description of the banner itself together with the slogan.
The failure to supply a copy of the photograph along with a copy of the election petition to the appellant amounted to non compliance of sub section
(3) of section 81,[661 B, C, 654 C, 655 D, 663 A B, F G] Sahodrabai Rai vs Ram Singh Aharwar, ; , held inapplicable.] Ch.
Subbarao vs Member, Election Tribunal Hyderabad, ; ; Jagat Kishore Prasad Narayn Singh vs Raj Kumar Poddar & Ors.
[1971] 1 SCR 821; Satya Narain vs Dhuja Ram & Ors., ; and Kamalam (M) vs Dr. V.A. Syed Mohamad, ; , referred to.
Sharif ud din vs Abdul Gani Lone,[1980] 1 SCR 1176, distinguished.
It is always important to bear the distinction between mandatory and directory provisions of 3 statute.
The general rule of interpretation is well known and it is but an aid for ascertaining the true intention of the legislature which is the determining factor and that must ultimately depend on the context.
The question as to whether a statute is mandatory or directory, depends upon the intent of the legislature and not upon the language in which the intent is clothed.
The meaning and intention of the legislature must govern, and these must be ascertained not only from the words used, but also by considering its object and consequences which would follow from construing it one way or the other.
An absolute enactment must be obeyed or fulfilled exactly but it is sufficient if a directory enactment be obeyed or fulfilled substantially.
An enactment in form mandatory might in substance be directory and the use of the word "shall" does not conclude the matter.
[645 E H, 646 A C] N.P. Ponnuswami vs Returning Officer, Namakkal, ; ; Wolyerhampton New Water Works Company vs Hawkesford; , at 356; Jagan Nath vs Jaswant Singh & Ors., ; ; Maxwell on the Interpretation of Statutes, 12th Edn.
p. 314; Crawford on 'Statutory Construction ' p. 516; State of U.P. vs Manbodhan Lal Srivastva, ; ; State of U.P. & ors, vs
Babu Ram Upadhya; , ; Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur, and Montreal Street Railway Company vs Normandin LR ; , referred to.
|
Civil Appeal No. 4379 of 1983.
From the Judgment and order dated the 11th January, 1983 of the Punjab and Haryana High Court at Chandigarh in Election Petition No. 3 of 1982.
S N. Kacker and V Mayakrishan for the Appellant.
A. K. Sen and Rathin Das for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
On May 3, 1983 we made the following order: "Special leave granted.
The appeal is allowed.
The order of the High Court refusing the request of the appellant to examine his 54 witnesses who, according to him, were kept present is varied.
The election petitioner appellant herein shall produce all those witnesses and examine all or any of them whomsoever he wants to examine out of them and in respect of whom, the Court did not grant permission to examine.
The examination shall be taken up day to day.
No Court assistance need be rendered for procuring the presence of all or any of them and the examination shall be completed within a span of 7 days commencing from the date on which the High Court commences examination of witnesses.
Subject to the convenience of the learned Judge and the parties recording of evidence shall be taken up on this side of the summer vacation of the High Court.
In the circumstances of the case, there shall be no order as to costs.
Reasons to follows.
" Here are the reasons.
528 Appellant Shri Mange Ram contested the election to Haryana Legislative Assembly from Jind Legislative Assembly constituency.
14 persons offered themselves as candidates for the election.
One Shri Brij Mohan, 1st respondent was declared elected.
Appellant was defeated.
The remaining candidates lost their deposits.
Appellant called in question the election of the 1st respondent (the returned candidate) by presenting .
an election petition under Sec. 81 of the Representation of People Act 1951 ( ' 1951 Act ' for short).
To this petition, the returned candidate as well as all other candidates who lost the election were impleaded as parties.
In the election petition, charges of corrupt practice and irregularities and illegalities in the conduct of election were made.
The returned candidate contested the petition.
After going through the pleadings of the parties, the Court ascertained the points on which parties were at variance and framed appropriate issues.
The election petition reached the stage of recording evidence.
It appears an application was filed by the appellant election petitioner seeking permission to produce and examine witnesses whose names were set out in the application.
It was averred in the application that the names of the witnesses whom he desires to produce are already mentioned in the appropriate paragraphs of the election petition and that the petitioner would keep the witnesses present.
The learned Judge to whom the election petition was assigned made an order on November 29, 1982 that as and when witnesses are produced, appropriate orders will be passed determining whether the witnesses could or could not be produced.
In the meantime, the evidence of election petitioner was being recorded.
It appears that again on January 11,1983, petitioner submitted a list of witnesses intimating to the Court that he desires to examine them.
This was objected to by the returned candidate.
The learned Judge after hearing the parties made an order upholding the objection raised by the returned candidate that the purpose for which the witnesses were offered is not mentioned in the list and therefore, the election petitioner could not be permitted to examine such witnesses.
A further observation was made by the Court that the election petitioner could not be allowed to examine more witnesses whose names had not been mentioned in the list of witnesses submitted in accordance with the relevant provisions of the Code of Civil Procedure and the rules framed by the High Court.
Accordingly, the learned Judge held that except Bahre son of Sher Singh, no other witness could be examined and that as soon as the evidence of the afore mentioned witness was recorded, 529 the Court would proceed to record the evidence on behalf of the returned candidate; and thereafter the matter will be set down for hearing oral arguments of the learned counsel of either side.
It is this order which was questioned in this appeal by special leave.
An election petition presented under Sec.
81 of the '1951 Act ' must satisfy the requirements of Secs.
83 and 84.
Chapter III in Part IV of the '1951 Act ' lays down the procedure for trial of election petitions.
Sec. 87 which is material for the present purpose reads as under: 87.
Procedure before the High Court (1) Subject to the provisions of this Act and of any rules made thereunder every election petition shall be tried by the High Court, as nearly as may be in accordance with the procedure applicable under the Code of Civil Procedure, 1908 (5 of 1908) to the trial of suits: Provided that the High Court shall have the discretion to refuse, for reasons to be recorded in writing, to examine any witness or witnesses if it is of the opinion that the evidence of such witness or witnesses is not material for the decision of the petition or that the party tendering such witness or witnesses is doing so on frivolous grounds or with a view to delay the proceedings.
(2) The provisions of the (1 of 1872), shall, subject to the provisions of this Act be deemed to apply in all respects to the trial of any election petition.
" Order XVI Rule 1 which is relied upon on behalf of the returned candidate reads as under.
"1. List of witnesses and summons to Witnesses (1) on or before such date as the Court may appoint, and not later than fifteen days after the date on which the issues are settled, the parties shall present in Court a list of witnesses whom they propose to call either to give evidence or to produce documents and obtain summonses to such persons for their attendance in Court.
530 (2) A party desirous of obtaining any summons for the attendance of any person shall file in Court an application stating therein the purpose for which the witness is proposed to be summoned.
(3) The Court may, for reasons to be recorded, permit a party to call, whether by summoning through Court or otherwise, any witness, other than those whose names appear in the list referred to in sub rule (1), if such party shows sufficient cause for the omission to mention the name of such witness in the said list.
(4) Subject to the provisions of sub rule (2), summonses referred to in this rule may be obtained by the parties on an application to the Court or to such officer as may be appointed by the Court in this behalf.
1A, Production of witnesses without summons Subject to the provisions of sub rule (3) of Rule 1, any party to the suit may, without applying for summons under rule 1, bring any witness to give evidence or to produce documents." Rule 1A was inserted by the Code of Civil Procedure (Amendment) Act, 1956.
Both Rule 1 and 1A have been drastically amended by the Amending Act, 1976 which came into force on February 1, 1977.
Rules 1 and 1A extracted hereinabove are the amended rules in force from February 1, 1977.
At the hearing of the appeal, a statement was made that the Punjab and Haryana High Court has introduced a proviso to subrule (4) of Rule 1 of order XVI.
It reads as under: "Provided that no party who has begun to call his witnesses shall be entitled to obtain process to enforce the attendance of any witness against whom process has not previously issued, or to produce any witness not named in a list, which must be filed in Court on or before the date on which the hearing of evidence on his behalf commences and before the actual commencement of the hearing of such evidence without any order of the Court made in writing and stating the reasons therefor.
" 531 In exercise of the powers conferred by clauses 27 and 35 of the Letters Patent and Sec. 129 of the Code of Civil Procedure, 1908, the High Court of Punjab and Haryana has framed rules styled as 'Rules of Procedure and Guidance in the matter of trial of Election Petitions under Part VI of the Representation of the People Act, 1951 ' (High Court Rules for short).
Rule 22 of the aforementioned rules is relevant.
It reads as under: "22(1) A party desirous of requiring the attendance of his witnesses at the trial of the petition through the process of the High Court shall, within fifteen days of the settlement of the issues, make an application for the purpose to the Registrar.
The said application shall contain the names of the said witnesses and a gist of the facts to be proved by each one of them.
A copy of the said application shall, also, be delivered by the party or his Advocate to the Advocate for the opposite party or if the same is not represented by an Advocate, to the said party, at the same time it is made to the Registrar.
. ," The neat question of law is: where a party to a proceeding does not wish to have the assistance of the Court for the purpose of procuring the attendance of a witness or witnesses, could he be denied the privilege of examining witnesses kept present by him on the date fixed for recording his evidence, on the sole ground that the names of the witnesses and the gist of evidence have not been set out in the list which may or ought to have been filed in compliance with order XVI Rule 1 of the Code of Civil Procedure ? Sub rule (1) of Rule 1 of order XVI casts an obligation on every party to a proceeding to present a list of witnesses whom it t proposes to call either to give evidence or to produce documents and obtain summonses to such persons for their attendance in Court.
Sub rule (2) requires that the parties seeking the assistance of the Court for procuring the attendence of a witness must make an application stating therein the purpose for which the witness is pro posed to be summoned.
Sub rule (3) confers a discretion on the Court to permit a party to summon through Court or otherwise any witness other than those whose names appear in the list submitted in sub rule (1), if such party shows sufficient cause for the omission to mention the name of such witness in the said list.
Rule 1A in its 532 amended form in force since 1977 enables a party to bring any witness to give evidence or to produce documents but this enabling provision is subject to the provision contained in sub rule (3) of Rule 1 of order XVI.
If a reference to Rule 22 of the High Court Rules is recalled at this stage, it merely reenacts sub rule (2) of Rule 1 of order XVI.
If the requirements of these provisions are conjointly read and properly analysed, it clearly transpires that the obligation to supply the list as well as the gist of the evidence of each witness whose name is entered in the list has to be carried out in respect of those witnesses for procuring whose attendance the party needs the assistance of the Court.
When a summons is issued by the Court for procuring the presence of a witness, it has certain consequences in law.
If the summons is served and the person served fails to comply with the same, certain consequences in law ensue as provided in Rule 10 of order XVI.
The consequence is that where the witness summoned either to give evidence or to produce documents fails to attend or to produce the documents in compliance with such summons, the Court on being satisfied of the service as provided therein and is further satisfied that the person has without lawful excuse failed to honour the summons, the Court may issue is a proclamation requiring him to attend to give evidence or to produce the document at a time and place to be named therein; and a copy of such proclamation shall be affixed in the manner therein provided.
Simultaneously, the Court may, in its discretion, issue a warrant, either with or without bail, for the arrest of such person, and may make an order for the attachment of his property for such amount as it thinks fit.
Even if thereafter the witness fails to appear, the Court may impose upon him such fine not exceeding five hundred rupees as it thinks fit, having regard to his condition in life and all the circumstances of the case, and may order his property, or any part, thereof, to be attached and sold as provided in Rule 12 of order XVI.
In view of this legal consequence ensuing from the issuance of a summons by the Court and failure to comply with the same, the scheme of Rules 1, 1A of order XVI and Rule 22 of the Rules framed by the High Court clearly envisaged filing of a list only in respect of witnesses whom the parties desire to t examine and procure presence with the assistance of the Court.
There, however, remains an area where if the party to a proceeding does not desire the assistance of the Court for procuring the presence of a witness, obviously the party can produce such witness on the date of 533 hearing and the Court cannot decline to examine the witness unless the Court proposes to act under the proviso to sub sec.
(1) of Sec. 87 of the '1951 Act ' which enables the Court for reasons to be recorded in writing, to refuse to examine any witness or witnesses if it is of the opinion that the evidence of such witness or witnesses is not material for the decision of the petition or that the party tendering such witness or witnesses is doing so on frivolous grounds or with a view to delay the proceedings.
It, therefore, unquestionably transpires that the obligation to supply the list of witnesses within the time prescribed under sub rule (1) of Rule 1 of order XVI is in respect of witnesses to procure whose presence the assistance of the Court is t necessary.
And this ought to be so because the Court wants to be satisfied about the necessity and relevance of the evidence of such witness whose presence will be procured with the assistance of the Court.
This not only explains the necessity of setting out the names of witnesses in the list but also the gist of evidence of each witness.
If mere omission to mention the name of a witness in the list envisaged by sub rule (1) of Rule 1 of order XVI would enable the Court to decline to examine such witness, Rule 1A of order XVI would not have omitted to mention that only those witnesses kept present could be examined whose names are mentioned in the list envisaged by sub rule (1) and who can be produced without the assistance of the Court.
Viewed from this angle, Rule 1A becomes wholly redundant.
If it is obligatory upon the party to mention the 1 names of all witnesses irrespective of the fact whether some or all of them are to be summoned and even the names of those whom the party desires to produce without the assistance of the Court are also required to be mentioned in the list on the pain that they may not be permitted to be examined, Rule 1A would have given a clear legislative exposition in that behalf and the marginal note of Rule 1A clearly negatives this suggestion.
Marginal note of Rule 1A reads as 'Production of witnesses without summons ' and the rule proceeds to enable a party to bring any witness to give evidence or to produce documents without applying for summons under Rule 1.
If it was implicit in Rule 1A that it only enables the party to examine only those witnesses whose names are mentioned in the list filed under sub rule (1) of Rule 1 whom the party would produce before the Court without the assistance of the Court, it was not necessary to provide in Rule 1A that the party may bring any witness to give evidence or to produce documents without applying for summons under R Rule 1.
Rule 1A of order XVI clearly brings to surface the two situations in which the two rules operate.
Where the party wants 534 the assistance of the Court to procure presence of a witness on being summoned through the Court, it is obligatory on the party to file the list with the gist of evidence of witness in the Court as directed by sub rule (1) of Rule 1 and make an application as provided by sub rule (2) of Rule 1.
But where the party would be in a position to produce its witnesses without the assistance of the Court, it can do so under Rule 1A of order XVI irrespective of the fact whether the name of such witness is mentioned in the list or not.
It was, however.
contended that Rule 1A is subject to sub rule (3) of Rule 1 and therefore, the Court must ascertain how far sub rule (3) would carve out an exception to the enabling provision contained in Rule 1A.
There is no inner contradiction between sub rule (1) of Rule 1 and Rule 1A of Order XVI.
Sub rule (3) of Rule 1 of Order XVI confers a wider jurisdiction on the Court to cater to a situation where the party has failed to name the witness in the list and yet the party is unable to produce him or her on his own under Rule 1A and in such a situation the party of necessity has to seek the assistance of the Court under sub rule (3) to procure the presence of the witness and the Court may if it is satisfied that the party has sufficient cause for the omission to mention the name of such witness in the list filed under sub rule (1) of Rule 1, the Court may still extend its assistance for procuring the presence of such a witness by issuing a summons through the Court or otherwice which ordinarily the court would not extend for procuring the attendance of a witness whose name is not shown in the list.
Therefore, sub rule (3) of Rule 1 and Rule 1A operate in two different areas and cater to two different situations.
The analysis of the relevant provisions would clearly bring out the underlying scheme under order XVI Rules 1 and 1A, and Rule 22 of the High Court Rules would not derogate from such scheme.
The scheme is that after the Court framed issues which gives notice to the parties what facts they have to prove for succeeding in the matter which notice would enable the parties to determine what evidence oral and documentary it would like to lead, the party should file a list of witnesses with the gist of evidence of each witness in the Court within the time prescribed by sub rule (1).
This advance filing of list is necessary because summoning the witnesses by the Court is a time consuming process and to avoid the avoidable delay an obligation is cast on the party to file a list of witnesses whose presence the party desires to procure with the assistance of the 535 Court.
But if on the date fixed for recording the evidence, the party is able to keep his witnesses present despite the fact that the names of the witnesses are not shown in the list filed under sub rule (1) of Rule 1, the party would be entitled to examine these witnesses and to produce documents through the witnesses who are called to produce documents under Rule 1A.
The only jurisdiction the Court has to decline to examine the witness is the one set out in proviso to Sec. 87 (1) of '1951 Act ', the discretion being confined to refusing to examine witnesses on the ground that the evidence is either frivolous or vexatious or the evidence is led to delay the proceedings.
Save this the Court has no jurisdiction to decline to examine the witness produced by the party and kept present when the evidence of the party is being recorded and is not closed, and the Court has no jurisdiction to refuse to examine the witness who is present in the Court on the short ground that the name of the witness was not mentioned in the list filed under sub rule (1) of Rule 1 of order XVI.
This scheme clearly emerges from the various provisions herein discussed.
If the scheme of the various provisions is as herein discussed, obviously, the order of the learned Judge is wholly unsustainable.
He declined to examine the witness by accepting the submission of the returned candidate that the names of the witnesses whom the appellant kept present in the Court were not mentioned in the list.
This is the only ground on which the learned Judge declined to permit the appellant to examine his witnesses who were kept present in the Court and this ground is utterly unsustainable.
Therefore, the order of the learned Judge had to be quashed and was accordingly quashed and the appeal was allowed.
H.L.C. Appeal allowed.
|
Sub r.
(1) of r. 1 of O. XVI, Code of Civil Procedure, 1908 casts an obligation on every party to a proceeding to present a list of witnesses whom it proposes to call and to obtain summonses to such persons for their attendance in court; sub r.
(2) requires that the party seeking such assistance from the court must make an application stating the purpose for which the witness is proposed to be summoned; and sub r.
(3) confers a discretion on the court to permit a party to summon through court or otherwise any witness other than those whose names appear in the list submitted under sub r.
(1), if such party shows sufficient cause for the omission to mention the name of such witness in the said list.
Rule 1A of O. XVI enables a party to bring in any witness without applying for summons under r. 1 but this enabling provision is ' subject to sub r.
(3) of r. 1.
Rule 22 of the "Rules of Procedure and Guidance in the matter of trial of Election Petition under Part Vl of the Representation of the People Act, 1951" of the Punjab and Haryana High Court merely re enacts sub rs.
(1) and (2) of r. 1 of o, XVI, C.P.C. Sub section
(1) of section 87 of the Representation of the People Act, 1951 makes O. XVI, c.
applicable to the trial of election petitions and the proviso thereto gives the High Court the discretion to refuse to examine any witness if it is of the opinion that the evidence of such witness is not material or that the party tendering such witness is doing so on frivolous grounds or with a view to delay the proceedings.
The appellant, who was the petitioner in an election petition, had filed an application seeking permission to produce and examine witnesses whose names were set out in the application and the court had passed appropriate orders thereon.
When the court was recording the evidence of the appellant he submitted another list of witnesses whom/he had kept present in the court for being examined, but the court rejected the same for two reasons.
(i) that the appellant had not mentioned their names in the application made by him earlier; and (ii) that there was no mention of the purpose for which they were being offered for examination.
The appellant challenged the validity of the Court 's order.
526 Allowing the appeal, ^ HELD: It is obligatory on the party to a proceeding to file the list of witnesses with the gist of evidence and to make an application for issue of summons as provided in sub rs.
(1) and (2) of r. 1, O. XVI only where the party wants the assistance of the court to procure the presence of witnesses; but where the party is in a position to produce its witnesses without the assistance of the court, it can do so under r. 1A irrespective of the fact whether the names of such witnesses are mentioned in the list or not and the court cannot decline to examine them unless it proposes to act under the proviso to sub section
(1) of section 87 of the Representation of the People Act, 1951.
[531 G H, 532 A] (i) The obligation to file a list of witnesses with the gist of evidence of each witness within the time prescribed under sub r.
(1) of r. 1, O. XVI is in respect of those witnesses to procure whose presence the assistance of the court is necessary.
And, this ought to be so because the court wants to be satisfied about the necessity and relevance of the evidence of such witness whose presence will be procured with the assistance of the court.
If mere omission to mention the name of a witness in the list envisaged by sub r.
(1) of r. 1 would enable the court lo decline to examine such a witness, r. 1A would not have omitted to mention that only those witnesses kept present could be examined whose names are mentioned in the list envisaged by sub r.
(1) of r. 1 and who can be produced without the assistance of the court.
The marginal note of r 1A reads: "Production of witnesses without summons" and the rule proceeds to enable a party to bring any witness to give evidence or produce documents without applying for summons under r. 1.
If it was implicit in r. 1A that it enables the party to examine only those witnesses whose names are mentioned in the list filed under sub r.
(1) of r. 1 whom the patty would produce before the court without the assistance of the court, it was not necessary to provide in r. 1A that the party may bring any witness without applying for summons under r. 1.
[533 B H] (ii) The contention that r 1A is subject to sub r.
(3) of r. 1 and therefore the court must ascertain how far sub r (3) would carve out an exception to the enabling provision contained in r. 1A cannot be accepted.
Sub r.
(3) of r. 1 and r. 1A operate in two different areas and cater to two different situations.
Sub r.
(3) of r. 1 confers a wider jurisdiction on the court to cater to a situation where the party has failed to name the witness in the list and yet is unable to produce him on its own under r. 1A and seeks the assistance of the court under sub r.
(3) of r. 1 to procure the presenee of the witness.
[534 C E] (ii) Failure to comply with the summons served on a person entails certain consequences in law as provided in r. 10 of O. XVI: the court may issue a proclamation requiring him to attend to give evidence or to produce the document at a time and place named therein, or issue a warrant for his arrest with or without bail, or impose a fine on him, or order his property to be attached and sold.
In view of these legal consequences ensuing from the issuance of a summons by the court and failure to comply with the same, the scheme of rs. 1 and 1A of O. XVI and r. 22 of the Rules framed by the High 527 Court envisaged the filing of a List only in respect of witnesses whom the parties desire to examine and procure presence with the assistance of the court.
The advance filling of list is necessary because summoning of witnesses by court is a time consuming process.
[532 D H]
|
Appeal No. 109 of 1957.
Appeal by special leave from the judgment and order dated March 1, 1956, of the Bombay High Court in Appeal No. 20 of 1956.
G. section Pathak, K. H. Bhabha, H. M. Vakeel and I. N. Shroff, for the appellants.
C. K. Daphtary, Solicitor General of India, B. K. Khanna and P. D. Menon, for the respondents.
724 C. K. Daphtary Solicitor General of India section N. Andley, Rameshwar Nath and P. L. Vohra, for the Interveners.
April 11.
The Judgment of Sinha C. J., Ayyangar, Madholkar and Aiyar, JJ., was delivered by Ayyangar, J., Subha Rao, J. delivered a separate judgment.
AYYANGAR, J. This is an appeal by special leave from the judgment of a Division Bench of the Bombay High Court affirming the judgment of a learned Single Judge whereby a petition filed under Article 226 of the constitution by the appellants was dismissed.
By their petition, the appellants challenged the validity of a notification issued by Forward Markets Commission a statutory body created by the Forward Markets Regulation Act 1952 (LXXIV of 1952) (hereinafter referred to as the Act) to the authorities of the East India Cotton Association, Bombay (which will be referred to as the Association) intimating to them that the continuation of trading in certain types of forward contracts in cotton including that known as "hedge contracts" was "detrimental to the interest of the trade and the public interest and to the larger interests of the economy of India" and directed these contracts to be closed out, to be settled at prices fixed in the notification.
It is necessary to set out briefly certain facts in order to appreciate the points raised by the appeal.
The fast India Cotton Association is an "association" which has been recognised by the Central Government under a. 6 of the Act.
The three appellants are members of the Association carrying on business in partnership.
The appellants had, prior to December 1955, entered into "hedges contracts" in respect with other members of the Association for settlements in February and May 1956.
There was no dispute that these 725 contracts were in accordance with the bye laws of the Association as they stood at the date when the contracts were entered into.
The terms and conditions of forward contracts in cotton including "hedge contracts", and the manner of their implementation, were governed by the provisions contained in certain bye laws of the Association and of these that relevant to the consideration of the matters in this appeal was bye law 52AA which on the date when the appellants entered into their contracts ran as follows: "52 A.A. (1) whether or not the prices at which the cotton may be bought or sold are at any time controlled under the provisions of the Essential Commodities Act, 1055, if the Textile Commissioner with the concurrence of the Forward Markets Commission and after consultation with the Chairman (of the Board), be of opinion that the continuation of hedge trading is likely to result in a situation detrimental to the larger interests of the economy of India and so informs the Board, the Board shall forthwith cause a notice to be posted on the Notice Board to that effect and on the posting of such notice and notwithstanding anything to be contrary contained in these bye laws or in any hedge or on call contract made subject to these Bye laws, the following provisions shall take effect.
(2)Every hedge contract and every on call contract in so far as the cotton is uncalled thereunder or "in so far as the price has not been fixed thereunder entered into between a member and a member or between a member and a non member then outstanding shall be deemed closed out at such rate, appropriate to such contract as shall be fixed by the Textile Commissioner and the provisions 726 of Clauses (3), (4) and (6) of Bye laws 52A in so far as they apply to hedge and on call contracts, shall apply as if they formed part of this Bye law.
After the affixation of the said Notice on the Notice Board trading in hedge and on call contracts shall be prohibit ed until the Textile Commissioner with the concurrence of the Forward Markets Commission and after consultation with the Chairman, permits resumption".
Towards the end of 1955 the Chairman of the Association appears to have apprehended that the forward Market in cotton was heading for a crisis which was in part due to the transacting of unbridled option business, which though prohibited by the Act and also by the bye laws of the Association was ever the less indulged in on a large scale.
The hairman brought this situation to the notice of the members of the Board of the Association at a meeting held on December 16, 1955, and suggested that they should give serious thought to this vital problem.
It may be mentioned that the government also were anxiously considering the steps to the taken to solve or avert the crisis.
The action which the government took in this matter is reflected in a notification issued by them on December 23, 1955, by which in exercise of the powers conferred in them by section 14 of the Act they directed the Association to suspend its business in Indian cotton edge contracts for delivery in February 1956 and May 1956 for a period of 7 days with effect from the date of the notification.
The situation did not apparently improve as a result of this temporary suspension so that before the expiry of the work fortnight, action under the same provision was gain taken under a notification dated December 10, 1955, by which the period of 7 days was exten ded by a further period of 7 days i. e. till 6, 1.
56A meeting of the Board of Association was held on 727 January 6, 1956, i. e., the day on which the suspension of forward business expired when the following , resolution was unanimously passed: " 'In view of the suspension of forward trading by government the Board hereby resolves under bye law 52 that an emergency has arisen or exists and prohibits until further notice, subject to the concurrence of the Forward Markets Commission as from Saturday, the 7th January, 1956, trading in hedge contracts for February and May 1956, deliveries above a maximum rate of Rs. 700/ per candy Thereupon a suit (numbered as suit 2/1956) was filed by a member of the Association as representing himself and all other members, on the original side of the High Court, Bombay against the Association and its Board, challenging the validity of the notification of Government suspending forward trading, as also of the resolution of the 'Board, just now extracted.
An application for the grant of interim stay was made for restraining the Board from giving effect to its resolution but this was refused by the learned trial Judge and an appeal was filed against the refusal.
While things were in this state the Central Government, in exercise of the powers conferred on them by section 12 of the Act, made anew bye law which was published in a Gazette of India Extra.
ordinary dated January 21, 1956, in substitution of bye law 52 AA set out earlier.
The new bye law ran.
"152 AA (1) Whether or not prices at which cotton may be bought or sold are at any time controlled under the provisions of the , if the Forward Markets Commission is of the opinion 728 that continuation of trading in hedge contrac ts for any delivery or deliveries is detrimental to the.
interest of the trading or the public interest or to the larger interests of the economy of India and so notifies the Chairman, then notwithstanding anything to the contrary contained in these bye laws or in any hedge or on call contract made subject to these bylaws the following provisions shall take effect.
(2)Every hedge contract and every on call contract in so far as the cotton is uncalle d thereunder or in so far as the price has not been fixed thereunder and relating to the delivery or deliveries notified under clause (1) entered into between a member and a member or between a member and a non member then outstanding shall be deemed closed out at such rate appropriate to such contract and with effect from such date as shall be fixed by the Forward Markets Commission and the provisions of clauses (3), (4) and (0) of Byelaws 52 A in so far as they apply to hedge and on call contracts shall apply as if they formed part of this Bye law".
This bye law was communicated to the Board of the Association on January 23, 1956.
We might here state that the validity of this new bye law has been impugned on various grounds and the alleged invalidity of this We law serves as the main foundation for challenging the validity of the notification of the Forward Markets Commission issued under the powers conferred by it.
On January 24, 1956, the appeal from the order refusing the interim injunction in Suit No. 2 of 1956 was settled between the parties on , theme terms : "(1) The impugned resolution dated January 6, 1956, declared to be valid, 729 (2)The Board of Directors to meet on January 25, 1958, and consider under bye laws 52 (2) whether the rate of Rs. 700 fixed under the said resolution should continue or whether it should be waived. 'In considering the same the Board will apply its own mind and exercise its own judgment".
On the same day, i.e. January 24, 1956, the Forward Markets Commission took action under the powers vested in them under the new bye law 52 AA which had been made by government three days earlier.
By a communication addressed to the Chairman of the Association, the Commission stated : " 'In pursuance of cl.
(1) of the bye law 52AA of the Bye laws of the E.I.C.A. Ltd., Bombay I hereby notify to you that the For.
ward Markets Commission is of the opinion that continuation of trading in the hedge contracts for February and May 1956 delivery is detrimental to the interests of the trade and the public interest and the larger interest of the economy of India and fixed under cl.
(2) of the said bye law; that the rates prevailing at the time at which the trading in the said contracts closed On January 24, 1956, viz., Rs. 700/ for February and Rs. 686/8/ for May delivery as the rates at which and January 25, 1956 as the date with effect from which the hedge contracts and on call contracts in so far as the cotton is uncalled thereunder or in so far as the price has not been fixed thereunder relating to the said delivery shal l be deemed to be closed out".
Thereupon the three appellants who are partners carrying on business in cotton under the name and style of Indramani Pyarelal Co. moved the High Court of Bombay by a petition under article 226 of the Constitution on January 27, 1956, for a writ of mandamus or a direction in the nature of 730 mandamus against the members of the Forward Markets Commission who were individually impleaded as respondents to the petition, ordering them to cancel or withdraw the notification dated January 24, 1956, whose validity was impugned on various grounds.
The petition was heard by a learned single Judge who dismissed it by his order dated February 23, 1956.
An appeal was filed therefrom to a, Bench of the High Court and when this was also dismissed the petitioners moved for a certificate of fitness to appeal to this Court but the same having been rejected, they applied for.
and obtained special leave from this Court, and that is bow the matter is now before us.
The submissions of Mr. Pathak learned Counsel for the appellant in support of the appeal may be classified under three main heads : (1) The notification dated 24th January, 1956, served on the Board of the Association by the Forward Markets Commission was ultra vires for the reason that bye law 52AA, as amended by the Central Government on January 21, 1956, was invalid.
(2) Assuming the byelaw to be valid it could not operate retrospectively or be availed of retrospectively so as to affect rights under existing contracts subsisting on the day the amended bye law was notified in the Gazette but that it could if at all, be validly applied only to Forward hedge contracts entered into thereafter.
(3) The notification by the Forward Markets Commission was improper and malafide and was therefore invalid.
It would be convenient to deal with these points in that order : (1) The first of the points raised raises the question of the validity of bye law 52 AA as amended by the Central Government on January 21, 1956.
Learned Counsel divided his submission on this matter into two sub heads (a) that the Forward Markets Commission could not, on a proper construction of the Act, be validly vested 731 with the power with which it was clothed by the amended bye law, and (b) that it was beyond the power of the Association to have conferred the power which it purported to do under the amended bye law 52AA.
Put in other words, the objections were that the Forward Markets Commission could not, having regard to the terms of the statute under which it was created, be a proper recipient of the power 'with which it was vested by the bye law and secondly that the Association was in law incapable of conferring that power on the Forward Markets Commission or on any other body.
We shall first take up for consideration the argument that the Forward Markets Commission was in law incapable of being the recipient of the power conferred by the bye law under which it was empowered to issue the impugned notification.
For this purpose it is necessary to examine in detail the relevant provisions of the Act.
Section 2 (b) defines 'Commission ' as meaning "The Forward Markets Commission" established under section 3.
Section 3 (1) enacts : "3.
The Central Government may, by notification in the Official Gazette establish a Commission to be called the Forward Markets Commission for the purpose of exercising such functions and discharging such duties as may be assigned to the Commission by or under this Act.
" The point urged by learned Counsel was that the function or the duty cast upon it by the amended bye law 52 AA was not such as could be assigned to the Commission "by or under this Act." The meaning of the words by or under ' and the extent and nature of the duties assigned to the Commission by the Act will therefore require careful examination.
Section 4 relates to the functions of the Commission and it is the proper construction of this 732 section that has loomed large in the arguments on this point.
It is, therefore, necessary to set this out in full : "4.
The functions of the Commission shall be (a)to advise the Central Government in respect of the recognition of, or the withdrawal of recognition from any association or in resPect of any other matter arising out of the administration of this Act ; (b)to keep forward markets under observation and to draw the attention of the Central Government or of any other prescribed autho rity to any development taking place, in or in relation to, such markets which, in the opinion of the commission is of sufficient importance to deserve the attention of the Central Government and to make recommendations thereon ; (e)to collect and whenever the Commission thinks it necessary publish information regar ding the trading conditions in respect of goods to which any of the provisions of this Act is made applicable, including information regarding supply, demand and prices, and to submit to the Central Government periodical reports on the operation of this Act and on the working of forward markets relating to such goods ; (d)to make recommendations generally with a view to improving the Organisation and working of forward markets ; (e)to undertake the inspection of the accounts and other documents of any recognished association whenever it considers it necessary ; and 733 (f)to perform such other duties and exercise such other powers as may be assigned to the Commission by or under this Act, or as may be prescribed".
Pausing here it is necessary to add that the expression prescribed" found at the end of cl.
(f) has been defined by section 2(h) of the Act to mean "Prescribed by rules made under the Act".
Before considering the points urged as regards the construction of this section taken in conduction with the terms of s.3(1) we shall refer to a few other provisions which are of some relevance in the present context.
Section 3(2) which confers power on the Central Government to call for periodical returns from Recognised Associations and to direct such enquiries as they consider necessary to be made, empowers the government to direct the Commission to inspect the accounts and other documents of any recognised Association or of any of its members and submit its report thereon to the Central Government [vide section 3(2) (c)].
Sub section (4) of this section enacts : "8(4).
Every recognised association and every member thereof shall maintain such books of account and other documents as the Commission may specify and the books of account and other documents so specified shall be preserved for such period not exceeding three years as the Commission may specify and shall be subject to inspection at all reasonable times by the Commission".
Section 28 reads : "28.
(1) The Central Government may, by Notification in the Official Gazette, make rules for the purpose of carrying into effect the objects of this Act.
734 (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for (a) the terms and conditions of service of members of the Commission; (b) the manner in which applications for recognition may be made under section 5 and th e levy of fees in respect thereof ; (c) the manner in which any inquiry for the purpose of recognising any association may be made and the form in which recognition shall be granted ; (d) the particulars to be contained in the annual reports of recognised associations ; (e) the manner in which the bye laws to be made, amended or revised under this Act shall, before being so made, amended or revised be published for criticism ; (f) the constitution of the advisory commit.
tees established under section 26, the terms of office of and the manner of filling vacancies among members of the committee ; the interval within which meetings of the advisory committee may be held and the procedure to be followed at such meetings ; and the matters which may be referred by the Central Govern ment to the advisory committee for advice ; (g) any other matter which is to be or may be prescribed.
" The argument on this part of the case was briefly this : The Forward Markets Commission is a statutory body specially created for the purposes of the Act.
The powers which mat be conferred upon the Commission and the duties which it may be called on to discharge are therefore subject to the provisions of the Act.
No more power can be conferred upon this body than what the Act allows 735 and the power under the amended bye law 52AA is not one which is contemplated by the Act as conferable on it.
Section 4 defines the functions of the Commission under five general heads (a) to (e) with a residuary clause contained in cl.
The powers or duties dealt with in cls.
(a) to (e) are in their essence either recommendatory or advisory.
In the context therefore #,,the other" duties or ' ,other" powers which may be assigned to the Commission under cl.
(f) must be either ejuesdem generis with advisory or recommendatory powers or of a nature similar to those enumerated in the previous subclauses.
In support of these submissions learned Counsel invited our attention to several decisions in which ancillary powers which might be implied from the grant of certain express powers were referred to.
In particular it was submitted that the Court would not imply a power which it was not absolu tely necessary to effectuate on express grant or was need to prevent the nullification of an express power that was granted.
In our opinion, these decisions afford no assistance for resolving the controversy before us.
There is no question here of deducing an implied power from the grant of an express one.
What we are concerned with is the scope of an express power or rather whether the grant of the power conferred upon the Commission by the bye. law could be held to be a power which could be assigned to the Commission under cl.
So far as the terms of el, (f) are concerned, there is no limitation upon the nature of the power that might be conferred except, of course, that which might flow from its having to be one in relation to the regulation of forward trading in goods which the Act is designed to effectuate.
Any limitation therefore would have to be deduced from outside cl.(f) of section 4.
Taking each of the clauses (a) to (e), it is not possible to put them positively under one genus in order 736 that there might be scope for the application of the ejusdem generis rule of construction.
Negatively, no doubt it might be said that none of these five clauses confer an executive power such as has been vested in them by the amended bye law 52AA but this cannot be the foundation for attracting the rule of construction on which learned Counsel relies.
On the other hand, if there is no common positive thread running through cls.(a) to (e) such as would bring them under one genus and negatively they do not expressly include any administrative or executive functions, that itself might be a reason why the expression "other" occurring in cl.
(f) should receive the construction that it is intended to com prehend such a function.
Learned Counsel further suggested that even if the rule of ejusdem generis did not apply, the allied rule referred to at page 76 of the report of Western India Theatres Ltd. vs Municipal Corporation of Poona, that the matters expressly referred to might afford some indication of the kind and nature of the power, might be invoked, but we consider that, in the context, there is no scope for the application of this variant either.
What we are here concerned with is whether it is legally competent to vest a particular power in a statutory body, and in regard to this the proper rule of interpretation would be that unless the nature of the power is such as to be incompatible with the purpose for which the body is created, or unless the particular power is contra indicated by any specific provision of the enactment bringing the body into existence, any power which would further the provisions of the Act could be legally conferred on it.
Judged by this test it would be obvious that the power conferred by the bye law is one which could be validly vested in the Commission.
A more serious argument was advanced by learned Counsel based upon the submission that a 737 power conferred by a bye law framed under section 11 or 12 was not one that was conferred ""by or under the Act or as may be prescribed".
Learned Counsel is undoubtedly right in his submission that a power conferred by a bye law is not one conferred "by the Act", for in the context the expression "conferrod by the Act" would mean "conferred expressly or by necessary implication by the Act itself".
It is also common ground that a bye law framed under section II or 12 would not fall within the phraseology "as may be prescribed", for the "expression" 'Prescribed ' has been defined to mean " 'by rules under the Act", those framed under section 28 and a bye law is certainly not within that description.
The question therefore is whether a power conferred by a bye law could be held to be a power ",conferred under the Act".
The meaning of the word ",under the Act" is well known.
"By" an Act would mean by a provision directly enacted in the statute in question and which is gatherable from its express language or by necessary implication therefrom.
The words under the Act " would, in that context, signify what is not directly to be found in the statute itself but is conferred or imposed by virtue of powers enabling this to be done; in other words, by laws made by a subordinate law making authority which is empowered to do so by the parent Act.
This distinction is thus between what is directly done by the enactment and what is done indirectly by rule making authorities which are vested with powers in that behalf by the Act.
(vide Hubli Electricity Company Ltd. vs Province of Bombay, and Narayanaswami Naidu vs Krishna Murthi.
That in such a sense bye laws would be subordinate legislation " 'under the Act" is clear from terms of sections 11 and 12 themselves.
Section 11 (1) enacts: "11.
(1) Any recognised association may, subject to the previous approval of the Central (1) 76 I.A. 57, 66.
(2) I.L.R. , 547.
738 Government.
make bye laws for the regulation and control of forward contracts", and sub section
(2) enumerates the matters in respect of which bye laws might make provision.
Sub section
(3) refers to the bye laws as the se made under this section and the provisions of sub section
(4) puts this matter beyond doubt by enacting: "11 (4) Any bye laws made under this section shall be subject to such conditions in regard to previous publication as may be prescribed, and when approved by the Central Government, shall be published in the Gazette of India and also in the Official Gazette of State in which the principal office of the recognised association is situate ; Section 12 under which the impugned bye law was made states in sub section
(2) : "12 (2) where, in pursuance of this section, any bye laws have been made or amended, the bye laws so made or amended shall be published in the Gazette of India and also in the Official Gazette of the State in which the principal office of the recognized association is situate, and on the publication thereof in the Gazette of India the bye laws so made or amended shall have effect as if they had been made or amended by the recognised associations, and in sub section
(4): "12.
The making or the amendment or revision of any bye laws under this section shall in all cases be subject to the condition of previous publication", Having regard to these provisions it would not be 739 possible to contend that notwithstanding that the bye laws are rules made by an Association under section 11 or compulsorily made by the Central Government for the Association as its bye laws under section 18, they are not in either case Subordinate legislation under section 11 or 12 as the case may be, of the Act and they would therefore squarely fall within the words , under the Act" in s 4(f).
Indeed, we did not understand Mr. Pathak to dispute this proposition.
His contention however was that when cl.
(f) specifically made provision for powers conferred by "rules" by the employment of the pbrase "or as may be prescribed" and, so to speak, took the "rules" out of the reach of the words " 'under the Act" it must necessarily follow that every power confered by Subordinate law making body must be deemed to have been excepted from the content of that expression and that consequently in the Content the word ,, 'by the Act" should be held to mean ,,directly by the Act" i.e., by virtue of positive enactment, of the words "under the Act" should be held to be a reference to powers gatherable by necessary implication from the provisions of the Act.
As an instance learned Counsel referred us to the power of the Central Government to direct the Commission to inspect the accounts and other documents of any recognised association or of any of its members and submit its report thereon to the Central Government under section 8 (2)(c) and suggested that this would be a case of a power or duty which would be covered by the words "under the Act".
We find ourselves wholly unable co accept this.
If without the reference to the phrase "as may be prescribed" the words " 'under the Act" would comprehend powers which might be conferred under "bye laws" as well as those under "rules" we are unable to appreciate the line of reasoning by which powers conferred by bye laws have to be excluded, because of the specific reference to powers conferred by rules".
740 Undoubtedly, there is some little tautology in the use of the expression "as may be prescribed" after the comprehensive reference to the powers conferred "under the Act", but in order merely to avoid redundancy you cannot adopt a rule of construction which cuts down the amplitude of the words used except, of course to avoid the redundancy.
Thus the utmost that could be that though normally and in their ordinary signification the words ,under the Act" would include both "rules" framed under s.28 as well as "bye laws" under section 11 or 12, the reference to "rules" might be eliminated as tautlogous since they have been specifically provided by the words that follow.
But beyond that to claim that for the reason that it is redundant as to a part, the whole content of the words "under the Act" should be discarded, and the words "by the Act" should be read in a very restricted and, if one may add, in an unnatural sense as excluding a power confered by necessary implication, when such a power would squarely fall within the reach of these words would not, in our opinion, be any reasonable con struction of the provision We need only add that the construction we have reached of s.4 (f) is reinforood by the language of section 3 (1) which is free from the ambiguity created by the occurrence of the expression " 'as may be prescribed" in the former.
We have therefore no hesitation in holding that there was no incompetency in the Forward Markets Commission being the recipient of the power which was conferred upon them by bye law 52AA as amended.
The next part of the submission in relation to this matter was that it was not competent for the Association to have framed this bye law and that the powers of the Central Government under section 12 and of the Association under section 11 in regard to the framing of bye law being co extensive, the bye law framed was not competent to confer any power on the commission.
741 This contention was urged with reference to two considerations: (a) that a bye law of the type now in controversy was not within section II of the Act, and (b) that having regard to the provision contained in the Articles of Association of the Association the bye law was beyond the powers of the Association to frame.
These we should deal in that order.
The first objection naturally turns upon whe ther the bye law is one which could be comprehended with section 11 of the Act.
Its first sub section enacts; " 11 (1) any recognised association may, subject to the previous approval of the Central Government, make bye laws for the regulation and control of forward contract.
" That the impugned bye law is one for the regulation and control of forward contracts cannot be disputed, and the terms being very general would include a bye law of the type now impugned.
In this connection reference may be made to byelaw 52AA which the impugned bye law amended, under which power was vested in the Textile Commissioner with the concurrence of the Forward Markets Commission, (though after consultation with the Chairman of the Board) to direct the enclosure of hedge contracts and fix the rates at which such contracts might be closed out a provision whose validity was not impugned in the present proceedings.
Mr. Pathak no doubt submitted that he was not precluded from challenging before us even the earlier bye law for the purpose of sus taining his argument that the amended bye law was ultra vires.
Nevertheless it must be apparent that it was always assumed that bye laws which vest in authorities external to the Association the 742 power to interfere with forward dealing was within the scope of the bye law making powers under This general provision apart, sub section
(2) of section 11 enact: "11(2).
In particular, and without prejudice to the generality of the foregoing power, such bye laws may provide for (a). . . . . . (b). . . . . . (c). . . . . . (d)fixing, altering or postponing days for settlement; (e)determining and declaring market rates, including opening, closing, highest and lowest rates for goods; (f). . . . . (g). . . . . . . (h). . . . . . . (i). . . . . . . . (j). . . . . . . (k). . . . . . . . (1). . . . . . . . (m). . . . . . . . (n) the regulation of fluctuations in rates and prices; (o) the emergencies in trade which may arise and the exercise of powers in such eme regencies including the power to fix maximum prices; 743 As the power of the Central Government to make bye laws under section 12 is admittedly co extensive with the power of the Associations to frame byelaws, it is not necessary to refer to the terms of the latter sections Before considering in detail the argument on this part of the case we consider it useful to set out a few of the bye laws of the Association whose validity has not been challenged and which would show the manner in which the Association has been functioning in emergencies such as that for which the impugned bye law provides, Bye law 52 which still exists: "52.(1) If in the opinion of the Board an emergency has arised or exists, the Board may, by a resolution, (i) passed by a majority of not less than and (ii) confirmed prohibit, as from the date of such confirmation or from such later date as maybe fixed by the Board in the resolution referred to in sub clause (1), (a)trading in the Hedge Contract for any delivery or deliveries or (b) all trading in such contracts as are referred to in clause (a) for a specified period "52A.
If the Board, at a meeting specially convened in this behalf, resolve that a state of emergency exists or is likely to occur such as shall in the opinion of the Board make free trading in forward contracts extremely difficult, the Board shall so inform the Forward Markets Commission and upon the 744 Forward Markets Commission intimating to the Board its agreement with such resolution, then notwithstanding anything to the contrary contained in these bye laws or in any forward contract made subject to these Byelaws, the following provisions shall take effect (1)The Board shall at a meeting specially convened in this behalf, (a)fix a date for the purpose hereinafter contained, (b)fix settlement process for forward con tracts, (c)fix a special Settlement Day.
(2). . . Every hedge contract entered into between a member and a member or between a member and a non member outstanding on the date fixed under clause (1)(a) hereof shall be demand closed out at the rate appropriate to such contracts fixed under clause (1)(b) hereof.
" 3 6 and then follows Bye law 52AAA.
Apart for the amended bye law occurring in the group of existing bye laws making provision for emergencies to which sub clause (o)of s.11(2) refers, there is no dispute that there was an emergency in the forward market and that the impugned bye law was framed to meet such a contingency.
It was not contended before us that the method by which the emergency was resolved by the impugned bye law viz., by closing out subsisting contract was not the usual method employed for the purpose.
If therefore the bye law was provision for an emergency within s.11 (2)(o) then it would seem to follow that for the resolution of that emergency, 745 every one of the matters which could be included in such bye laws would be attracted to it, and so we find it impossible to accept Mr. Pathaks submission regarding the invalidity of the bye Law.
An analysis of the impugned bye law 52AA and comparison of it with that which it replaced would show that the main point of difference is that whereas formerly action to stop forward trading and for closing out contracts and to fix the rate at which contracts were to be closed out was vested in the Textile Commissioner, acting with the concurrence of the Forward Markets Commission, under the amended bye law the power is directly vested in the Forward Markets Commission itself.
The arguments addressed to us on this point are concerned not so much with the propriety as with the vires of a provisions by which the power to close out contracts by the issue of a notification is vested in the Commission.
Apart from an argument immediately to be noticed, we do not see how, if such a power could validly be conferred upon a Textile Commissioner or even exercised by the Board of the Association under a bye law framed under section 11, the same would be beyond the power to make bye laws under section 11 by the mere fact that the authority vested with the power is the Forward Markets Commission.
We are clearly of the opinion that bye law 52AA is well within the bye law making power under section 11 of the Act and therefore within 12.
It was then said that the amended bye law 52AA wag invalid as in violation of the Articles of Association of the Association being an impermissible delegation of the powers vested in the board of the Association by its Memorandum of Articles.
In this context Mr. Pathak placed reliance on cl. 64 of the Articles as laying down the limits within which 746 the Board might delegate their powers.
He contended that the conferment of the power to take action on the Forward Markets Commission was thus contrary to and inconsistent with the powers of the Association under this Article.
It would be seen that if learned Counsel is right, this would render invalid not merely bye law 52AA as now amended but even the bye law as it originally stood, but as already stated learned Counsel urged that he was not precluded from raising this contention.
This point was not raised in the Court below but having beard arguments on it we shall pronounce upon it.
We consider that there is no substance in this objection.
Article 64 on which reliance was placed runs in these terms: "The Board may delegate any of their powers, authorities and duties to committees consisting of such members or member, of their body or consisting of such other members or members Associate Members, Special Associate Members or Temporary Special Associate Members of the Association not being Directors, or partly of Directors and partly of such other members and/or Associate Members, Special Associate Members or Temporary Special Asso ciate Members as the Directors may think fit.
Any Committee so formed shall in the exercise of the powers so delegated conforms to any regulation that may from time to time be imposed on it by the Directors".
In so far as the Memorandum is concerned, its paragraph III states the objects for which the Association was established, as being, inter alia " " (e) To make from time to time bye laws for opening and closing of markets in cotton and the 747 times during which they shall open or closed; the making performance and determination the prohibition of specified classes of dealings and the time during which such prohibition shall operate; the provision of an dealing with 'Croners ' or ,Bear Raids ' in any and every kind of cotton and cotton transactions so as to prevent or stop or mitigate undue speculation inimical to the trade as a whole; the course of business between Original Members inter be or between any of them on the one hand, and their constituents on the other hand, the forms of contracts between them and their rights and liabilities to each other in respect of dealings in The Articles dealing with bye laws, the manner in which they are to be made as well as the subject to which they might relate is to be found in Articles 73 and 74.
The relevant portion of Article 73 runs: ""Under and in conformity with any Statutory provisions for the time being in force, the Board may pass and bring into effect such bye laws as may be considered in the interest of or conducive to the objects of the and Article 74 runs: "Without prejudice to the generality of the powers to make bye laws conferred by the Memorandum of Association and by these Articles and under or in the absence or any statute or statutes in force in that behalf, it is hereby expressly declared that the said powers to make, alter, add to, or rescined Bye laws including power to do so in regard to all or any of the following matters " Sub para (7) repeats inter alia the contents of 748 Paragraph III (e) of the Memorandum of Association which we have extracted, The entire argument of Mr. Pathak on Article 64 was based on the footing that the power to make a bye law was vested solely in the Board, because it is only the powers of the Board that are subject to the limitation imposed by Article 64.
If however the power to make a bye law was not confined to the Board but bye laws might be framed by the Association itself, the argument based on Article 64 would be seen to have no validity.
That the later is the true position is clear from Article 73 which reads: "The Board 's powers as aforesaid in relation to bye laws shall not derogate from the powers hereby conferred upon the Association who may also in the same way and for the same purpose from time to time pass and bring into effect new bye laws and rescind or alter or add to any existing bye law by resolution passed by a majority of two thirds at the least of the Members present and voting at the General Meeting previous to which at least fourteen day 's notice has been given that a Member intends at such meeting to propose the making of such bye law or the decision, alteration of or addition to a bye law or bye laws".
If therefore a bye law could be made, by the Association it is manifest that there is no limitation upon its powers such as is to be found in Article 64 which applies only to the Board.
The validity of the bye law therefore cannot be challenge by reference merely to the powers of the Board, because what is contemplated by section I I is the power of the "recognised Association" to frame the bye law.
We have therefore no hesitation in rejecting the contention that the bye law as framed contravenes the rules of the Association.
749 Mr. Pathak next contended that the impugned bye law was invalid because it operated retrospectively.
This argument he presented under two heads His first submission was that consistently with the rule that an, enactment 'would not be construed as.
retrospective unless the same were to have that effect by express language or by necessary intendment, the impugned bye law should, be held to affect and close out only those contracts which were entered into after the date on which the byelaw came into operation and that if he was right in this construction the impugned notification had gone beyond the powers conferred on the Commission by the new bye law.
We are wholly unable to accept this submission as to the construction of the bye law.
The first paragraph of the ])ye .law by its list words points out the consequence of a notification by the Forward Markets Commision.
It provides that if the Chairman were notiified that the continuation of trading in hedge contracts for any delivery etc.
"was detrimental to the interests of the general public or the larger interests of the economy of rndia," then, notwithstanding, anything to the contrary contained the bye laws of the Association or in any hedge etc.
contract the provisions contained in the second paragraph should have effect.
, If one had regard only to paragraph and nothing more there might be ' some room for a plausible argument that subsisting contracts were not to be affected, though the expression "notwithstanding anything to the contrary contained in any bedge etc.
contract" would undoubtedly militate against any such contention.
But such ambiguity if any is cleared by the provision in paragraph 2 which has effect on the notification under paragraph 1, for by express terms it refers to "every hedde contract" and "every on call contract" "in so far as cotton is uncalled thereunder or in so far as the pride has not been fixed thereunder".
This therefore places it beyond doubt that executory contracts 750 which were subsisting on the date of the notification were within its scope and were intended to be affected by it.
And this, if anything more needed, is made more certain by the I reference in parts (2) to the provisions of old.
(3), (4) and (6) of bye law 52A.
Bye law 62A deals with cases where the Board of the Association resolves repeat its terms "that a state of emergency exists or is likely to occur which makes free trading in forward con.
tracts difficult and on obtaining the concurrence of the Forward Markets Commission, then notwithstanding anything to the contrary contained in these Bye laws subject to these Bye laws.
The following provision %hall have effect "(1) The Board shall at a meeting specially convened in this behalf, (a)fixa date for the purposes herein.
after contained, (b)fix settlement prices for forward contracts, (c) fix a special Settlement Day.
" Clause (3) of bye law 52A runs : "52A (3) All differences arising out of every such contract between members shall be paid through the Clearing House on the Settlement Day fixed under clause (1) (c) her Clause (4) "52A (4) All differences arising out of every such contract between a member and a non member shall become immediately due and payable." and Clause (6) "52A (6 In hedge and on call contracts entered into between a member and a non.
member and in contracts to which clause (5) 751 applies, any margin received shall be adjusted and the whole or the balance thereof, as the case may be, shall be immediately refundable.
It is thus clear that the entire machinery for resolving emergencies such as is contemplated by byelaw 52A includes the suspension of forward businow together with the closing out of forward contracts of hedge and on call types whose volume or nature had led to the emergency.
It proceeds on the basis that the crisis could not be met unless subsisting contracts were closed out and, so to speak a new chapter begun.
That is the ratio underlying the combined effect of bye laws 52AA and 52 A and in view of this circumstance the argument that on a reasonable construction of the amended bye law it would apply to contracts to be entered into in future and not to subsisting contracts must be rejected.
If he was wrong in his argument that the byelaw on its proper construction did not affect subsisting contracts such as these of the Appellants, Mr. Pathak 's further submission was that the impugned bye law was invalid and ultra vires of the Act because it purported to operate retrospectively affecting vested rights under contracts which were subsisting on the day on which the bye law came into force.
Mr. Pathak invited our attention to a passage in Craies ' Statute Law, 5th Ed.
p. 366 reading: "Sometimes a statute, although not intended to he retrospective, will in fact have a retrospective operation.
For instance if two persons enter into a contract, and afterwards a statute is passed which, as Cockburn, C. J., said in Duke of Devonshire vs Barrow, etc.
, Co. , 289) "engrafts an enactment upon existing contracts ' and 752 thus operates so as to produce a result which is something quite different from the original intention of the contracting parties, such a statute has, in effect a retrospective operation.
" The bye law in so far as it affects executors contracts requiring such contracts to be closed out on a (lay not originally: contracted for and at a price fixed by law is in the above sense undoubtedly retrospective.
The submission of learned 'Counsel was that though a legislature which bad plenary power in this regard could enact a, havind a retrospective operation, Subordinate legislation, be it a rule, a bye law or a notification, could not be made so as to have retrospective operation and that to that extent the rule, bye law or notification would be ultra vires and would have to be struck down, relying for this position on the decision of the Mysore High Court reported in AIR 1960 Mys, 326. 'We do not however consider it necessary to canvass the correctness of this decision or the broad propositions laid down in it.
It is clear law that a Statute which could validly enact a law with retrospective effect could in express terms validly confer upon a rule making, authority a power to make a rule or frame a: bye law having retrospective operation and we would add that we did not understand Mr. Pathak to dispute this position.
If this were so the same result, would follow where the power to enact a rule or,a byelaw with "retrospective effect" so as to Affect PendinG transactions, is conferred not by express words but where the necessary intendment of I the Act confers such A power.
If in the present case the power to make a byelaw so as to operate on contracts subsisting on the day the same was framed, would follow as; a necessary implication from the term of section 1 1, it would not be necessary to discuss the larger question as to whether and the 753 circumstances in which Subordinate legislation with retrospective effect could be validly made.
Before proceeding further it is necessary to notice a submission that under the Act, far from there being a conferment of power to make a bye law, so as to affect rights under subsisting contracts, there was a contra indication of such a power being conferred.
In, this connection Mr. Pathak invited, our attention to the: terms of sections 16 and 17 and 19 of the Act under which the Act has itself made special provision for affecting rights such as those, if the appellants in the present case.
Detailing the conseqences of a notification under section 15, s.16 (a:) enacts "16 (a,,) Every forward contract for the sale or purchase of any goods specified in the notification, entered into before the date of the notification and remaining to be performed after the said, date and which is not in conformity with the provision of section 15, shall be deemed to be closed out at such rate as the Central Government may fix in this behalf.
S.17 (3) enacts "17.
(3) Where a notification has been issued under sub section (1), the provisions of section 16 shall, in the absence of anything to the contrary in the notification, apple to all forward contracts for the sale or purchase of any goods specified in the notification entered into before the date of the notification and remaining to be performed after the said date as they apply to all forward contracts for the sale or purchase, of any goods specified in the notification under section 15." and f 19 (2) runs: "19 (2).
Any option in good which has been entered into ' before the date on which 754 this section comes into force and which re mains to be performed, whether wholly or in part, after the said date shall, to that extent, becomes void.
" Based on these provisions the submission was that Act had made special provisions for retrospective operation of certain notifications so as to affect rights under subsisting contracts and that in cases where there was no such specific provision it was not intended that a bye law or a notification could have that effect.
We see no force in this argument.
The fact that the Act itself makes provision for subsisting contracts being affected, would in our opinion far from supporting the appellants indicate that in the context of a crisis in forward trading the closing out of contracts was a necessary method of exercising control and was the mechanism by which the enactment contemplated that normalcy could be restored and healthy trading resumed.
If therefore we eliminate the provisions in as. 16, 17 and 19 as not containing any indication that a power to frame a bye law with retrospective effect was withheld from the Association, the question whether such bye law making power was conferred has to be gathered from the terms of section II itself.
Thus considered we are clearly of the opinion that a power to frame a bye law for emergencies such as those for which a bye law like 52 AA is intended includes a power to frame one so as to affect subsisting contracts for resolving crisis in Forward Markets.
We have already referred to the terms of bye law 52A which shows that when an emergency of the type referred to a. It (2) (a) arises it is not practicable to rescue a forward market from a crisis without (1) putting an end to forward trading, and (2) closing out subsisting contracts so as to start with a clean slate for the 755 future.
When therefore under section 11 (2) power is conferred to frame a bye law to provide for: " (O) the emergencies in trade which may &rise and the exercise of power in such emergencies including the power to fix maximum and minimum prices;" & ad this is read in conunction with clause (g) reading: "regulating the entering into, making, per formance, rescission and termination of contra eta. . .
If It is manifest that the section contemplates the making of a bye law regulating the performance of contracts, the rescission and termination of contracts and this could obviously refer only to the bye law affeding rights under contracts which are subsisting on the day the action is taken.
It is therefore manifest that section 11 authorises the framing of a byelaw which would operate retrospectively in the sense that it affects rights of parties under subsisting contracts.
Finally it should be borne in mind is that ultimately what we are concerned in a. 1 1 of the Act is the power of the Association to frame the bye law ' for if the Association could validly frame such a bye law the Central Government could under section 12 have a similar power.
We did not hear any argument to establish that the Association had no such power.
There is one other aspect in which the same problem might be viewed and it is this : The contract entered into by the respondents purported to be one under the bye laws for the time being in force and any change in the bye laws therefore would in to be contemplated and provided for by the contract itself, so that it might not be correct to speak of the new bye law as affecting any accrued 756 rights under a contract.
For when those by laws were altered the changes would get incorporated into the contracts themselves, so as to afford no scope for the argument that there has been an infringement of a vested right.
In the view however which we have taken about the validity of the bye law on the ground that it was well within the terms of as. ' 'II and 12 we do not consider it necessary to pursue this aspect further or to rest our decision on it.
What remains to consider is the challenge to the notification based on the ground that it was vitiated by having been issued malafide.
The ground of malafides alleged was that the impugned notification was issued in order to prevent the Board of Directors of the Association.
from applying their minds and exercising their judgment which they were directed to do by the terms of the Consent Memo filed on which the appeal from the judgment in C.S. 2 of 1956 was disposed of on January 24, 195 .
To the allegation made in this form in the petition the first respondent, the, Chairman: of the Forward Markets Commission, filed an affidavit in the course of which he pointed out that the continuance of trading in futures was in the circumstances then prevailing in the market detrimental to the interests of the trade and that a conclusion on this matter had,been reached by the Commission even before by law 52 AA was amended, that the question of closing out existing contracts was engaging the attention of even the Board of the Association from as early as the beginning of January 1956 and it was for the purpose of enabling the Commission to take action to set right matters that bye law 52AA was amended and that immediately the amended bye law came into force the Commission took action and issued: the notification now manugned.
He also pointed out that the liberty given to the Association to consider the matter 757 under ' the terms of the Compromise Memo was a factor which had also boon taken into account before the notification had been issued.
The learned Judges of the High Court accepted this explanation of the circumstances in which the notification came to be issued and considered that on the allegation in the petition no mala fides could be inferred.
We are in entire agreement with the learned Judges of the High Court on this point.
No personal motive or mala fided in that sense has been attributed to the members of the Commission and in these circumstances we consider that there is no basis for impugning the notification on the ground that it was not issued bonafide.
This completes all the points urged by the learned Counsel for the appellants.
We consider that there is no merit in the appeal which fails and is dismissed with costs.
SUBBA RAO, J.
I regret my inability to agree with the judgment prepared by my learned brother Rajagopala Ayyangar, J.
As the fact, ; have been fully stated in the judgment of my learned brother, I need not repeat them except to the extent necessary to appreciate the two points on which I propose to express my opinion.
The appellants carry on business in cotton under, the name and style of Indramani Pyarelal Gupta & Co. The said firm is a member of the East India Cotton Association Limited, which is a recognized Association within the meaning of the Forward Contracts (Regulation) Act, 1952, hereinafter called "the Act".
The Association has been formed for the purpose of, inter alia, promoting and regulating trade in cotton and providing a cotton Exchange and a Clearing House.
Under the Act a formed by the Central Government and respondent is its man and respondents 2 and 3 are its Members.
758 Prior to January 21, 1956, on behalf of themselves and their constituents, the appellants entered into hedge contracts in cotton for February 1956 and May, 1956 Settlements with other members of the Association in accordance with its bye laws.
When the said contracts were effected, bye law 52 AA ran as follows : "(I) Whether or not the prices at which cotton may be bought or sold are at any time controlled under the provisions of the , if the Textile Commissioner with the concurrence of the Forward Markets Commission and after consultation with the Chairman, be of opinion that the continuation of hedge trading is likely to result in a situation detrimental to the larger interests of the economy of India and so informs the Board, the Board shall forthwith cause a notice to be posted on the Notice Board to that effect and on the posting of such notice and notwithstanding anything to the contrary contained in these Bye laws or in any hedge or on call contract made subject to these Bye law, the following provision shall take effect.
(2)Every hedge contract and every on call contract in so far as the cotton is uncalled thereunder, or in so far as the price has not been fixed thereunder, entered into between a member and a member or between a member and a non member then outstanding shall be deemed closed out at such rate, appropriate to such contract, as shall be fixed by the Textile Commissioner and the provisions of clauses (3), (4) and (6) of Bye law 52 A, in so far as they apply to hedge and on call contracts shallapply as if the formed part of this Bye law.
After the affixation of the said notice onthe Notice Board, trading in hedge 759 and on call contracts shall be prohibited until the Textile Commissioner with the concurrence of the Forward Markets Commission and after consultation with the Chairman, permits resumption".
On January 21, 1956, the Central Government, in exercise of power conferred upon it by sub section
(1) of section 12 of the Act, notified a new bye law 52 AA to be substituted in place of the earlier bye law 52 AA.
The new bye law reads as follows : "(1) Whether or not prices at which cotton may be bought or sold are at any time controlled under the provisions of the , if the Forward Markets Commission is of the opinion that continuation of trading in hedge contract for any delivery or deliveries is detrimental to the interest of the trading or the public interest or the larger interests of the economy of India and so notified the Chairman, then notwithstanding anything to the contrary contained in these Bye laws or in any hedge or on call contract made subject to these Bye laws the following provisions shall take effect.
(2) Every hedge contract and every on call contract in so far as cotton is uncalled thereunder and relating to the delivery or deliveries notified under clause (1) entered into between a member and a member or between a member and non member then outstanding shall be deemed closed out at such rate appropriate to such contract and with effect from such date as shall be fixed by the Forward Markets Commission and the provisions of Clauses (3), (4) and (6) of Bye law 52A in so far as they apply to hedge and on call contract" shall apply as if they formed part of this Bye law." 760 On January 24, 1956, the Forward Markets Commission, in exercise of the power conferred on it under the new bye law, issued a notification closing out all contracts of February 1956 and May 1956 Settlements at the rates mentioned in the said notification.
The, petition for a writ of mandamus filed by the appellants in the High Court of Judi cature at Bombay for ordering the respondents to cancel or withdraw the said notification dated January 24, 1956, was dismissed in the first instance by Coyajee, J., and, the appeal preferred against the judgment of Coyajee, J., was also dismissed by a division Bench consisting of Chagla, C.J., and Tendolkar, T. Hence the appeal.
I purpose, as I have already indicated, to consider the following two questions, as in the view I will be taking on those questions, the appeal will have to be allowed, and no other question, therefore, will arise for consideration.
The said questions are : (1) Whether under section 12 (i) of the Act the Central Government.
has power to make a bye law with retropective effect; and (21 whether under section 4 (f) of the Act, the Forward Markets Commission can exercise a, power assigned to it under a bye law made by the Government under section 12 of the Act.
Before considering the scope of the power of the Central Government under section 12 (1) of the Act, it is necessary to consider whether the new byelaw notified on January 21, 1956, has retrospective There are material differences between the old bye law 52 AA and the new one substituted in its place Under the now bye law the important provision is that all hedge Contracts outstainding at the time it came into force shall be deemed to be closed out at such rates as shall be fixed by the Textile Commissioner.
Whereas under the old by law the, Textile Commissioner had to form his opinion with the concurrence of the Forward Markets Commission and after consultation with 761 the Chairman, under the new bye law the said power of forming an opinion is conferred solely on the For ward Markets Commission where as under the old, bye law the opinion and was in regard to the question whether hedge trading was likely to result in a situation detrimental 'to the larger interests of the economy of; India under the new bye law the opinion is in respect of the question whether the continuation of trading in hedge contracts will be detrimental to the interests of trading or the public interest or the larger interests of the economy of India.
While under the old byelaw the question to he considered was in regard to hedge trading as such, under the new bye law it is in respect of the continuation of trading in hedge contracts for any delivery or deliveries.
While under the old bye, law the, said opinion was Communicated to the Board for action, under the new bye law it is notified to the Chairman.
While under the old bye law trading, in hedge and on call contracts could be resumed if the Textile Commissioner, with the concurrence of the Forward Markets Commission and after consultation with the Chairman, permitted the resumption, under the now bye law the said provision for resumption is omitted.
It is, therefore, manifest that the power of closing out a contract under the new bye law differs from that Under the old bye law in respect of the purpose of closing out, the authority empowered to order the close out and the consequences of such closing out.
It is idle to contend that the new bye law makes only inconsequential changes in the old bye law.
The new bye law operates upon an important term of a contract entered into before it came into force, namely, the mode of performance: it carries oil its face the vice of retroactivity.
In Craies on Statutes, 5th Edn '.
p, 366, the following passage appropriate to the question now raised is found.
762 renders the performance of a contract impo ssible, the rule of law is that the contract to frustrated by supervening impossibility, consequently in this case also the statute operates retrospectively.
" The learned author proceeds to state at p. 367: "The principle of this case has been applied in later cases to contracts the performance of which in manner contemplated by the parties has been rendered impossible by reason of some change in the law.
" It is, therefore, clear that the said bye law, in so far as it purports to effect the mode of performance of the preexisting contracts, is certainly retrospective in operation.
I am assuming for the purpose of the present question that the bye law cannot be construed in such a way as to confine its operation only to contracts that are entered into after it came into force.
If so, the question arises whether the Central Government had power to make a bye law under section 12 (1) of the Act with retrospective effect Section 12 (1) of the Act reads "The Central Government may, either on a request in writing received by it in this behalf from the governing body of a recognized association, or if in its opinion it is expedient so to do, make bye laws for all or any of the matters specified in section II or amend any bye laws made by such association under that section. ' Section 11 enumerates the matters in respect of which the recognized associations can make bye. laws for the regulation and control of forward contracts.
Neither section 12 nor a. 11 expressly states that a bye law with retrospective operation can be made under either of those two sections.
Full effect 763 can be given to both the sections by recognizing a power only to make bye laws prospective in operation, that is, bye laws that would not affect any vested rights.
In the circumstances, can it be held that the Central Government to which the power to make bye laws is delegated by the Legislature without expressly conferring on it a power to give them retrospective operation can exercise a power thereunder to make such bye laws.
Learned counsel for the respondents contends that, as the Legislature can make a law with retrospective operation, so too a delegated authority can make a bye law with the same effect.
This argument ignores the essential distinction between a Legislature functioning in exercise of the powers conferred on it under the Constitution and a body entrusted by the said Legislature with power to make subordinate Legislation.
In the case of the Legislature, article 246 of the Constitution confers a plenary power of Legislation subject to the limitations mentioned therein and in other provisions of the Constitution in respect of appropriate entries in the Seventh Schedule.
This Court, in Union of India vs Madan Gopal Kabra (1), held that the Legislature can always Legislate retrospectively; unless there is any prohibition under the Constitution which has created it.
But the same rule cannot obviously be applied to the Central Government exercising delegated Legislative power for the scope of their power is not co extensive with that of Parliament.
This distinction is clearly brought out by the learned Judges of the Allahabad High Court in Modi Food Products Ltd. vs Commission of sales Tax, U. P. (2), wherein the learned Judges observed: "A Legislature can certainly give retrosp ective effect to pieces of Legislation passed by it but an executive Government exercising subordinate and delegated legislative (1) ; (2) A. T. R. 1956 All.
764 powers, cannot make legislation retrospective in effect unless that power is expressly conferred." In Strawboard Manufacturing Co. Ltd. vs Gutta Mill Workers Union (1) a question arose whether the Governor of U. P., who referred an industrial dispute to a person nominated by him with a direction that he should submit the award not later than a particular date could extend the date for a making of the award so as to validate the award made after the prescribed date.
Reliance was placed upon section 21 of the U. P. General Clauses Act, 1904, in support of the contention that the power of amendment and modification conferred on the State Government under that section might be so exercised as to have retrospective operation.
In rejecting that contention, Das, J., as he then was, observed : "It is true that the order of April 26, 1950, does not ex facie purport to modify the order of February 18, 1950, but, in view of the absence of any distinct provision in section 21 that the power of amendment and modification conferred on the State Government may be so exercised as to have retrospective operation the order of April 26, 1950, viewed merely as an order of amendment or modification cannot, by virtue of section 21, have that effect." This decision is, therefore, an authority for the position that unless a statute confers on the Government an express power to make an order with retrospective effect, it cannot exercise such a power.
The Mysore High Court in a considered judgment in India Sugar & Refineries Ltd. vs State of Mysore (2) dealt with the question that now arises for consideration.
There, the Government issued (1) ; 447 448.
(2) A. 1.
R. 1960 Mys.
3 765 there notifications dated 9 4 1956, 15 10 1957 and 13 2 1958 purporting to act under section 14 (1) of the Madras Sugar Factories Control Act, 1949, whereby cess was imposed on sugarcane brought and crushed in Petitioner 's factory for the crushing season 1955.
56, 1956 57 and 1957 58 respectively.
One of the question raised was whether under the said section the Government had power to issue the notifications imposing a cess on sugarcane brought and crushed in petitioner 's factory for a period prior to the date of the said notifications.
Das Gupta, C. J., deliver ing the judgment of the division Bench, held that it could not.
The learned Advocate General, who appeared for the State, argued, as it is now argued before us, that in a case where power to make rules is conferred on the Government and if the provision conferring such a power does not expressly prohibit the making of rules with retrospective operation, the Government in exercise of that power can make rules with retrospective operation.
In rejecting that argument, the learned Chief Justice, delivering the judgement of the division Bench, observed at p. 332: "In my opinion a different principle would apply to the case of an executive Government exercising subordinate and delegated legislative powers.
In such oases, unless the power to act retrospectively is expressly conferred by the Legislature on the Government, the Government cannot act retrospectively.
" With respect, I entirely agree with the said observations.
The same question was again raised and the same view was expressed by the Kerala High Court in C. W. Motor Service (P) Ltd. vs State of Kerala (1).
There the Regional Transport Authority, Kozhikode, granted a stage carriage permit to the third respondent therein in respect of a proposed (1) A. 1.
R. (195) Ker.
347, 348.
766 Ghat route.
The grant of the permit was challenged on the ground that when that order was passed there was no constituted Regional Transport Authority for the district.
It was contended on behalf of the contesting respondent that the said defect was cured by a subsequent notification issued by the Government whereby Government ordered the continuance of the Road Transport Authority from the date of the expiry of the term of the said 'Authority till its successor was appointed.
The High Court held that the notification with retrospective operation was bad.
In that context, Varadaraja lyengar, J., observed : "The rule is well settled that even in a case where the executive Government acts as a delegate of a legislative authority, it has no plenary power to provide for retrospective operation unless and until that power is expressly conferred by the parent enactment." The House of Lords in Howell vs Folmouth Boat Construction Co. Ltd. (1) expressed the same opinion and also pointed cut the danger of conceding such a power to a delegated authority.
There, a licence was issued to operate retrospectively and to cover works already done under the oral sanction of the authority.
Their Lordships observed: "It would be a dangerous power to place in the hands of Ministers; and their subordinate officials to allow them, when.
ever they had power to license, to grant the licence ex post facto; and a statutory power to license should not be construed as a power to authorise or ratify what has been done unless the special terms of the statutory provisions clearly warrant the construction.
" It is true that this is a case of a licence issued by an (1) 767 authority in exercise of a statutory power conferred on it, but the same principle must apply to a byelaw made by an authority in exercise of a power conferred under a statute.
Our Constitution promises to usher in a welfare State.
It involves conferment of powers of subordinate legislation on government and governmental agencies affecting every aspect of human activity.
The regulatory process is fast becoming an ubiquitouselement in our life.
In a welfare State, perhaps,it is inevitable, for the simple reason that Parliament or Legislature cannot be expected to provide for all possible contingencies.
But there is no effective machinery to control the rule making powers, or to prevent its diversion through authoritarian channels.
If the conferment of power to make delegated Legislation proportion vigor carried with it to make a rule or bye law with retrospective operation, it may become an instrument of oppression.
In these circumstances, it has been rightly held that the provision conferring such a power must be strictly construed and unless a statute expressly confers a powers to make a rule or bye law retrospectively, it must be held that it has not conferred any such power.
It is said that such a strict construction may prevent a rule making authority from making a rule in an emergency, though the occasion demands or justifies a rule with retrospective effect.
The simple answer to this alleged difficulty is that if the Legislature contemplates or visualizes such emergencies, calling for the making of such rules or bylaws with retrospective effect, it should expressly confer such power.
It is also said that the Government can be relied upon to make such rules only on appropriate occasions.
This Court cannot recognize implied powers pregnant with potentialities for mischief on such assumptions.
That apart, the scope or ambit of a rule cannot be made to depend upon the status of a functionary entrusted with a 768 rule making power.
In public interest the least the court can do is to construe provisions conferring such a power strictly and to confine its scope to that clearly expressed therein.
Applying that rule of strict construction, I would hold that section 12 (1) does not confer a power on the Central Government to make a bye law with retrospective effect and, therefore, the new bye law made on January 21, 1956, in so far as it purports to operate retrospectively is invalid.
Assuming that it is permissible to infer such a power by necessary implication, can it be said that it is possible to so imply under section 12 of the Act ? The phrase "necessary implication", as applied in the law of statutory construction means an implication that is absolutely necessary and unavoidable; that is to say, a court must come to the conclusion that unless such an implication is made, the provisions of the section could not be given full effect on the wording as expressed therein.
Under section 12 of the Act, the Central Government may either on a request in writing received by it from the governing body of a recognized association, or if in its opinion it is expedient so to do, make byelaws for all or any of the matters specified in section 11 or amend any bye law made by such association under that section.
Now section 11 says that any recognized association may, subject to the previous approval of the Central Government, make bye laws for the regulation and control of forward contracts; under sub a. (2) thereof, the association is authorized to make laws providing for any of the matters mentioned therein.
A glance at those matters shows that all the bye laws providing for those matters could be framed without giving section 12 any retrospective effect.
It is said that section II (o) gives an indication that a bye law contemplated by that sub clause must necessarily provide for its retrospective operation.
It reads: 769 "the emergencies in trade which may arise and the exercise of powers in such emergencies including the power to fix maximum and minimum prices;" The learned Solicitor General contends that an occasion may arise when by a determined action of a "bear" or a "bull" the rates may about up beyond a reasonable level or fall down steeply below a particular point creating an emergency in the market and in that emergency it would be necessary for the authorities concerned to step in and close out the contracts, and unless the bye law is made retrospective such an emergency cannot be met and, therefore, the power to make a by law to meet an emergency contemplated in section 11(o) of the Act must necessarily imply a power to make a bye law retrospectively.
There is an underlying fallacy in this argument.
The conferment of a power on the Government to make a bye law with retrospective operation must be abso lutely necessary and unavoidable to provide for the matter mentioned in sub cl.
(o) of section 11 or any other clause of sub section
(2) of section 11.
A bye law could certainly be made to provide for an emergency visualized by the learned Solicitor General or for any other emergency contemplated by that clause with only prospective operation.
It cannot, there fore, be said that unless retrospective operation was given to the provisions of section 12, the objects of the legislation would be defeated or the purposes for which the power was conferred could not be fulfilled.
therefore, hold that section 12(1) of the Act does not confer any such power on the Central Government by necessary implication.
The second question turns upon the interpretation of a. 4 of the Act.
It reads: "The function of the Commission shall be (a) to advise the Central Government in.
770 respect of the recognition of, or the with drawal of recognition from, any association or in respect of any other matter arising out of the administration of this Act; (b) to keep forward markets under observa tion and to take such action in relation to them as it may consider necessary, in exercise of the powers assigned to it by or under this Act; (c) to collect and whenever the Commission thinks it necessary publish information regarding the trading conditions in respect of goods to which any of the provisions of this Act is made applicable, including information regarding supply, demand and prices, and to submit to the Central Government periodical reports on the operation of this Act and on the working of forward markets relating to such goods; (d) to make recommendation generally with a view to improving the Organisation and working of forward markets; (e) to undertake the inspection of the acco unts and other documents of any recognized association or registered association or any member of such association when.
ever it considers it necessary; and (f) to perform such other duties and exercise such other powers as may be assigned to the Commission by or under this Act, or as may be prescribed.
" Two questions arise under this section, namely, (i) whether the duties imposed and the powers conferred on the Commission under cl.
(f) of section 4 shall 771 be read ejusdem generis with those imposed or conferred under cls.
(a) to (e), and (ii) whether the powers assigned to the Commission by or under a bye law can be performed by the Commission under cl.
To appreciate the first question it would be necessary to know the constitution of the Commission and its rule in the scheme of control pro vided by the Act.
Under a. 2(b), ",Commission ' means the Forward Markets Commission established under section 3.
Section 3 empowers the Central Government to "establish a Commission to be called the Forward Markets Commission for the purpose of exercising such functions and discharging such duties as may be assigned to the Commission by or under this Act".
Clauses (a) to (e) of section 4 show that the function of the Commission are wholly supervisory and advisory in nature.
It keeps the forward markets under observation, collects and publishes information, undertakes the inspection of the accounts and other documents, and makes recommendations to the Central Government in respect of matters mentioned in that section.
Under section 8(2)(c), the Central Government may also direct the Commission to inspect the accounts and other documents of any recognized association or any of its member,% and submit its report thereon to the Central Government.
It is, therefore, manifest that the Commission has no administrative functions or powers of management or powers of interference in the internal management of the registered associations on the other hand, section 11 and the bye laws framed thereunder it is not necessary to go into them in detail show that the regulation and control of the business of forward contracts and other businesses is entirely in the hands of the Association.
The doctrine of ejusdem generis is very well settled.
The expression of ejusdem generis" means of the same kind ', and "it is only an illustration of specific application of the broader maxim noscuntur a sociia i. e., general and specific 772 words which are capable of an analogous meaning, being associated together, take colour from each other, so that the general words are restricted to a sense, analogous, to the less general".
While to invoke the application of the doctrine of ejusdem generis there must be a distinct genus or category.
, that is to say, the specific words preceding the general word must belong to the same class, the maxim noscuntur a sociis is of wider application.
This Court in The Western India The acres Ltd. vs Municipal Corporation of the City of Poona, though did not expressly say so, in my view was dealing with the said two doctrines, and it observed therein: ". . . although the rule of construction based on the principle of ejusdem generis cannot be invoked in this case, for items (i) to (x) do not, strictly speaking, belong to the same genus, but they do indicate, to our mind the kind and nature of tax which the municipalties are authorized to impose." So, in the present case, it way be said that cls.
(a) to (f) may not belong to the same class, but they indicate that the functions described in the said clauses, being supervisory and advisory in character, are so analogous to each other that they take colour from each other and therefore the general words following must be restricted to a sense ana logous to the said functions.
It is said that cl.(f) provides for duties and powers, whereas cls.
(a) to (e) only deal with functions and, therefore, cl.
(f) must be deemed to provide for altogether a different subject matter.
I cannot agree with this contention, for the heading of s.4 is "Function of the Commission", and the action opens out with the words "The functions of the Commission shall be" and the functions are mentioned in cls.
(&) to 773 (f).
It is, therefore, manifest that the duties and powers mentioned in cl.(f) are also functions.
To put it differently, all the clauses deal with functions of the Commission.
That apart, a power and a duty are, the two facts of the same concept.
Clauses (a) to (e) also, though ex facto they read as if they impose only duties, on a closer scrutiny indicate that the duties cannot be exercised without the corresponding powers for the discharge of those duties.
I would, therefore, hold that the duties and powers that may be assigned to the Commission under cl.
(f) can be only supervisory or advisory functions other than those mentioned in cls.(a) to (e).
The power conferred on the Commission under the bye law made by the Government to close out contracts and thus terminate the contracts is neither an advisory nor a supervisory power, and, therefore, the Commission cannot legally exercise the same.
The second question turns upon the interpretation of the provisions of cl.
(f) of s.4.
The said clause reads: "to perform such duties and exercise such other powers as may be assigned to the Commission by or under this Act, or as may be prescribed.
" The crucial words are ,by or under this Act, or as may be prescribed".
Under section 2(h) of the Act "Prescribed" means "prescribed by rules made under this Act" ; an( a. 2 (k) defines "rules" thus ; "rules", with reference to the rules relating in general to the constitution and managemen t of an association, includes in the case of an incorporated association its memorandum and articles of association.
" If read with the definition of the word "Prescribed" 774 cl.
(f) indicates that the commission can perform the functions assigned to it by or under the Act, or as may be prescribed by the rules made under the Act.
The specific mention of the rules made under the Act in the clause makes it abundantly clear that the phrase " 'under the Act" excludes a rule made in exercise of the power conferred under the Act, for if the said phrase takes in a rule, the word "Prescribed" becomes redundant.
Such ineptitude and went of precision in drafting shall not be attributed to the Legislature, except for compelling reasons.
If a rule was not comprehended by the phrase "Under the Act", it would be illogical to hold that it would take in a bye law.
It would mean that the Legislature specially provided for a rule, which has certainly a higher status than a bye law in legislative practice, while it treated a bye law as a provision of Act: that cannot be.
The other reason that may be suggested is that the word "Prescribed" was used in superabundant caution or by mistake.
If superabundant caution was required to mention separately the rules, greater caution would have been necessary to provide separately for a bye law.
A court ordinarily shall attempt to give meaning to every word used by the Legislature, unless it is impossible to do so.
Here there is not only no such impossibility, but there is also a good reason for the Legislature in excluding the bye laws from the operation of cl.(f) of section 4 of the Act.
Subordinate or delegated legislation takes different forms.
Subordinate legislation is divided into two main classes, namely, (i) statutory rules, and (ii) bye laws or regulations made, (a) by authorities concerned with local government, and (b) by persons, societies, or corporations.
The Act itself recognizes this distinction and provides both for making of the rules as well as bye laws.
A comparative study of sections 11 and 12 whereunder 775 power is conferred on the Central Government and the recognized associations to make bye laws on the one hand, and section 28, whereunder the Central Government is empowered to make rules on the other, indicate that the former are intended for conducting the business of the association and the letter for the purpose of carrying into effect the objects of the Act.
In considering the question raised in this case in this distinction will have to be borne in mind.
It would be unreasonable to assume that a private association, though registered under the Act, could confer powers on a statutory authority ,under the Act.
That is why under section 4(f), the Legislature did not think fit to provide for the assignment of a function to the commission in exercise of a power under a bye law.
The nonmention of bye law in cl.
(f) is not because of any accidental omission but a deliberate one, because of the incongruity of an assignment of a function to the Commission under a bye law.
I would, therefore, construe the words "by or under this Act, or as may be prescribed" as follows : (by this Act" applies to powers assigned proportion vigor by the provisions of the Act ; 'under this Act" applies to an assignment made in exercise of an express power conferred under the provisions of the Act; and 'may be prescribed" takes in an assignment made in exercise of a power conferred under a rule.
This construction gives a natural meaning to the plain words used in the section and avoids stretching, the language of a statutory provision to save an illegal bye law.
In this context two decisions are cited at the Bar.
The first is that of the Judicial Committee in Hubli Electricity Company Ltd. vs Province of Bombay (1).
There, under section 3(2)(f) of the Indian Electricity Act (No. TX of 1910) "the provisions contained in (1)(1948) 26 I.A. 57. 776 the Schedule shall be deemed to be incorporated with, and to form part of, every licence granted under this Part".
Under section 4(1)(a) of the said Act, ",The Provincial Government may, if in its opinion the public interest so requires, revoke a licence", inter alia, if "the licensee in the opinion of the Provincial Government makes wailful and unreasonably prolonged default in doing anything required of him by or under this Act".
Under sub cl.
(6) of the Schedule, a licensee had to comply with certain conditions.
The Government revoked the licence on the ground that the licensee did not comply with the conditions laid down in Schedule VI, which were deemed to be incorporated in the licence by virtue of section 3(2), and therefore he did not do the thing required of him within the meaning of section 4 of that Act.
The Privy Council held that the performance by the licensee of the conditions of the Schedule to the Act was clearly required to be made under the Act.
This decision does not help us very much in the present case, as the question of bye law did not arise therein '.
Nor the decision of the Madras High Court in Narayanaswamy vs Krishnamurthi (1) is of any assistance.
There the question was whether the regulations framed by the Life Insurance Corporation by virtue of the powers vested in it by Act 31 of 1956 prohibiting the employees from standing for election fell within the meaning of the words ,under any law" in article 191 (1) (e) of the Constitution.
The High Court held that the regulations were law made under the Act of Parliament.
The conclusion was based on the principle that the rule made in pursuance of the delegated power has the same validity and has the same characteristic as a law made directly by the Parliament.
Apart from the fact that the words to be construed there were different and in a sense wider than the words to be construed in the present case, the principle accepted in the decision is only (1) I.L.R. 777 of a general application and does not help to construe the specific words of cl.
(f) of section 4 ; their meaning can be gathered only by interpreting the said words, having regard to the setting and the context in which they are used.
For the foregoing reasons, I would hold that the Government had no power under section 12 of the Act to make a bye law assigning any function to the Commission.
It follows that notification dated January 24, 1956, by the Forward Markets Commission was illegal and the appellants would be entitled to the issue of a writ of mandamus in the terms prayed for.
In the result, the appeal is allowed with costs.
ORDER In view of the Judgment of the majority, the appeal stands dismissed with costs.
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The appellants were members of the East India Cotton Association which was an association recognised by the Cen tral Government under the Forward Markets Regulation Act, 1952.
Prioi to December 1955, they had entered into "hedge contracts" in respect of cotton for settlements in February and May 1956 in accordance with the bye laws of the Associa tion.
Towards the end of 1955 it was apprehended that the forward market in cotton was heading for a crisis and the Central Government issued notifications directing the Asso ciation to suspend business in hedge contracts for February and May 1955 deliveries for short periods this did not improve the situation.
On January 21, 1956, the Central Government, acting under section 12 of the Act, made a new bye law in substitution of bye law 52AA of the Association which empowered the Forward Markets Commission, constituted under, the Act, to issue a notification closing out all hedge contracts at rates fixed by the Commission.
On January 24, 1956, the Commission issued a notification closing out all hedge contracts including those subsisting on that date, and fixed the rates for the settlement of such contracts.
The appellants contended that the amended bye.law 52AA was invalid as the power to close out hedge contracts could not be conferred upon the Commission and as the Association was in law incapable of conferring such a power on the Commission or on any other body and that in any cases the bye law could not operate retrospectively so as to affect existing contracts.
Held, (per Sinha, C. J., Ayyangar, Mudholkar and Aiyar, JJ.
Subba Rao, J. contra), that the amended bye law 52AA was not ultra vires the Central Government and validly empowered the Commission to close all hedge contracts in cotton including existing contracts.
Clause (f) of section 4 of the Act provided that one of the functions of the Commission 722 shall be to perform such other duties and exercise such other powers as may be assigned to the Commission "by or under the Act, as may be prescribed".
There was no limitation upon the nature of the power that may be conferred under cl.
(f) except that it must be in relation to the regulation of forward trading in goods.
It was not possible to place any limitation on this power by invoking the rule of ejusdem genesis as there was no common positive thread running through cls.
(a) to (e) of section 4.
To judge whether legally a power could be rested in a statutory body the proper rule of interpretation was that unless the nature of the power was such as to be inconsistent with the purpose for which the body was created or unless the particular power was contra indicated by any specific provisions of the Act, any power which furthered the provisions of the Act could be legally conferred.
judge by this test the power conferred by the bye law could be validly vested in the Commission.
The power was one conferred "under the Act".
The words "under the Act" signified a power conferred by laws made by a subordinate law making authority which was empowered to do so by the Act.
The impugned bye law was clearly well within the bye law making power under sections II and 12.
The bye law did not contravene articles 64 of the Articles of Association of the Association as articles 64 applied only to the Board and placed no restrictions on the power of the Association, Western India Theaters Ltd. vs Municipal Corporation of Poona, [1959] Supp. 2 S.C.R. 71, Hubli Electricity Co. Ltd. vs Province of Bombay, 76 I.A. 57 and Narayanaswamy Naidu vs Krishnamurthi, I.L.R. , referred to, Further, upon a proper construction of the amended bye law it applied not only to contracts to be entered into in future but also to subsisting contracts.
A statute which could validly enact a law with retrospective effect could in express terms validly confer upon a rule making authority a power to make a rule or frame a bye law having retrospective operation.
In the present case the power to make bye laws so as to operate on subsisting contracts followed as a necessary implication from the terms of section 11.
There was no contra indication in the other provisions of the Act.
Per Subba Rao, J. Under section 12 (1) of the Act the Central Government had no power to make a bye law with retrospective effect.
The provision conferring rule making power must be strictly construed and unless it expressly conferred a power to make a bye law with retrospective effect, it must be held that it was not conferred any such power.
Evey if it was permissible to inter such a power by necessary 723 implication, it could not be inferred in the present case.
It could not be said that unless retrospective operation was given to the provisions of section 12, the object of the legis lature would be defeated or the purposes for which the power was conferred could not be fulfilled.
Further, the powers conferred on the Commission under the impugned bye law could not be performed by the Commission under c1.
(f) of section 4.
Clauses (a) to (e) of section 4 showed that the functions of the Commission were wholly supervisory and advisory in nature; the functions described in cl.
(f) were analogous to these and could only be supervisory or advisory.
The Commission had no administrative functions or powers of management or powers of interference in the internal management of registered association which were vested in the Association.
The power conferred upon the Commission was not conferred "under the Act".
The words did not include a rule or a bye law, and applied only to an assignment made in the exercise of an express power conferred under the Act.
The Central Government had no power tinder section 12 to make a bye,law assigning any function to the Commission.
Union of India vs Madan Gopal Kabra ; , Modi Food Products Ltd. vs Commissioner of Sale 's Tax, U.P., A. I.R. 1956 All. 35, Strawboard Manufacturing Co. Ltd. vs Gupta Hill Workers ' Union; , , India Sugar & Belineries Ltd. vs State of Mysore, A.I.R. 1960 Mys.
326, C.W. Motor Service (P) Ltd. vs State of Kerala, A.I.R. 1959 Kerala 347, Howell vs Falmouth Boat Construction Co. Ltd. ; The Western India Theatres Ltd. vs Municipal Crporation of the City of Poona, (1959) Supp.
2 S.C.R. 71 and Hubli Electricity Co. Ltd. vs Province of Bombay ( 1948) 76 I.A. 57, referred to.
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N: Criminal Appeal No. 386 of 1983.
From the Judgment and order dated the 23rd June, 1981 of the High Court of Bombay in Crl.
Appeal No. 1138 and 1144 of 1980.
section N. Jha, Amicus Curiae for the Appellant.
M. N. Shroff for the Respondent.
The order of the Court was delivered by CHINNAPPA REDDY, J. Special Leave granted.
The appeal of the accused to the High Court was 'dismissed ', summarily with the one word 'dismissed ', placing this Court in a most embarrassing position in dealing with the special leave petition under article 136 of the Constitution.
Such summary rejection of appeals by the High Court has been disapproved by this Court more than thirty years ago in Mushtaq Hussain vs State of Bombay(13 and thereafter, over the year;, in a series of cases from the same High Court: Ramayya vs State of Bombay( '), Vishwanath Shankar Beldar vs State of Mahatashtra(3), Siddanna Appa Rao vs State of Maharashtra(4).
Narayan Nathu Naik vs State of Maharashtra(5), Govinda kadutji Kadam vs State of Maharashtra(6), Shaik Mohamed Ali vs State of Maharashtra(7), K. K. Jain vs State of Maharashtra(8), Jeewan 653 Prakash vs State of Maharashtra(l), Mushtaq Ahmed v State of Maharashtra(2), Krishna Vithu Suroshe vs State of Maharashtra(3), Sampata Tatyada Shinde vs State of Maharashtra(4), Dagadu vs State of Maharashtra(s).
We are pained, and not a little perturbed, that despite the long series of judgments all arising from cases from the same High Court, the High Court has not chosen to correct itself and continues in the error of its ways.
Except in certain cases when an accused person has pleaded guilty and in petty cases, every person convicted of an offence has a right of appeal under the Criminal Procedure Code.
An appeal may be both against conviction and sentence and on facts and law.
A convicted person is entitled to ask an appellate Court to reappraise the evidence and come to its own conclusion.
An appellate Court has the undoubted power to dismiss an appeal in limine.
Section 384 of the Criminal Procedure Code provides for it.
But, it is a power which must be exercised sparingly and with great circumspection.
One would think a conviction for murder and a sentence of imprisonment for life, as in the case before us, were serious enough matters for the High Court to warrant b 'admission ' of the appeal and fair and independent consideration of the evidence by the High Court.
Summary rejection of the appeal with the laconic expression 'dismissed ' seems to be a drastic step in such cases.
To so reject an appeal is to practically deny the right of appeal.
We cannot also over emphasis the importance of the High Court making a speaking order when dismissing a Criminal Appeal in limine.
"The requirement of recording reasons for summary dismissal, however concise, serves to ensure proper functioning of the judicial process".
There must be some indication that the High Court addressed itself to the questions at issue and had the record before it.
In the present case there.
is not even an indication whether the record had been called for and whether it was before the Court.
We have little option but to set aside the order of the High Court.
The High Court may now 'admit ' the appeal and deal with it according to law.
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The petitioner was convicted for the offence u/s 302 I.P.C. and sentenced to life imprisonment by the Sessions Judge.
The appeal preferred by him was dismissed by the High Court of Bombay in limine.
Hence the appeal by Special leave.
Allowing the petition and directing the High Court to admit the appeal and deal with it according to law, the court ^ HELD: An appellate Court has the undoubted power to dismiss an appeal in limine, as provided under section 384 of the Code of Criminal Procedure.
But, it is a power which must be exercised sparingly and with great circumspection, more so in a case where the conviction is for murder and the sentence is one of imprisonment for life, which are serious enough matters for the High Court to warrant admission of the appeal and fair and independent consideration of the evidence by the High Court.
Summary rejection of the appeal with the laconic expression, "dismissed" is a drastic step in such cases.[653 C E] To so reject an appeal is to practically deny the right of appeal.
Except in certain cases when an accused person has pleaded guilty and in petty cases every person convicted of an offence has a right of appeal under the Code; an appeal may be both against conviction and on facts and law.
A convicted person is entitled to ask an appellate Court to reappraise the evidence and come to its own conclusion.
Therefore, it is necessary to make a speaking order, while dismissing a criminal appeal.
[653 E F] Mustaq Hussain vs State of Bombay, [ ; ; Ramayya vs State of Bombay, ; ; Vishwanath Shankar Beldar vs State of Maharashtra, ; Siddanna Appa Rao vs State of Maharashtra A.I.R. 1970 S C. 977; Narayan Nathu Naik vs State of Maharashtra, A.l.
R. ; Govinda Kadutji Kadam vs State of Maharashtra, ; Shaik Mohamed Ali vs State of Maharastra, A.I.R. 1973 S.C. 43; 652 K.K. Jain vs State of Maharashtra, A.l.
R. ; Jeewan Prakash vs State of Maharashtra, A.I.R. 1973 S.C. 278; Mustaq Ahmed vs State of Maharashtra, A.I.R. 1973 S.C. 1122; Krishna Vithu Suroshe vs State of Maharashtra, A.I.R. ; Sampata Tatyada Shinde vs State of Maharashtra, A.I.R. 1974 S.C. 791; and Dagadu vs State of Maharashtra, ; reiterated.
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DICTION: Civil Appeals Nos.
51 72 of 1981.
Appeals by Special Leave from the Judgment and Order dated the 22nd September.
1980 of the High Court of Himachal Pradesh at Simla in R.F.A. Nos. 262, 249, 251, 252, 261, 265, 266, 267, 280, 281, 292, 297, 299, 300, 307, 308, 352, 355, 356, 366, 370 and 220 of 1980 respectively.
M.M. Abdul Khader and Ms. A Subhashini with him for the Appellants.
K.R. Nagargia, Mr. Naresh Kaushik and Krishna Prasad for the Respondents.
J. What should be the true multiplier to be adopted in determining the compensation payable in respect of land acquired in or about the year 1962 63 where the market value of the land is to be fixed on the basis of the capitalisation principle, is the question which arises for consideration in these appeals.
The construction of the Beas Project was commenced in the year 1960 as a joint venture of the erstwhile State of Punjab and the State of Rajasthan by mutual agreement between the two States.
All decisions on the policy and administrative matters were taken by a Board known as the Beas Control Board which was set up by the Central Government in consultation with the two States on February 19, 1961.
The Beas Project Board was presided over by the Governor of the then State of Punjab and its members included Ministers of the States of Punjab and Rajasthan and senior officers of the Central Government and of the two States.
The decisions of the Beas Control Board used to be implemented by the Punjab Government which was administering and executing the works on the Project.
The expenditure on the Project was shared by the Rajasthan Government.
With the coming into force of the (Act 31 of 1966), the new State of Haryana and the Union Territory of Chandigarh came into being, having been formed out of the territory of the erstwhile State of Punjab.
A part of the Punjab 220 territory was also transferred to what was then the Union of Territory of Himachal Pradesh.
What remained with Punjab became the new State of Punjab.
Sub section (1) of section 80 of the provided that the construction including the completion of any work already commenced of the Beas Project should on and from November 1,1966 be undertaken by the Central Government on behalf of the successor States (as defined under that Act) and the State of Rajasthan should provide the necessary funds to the Central Government for the expenditure on the Project including the expenses of the Beas Construction Board.
For the discharge of its functions, sub section (1) and sub section (2) of section 80 of the Punjab Reorganistation Act empowered the Central Government in consultation with the Governments of the successor States and the State of Rajasthan to constitute a Board to be called the Beas Construction Board, Thus by the , the entire expenditure for the construction and completion of the Beas Project was to be shared by the successor States and the State of Rajasthan but the responsibility of construction and completion of the Beas Project was entrusted to the Central Government.
About 70,000 acres of land had to be acquired for the Beas Dam Project which was located in the Kangra area of the erstwhile State of Punjab which stood transferred to the then Union Territory of Himachal Pradesh under the .
The necessary notifications under section 4 (1) of the Land Acquisition Act, 1894 had been issued by the appropriate Government for that purpose.
We are concerned in these cases with lands which were notified for acquisition in the years 1962 and 1963 under section 4 (1) of the Land Acquisition Act.
The acquisition proceedings in respect of the lands which stood transferred to the Union Territory of the State of Himachal Pradesh, as mentioned above, were to be completed by its officers.
The land in question are situated in Tikka Bhararian, Mauza Dhameta, Tehril Dehra, District Kangra.
Himachal Pradesh.
The Land Acquisition Officer issued notices under section 9 (3) of the Land Acquisition Act to the interested persons inviting their representations and objections with regard to the determination and payment of the compensation.
After receiving the representations and objections, the Land Acquisition Officer (Shri Didar Singh) passed a common award on January 31, 1972 in respect of an extent of 1125.33 acres of land in Tikka Bhararian 221 which had been notified on April 1,1963.
It would appear that another Land Acquisition Officer, Shri Jaswant Singh, had passed an award earlier on April 2,1969 in respect of certain lands situated in Tikka Bihari which has been acquired for the very same public purpose.
The Land Acquisition Officer who had to pass the award in these cases being of the opinion that the fertility, productivity and potentiality of land in Tikka Bhararian (the lands in question) were more or less comparable with those of the lands situated in Tikka Bihari and that the classification and valuation of lands in the award passed by Shri Jaswant Singh were quite fair, adopted the same for the purpose of passing the award in respect of the lands in question.
It may be mentioned here that Shri Jaswant Singh had adopted for the purpose of valuation of lands the principle of capitalisation.
He was of the view that the rule of 20 years purchase was to be adopted.
He accordingly after determining the net annual profit per kanal of land of the best category at Rs. 50 and multiplying it by 20 arrived at Rs. 1,000 as the value of one kanal of the best variety of land.
In order to determine the net annual profit from the land, it appears that he had carried out a crop cutting experiment on some Plot of land after the publication of the notification under section 4 (1) of the Land Acquisition Act.
It would appear that on behalf of the Department, a statement had been filed showing that the lands of similar quality were being sold at or about the time of publication of the notification under section 4 (1) of the Land Acquisition Act at Rs. 300 per kanal.
Shri Jaswant Singh (the Land Acquisition Officer) found that a mean between the valuation arrived at by him by adopting the principle of capitalisation i.e. Rs. 1,000/ per kanal and Rs. 300/ per kanal which, according to the Department was the value of the best category of land in the area would be a reasonable compensation.
Accordingly by adding the above two figures and dividing the total by two he arrived at Rs. 650/ per kanal as the value of the best category of land and reduced the value proportionately in respect of other categories of land which were lower in quality.
Virtually what was awarded was equivalent to thirteen times the net annual income.
Aggrieved by the award passed by the Land Acquisition Officer, the claimants demanded that a reference should be made under section 18 of the Land Acquisition Act to the Civil Court for the determination of proper compensation payable to them.
Accordingly the cases were referred to the District Court of Kangra at Dharamsala.
Alongwith these references, several other references also had 222 been made to that Court in respect of several other bits of lands situated at Tikka Bihari Tikka Bhararian which had been acquired at or about the same time.
The learned District Judge who tried the cases was of the view that the oral evidence adduced by the owners of the land on whom the burden of proof lay could not be relied upon.
After discarding the oral evidence, the learned District Judge determined the market value of the land by adopting the capitalisation principle.
He determined the compensation by multiplying the net annual income from each category of land by 20.
Accordingly he fixed the compensation of the best category of land at Rs. 1,000 per kanal having held that the net annual income per kanal of that class of land was Rs. 50.
For this purpose he appears to have relied on the result of the crop cutting experiment about which there was no evidence before him He rejected the reason given by the Land Acquisition Officer for reducing the compensation from Rs. 1,000 to Rs. 650 on the ground that the Department had asserted that the land of similar quality was being sold at or about the relevant time at Rs. 300 per kanal.
The compensation was fixed at comparatively lower rates in respect of other classes of land which were involved in these cases except in the case of G.M. abadi land for which he fixed at Rs. 650 per kanal.
Aggrieved by the decision of the District Judge, the Union of India and the State of Himachal Pradesh preferred appeals before the High Court of Himachal Pradesh.
The appellants contended that the methods adopted by Land Acquisition Officer and the District Judge were both faulty and if the principle adopted by them was used in respect of all the 70,000 acres of land acquired, the Government would suffer a huge loss.
It is necessary to state here that in the meanwhile the High Court disposed of two appeals being R.F.A. Nos. 16 and 17 of 1970 in respect of the same lands in Tikka Bihari where the two learned Judges (R.S. Pathak, C.J. (as he then was) and D.B. Lal, J.) who heard the said appeals by their separate judgments dated January 14, 1976 set aside the judgment of the District Judge and remanded the cases for fresh disposal to the District Court.
Pathak, C.J. in the course of his judgment observed : "In my opinion the position is this.
The Collector had determined the market value at Rs. 1000 per kanal of the best category of land.
He did this on the basis of a method recognised in law.
He then took into account 223 an offer of Rs. 300 per kanal made by the State.
He did not, when taking that rate into account, determine whether it was based on valid material on the record.
He acted arbitrarily in taking that offer into account.
Moreover, although he took that offer into account, he did not accept it as a proper basis for determining the market value.
He embarked on the novel method of adopting a mean between the market value of Rs. 1000 per kanal determined by him and the offer of Rs. 300 per kanal made by the State.
The learned Additional District Judge was entirely right in holding that the award of the Collector was misconceived.
But the learned Additional District Judge then proceeded wholly on the basis of the market value of Rs. 1000 per kanal determined by the Collector.
What he should also have done was to determine whether the exemplars on the record could serve as a guide for determining the market value.
It is this error which has vitiated the decision of the learned Additional District Judge".
After remand the claimants in those cases adduced some evidence which was not of much value.
Again the District Judge arrived at the very same valuation which had been determined by that Court earlier.
The appellants once again preferred appeals before the High Court.
The High Court dismissed those appeals in limine by a short order dated May 20, 1981.
The appeals filed against that order are also before us now.
Now coming back to the present appeals which arise out of R.F.A. No. 262 of 1980 and connected cases which were disposed of by a common judgment dated September 22, 1980, the High Court dismissed all the said connected appeals.
The present appeals are filed against that common judgment after obtaining the special leave of this Court under Article 136 of the Constitution.
Although the award passed by the Land Acquisition Officer deals with 18 classes of lands, we are concerned in this case with some of them only.
The rates of compensation awarded by the Land Acquisition Officer and the District Judge for the following classes of land involved in these cases are as follows : 224 Class of Land Rate per kanal Rate per kanal fixed in the award fixed by the of the Land District Judge Acquisition Officer Nehri awal Rs. 650 per kanal Rs. 1000 per kanal Nehri Bramdi Rs. 520 do Rs. 800 do Barani Dofasli Rs. 455 do Rs. 700 do Barani Ekfasli Rs. 390 do Rs. 600 do Banjar Kadim Rs. 260 do Rs. 400 do G.M. Abadi Rs. 650 do Rs. 1000 do (In Himachal Pradesh, 1 acre = 8 kanals) The High Court has confirmed the rates fixed by the District Judge.
At the outset we should state that we are not happy about the manner in which the proceedings have gone on in these and other similar cases relating to the acquisition of land for the Beas Project.
As mentioned earlier the total extent of land acquired is 70,000 acres.
We are told there are nearly 800 cases before this Court arising out of those acquisition proceedings.
There may be many others which have not yet reached this Court.
The only method of valuation adopted in all cases appears to be the capitalisation method.
The evidence regarding the crop cutting experiment said to have been conducted is not satisfactory.
The crop in question is said to have been grown after the acquisition proceedings commenced only for the purpose of determining the compensation.
Naturally if such crop is grown by the owner, there is bound to be some anxiety on his part to adopt extraordinary agricultural practices to show a higher yield than what would be the normal yield of the land.
It is seen that the direction given by Pathak, C.J. in the order of remand passed in 1976 in the cases pertaining to lands in Tikka Bihari referred to above appears not to have been kept in view either by the District Court and by the High Court when they subsequently disposed of hundreds of cases arising out of these land acquisition proceedings.
The approach on their part has been very casual.
The fact that any error committed in one of these cases would affect the compensation payable in respect of 70,000 acres of land does not appear to have weighed with the District Court and the High Court.
The spirit behind the observation made by one of us (A.P. Sen, J,) on the question of fixing the compensation for lands acquired under the Land Acquisition Act in the minority judgment of this Court 225 in The Collector.
Raigarh vs Dr. Harisingh Thakur and Anr.
and Vice Versa to the effect that "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" appears to be lacking in the disposal of these cases by the District Court and the High Court.
In these and other connected cases, neither the Land Acquisition Officer nor the High Court and the District Court have adopted the other well known methods of valuation of land namely, the price paid within a reasonable time in bona fide transactions in respect of the land acquired or adjacent lands which possess similar advantages, the price which a willing buyer was prepared to pay to a willing seller of such lands or the opinion of valuers or experts.
They have all followed the capitalisation method by adopting the 20 years ' purchase rule.
In the absence of any reliable evidence to adopt the other methods of valuation, we are also driven in these cases to adopt the very same capitalisation method in disposing of these appeals.
Although we are not satisfied with the determination of the net annual profit from each plot of land acquired in these proceedings, we have to adopt the finding of the District Court which has been affirmed by the High Court on the facts and in the circumstances of these cases as none of the parties has questioned it.
The only question which remains to be determined is the appropriate number of years purchase that should be followed in the case of acquisition made in the years 1962 and 1963.
The relevant date for determining compensation of a property acquired under the Land Acquisition Act, 1894 is the date on which the notification under section 4 (1) is published.
The capitalised value of a property is the amount of money whose annual interest at the highest prevailing interest at any given time will be its net annual income.
The net annual income from a land is arrived at by deducting from the gross annual income all out goings such as expenditure 226 on cultivation, Land revenue etc.
The net return from landed property generally speaking, reflects the prevalent rate of interest on safe money investments.
It is on this basis, Rajamannar offg.
C. J. held in T. Radhakrishna Chettiar vs The Province of Madras that the number of years ' purchase to be adopted was 33 1/3 where the interest paid on gilt edged securities at the time of acquisition i. e. in 1942 was 3% per annum.
But the same learned Chief Justice held in Sri Lakshmi Narasimha Devaru & Anr.
vs The Revenue Divisional Officer.
Mangalore & Anr.
that 20 years ' purchase was the appropriate rule to be followed in determining the value of agricultural Land acquired in the year 1943 by capitalisation method.
In State of Kerala vs Hassan Koya in the case of a Land with building acquired in the year 1954 when Government securities were yielding 3 1/2% per annum, this Court upheld the decision of the Kerala High Court which had adopted 33 1/3 as the multiple for determining compensation payable in respect of it.
For a land acquired in the year 1952.
this Court in The State of West Bengal vs Shyama Pada etc.
awarded compensation at 20 times the net annual income.
In Varadarajulu Naidu vs The Revenue Divisional Officer, Tirukoilur, the High Court of Madras in the case of a land acquired in the year 1956 adopted the rule of 11 years ' purchase.
In Oriental Gas Ltd. & Ors.
vs State of West Bengal, the Constitution Bench of this Court speaking through Chinnappa Reddy, J. observed: "The next target of Mr. Sen 's attack was the choice of the multiplier.
He submitted that in the year 1962 gilt edged securities were fetching no more than six per cent per annum and therefore, not eight, but some other higher multiplier should have been specified.
The argument of Shri Sen is based on the observation of Shah, J., in Cooper 's case that `capitalisation of the net annual value of the property at a rate equal in normal cases to the return from gilt edged securities ' was an important method of determination of compensation.
The very use of the word normal by Shah J., indicates 227 that it was not intended to lay down any invariable rule that whenever a method of capitalisation of net profit was adopted, the return from gilt edged securities was to be the basis.
That should depend on a variety of circumstances such as the nature of the property, the normal return which may be expected on like investment, the state of the capital market and several such factors.
For example, it is well known that a large investment yields a higher return that a smaller investment and similarly a long term investment yields a better return than a short term investment.
A different principle and a different multiplier may have to be applied to different kinds of property, such as, agricultural land, residential buildings, industrial undertakings etc.
In the case of a going business or industrial undertaking the appropriate multiplier may be determined on the basis of the annual return of an undertaking with similar capital investment.
If the Legislature thinks that a return of 12 1/2% in the case of a large industrial undertaking such as the petitioner 's is reasonable and on that basis adopts the multiplier `eight ', it is not for this Court to sit in judgment and attempt to determine a more appropriate multiplier.
We are unable to see how the adoption of the particular multiplier in the present case is the result of the application of any irrelevant principle.
We do not, therefore, agree with the submission of Shri Sen., ' In the above case the Court felt that if 12 1/2% was the annual return, the adoption of multiplier `eight ' could not be unreasonable in the year 1962 in the case of an industrial undertaking.
A perusal of the decisions referred to above and some others which have not been cited here shows that in India the multiplier which is adopted in determining the compensation by the capitalisation method has been 33 1/3, 25, 20, 16 3/2 11 and 8.
The number of years ' purchase has gradually, decreased as the prevailing rate of interest realisable from safe investments has gradually increased the higher the rate of interest, the lower the number of years ' purchase.
This method of valuation involves capitalising the net income that the property can fairly be expected to produce and the rate of capitalisation is the percentage of return on his investment that a willing buyer would expect 228 from the property during the relevant period.
It was once felt that the relevant rate of interest that should be taken into consideration was the interest which gilt edged securities or Government bonds would normally fetch.
The safety and liquidity of the investment in bonds were relied on as the twin factors to take the view that the interest on gilt edged securities should alone be taken into consideration.
This was at a time when there were not many avenues of safe investments and investment in private commercial concerns was not quite reliable.
But from the year 1959 60 circumstances have gradually changed.
There are many State Banks and nationalised banks in which deposits made are quite safe.
Even in the share market we have many `blue chips ' which command stability and other attendant benefits such as the possibility of issue of bonus shares and rights shares and appreciation of the value of the shares themselves.
They are attracting a lot of capital investment.
A return of 10% per annum on such safe investments is almost assured.
Today nobody thinks of investing on land which would yield a net income of just 5% to 6% per annum.
A higher return of the order of 10% usually anticipated.
Even in the years 1962 and 1963 an investor in agricultural land expected annual net return of at least 8%.
It means that if the land yielded a net annual income Rs. 8 a willing buyer of land would have paid for it Rs. 100 i. e. a little more than 12 times the annual net income.
The multiplier for purposes of capitalisation would be about thirteen.
On the question of the potential value of the lands involved in these cases, we may state here that there is no evidence suggesting that the lands were likely to be in demand for any other purpose.
They were all agricultural lands or banjar lands on which no agricultural operations could be carried on.
They were situated in a hilly tract.
There were no potential buyers who were in need of this vast tract of 70,000 acres.
If the project work had not been undertaken possibly there would have been no occasion for the sale of all these lands in one lot.
Having regard to all the facts and circumstances of the case we feel that the High Court and the District Court erred in applying the twenty years, purchase rule in the case of these lands which were acquired in the years 1962 and 1963.
The proper principle was fifteen years ' purchase rule.
The District Judge awarded compensation in all these cases at Rs. 1,000 per kanal for the land of the first category by applying the twenty years ' purchase rule and has fixed the compensation for other lands on the above basis.
The 229 High Court has affirmed it.
Since we have held that the proper basis of fixing compensation in these cases was fifteen years ' purchase rule, the compensation awarded for lands in these cases should be reduced by one fourth i.e. for lands of the first category compensation payable should be Rs. 750 per kanal instead of Rs. 1,000 per kanal.
Similarly in the case of other lands also there should be a reduction of the compensation awarded by one fourth.
The claimants shall get solatium of 15% on the compensation computed on the above basis and they shall be paid interest at the rate ordered by the District Judge on the aggregate amount from the date of taking possession of the land till the date of payment.
The orders passed by the High Court in all these cases shall stand modified accordingly.
The appeals are accordingly allowed in part.
Parties shall bear their own costs throughout.
N.V.K. Appeals partly allowed.
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Certain lands were notified for acquisition in the years 1962 and 1963 under s.4(1) of the Land Acquisition Act, 1894.
On the question of payment of compensation the Land Acquisition Officer, relying on an earlier award in respect of similar lands acquired for the very same public purpose adopted the same criteria and fixed the compensation.
He adopted the principal of capitalisation and determined the compensation at Rs. 650 per kanal, as the value of the best category of land and awarded compensation equivalent to 13 times the net annual income.
On reference under Sec.18 the District Judge determined the market value of the land adopting the capitalisation principle, and determined the compensation by multiplying the net annual income from each category of land by 20.
The Union of India and the State Government preferred appeals and contended before the High Court that if the principle adopted by the authorities below was used the Government would suffer.
These appeals were however dismissed.
In the meanwhile the High Court in appeals arising out of similar awards set aside the orders of the District Judge and remanded the cases for fresh disposal for failure to determine whether the exemplars on the record could serve as a guide for determining the market value.
After remand the District Judge arrived at the very same valuation and this was confirmed by the High Court.
In the appeals to this Court on the question as to what should be the multiplier to be adopted in determining the compensation payable in respect of land acquired in the year 1962 63 where the market value of the land is fixed on the basis of the capitalisation principle.
Allowing the appeals in Part, HELD: 1.
The High Court and the District Court erred in applying the twenty years purchase rule in the case of these lands which were acquired 218 in the years 1962 and 1963.
The proper principle was fifteen years ' purchase rule.[228 H] 2.
The relevant date for determining compensation of a property acquired under the Act, is the date on which the notification under s.4(1) is published.
The capitalised value of a property is the amount of money whose annual interest at the highest prevailing rate of interest at any given time will be its net annual income.
The net annual income from a land is arrived at by deducting from the gross annual income all outgoings such as expenditure on cultivation, land revenue etc.
The net return from landed property, reflects the prevalent rate of interest on safe money investments.
[225 G H; 228 A] 3.
(i) In India the multiplier which is adopted in determining the compensation by the capitalisation method has varied from time to time.
The number of years purchase has gradually decreased as the prevailing rate of interest realisable from safe investments has gradually increased, the higher the rate of interest, the lower the number of years purchase.
This method of valuation involves capitalising the net income that the property can fairly be expected to produce and the rate of capitalisation is the percentage of return on investment that a willing buyer would expect from the property during the relevant period.[227 G H; 228 A] (ii) In the years 1962 and 1963 an investor in agricultural land expected annual net return of at least 8%.
If the land yielded a net annual income of Rs. 8 a willing buyer of land would have paid for it Rs.100 i.e. a little more than 12 times the annual net income.
The multiplier for purposes of capitalisation would be about thirteen.[228 D E] (iii) In these cases there was no evidence about the potential value of the lands.[228 F] (iv)In the instant cases neither the Land Acquisition Officer nor the High Court nor the District Court has adopted the other well known methods of valuation of land namely, the price paid within a reasonable time in bona fide transactions in respect of the land acquired or adjacent lands which possess similar advantages, the price which a willing buyer was prepared to pay to a willing seller of such land or the opinion of valuers or experts.
In the absence of any reliable evidence to adopt the other methods of valuation the very same capitalisation method was applied and the Court adopted fifteen years ' purchase rule for determining compensation has to be adopted.[225 C E] The Collector, Raigarh vs Dr. Harisingh Thakuar and An. and Vice Versa; , ; State of Kerala vs Hassan Koya; , ; The State of West Bengal vs Shyamapada etc.
, A.I.R. 1975 S.C. 1723; Oriental Gas Ltd. referred to.
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Civil Appeal No. 236 of 1983.
From the Judgment and Order dated the 11th January, 1983 of the Punjab and Haryana High Court in Election Petition No.2 of 1982.
M. C. Bhandare and Prem Malhotra for the Appellant.
Hardev Singh and R. section Sodhi for the Respondent.
The Order of the Court was delivered by FAZAL ALI, J.
This election appeal arises out of the election held in 1980 from the constituency No. 56 called Hathin to the 796 Legislative Assembly of the State of Haryana.
At the counting held by the Returning Officer, the Appellant secured 12,828 votes whereas respondent No. 1 Khillan Singh got 12,655 votes and one Ramjilal got 12,213 votes.
Accordingly the appellant was declared as elected.
Aggrieved by the result of the election, Khillan Singh and Ramjilal filed election petitions in the High Court.
In the course of the election petition, the appellant filed a recrimination petition in which one of the grounds related to the errors committed in the counting of votes of respondent No. 1.
All the parties agreed that the court should order a recount and that the parties would be bound by the result of the recount.
The recount was accordingly held as a result of which Khillan Singh respondent No. 1 got 12,751 i.e. the highest number of valid votes and the appellant got 12,698 votes.
In view of the higher votes secured by Khillan Singh respondent No. 1 at the recount ordered by the High Court, his petition was allowed, the election of the appellant was set aside and Khillan Singh was declared as elected.
This appeal is filed against the decision of the High Court.
In support of the appeal, Mr. Bhandare with the usual ingenuity pressed only one point before us.
He submitted on the basis of the Judgment of this Court in Jabar Singh vs Genda Lal that even if the result had gone in favour of respondent No. 1 he could not have been declared elected.
We have gone through this authority and we find that the facts of the present case are clearly distinguishable.
In the decision referred to above the returned candidate did not recriminate as provided under section 97 of the Representation of the People Act, 1951 and this was the important ground on which the Court said that it could not make any attack against the alternative claim made by the petitioner.
In the instant case, the appellant had admittedly recriminated and in the recrimination petition one of the grounds taken related to the errors committed at the time of the counting of votes of the Ist respondent by the Returning Officer.
The appellant had also agreed to the recounting of the votes secured by all the parties.
In these circumstances, this case does not appear to be of any assistance to the appellant.
The decision of the High Court is in accordance with the result of the recount ordered by it.
For the foregoing reasons, the appeal is dismissed but in the circumstances of the case there will be no order as to costs.
H.S.K. Appeal dismissed.
|
The appellant, who was a returned candidate, filed a recrimination petition in the election petition filed by the first respondent and another.
As a result of the recount to which all the parties had agreed, the High Court declared the first respondent as elected.
Hence this appeal.
Dismissing the appeal.
^ HELD: The case of Jabar Singh vs Genda Lal on which the appellant relies is of no assistance to him because the facts of the present case are clearly distinguishable from that case.
In that case the returned candidate did not recriminate as provided under sec.
97 of the Representation of the People Act, 1951.
In the instant case, the appellant had admittedly recriminated and in the recrimination petition one of the grounds taken related to the errors committed at the time of the counting of votes of the Ist respondent by the Returning Officer.
The appellant had also agreed to the recounting of the votes secured by all the parties.
[796 E G] Jabar Singh vs Genda Lal, ; , referred to and distinguished.
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ivil Appeal Nos.
3085 of 1981 and 3628 3649 of 1982.
From the judgment and Order dated the 6th July, 1981 and 5th August, 1982 of the High Court of Karnataka at Bangalore in Writ Appeal Nos.
724/81 and 1324/80, 1470, 1788, 1894/81, 55, 94, 368/82, 475/81, 1133/82, 21310/80, 22158, 21822/80, 10531, 10612/82, 1086, 1778/80, 12332, 12890/78, 19550/79, 11089/82, 11228 & 19410/82.
N. K. Sharma, Ms. Depika Saxena and Vineet Kumar for the appellants.
R. K. Garg, D. K. Garg, P. R. Ramasesh and Ms. R. Bagai for the respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The employer Karnataka State Road Transport Corporation created under a State Act entitled the Transport Corporation Act of 1950 ( 'Corporation Act ' for short) is in appeal by special leave and the common decision of a Division Bench of the High Court which held that termination of employees while on probation on ground of unsuitability amounted to retrenchment and for non compliance with the provisions of section 25F of the ( 'Disputes Act ' for short), the termination is bad, is challenged.
As per Rule 7 made under section 45 of the Corporation Act, direct recruits are to be on probation for two years and such probation can be extended.
The employer terminated the employment 785 of some of the employees during the initial period of probation and of some others during the extended period on the ground of unsatisfactory service.
Thereupon an industrial dispute was raised questioning the legality of their termination and the State Government referred the dispute to the Labour Court for adjudication under section 10 of the .
The Labour Court held, overruling the stand of the employer that section 25F of the had no application, to the effect that the discharge was invalid.
The employer Corporation came before the High Court challenging the Award.
A learned single Judge dismissed the writ petition holding that the order of discharge amounted to retrenchment as defined in section 2(oo) of the and those orders were bad for noncompliance of section 25F. The employer Corporation challenged the decision of the single Judge before a Division Bench and the Division Bench by the impugned judgment upheld the decision of the learned single Judge.
Admittedly the employees were probationers at the time of discharge from service.
There is no dispute that as a condition precedent to discharge the requirements of section 25F of the had not been complied with.
If the discharge of the employees would amount to retrenchment, appellant 's counsel does not dispute that the order of discharge would be bad for non compliance of section 25F of the .
The only question for consideration in these appeals, therefore, is whether the discharge of the employees from service amounted to retrenchment.
It is the stand of the employer Corporation that the employees were probationers and the order of discharge in every case was on account of unsatisfactory service.
Since the order of discharge has been grounded upon unsatisfactory service during the period of probation, it has been argued that such termination of service is not retrenchment.
Section 2(oo) of the defines retrenchment to mean: " 'retrenchment ' means the 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 (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation 786 if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill health.
" A Constitution Bench of this Court in Hariprasad Shivshanker Shukla vs A.D. Divikar, examined the true meaning of the expression 'retrenchment ' and posed the following question: "The question however, before us is does this definition merely give effect to the ordinary, accepted notion of retrenchment in an existing or running industry by embodying the notion in apt and readily intelligible words or does it go so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bona fide closure or discontinuance of his business by the employer.
" It went on to say: "There is no doubt that when the Act itself provides a dictionary for the words used we must look into that dictionary first for an interpretation for the words used in the statue.
We are not concerned with any presumed intention of the legislature; our task is to get at the intention as expressed in the statute.
Therefore, we propose first to examine the language of the definition and see if the ordinary, accepted notion of retrenchment fits in, squarely and fairly, with the language used.
What is the ordinary, accepted notion of retrenchment in an industry.
Let us now see how far that meaning fits in with the language used.
We have referred earlier to the four essential requirements of the definition, and the question is, does the ordinary meaning of retrenchment fulfil those requirements ! In our opinion it does.
When a portion of the staff or labour force is discharged as surplusage in a continuing business, there are (a) termination of the service of a workman; (b) by the employer; (c) for 787 any reason whatsoever; and (d) otherwise than as a punishment inflicted by way of disciplinary action." The Constitution Bench further said: "The legislature is using the expression 'for any reason whatsoever ' says in effect : It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment.
" In the absence of any compelling words to indicate that the intention was even to include a bona fide closure of the whole business, it would, we think, be divorcing the expression altogether from its context to give it such a wide meaning as is contended for by learned counsel for the respondents.
What is being defined is retrenchment, and that is the context of the definition; It is true that an artificial definition may include a meaning different from or in excess of the ordinary acceptation of the word which is the subject of definition; but there must then be compelling words to show that such a meaning different from or in excess of the ordinary meaning is intended.
Where, within the framework of the ordinary acceptation of the word every single requirement of the definition clause is fulfilled, it would be wrong to take the definition as destroying the essential meaning of the word defined.
" After referring to certain decisions the Constitution Bench concluded by saying: "For the reasons given above, we hold, contrary to the view expressed by the Bombay High Court, that retrenchment as defined in section 2(oo) and as used in section 25F has no wider meaning than the ordinary, accepted connotation of the word; it 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," The ratio of this decision has been pressed into service by the appellant Corporation for its stand that in the instant case the services have been terminated on the ground of unsuitability and it was not a case of disbanding surplus labour force and, therefore, did 788 not amount to retrenchment.
On the other hand, counsel for the employees have contended that the consensus of judicial opinion in later decisions of this Court is against the appellant 's stand.
The first decision is the case of State Bank of India vs N. Sundara Money.
A Bench of three learned Judges of this Court referred to the definition in section 2(oo) of the and observed : "To protect the weak against the strong this policy of comprehensive definition has been effectuated.
Termination embraces not merely the act of termination by the employer, but the fact of termination howsoever produced.
" Then came the decision in Hindustan Steel Ltd. vs The Presiding Officer, Labour Court, Orissa & Ors, when a three Judge Bench of this Court again examined the true meaning of the definition of the expression 'retrenchment '.
On this occasion reference was made to the Constitution Bench decision and as would appear from page 589 of the Report, counsel had submitted that the three Judge decision of this Court in Sundara Money 's case (supra) was in apparent conflict with the Constitution Bench decision and required reconsideration.
This submission of counsel was considered and facts of the Constitution Bench case were analysed and Gupta, J, who spoke for the Court, stated: "On the facts of the case before us, giving full effect to the words 'for any reason whatsoever, would be consistent with the scope and purpose of section 25F of the , and not contrary to the scheme of the Act.
We do not find anything in Hariprasad 's case which is inconsistent with what has been held in State Bank of India vs N. Sundara Money (supra).
" The same question came up for consideration before a two Judge Bench of this Court in Santosh Gupta vs State Bank of Patiala.
The facts of the case were more or less the same as in the present dispute.
Employment there had been terminated upon failure of the workman to pass the test which would have enabled her to be confirmed in service and it was contended on behalf of the 789 management that termination of service was not due to discharge of surplus labour force and, therefore, it did not amount to retrenchment.
The Division Bench referred to the Constitution Bench decision and observed: "If the definition of 'retrenchment ' is looked at unaided and unhampered by precedent, one is at once struck by the remarkably wide language employed and particularly by the use of the words "termination for any reason whatsoever".
The definition expressly excludes termination of service as a 'punishment inflicted by way of disciplinary action '.
The definition does not include, so it expressly says, voluntary retrenchment of the workman or retrenchment of the workman on reaching the age of superannuation or termination of the service of the workman on the ground of continuous ill health.
Voluntary retrenchment of a workman or retrenchment of the workman on reaching the age of superannuation can hardly be described as termination by the employer of the service of a workman.
Yet, the Legislature took special care to mention that they were not included within the meaning of 'termination by the employer of the service of a workman for any reason whatsoever '.
This, in our opinion, emphasizes the broad interpretation to be given to the expression 'retrenchment '.
In our view if due weight is given to the words 'the termination by the employer of the service of a workman 'for any reason whatsoever ' are understood to mean what they plainly say, it is difficult to escape the conclusion that the expression 'retrenchment ' must include every termination of the service of a workman by an act of the employer.
The underlying assumption, of course, is that the undertaking is running as an undertaking and the employer continues as an employer but where either on account of transfer of the undertaking or on account of the closure of the undertaking the basic assumption disappears, there can be no question of 'retrenchment, within the meaning of the definition contained in section 2(oo).
This came to be realised as a result of the decision of this Court in Hariprasad Shivshanker Shukla vs A. D. Divikar (supra).
The Parliament then stepped in and introduced 25F and 25FFF by providing that compensation shall be payable to workmen in case of transfer of 790 undertaking or closure of undertaking as if the workmen had been retrenched.
We may rightly say that the termination of the service of a workman on the transfer or closure of an undertaking was treated by Parliament as 'deemed retrenchment '.
The effect was that every case of termination of service by act of employer even if such termination involved was a consequence of transfer or closure of the undertaking was to be treated as 'retrenchment ' for the purposes of notice, compensation etc.
Whatever doubts might have existed before Parliament enacted 25FF and 25FFF about the width of 25F there cannot now be any doubt that the expression 'termination ' of service for any reason whatsoever now covers every kind of termination of service except those not expressly included in section 25F or not expressly provided for by other provisions of the Act such as sections 25FF and 25FFF." The learned Judges drew support from what had been observed in Indian Hume Pipe Co. Ltd. vs The Workmen, "The object of retrenchment compensation is to give protection to the retrenched employee and his family to enable them to tide over the hard period of unemployment," and observed: "Once the object of 25F, 25FF and 25FFF is understood and the true nature of the compensation which those provisions provide is realised, it is difficult to make any distinction between termination of service for one reason and termination of service for another." Chinnappa Reddy, J. thereafter referred to the Constitution Bench decision and said: "It is true that there are some observations which, if not properly understood with reference to the question at issue, seemingly support the submission of Dr. Anand Prakash that "termination of service for any reason whatsoever" means no more and no less than discharge of a labour force which is a surplusage.
The misunderstanding of the observations and the resulting confusion stem from not appreciating (1) the lead question which 791 was posed and answered by the learned judges and (2) that the reference to 'discharge on account of surplusage ' was illustrative and not exhaustive and by way of contrast with discharge on account of transfer or closure of business. ' It was further observed: "The ratio of Shukla 's case in fact has already been explained, in Hindustan Steel Ltd. vs The Presiding Officer, Labour Court Orissa & Ors.
The decisions in Hindustan Steel Ltd. vs The Presiding Officer, Labour Court, Orissa & Ors.
and State Bank of India vs N. Sundara Money have, in our view, properly explained Shukla 's case and have laid down the correct law.
" The same question arose for consideration before another two Judge Bench in Mohan Lal vs Management of M/s. Bharat Electronics Ltd. Desai, J. spoke for the Court thus: "Niceties and semantics apart, termination by the employer of the service of a workman for any reason whatsoever would constitute retrenchment except in cases excepted in the section itself.
The excepted or excluded cases are where termination is by way of punishment inflicted by way of disciplinary action, voluntary retirement of the workman, retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf, and termination of the service of a workman on the ground of continued ill health.
It is not the case of the respondent that termination in the instant case was a punishment inflicted by way of disciplinary action.
If such a position were adopted, the termination would be ab initio void for violation of principle of natural justice or for not following the procedure prescribed for imposing punishment.
It is not even suggested that this was a case of voluntary retirement or retirement on reaching the age of superannuation or absence on account of continued ill health.
The case does not fall under any of the excepted categories.
792 There is thus termination of service for a reason other than the excepted category.
It would ' indisputably be retrenchment within the meaning of the word as defined in the Act.
It is not necessary to dilate on the point nor to refer to the earlier decisions of this Court in view of the later two pronouncements of this Court to both of which one of us was a party.
A passing reference to the earliest judgment which was the sheet anchor till the later pronouncements may not be out of place.
In Hariprasad Shivshanker Shukla vs A. D. Divikar, after referring to Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union, a Constitution Bench of this Court quoted with approval the following passage from the aforementioned case: 'But retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplusage and the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment. ' "This observation was made in the context of the closure of an undertaking and being conscious of this position, the question of the correct interpretation of the definition of the expression 'retrenchment ' in section 2(oo) of the Act was left open.
Reverting to that question, the view was re affirmed but let it be remembered that the two appeals which were heard together in Shukla 's case were cases of closure,. . " In the majority judgment in Surendra Kumar Verma etc.
vs The Central Government Industrial Tribunal cum Labour Court, New Delhi & Anr., the ratio of the latter case has been followed.
A Bench of two learned Judges in the case of L. Robert D 'Souza vs The Executive Engineer, Southern Railway & Anr., re examined the entire position.
Desai, J. who again spoke for the Court indicated: 793 "At the outset it must at once be pointed out that the construction put by the Full Bench of the Kerala High Court on the expression 'retrenchment ' in section 2(oo) of the Act that it means only the discharge of surplus labour or staff by the employer for any reason whatsoever is no more good law and in fact the decision of the full Bench of Kerala High Court in L. Robert D 'Souza vs Executive Engineer, Southern Railway & Anr., [(1970) has been specifically overruled by this Court in Santosh Gupta vs State Bank of Patiala.
This Court has consistently held in State Bank of India vs N. Sundara Money, Hindustan Steel Ltd. vs Presiding Officer, Labour Court, and Delhi Cloth & General Mills Ltd. vs Shambhu Nath Mukherjee, [(1971) 1 SCR 591] that the expression 'termination of service for any reason whatsoever ' now covers every kind of termination of service except those not expressly included in section 25F or not expressly provided for by other provisions of the Act such as sections 25FF and 25FFF.
It was attempted to urge that in view of the decision of this Court in Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union, the ratio of which was re affirmed by a Constitution Bench of this Court in Hariprasad Shivshanker Shukla vs A. D. Divikar, all the later decisions run counter to the Constitution Bench and must be treated per in curium.
This contention need not detain us because first in Hindustan Steel Ltd. case ' than in Santosh Gupta 's case, (supra) and lastly in Mohan Lal vs Bharat Electronics Ltd., it was in terms held that the decision in Sundara Money 's case was not at all inconsistent with the decision of the Constitution Bench in Hariprasad Shukla 's case and not only required no reconsideration but the decision in Sundara Money 's case was approved in the aforementioned three cases. 'This position is further buttressed by the decision in Delhi Cloth & General Mills Ltd. case wherein striking off the name of a workman from the roll was held to be retrenchment.
" In the series of cases that have come later the Constitution Bench decision has been examined and the ratio indicated therein has been confined to its own facts.
The view indicated by this Court in that case obviously did not meet with the approval of Parliament and, 794 therefore, the law has been subsequently amended as already indicated.
Lord Devlin once observed: "I am not one of those who believe that the only function of law is to preserve the status quo.
Rather, I should say that law is the gate keeper of the status quo.
There is always a host of new ideas galloping around the outskirts of society 's thought.
All of them seek admission but each must first win its spurs; the law at first resists, but will submit to a conqueror and become his servant.
In a changing society the law acts a valve.
New policies must gather strength before they can force an entry; when they are admitted and absorbed into the consensus, the legal system should expand to hold them, as also it should contract to squeeze out old policies which have lost the consensus they once obtained.
" We are inclined to hold that the stage has come when the view indicated in Money 's case (supra) has been "absorbed into the consensus" and there is no scope for putting the clock back or for an anti clockwise operation.
Once the conclusion is reached that retrenchment as defined in s.2(oo) of the covers every case of termination of service except those which have been embodied in the definition, discharge from employment or termination of service of a probationer would also amount to retrenchment.
Admittedly the requirements of section 25F of the had not been complied with in these cases.
Counsel for the appellant did not very appropriately dispute before us that the necessary consequence of non compliance of section 25F of the in a case where it applied made the order of termination void.
The High Court, in our opinion, has, therefore, rightly come to the conclusion that in these cases the order of retrenchment was bad and consequently it upheld the Award of the Labour Court which set aside those orders and gave appropriate relief.
These appeals are dismissed.
There would be one set of costs.
Consolidated hearing fee is assessed at Rs. 5,000.
N.V.K. Appeal dismissed.
|
The appellant Corporation terminated the employment of some of its employee respondents who were probationers on the ground of unsatisfactory service, some during the period of their probation and others during the extended period of probation.
The Labour Court, to which the dispute was referred, held that section 25F of the had no application, and that for this reason the discharge was invalid.
Dismissing the employer 's writ petition a Single Judge held that the orders of discharge amounted to retrenchment as defined in S.2 (oo) of the Act and were bad for non compliance of s.25F. A Division Bench of the High Court upheld this decision.
In the appeal to this court it was contended on behalf of the appellant that the services of the respondents had been terminated on the ground of their unsuitability and it was not a case of disbanding surplus labour force and, therefore, such termination did not amount to retrenchment.
Dismissing the appeal, ^ HELD: 1.
Once the conclusion is reached that retrenchment as defined in section 2 (oo) of the covers every case of termination of service except those which have been embodied in the definition, discharge from employment or termination of service of a probationer would also amount to retrenchment.
[794 E] In the instant case the requirements of section 25F had not been complied with.[794 F] 784 2.
The stage has come when the views indicated in State Bank of India vs N. Sundara Money ; has been "absorbed into the consensus" and there is no scope for putting the clock back or for an anti clockwise operation.
[794 D] Hariprasad Shivshanker Shukla vs A.D. Divikar, 1957 S.C.R. 121; Hindustan Steel Ltd. vs The Presiding Officer, Labour Court; Orissa & Ors.
; ; Santosh Gupta vs State Bank of Patiala, ; ; Indian Hume Pipe co. Ltd. vs The Workmen, ; Mohan Lal vs Management of M/s. Bharat Electronics Ltd. ; ; Surendra Kumar Verma etc.
vs The Central Government Industrial Tribunal cum Labour Court, New Delhi and Anr.[1981] 1 S.C.R. 789; L. Robert D ' Souza vs The Executive Engineer, Southern Railway & Anr.
[1982] 3 S.C.R. 251 referred to.
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Civil Appeal No. 5742 of 1983 Appeal by Special leave from the judgment and order dated the 7th May, 1983 of the Assam High Court in Civil Rule No. 1292 of 1982.
K.K. Venugopal, Ms. Laxmi Venugopal, A.K Bordelay, C.S. Vaidyanathan and Praveen Choudhary for the Appellants.
S.S. Ray, A.S. Pundir, Vijay Hansaria, Sunil Kumar Jain, Mukesh Advani and Ms. Mridula Ray for Respondent Nos. 1 & 2. S.K.Nandy for the Respondents 3 & 5.
N.R. Choudhary for the Intervener.
The Judgment of the Court was delivered by 828 SEN, J.
This appeal by special leave is directed against the judgment and order of the Assam High Court dated November 4, 1982 concerns the propriety of the grant of a liquor licence.
By the judgment the High Court quashed an order of the Board of Revenue dated February 11,.1982 affirming the grant of licence in respect of Jorhat Country Spirit Shop No. 1 made by the Deputy Commissioner Sibsagar, Jorhat, by his order dated August 28, 1981, and instead of remitting the matter to the Board of Revenue for a decision afresh, the High Court had directed the Deputy Commissioner to settle the liquor shop with respondents Nos. 1 and 2 for the remaining period of the grant upto March 31, 1984.
The short question that arises in the appeal is whether it was proper exercise of jurisdiction by the High Court under article 226 of the Constitution to have issued a writ of mandamus ordaining the Deputy Commissioner to grant the licence.
Further, a question arises whether it was impermissible for the High Court to have embarked upon an inquiry into the facts and on a reappraisal of the evidence come to a finding contrary to that reached by the Board of Revenue based on appreciation of evidence that one set of rival claimants i.e. Parag Saikia and Prafulla Barua, respondents Nos. 1 and 2 were entitled to grant of such privilege in preference to the appellant under the note beneath r. 223(2) of the Assam Excise Rules, 1945 (for short 'Rules ').
The facts of this case present a rather disturbing feature.
Jorhat Country Spirit Shop No. 1 is a big excise shop within the meaning of r. 232 of the Rules.
Under cl.(a) thereof, the settlement of such a country liquor shop has to be made with a pair of tenderers constituting two or more, partners.
Five joint tenders were received in response to the notification issued by the Deputy Commissioner, Sibsagar, Jorhat calling for tenders of the country liquor shop for the financial year 1983 84.
The Deputy Commissioner, Sibsagar, Jorhat in consultation with the Advisory Committee constituted for that purpose as required under r. 208 by his order dated August 28, 1981 settled the shop with the two appellants Bishnu Ram Borah and Bipin Chandra Borah.
One set of the unsuccessful tenderers were respondents Nos. 1 and 2 Parag Saikia and Prafulla Barua.
Of them, Parag Saikia respondent No. 1 herein was held by the Deputy Commissioner to be a mere benamidar of a prominent businessman of Dibrugarh while respondent No. 2 Prafulla Barua was a student studying for his B.Sc.
degree and stying in a hostel at Golaghat, which is a place some 30 miles away from Jorhat.
The Board of 829 Revenue, Assam by its order dated February 11, 1982 upheld the settlement of the country liquor shop with the appellants.
Being aggrieved by the decision of the Board, two sets of unsuccessful tenderers viz, respondents Nos. 1 and 2 and the interveners Daya Ram Borah and Prabin Kumar Borah filed petitions under article 226 of the Constitution before the Assam High Court being Civil Rule Nos. 215 of 1982 and 1163 of 1982.
The High Court instead of taking up both the writ petitions together, heard and decided the writ petition filed by respondents Nos. 1 and 2 and by its judgment dated November 4, 1982 quashed the order of the Board of Revenue and remitted the appeal to the Board for a decision afresh in the light of the observations made by it.
The Board however by its order dated December 3, 1982 maintained the settlement of the country liquor shop with the appellants.
Thereupon, respondents Nos. 1 and 2 again moved the High Court under article 226 for appropriate writ, direction or order in the matter of grant of the liquor licence.
The High Court by its judgment dated May 7, 1983 quashed the order of the Board of Revenue and instead of remitting the matter to the Board for a decision afresh, issued a writ of mandamus by which it directed the Deputy Commissioner to settle the liquor shop with respondents Nos. 1 and 2 for the remaining period of the grant upto March 31, 1984.
While making the direction the High Court observed that 'in case it was found that respondents Nos. 1 and 2 were benamidars of anybody, it would be open to the settling authority i.e. the Deputy Commissioner to cancel the liquor licence '.
Further, it observed that 'the grant ' would be subject to the result of the decision in the writ petition filled by the interveners i.e. Civil Rule No. 1163 of 1982 '.
Before proceeding further, it is necessary to refer to certain provisions of the Assam Excise Act, 1910 (for short 'Act ') and the Assam Excise Rules, 1945 (for short 'Rules ') as amended from time to time.
Section 18(1) of the Act provides: "18 (1).
Prohibition of sale without licence, and the exceptions to such prohibitions No intoxicant shall be sold except under the authority and in accordance with the terms and conditions of a licence granted by the Authority prescribed in the rules framed under this Act.
" Rule 208 provides as follows: "Advisory Committee The Collectors should make settlements in consultation with an advisory committee.
" 830 Rule 223(2) provides: "In making settlement to any person preference shall always be given to the educated unemployed youths or to co operatives and co opt firms formed by such educated unemployed youth.
Preference shall also be given to the persons belonging to the more backward classes.
" Note: The term 'educated unemployed youth ' as mentioned in sub rule (2) of Rule 223 means a person not exceeding 35 years of age who has passed the H.S.L.C. or its equivalent examination and is without any employment." A few facts have to be stated.
Before the Board of Revenue passed its earlier order dated February 11, 1982 upholding the grant of licence by the Deputy Commissioner by his order dated August 28, 1981, the Board had called a report from the Deputy Commissioner, Sibsagar, Jorhat and had also before it a parawise comment of the Deputy Commissioner.
On an evaluation of the comparative merits and demerits and after eliminating the other sets of competitors ' the Board upheld the grant of licence made by the Deputy Commissioner in favour of the appellants.
On a careful consideration of the material on record and in the light of the confidential report made by the Deputy Commissioner, the Board held that respondent Nos. 1 and 2 were not suitable for the grant of licence for the country liquor shop.
As regards respondent No.1 Parag Saikia, the Board relying upon the report of the Deputy Commissioner held that he was a mere benamidar of a prominent businessman of Dibrugarh who was trying to corner big liquor shops at Jorhat and that it was evident from the report that he mostly resides at Gauhati enjoying the pay and perquisites provided by this businessman and that he was apparently not an unemployed person as he was resorting to highly expensive litigation for getting a liquor shop licence.
Further, the Board observed that he had the means not only to prefer appeals before the State Government and the Board of Revenue but that he had also repeatedly moved the High Court for the grant of appropriate writ, direction or order in the matter of settlement of a country liquor shop which showed that he had some strong financier behind him.
As regards respondent No.2 Prafulla Barua who was still a student studying for his B.Sc.
degree and staying in a hostel at Golaghat, the Board held that he could not be treated as an 'educated unemployed youth ' within the meaning of the note beneath r.223 of the Rules.
831 In reaching the conclusion that it did, the Board of Revenue observed: "In an excise settlement apart from the finance, there is also the question of general suitability of the tenders for a particular shop.
It came out during the hearing that this is one of the Sibsagar District.
As such substantial revenue of the State is involved in this shop and the suitability of the lessee has therefore to be examined very closely.
Under Rule 232 of the Excise Rules, no distinction can be drawn between the legal liabilities of the two partners who will be jointly and severally responsible for the management of the shop.
It is implicit in this Rule that the partners have to be more or less equal partners.
It is also implicit that the settling authority should be satisfied about their respective role, responsibilities, investments and involvements.
On a total consideration of the tender, the memo of appeal and the various affidavits and other documents filed on behalf of the appellant Parag Saikia, it appears doubtless that he is the dominant partner and his associate appears more as a show boy than even as a sleeping partner.
" The Board then went on to say: "Reverting to the partnership of the appellants it is observed that their respective financial investment and physical involvement as well as the sharing of the profit or loss is not known.
Indeed for the two persons living in two different Sub divisional Head quarter towns and having a substantial difference in age and present status, it is difficult to be definite that they have the needed concord and compatibility or unity and understanding for operating a major shop like this.
Again, in a double lessee shop what is needed is not just a second helping hand to a lessee but it requires persons of a minimum calibre from the point of intelligence, experience and businessman.
Parag Saikia by his own admission found that the firm set up by him or joined by him had failed or were non starters.
These considerations might have weighed with the Advisory Committee and the District Collector in not setting with Parag Saikia even any of the smaller shops for which he is known to have tendered 832 and Prafulla Barua being still an undergraduate student might have been considered unsuitable on that ground as well among others.
" The Board of Revenue accordingly held that respondent No. 1 Parag Saikia was a mere benamidar and therefore ineligible for the grant of licence while respondent No. 2 Prafulla Barua being still a student studying for his B.Sc.
degree was not suitable for grant of such privilege, and at any rate, he could not be encouraged when educated unemployed youths and other suitable tenderers were available.
It found considerable force in the submission that the Board should adopt it as a policy to discourage students from entering into liquor business.
Regrettably, the High Court while allowing the writ petition preferred by respondent Nos. 1 and 2 passed certain strictures which, in our opinion, should have been avoided.
It found fault with the Board of having acted on the report of the Deputy Commissioner observing that 'the Board could not act on the ipse dixit of the Deputy Commissioner '.
Further, the High Court held that there was no basis for the Board to adopt a policy to discourage students from entering into liquor business when there was no such legal bar.
Still further, it observed that merely because respondent No. 2 Prafulla Barua was a student of B.Sc.
class and was staying at a hostel at Golaghat which was about 30 miles away, it would not be difficult for him to carry on a partnership business at Jorhat where his cousin lives and further that he answers the description of 'educated unemployed youth ' envisaged in the note beneath r.223 of the Rules.
It recorded that respondent No. 2 Prafulla Barua had given an undertaking that he would give up his studies if the settlement of the liquor shop was made in his favour.
There was no warrant for any of these observations made by the High Court and the High Court was not entitled to enter into a question of fact as to whether or not respondent No. 1 Parag Saikia was a mere benamidar.
It is somewhat strange that the High Court should have taken an undertaking from respondent No. 2 Prafulla Barua that he would give up his studies if the settlement was made in his favour and observed that there was nothing in law to discourage students still undergoing their studies from entering into the liquor business and that he falls within he category of 'educated unemployed youth ' within the note beneath r.223 of the Rules 833 On remand, the Board of Revenue by its order dated December 2, 1982 reacted sharply to the observations and went on to say that the observations were uncalled for.
That apart, the Board observed that since the observations were on questions of fact, they could not be taken as binding on the Board.
It reaffirmed its earlier order upholding the grant of the licence to the appellants by the Deputy Commissioner.
As regards respondents Nos. 1 and 2, the Board relying on the report of the Deputy Commissioner held them to be unsuitable for the grant of licence.
It held that respondent No. 1 Parag Saikia was a mere benamidar of a mahaldar of Dibrugarh district who had cast his net far and wide in the Jorhat sub division and that respondent No. 2 Prafulla Barua who was still undergoing his studies for the B.Sc.
degree could not be regarded as falling within the category of educated unemployed youth appearing in the note beneath r.223 of the Rules.
Thereupon, respondents Nos. 1 and 2 again moved the High Court under Art.226 of the Constitution for appropriate writ, direction or order in the matter of grant of the liquor licence.
As was expected, the High Court strongly deprecated the action of the Board of Revenue defying the directions made by the High Court in exercise of its jurisdiction under article 226 of the Constitution and held that the Board had no other alternative but to decide the matter afresh in the light of the directions given by the High Court and expressed its regret that it had not done so at all observing: "Such an effort of subordinate tribunal is fraught with grave danger to the administration of justice known to the people of this country and had to be duly taken note of with great concern by all." The High Court then went on to observe that the Board had thrown all judicial decorum and discipline to the winds by disregarding its judgment.
It further observed: "A perusal of the impugned judgment shows that though the petitioners are entitled to preference under r.223(2) of the Assam Excise Rules, 1945, hereinafter the Rules, whereas the respondents land 2 are not, they have not been found suitable for settlement for these reasons; (i) Parag, one of the petitioners, is a benamidar; 834 (ii) the partnership in question is sham; and (iii) the petitioners are not financially sound to run the shop.
" After adverting to the well settled principles relating to the power of the High Courts under Art.226 of the Constitution to issue a writ of certiorari and observing that it was conscious of its own limitations in the matter, the High Court nonetheless observed that 'it could definitely set aside the order of an inferior tribunal like the Board of Revenue founded even on some factual conclusions if they were based on irrelevant or extraneous materials or be such which no reasonable person could have reached or if they were grounded on a total misconception of law '.
It held that a finding reached by the Board by disregarding the directions given to it by the High Court was in excess of jurisdiction.
It is regrettable that the Board of Revenue failed to realize that like any other subordinate tribunal, it was subject to the writ jurisdiction of the High Court under Art.226 of the Constitution.
Just as the judgments and orders of the Supreme Court have to be faithfully obeyed and carried out throughout the territory of India under Art.142 of the Constitution, so should be the judgments and orders of the High Court by all inferior courts and tribunals subject to their supervisory jurisdiction within the State under Art.226 and 227 of the Constitution.
We cannot but deprecate the action of the Board of Revenue in refusing to carry out the directions of the High Court.
In Bhopal Sugar Industries Limited vs Income tax Officer Bhopal, the Income tax Officer had virtually refused to carry out the clear and unambiguous directions which a superior tribunal like the Income tax Appellate Tribunal had given to him by its final order in exercise of its appellate powers in respect of an order of assessment made by him.
The Court held that such refusal was in effect a denial of justice and is furthermore destructive of one of the basic principles in the administration of justice based as it is in this country on the hierarchy of courts.
The facts of the present case are more or less similar and we would have allowed the matter to rest at that but unfortunately the judgment of the High Court directing the issue of a writ of mandamus for the grant of a liquor licence to respondents Nos. 1 and 2 cannot be sustained.
The High Court dealt with the finding of the Board as to whether or not the alleged partnership between respondents Nos.1 835 and 2 was genuine.
As regards the suitability in their ages which, according to the Board, would stand in the way of needed.
concord and compatibility, it felt that it was for respondent No.2 Prafulla Barua to decide whether respondent No.1 Parag Saikia was a suitable person with whom he should enter into a partnership.
Secondly, the High Court observed that it would not be difficult for respondent No.2 Prafulla Barua although he was a student studying for his B.Sc.
degree and staying in a hostel at Golaghat which was some 30 miles away from Jorhat to carry on the liquor business in partnership.
Thirdly, the High Court went into the question whether they had the requisite financial capacity to fulfil the requirements of r.346.
From all this, it is quite evident that the High Court was oblivious of the limitations of its own powers under Art.226 of the Constitution in the matter of grant of a writ of certiorari.
It was impermissible for the High Court to have embarked upon an inquiry into the facts to adjudge the suitability or otherwise of the rival pairs of claimants and upon a reappraisal of the evidence come to a finding contrary to that reached by the Board of Revenue.
There was nothing on record to show that the Board had acted in excess of jurisdiction or there was an error apparent on the face of the record which resuited in manifest injustice.
That apart, it was not a proper exercise of jurisdiction under Art.226 of the Constitution for the High Court to have issued a writ of mandamus ordaining the Deputy Commissioner to grant the liquor licence to respondents Nos.1 and 2 in preference to the appellants.
Although a writ of mandamus may be a necessary adjunct to a writ of certiorari, in the High Court was satisfied that a writ of certiorari had to be issued to quash the impugned order of the Board of Revenue on the ground that its order was vitiated by an error apparent on the face of the record, the proper course for the High Court to adopt was to have issued a writ of mandamus to hear and redetermine the appeal according to law: H.W.R. Wade 's Administrative Law, 5th edn., p.638.
The High Court was also in error in holding that the earlier order passed by the High Court remanding the case to the Board of Revenue contained a direction requiring the Board not to act upon the report of the Deputy Commissioner.
The fact that the Board had in the past in some other case viz. for the grant of liquor licence for Melan Country Spirit Shop not acted upon the report of the Deputy Commissioner against respondent No.1 Parag Saikia was not 836 a ground sufficient for ignoring the adverse report of the Deputy Commissioner against him in the present case.
It would be apposite to quote the report which reads as follows: "Jorhat town country spirit shop No.1 (with which shop we are concerned) is meant for joint lessee.
Just after the submission of the tender on 21.8.81 secret information was received to the effect that Shri Parag Saikia (one of the petitioners in the case) is in the private employment of a prominent businessman of Dibrugarh district who is also said to be benamidar of important C.S. shops and Shri Saikia resides in Gauhati for the greater part of the year enjoying all the perquisites of the employer, The secret information further indicates that the said benamidar of Dibrugarh district was trying to grab important shops of Jorhat Sub Division through Parag Saikia.
The matter was discussed in the Advisory Board which rejected the tender of the joint appellant.
" Further, the High Court had observed that the Board could not have relied upon the report of the Deputy Commissioner unless respondents Nos.1 and 2 were confronted with the same and respondent No.1 was allowed to have his say in the matter.
The responding of the High Court can hardly be supported.
In the first place, the Deputy Commissioner is the head of the administration of the district and is conversant with the local situation and has secret sources of information.
Normally the Board is entitled to rely upon the word of the Deputy Commissioner.
It is expected that the Deputy Commissioner would always act with a sense of responsibility.
Secondly, the report of the Deputy Commissioner was confidential in nature.
There was no question of the Board disclosing the contents of the report to respondents Nos. 1 and 2.
Further, respondents Nos.1 and 2 never made a demand for a copy of the report, and even if such a request was made the Board would have been fully justified in not furnishing the same.
Such a refusal would not amount to denial of natural justice for the obvious reason that the rules of natural justice must necessarily vary with the nature of the right and the attendant circumstances.
The grant of a liquor licence was not a matter of right but merely in the nature of privilege, Furthermore, the Board was entitled to call for a report of the Deputy Commissioner in an appeal of this nature.
837 We cannot also subscribe to the view expressed by the High Court that respondent No.2 Prafulla Barua who is a student of B.Sc.
class still undergoing his studies falls within the description of 'educated unemployed youth ' appearing in the note beneath r.223 of the Rules.
In our judgment, the expression 'educated employed youth has definite legal connotation.
It denotes a class of citizens who after completing their education are faced with unemployment R.223(2) read with the note embodies a rule of preference.
The question of grant of preference under the note beneath r.223(2) can only arise when other conditions as regards suitability of the rival tenderers is equal Besides, the construction placed by the High Court on the expression 'educated unemployed youth ' is manifestly erroneous.
By no stretch of imagination can a student still under going his studies in the university be regarded as having completed his education or being 'unemployed ' youth.
When a person is still pursuing his course of studies in a university, we fail to see any basis for treating him as an 'educated unemployed youth '.
The judgment of the High Court directing the issue of a licence to respondents Nos.1 and 2 being based on the rule of preference contained in the note beneath r.223 of the Rules cannot therefore be supported.
The judgment of the High Court also suffers from a serious infirmity.
As already stated, instead of remitting the matter to the Board of Revenue, the High Court issued a mandamus directing the Deputy Commissioner to make a grant of the licence to respondents Nos.1 and 2.
While doing so, the High Court made a direction that the grant of licence would be subject to the result of the inquiry as to whether respondent No.1 Parag Saikia was a benamidar and therefore not entitled to such grant.
Moreover, the High Court made the grant subject to the result of the writ petition filed by the interveners Daya Ram Borah and Prabin Kumer Borah which was still pending before it against the earlier order, of the Board dated February 11, 1982.
We fail to appreciate the making of a grant in favour of respondents No. 1 and 2 subject to the result of the inquiry as to whether respondent No.1 Parag Saikia was a mere benamidar.
If that were to be so, it would affect the validity of the grant itself.
Further, the procedure adopted by the High Court in separately dealing with the writ petition filed by respondents Nos.1 and 2 making a grant of the licence to them for the country spirit shop in question while the earlier writ petition filed by the interveners was still pending was not in consonance with law and rules of fairplay and justice.
838 Before parting with the case we must express our deep sense of anguish that there should have been this unseemly tussle between the High Court and the Board of Revenue, particularly the lack of restraint in the language used by the Board in its order dated December 3, 1982.
We also feel that the High Court was not right in criticizing the Board of Revenue in such strong language.
The use of harsh language does not redound to the credit of anyone.
There must be restraint at all levels as otherwise there can be no rule of law and our entire system of administration of justice will fail.
For these reasons, we set aside the judgment and order of the High Court, as a consequence whereof the order of the Board of Revenue dated December 3, 1982 will stand restored.
We hope and trust that the High Court will be able to dispose of the writ petition as expeditiously as possible.
The writ petition filed by the interveners shall also be heard and disposed of by the High Court along with this writ petition according to law.
There shall be no order as to costs.
H.S.K. Appeal remanded.
|
The Board of Revenue on a consideration of the material on record as to the suitability or otherwise of the rival pairs of claimants upheld the grant of a liquor licence made by the Deputy Commissioner in favour of the appellants.
It held that respondent No. 1 was a mere benamidar of a prominent businessman and respondent No. 2 being still a student studying for his B.Sc.
degree could not be treated as an 'educated unemployed youth ' within the meaning of the note beneath r. 223 of the Assam Excise 'Rules, 1945.
The respondent Nos. 1 and 2 and the interveners separately moved the High Court under article 226 of the Constitution.
The High Court instead of taking up both the petitions together: took: the writ petition filed by respondents Nos. 1 and 2 and on a reappraisal of the evidence came to the conclusion contrary to that reached by the Board.
It accordingly quashed the order of the Board of Revenue and remanded the matter to the Board for a decision afresh, in the light of the directions made by it.
The Board took serious exception to certain observations made by the High Court and held that the directions issued were nothing but mere observations and therefore it was not bound by it.
After hearing the parties, the Board maintained its earlier order confirming the settlement of the liquor shop by the Deputy Commissioner with the appellants.
Respondents Nos. 1 and 2 again moved the High Court under article 226.
The High Court passed strictures on the Board of Revenue for not having complied with its directions and on a consideration of the facts appearing came to the same 826 conclusion as before and quashed the order of the Board but instead of remanding the matter to the Board for complying with its earlier orders issued a writ of mandamus directing him to settle the country liquor shop with respondents Nos. 1 and 2 on condition that the grant would be subject to an inquiry as to whether respondent No. 1 was a mere be subject and also subject to the result of earlier writ petition filed by the interveners which was still pending.
In appeal, the two questions which arose were :(1) whether it was impermissible for the High Court to have embarked upon an inquiry into facts and on a reappraisal of the evidence come to a finding contrary to that reached by the Board of Revenue and upon that basis issue a writ of certiorari under article 226 quashing the order of Board.
And (2) Whether it was a proper exercise of jurisdiction by the High Court under article 226 to have issued a writ of mandamus ordaining the Deputy Commissioner to settle the country liquor shop with respondents Nos. 1 and 2.
Answering the first question in the affirmative and the second in the negative.
^ HELD : 1.
The High Court clearly exceeded its jurisdiction while issuing a writ of certiorari under article 226 of the Constitution in quashing the impugned order of the Board of Revenue to have embarked upon an inquiry into the facts and upon a reappraisal of the evidence come to the conclusion contrary to that reached by the Board of Revenue viz. whether or not respondent No. 1 was a mere benamidar.
[837 F G] 2.
It was also not a proper exercise of jurisdiction under article 226 for the High Court to have issued a writ of mandamus directing the Deputy Commissioner to grant the liquor licence to respondents Nos. 1 and 2 in preference to the appellants.
Although a writ of mandamus may be a necessary adjunct to a writ of certiorari, if the High Court was satisfied that a writ of certiorari had to be issued to quash the impugned order of the Board of Revenue on the ground that its order was vitiated by an error apparent on the face of the record, the proper course for the High Court to adopt was to issue a writ of mandamus to the Board to hear and redetermine the appeal according to law.
[835 E F] HWR Wade 's Administrative Law, 5th edn., p. 638, referred to.
The construction placed by the High Court on the meaning of the expression 'educated unemployed youth ' appearing in the note beneath r. 223 of the Rules is apparently erroneous.
When a person is still pursuing his course of studies in a university, one fails to see any basis for creating him as an 'educated unemployed youth.
The expression 'educated unemployed youth, in the note beneath r. 223 has a definite legal connotation.
It denotes a class of citizens, who after completing their education, are faced with the growing problem of unemployment.
[837 B D] 827 4.
The direction made by the High Court while issuing a writ of mandamus to the Deputy Commissioner ordaining him to grant the liquor licence to respondents Nos. 1 and 2 that the grant would be subject to the result of an inquiry as to whether respondent No. 1 was a mere benamidar and also subject to the result of the writ petition which was filed by the interveners and still pending, appears to be unwarranted.
If that were to be so, it would affect the validity of the grant itself.
It was also irregular for the High Court to have taken an undertaking from respondent No. 2 who was a student still undergoing his studies for B.Sc.
degree in a university that he would give up his studies in case he was given the liquor licence.
The procedure adopted by the High Court in separately hearing the writ petition filed by respondents Nos. 1 and 2, while the writ petition filed by the interveners was still pending, and in not taking up both the writ petitions together, and directing the Deputy Commissioner to issue a liquor licence to respondents Nos. 1 and 2, was not in consonance with the procedure established by law and clearly in denial of rules of fairplay and justice.
The Board of Revenue was bound to comply with the directions made by the High Court and it was not open to it to say that they were mere observations and not directions issued.
The refusal of the Board to comply with the directions of the High Court issued under article 226 was in effect a denial of justice and also destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of Courts.
Bhopal Sugar Industries Limited vs Income tax Officer, Bhopal.
[1961] 1 S C.R. 474 relied on.
|
Special Leave Petition (Civil) No. 4783 of 1988.
536 From the Judgment and order dated 23.2.88 of the High Court of Gujarat in Civil Rev. Appln.
No. 1737 of 1982.
S.K. Dholakia, D.L. Kothari, R.C. Bhatia and P.C. Kapur for the Petitioners.
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 of India from the judgment and order of the High Court of Gujarat dated 23rd February, 1988.
By the impugned judgment, the High Court has dismissed the civil revision application which challenged the award made in this case.
The petitioner is the father of the respondent.
Both of them are established Vaidyas in Rajkot.
They come from a well to do family.
The petitioner is advanced in age and both the father and the son have been fighting between themselves since more than a decade.
The High Court found that the petitioner and the respondent had referred their disputes to one Kantibhai Vaidya (Shri Kantilal Dayaram Jani) who had intervened between them with the good intention to bring their disputes to an end.
He made an award.
The award was produced.
It appears that the award was endorsed and signed by both the parties.
In the award, it was stated by the arbitrator that he had called both the father and the son at his residence on 18th January, 1977.
He had discussed the matter with both of them and had warned them that both of them would ruin themselves in the property disputes, if they did not solve the matter amicably.
In the award, it was stated that the entire responsibility of solving the dispute was entrusted to him and the petitioner and the respondent had agreed to such entrustment.
Accordingly, he made the award on 18th January, 1977.
Below the award, both the parties and the arbitrator had signed.
The endorsement reads, when translated in English, as found by the High Court that the award is agreed to and binding upon both the parties and that the entire responsibility of the arbitrator will lie on Shri Kantibhai Vaidya and that he has taken the responsibility.
Thereafter followed a spell of litigation.
The respondent applied on 20th June, 1977 for filing the award and sought the judgment in terms of the award under section 17 of the (hereinafter called 'the Act ').
A notice consequent upon the filing of the award was issued to the petitioner.
The application was converted into Special Civil Suit No. 84 of 1977.
It was stated in the application to file the award, that the 537 petitioner had torn off the award and, therefore, the respondent was compelled to rely upon a photo copy of the original award, which was produced with the application.
The petitioner filed his objections to the application but did not file any application within the prescribed limitation of 30 days.
The learned trial Judge rejected the objections filed beyond the period of limitation and for the reasons that (1) the notice was already given to the party concerned about the filing of the award, (2) the time for making an application to set aside the award had expired and no such application was made (3) the award was not set aside under section 30 and (4) that the award was not remitted under section 16(5) of the Act.
The learned trial Judge made a decree in terms of the award.
The petitioner preferred a Civil First Appeal against the judgment and decree passed in Special Civil Suit No. 84 of 1977 and had also preferred Civil Revision Application No. 655 of 1978.
Both these legal proceedings were, however, withdrawn by the petitioner and thus the judgment of the trial court in Special Civil Suit No. 84 of 1977 became final.
The High Court had recorded that the First Appeal and Civil Revision Application were withdrawn in pursuance of an agreement reached between the parties on or about 14th August, 1978.
A copy of the said agreement was also produced before the Court as Exhibit 40.
It was signed by both the parties as well as their respective advocates.
The agreement was in the form of a letter addressed to the arbitrator wherein it was stated that both of them had appointed him as an arbitrator to resolve the disputes between them and that he had given an award dated 20th January, 1977 in respect of which award, there had been continued objections but now they have agreed that both of them should abide by the award dated 20th January, 1977 and that its interpretation should be left to the arbitrator himself.
It was also categorically mentioned therein that its interpretation by the arbitrator would be binding on both the parties.
It was clear, therefore, that both of them had re affirmed the acceptance of the award.
This letter of 14th August, 1978 was replied in the form of a letter dated 4th September, 1978 addressed to the petitioner by the arbitrator, that is Exhibit 137.
The petitioner thereafter filed a civil suit for setting aside the decree passed in Special Civil Suit No. 84 of 1977 and had also submitted an application to obtain interim orders.
That application was decided against him, against which he preferred an appeal/revision but later on, he withdrawn the said appeal/revision.
During the course of the execution proceedings, the petitioner 538 preferred a civil revision application against the judgment and order passed by the Civil Judge raising practically all the disputes which had been raised by the petitioner in this civil revision application.
The same was rejected summarily.
The main objection to the award is that there was no written agreement signed by both the parties to refer the disputes to arbitration.
It is clear from the narration of facts that the parties had agreed to refer the dispute to the arbitrator.
The award was signed by both the parties, about which there is no factual dispute, reiterated the fact that the parties had agreed to refer the dispute to the arbitration of the said arbitrator and that he made an award.
All these are in writing and signed by all the parties.
This, in our opinion, in the light of the facts and circumstances of the case can certainly be construed to be a proper arbitration agreement in terms of section 2(a) of the Act.
In this connection reference may be made to the observations of this Court in Prasun Roy vs The Calcutta Metropolitan Development Authority and another, A.I.R. 1988 S.C. 205 where all the relevant authorities on this point have been discussed.
See also in this connection the decision of the Judicial Committee in Chowdhri Murtaza Hossein vs Mst.
Bibi Bechunnissa, [1876] 3 Indian Appeal 209 at 220.
The observations in the said decision were made in different context.
But in the present context, it is clear that the conduct of the parties that there was an arbitration agreement and by signing the award it could be said that the parties had agreed to refer the disputes in writing to the arbitration of the named arbitrator.
This agreement was done twice, firstly by signing an endorsement below the award and secondly, by entering into an agreement in the form of a letter dated 14th August, 1978 (Exhibit 40).
In that view of the matter, we are in agreement with the High Court that on this aspect the petitioner is not entitled to challenge the award.
The High Court has further held that the revision before the High Court suffered from res judicata.
The High Court, in our opinion, was right in doing so.
It was contended that the previous proceedings were without jurisdiction.
We are unable to accept this contention.
The Civil Court had jurisdiction to take cognizance of the award under sections 14 and 17 of the Act.
This question had come up for consideration before the Judicial Committee in Rajah Amir Hassan Khan vs Sheo Baksh Singh, 11 I.A. 237.
The Judicial Committee held that they had perfect jurisdiction to decide the question which was before them (namely, whether the suit was barred as res judicata) and they did decide it.
It was not relevant according to the Judicial Committee, 539 whether they decided it rightly or wrongly, they had jurisdiction to decide the case; and even if they decided wrongly, they did not exercise their jurisdiction illegally or with material irregularity.
Section 9 of the Civil Procedure Code provides that the Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.
In this case, there was no such express or implied prohibition nor any inability of the Judge concerned.
In this connection, it may be useful to refer to the observations of this Court in Seth Hira lal Patni vs Shri Kali Nath, ; , where this Court observed that the validity of a decree could be challenged in execution proceedings only on the ground that the Court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have seizing of the case because the subject matter was wholly foreign to its jurisdiction or that the defendant was dead at the time the suit had been instituted or decree was passed or some such other ground which could have the effect of rendering the court entirely lacking in jurisdiction in respect of the subject matter of the suit or over the parties to it.
In this connection reference may be made to the observations of this Court in Vasudev Dhanjibhai Modi vs Rajabhai Abdul Rehman and others, [1971] 1 SCR 66.
Having regard to all these factors, we are of the view that the High Court was right in dismissing the application in the manner it did.
In M/s. Guru Nanak Fundation vs M/s. Rattan Singh and Sons, ; , where this Court observed that interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to the .
However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts, has made lawyers laugh and legal philosophers weep.
This Court further observed that experience shows and law reports hear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary.
With respect, we could not agree more in the facts and the circumstances of this case.
In the view, however, we have taken of the matter indicated above, we decline to interfere with the order of the High Court.
The special leave petition fails and is accordingly dismissed.
N.P.V. Petition dismissed.
|
The Petitioner and the respondent father and son respectively referred certain disputes, which arose between them to the Arbitrator, who made the award.
The award, duly signed by the parties and the Arbitrator, contained an endorsement to the effect that the award was agreed to and binding upon both the parties.
The respondent filed an application, which was later converted into special civil suit, for filing of the award, and sought a judgment in terms of the award under section 17 of the .
Consequent upon the filing of the award, notice was issued to the petitioner, who filed objections.
The trial court rejected the objections and passed decree in terms of the award.
The petitioner preferred a first appeal against the aforesaid decree and also filed a revision application, but later withdrew them in pursuance of an agreement reached between the parties on August 14, 1978, reaffirming the appointment of the arbitrator and the award made by him and the trial court judgment became final.
Thereafter, the petitioner filed a suit for setting aside the decree passed by the trial court which was dismissed.
The revision/appeal against the aforesaid decision was withdrawn.
During the execution proceedings, the petitioner filed a civil revision application, which was summarily rejected.
The High Court held 535 that the petitioner was not entitled to challenge the award and the revision before it suffered from res judicata.
Hence the Special Leave Petition to this Court.
The main objection to the award was that there was no written agreement signed by both the parties to refer the disputes to arbitration.
It was also contended that the previous proceedings were without Jurisdiction.
Dismissing the Special Leave Petition, ^ HELD: 1.1 It is clear from the conduct of the parties that there was a proper arbitration agreement in terms of section 2(a) of the .
By signing the award it could be said that the parties had agreed to refer the disputes in writing to the arbitration of the named arbitrator.
This agreement was done twice, firstly by signing an endorsement below the award and secondly, by entering into an agreement in the form of a letter dated 14th August, 1978.
[538E] 1.2 Section 9 of the Civil Procedure Code 1908 provides that the Courts shall, subject to the provisions contained in the Code, have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.
[539B] In the instant case there was no such express or implied provision nor any inability of the Judge concerned.
The Civil Court, therefore, had jurisdiction to take cognizance of the award under sections 14 and 17 f the [538G] The High Court was, therefore, right in dismissing the application of the petitioner.
[539E] Rajah Amir Hassan Khan vs Sheo Baksh Singh, 11 I.A. 237; Seth Hira Lal Patni vs Shri Kali Nath, ; ; Vasudev Dhanjibhai Modi vs Rajabhai Abdul Rehman and others, [1971] 1 SCR 66; M/s. Guru Nanak Foundation vs M/s. Rattan Singh and Sons, ; ; Prasun Roy vs The Calcutta Metropolitan Development Authority and another, A.I.R. 1988 S.C. 205 and Chowdhri Murtaza Hossein vs Mst.
Bibi Bechunnissa, [1876] 3 Indian Appeal 209 at 220, referred to.
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ivil Appeal No 3177 of 1982.
From the Judgment and Order dated 24 ' 81 of the Orissa High Court in Original Jurisdiction Case No. 233 of 1977.
N K Das and A P Mohanty for the Appellant G L. Sanghi R K Mehta, Ms. Mona Mehta and J R Das for the Respondents The Judgment of the Court was delivered by SHARMA, J.
The question which arises in this appeal by special leave from the decision of the Orissa High Court in a writ case is whether the "estate" of Lord Jagannath has PG NO 734 vested in the State of Orissa as a result of the notification dated 18.3.1974 issued under section 3 A of the Orissa Estates Abolition Act, 1951 (hereinafter referred to as the Act) or the said notification is ultra vires and fit to be quashed.
The writ petition in the High Court was filed by a number of persons claiming to be Sevaks and worshippers of Lord Jagannath, the presiding deity of the famous Jagannath temple.
The management of the temple and the properties including the intermediary interest is in the hands of a trust which was impleaded as a respondent in the case.
Besides, the State of Orissa and Collector, Puri, the Administrator, Jagannath temple, the Jagannath Committee were also made parties.
They, however, do not support the writ petitioners and agree with the State that the "estate" has vested under the impugned notification.
The Act was passed in 1952 for the purpose of abolishing all the rights in land of intermediaries between the raiyats and the State of Orissa by whatever name known and for vesting the same in the State.
Section 3 authorises the State Government to declare by a notification any estate specified therein to have passed to and become vested in the State.
The result of such a notification is dealt with in section 5.
In substance the intermediary concerned is divested of the notified interests and becomes entitled to compensation to be computed in the manner indicated in the Act.
By an amendment section 3 A was included in the Act permitting the State Government to issue a single notification in respect of a class or classes of intermediaries in the whole or a part of the State.
By a further amendment in 1963 Chapter II A was inserted in the Act, making special provisions for public trusts.
Clause (e) of section 13 A described "trust estate" as an estate the whole of the net income whereof is dedicated exclusively to charitable or religious purposes.
Admittedly the estate belonging to Lord Jagannath is included in the expression "trust estate".
Provisions were made in Chapter II A for entertaining claims and determining nature of the estates claimed to be trust estates and announcing the decision by notification.
The effect of such a determination was, as mentioned in section 13 I(1) to save the estate from vesting under a notification issued under s 3 or 3 A. 4.
A notification under section 3 of the Act was issued in respect to the estate of Lord Jagannath on 27.4.1963 and on the same date another notification under Chapter II A followed declaring the estate as trust estate.
Consequently the deity was not divested of the estate.
In 1970 Chapter PG NO 735 II A was repealed.
In 1974 the Act was further amended and "trust estate" which was not included in the definition section of the original Act was defined in clause (oo) in the following terms (excluding the Explanation which is not relevant for the present case): 0"(oo) 'trust estate ' means an estate the whole of the net income whereof under any trust or other legal obligation has been dedicated exclusively to charitable or religious purposes of a public nature without any reservation of pecuniary benefit to any individual: Provided that all estates belonging to the Temple of Lord Jagannath at Puri within the meaning of the Shri Jagannath Temple Act, 1955 and all estates declared to the trust estates by a competent authority under this Act prior to the date of coming into force of the Orissa Estates Abolition (Amendment) Act, 1970, shall be deemed to be trust estates.
On 18.3.1974 the impugned notification under section 3 A, as quoted below, was issued: "The 18th March 1974 S.R.O. No. 184/74 In exercise of the powers conferred by sub section (1) of section 3 A of the Orissa Estates Abolition Act, 195 l (Orissa Act I of 1952), the State Government do hereby declare that (i) the intermediary interests of all intermediaries whose estates have been declared as trust estates under Chapter Il A of the said Act; (ii) those in respect of which claims and references made under the said chapter were pending on the date of commencement of the Orissa Estates Abolition (Amendment Act, 1970 (Orissa Act 33 of 1970); and (iii) the intermediary interests of all intermediaries in respect of all estates other than those which have already vested in the State have passed to and become vested in the State free from all encumbrances.
PG NO 736 (No. 13699 EA I ND 1/74 R) By order of the Governor S.M. Patnaik Commissioner cum Secretary to Government.
" In this background the writ application was filed in the High Court challenging the notification.
The High Court rejected the claim of the petitioner and dismissed the writ application by the impugned judgment.
The learned counsel for the petitioner has contended that as a result of the decision under Chapter II A declaring Lord Jagannath 's estate a "trust estate" the same must be deemed to have been excluded from the scope of the Act, and this result in the eye of law became final and cotinued to remain effective even after the repeal of Chapter II A Reliance was placed on Section 5 of the Orissa General Clauses Act and it was argued that the right which the petitioner acquired under Section 13 1 as a result of the decision cannot disappear on the repeal of this Chapter The learned counsel proceeded to urge that as a result of the said decision the estate in question went completely out of the ambit of the Act and for this reason when in 1974 the Act was further amended it was considered necessary to define "trust estate" in Section 2 of the Act and to expressly include Lord Jagannath 's estate within the expression with a view to set at rest any controversy in this regard.
According to the learned counsel the intention of the legislature is clearly to permanently spare the petitioner 's estate from the of the Act In our view the argument has no merit and must be rejected.
It is true that an order was passed under s 13 G declaring the petitioner 's estate as a trust estate" and further by the insertion of clause (oo) in s 2 the petitioner 's estate continued to be a 'trust estate", but the question is as to what is the legal effect flowing from such a declaration This aspect is dealt within s 13 I, which is quoted as under (omitting sub section (2) which is not relevant in the present context): "13 1.
Effect of orders passed under section 13 G: (I) All estates declared under this Chapter to be trust estates by the Tribunal or the High Court, as the case may be, shall he deemed to have been excluded from the operation of the vesting notification and never to have vested in the State in pursuance thereof." (emphasis added) PG NO 737 It is manifest from the language of the Section that it saves a ' 'trust estate" so declared under section 13 G from the operation of a notification issued under section 3 or 3 A, but does not extend the benefit any further The provisions do not confer protection from the Act itself and cannot be interpreted to clothe it with a permanent immunity from being vested by a later notification issued under the Act Such an estate could be vested in the State of Orissa by a subsequent notification was made clear by clause (b) of s 13 K which reads as follows: "(a) .
(b) 'nothing in this Chapter shall be deemed to debar the State Government from vesting any trust estate by the issue of a notification under Section 3." Sections 7 A, 8 A, 8 D and X E of the Act include special provisions for a trust estate and unmistakably indicate that trust estates" are within the purview of the Act The benefit they receive from a declaration under section 13 G is limited and referable only to a vesting notification issued earlier.
There is thus, no merit in the argument of the learned counsel for the appellant that the petitioner 's estate could not be vested in the State by a notification issued subsequently 7.
We accordingly hold that there is no infirmity in the notification dated 18.3.1974 issued under section 3 A of the Act The appeal fails and is dismissed but in the circumstances without costs.
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Orissa Estates Abolition Act, 1951 was enacted to abolish all the rights in the land of intermediaries between the raiyats and the State of Orissa by whatever name known and for vesting the same in the State.
Section 3 authorises the State Government to declare by a notification any estate specified therein to have passed to and become vested in the same State, i.e., the intermediary concerned is divested of the notified interests and becomes entitled to compensation.
By an amendment section 3 A was included in the Act permitting the State Government to issue a single notification in respect of a class or classes of intermediaries in the whole or a part of the State.
By a further amendment in 1963 Chapter Il A was inserted in the Act making special provisions for public trusts.
Clause (e) of s.13 A described "trust estate".
provisions were made in Chapter II A for entertaining claims and determining the nature of the estates claimed to be trust estates and announcing the decision by notification.
The effect of such a determination was.
as mentioned in section 13 , to save the estate from vesting under a notification issued under section 3 or 3 A. A notification under section 3 of the Act was issued in respect of the estate of Lord Jagannath on 27 4 1963, and on the same date another notification under section 13 C., Chapter lI A followed declaring the estate as "trust estate".
The consequence was the diety was not divested of the estate.
In 1970 Chapter Il A was repealed.
By insertion of clause (oo) in section 2 in 1974 the said estate continued to be "trust estate." On 18.3.1974 a notification under section 3 A was issued declaring the estate of the diety to have vested in the State.
A writ petition was filed in the High Court challenging the validity of the said notification, which was dismissed.
PG NO 732 PG NO 733 In the appeal to this Court, on behalf of the appellant it was contended that as a result of the decision under chapter Il A declaring Lord Jagannath 's estate a "trust estate" the same must be deemed to have been excluded from the scope of the Act and this decision became final and continued to remain effective even after the repeal ot ' Chapter II A.
The right which was acquired under section 13 I cannot disappear on the repeal of Chapter Il A as the estate in question went completely out of the ambit of the Act.
The intention of the Legislature to include Lord Jagannath 's estate within the expression "trust estate" in cl.
(oo) in section 2 by the Amending Act 1974 was clearly to spare the said estate permanently from the mischief of the Act.
Dismissing the appeal, this Court, HELD: l.
There is no infirmity in the notification dated 18.3.1974 issue under.
3 A of the Act.[737El 2.
It is manifest from the language of section 13 l that it saves a "trust estate" so declared under section 13 G from the operation of a notification issued under section 3 or 3 A, but does not extend the benefit any further.
The provisions do not confer protection from the Act itself and cannot be interpreted to clothe it with a permanent immunity from being vested by a later notification issued under the Act.
[737A BI 3.
Sections 7 A, X A, 8 D and 8 E of the Act include special provisions for a trust estate and unmistakably indicate that "trust estates" are within the purview of the Act.
The benefit they receive from a declaration under section 13 (. is limited and referable only to a vesting notification issued earlier.
[737Dl
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Civil Appeal No. 96 of 1972.
From the Judgment and Order dated 23rd December, 1971 of the High Court of Judicature at Allahabad in Second Appeal No. 3082 of 1971.
Yogeshwar Prasad, Mrs. Rani Chhabra and section K. Bagga for the Appellants.
B. R. Agarwala, R. H. Pancholi and Ms. Vijayalakshmi Menon for the Respondent.
The Judgment of the Court was delivered by VENKATRAMIAH, J.
The short question which arises for consideration in this appeal by special leave is whether a nominee of a life insurance policy under section 39 of the (Act No. IV of 1938) (hereinafter referred to as 'the Act ') on the assured dying intestate would become entitled to the beneficial interest in the amount received under the policy to the exclusion of the heirs of the assured.
994 The facts leading to this appeal are these: One Jag Mohan Swarup who was governed by the died intestate on June 15, 1967 leaving behind his son, Alok Kumar (plaintiff No. 2), his widow Usha Devi (defendant) and his mother Sarbati Devi (plaintiff No. 1) as his heirs.
He had during his lifetime taken out two insurance policies for Rs. 10,000 each and had nominated under section 39 of the Act his wife Usha Devi as the person to whom the amount was payable after his death.
On the basis of the said nomination, she claimed absolute right to the amounts payable under the two policies to the exclusion of her son and her mother in law.
Thereupon Sarabati Devi and Alok Kumar (minor) represented by his next friend Atma Ram who was the father of Jag Mohan Swarup filed a suit in Civil Suit No. 122 of 1970 on the file of the Ist Additional Civil Judge.
Dehradun for a declaration to the effect that they were together entitled to 2/3rd share of the amount due and payable under the insurance policies referred to above.
Usha Devi, the defendant resisted the suit.
Her contention was that on the death of the assured, she as his nominee became absolutely entitled to the amounts due under the insurance policies by virtue of section 39 of the Act The trial court dismissed the suit.
The first appeal filed by the plaintiffs against the decree of the trial court was dismissed by the District Judge, Dehradun.
The second appeal filed by them against the judgment of the District Judge before the High Court of Allahabad was dismissed in limine under Rule 11, Order 41 of the Civil Procedure Code.
The plaintiffs have filed this appeal after obtaining special leave under Article 136 of the Constitution.
The only question which requires to be decided in this case is whether a nominee under section 39 of the Act gets an absolute right to the amount due under a life insurance policy on the death of the assured.
Section 39 of the Act reads: "39.
Domination by policy holder. (1) The holder of a policy of life insurance on his own life may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death: Provided that where any nominee is a minor, it shall be lawful for the policy holder to appoint in the prescri 995 bed manner any person to receive the money secured by the policy in the event of his death during the minority of the nominee.
(2) Any such nomination in order to be effectual shall unless it is incorporated in the text of the policy itself, be made by an endorsement on the policy communicated to the insurer and registered by him in the records relating to the policy and any such nomination may at any time before the policy matures for payment be cancelled or changed by an endorsement, or a further endorsement or a will, as the case may be, but unless notice in writing of any such cancellation or change has been delivered to the insurer, the insurer shall not be liable for any payment under the policy made bona fide by him to a nominee mentioned in the text of the policy or registered in records of the insurer.
(3) The insurer shall furnish to the policy holder a written acknowledgement of having registered a nomination or a cancellation or change thereof, and may charge a fee not exceeding one rupee for registering such cancellation or change.
(4) A transfer or assignment of a policy made in accordance with section 38 shall automatically cancel a nomination: Provided that the assignment of a policy to the insurer who bears the risk on the policy at the time of the assignment, in consideration of a loan granted by that insurer on the security of the policy within its surrender value, or its reassignment on repayment of the loan shall not cancel a nomination, but shall affect the rights of the nominee only to the extent of the insurer 's interest in the policy.
(5) Where the policy matures for payment during the lifetime of the person whose life is insured or where the nominee or, if there are more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be 996 payable to the policy holder or his heirs or legal representatives or the holder of a succession certificate, as the case may be.
(6) Where the nominee or if there are more nominees than one, a nominee or nominees survive the person whose life is insured, the amount secured by the policy shall be payable to such survivor or survivors.
(7) The provisions of this section shall not apply to any policy of life insurance to which section 6 of the Married Women 's Property Act, 1874 applies or has at any time applied : Provided that where a nomination made whether before or after the commencement of the Insurance (Amendment) Act, 1946, in favour of the wife of the person who has insured his life or of his wife and children or any of them is expressed, whether or not on the face of the policy, as being made under this section the said section 6 shall be deemed not to apply or not to have applied to the policy.
" At the out set it should be mentioned that except the decision of the Allahabad High Court in Kesari Devi vs Dharma Devi on which reliance was placed by the High Court in dismissing the appeal before it and the two decisions of the Delhi High Court in section Fauza Singh vs Kuldip Singh & Ors.
and Mrs. Uma Sehgal & Anr.
vs Dwarka Dass Sehgal & Ors in all other decisions cited before us the view taken is that the nominee under section 39 of the Act is nothing more than an agent to receive the money due under a life insurance policy in the circumstances similar to those in the present case and that the money remains the property of the assured during his lifetime and on his death forms part of his estate subject to the law of succession applicable to him.
The cases which have taken the above view are Ramballav DhanJhania vs Gangadhar Nathmall.
Life Insurance Corporation of India vs United Bank of India Ltd. & 997 Anr., D. Mohanaeelu Muldaliar & Anr.
vs Indian Insurance and Banking Corporation Ltd. Salem & Anr., Sarojini Amma vs Neelakanta Pillai Atmaram Mohanlal Panchal vs Gunavantiben & Ors., Malli Dei and Lakshmi Amma Anr.
vs Sagnna Bhagath & Ors.
, Since there is a conflict of judicial opinion on the question involved in this case it is necessary to examine the above cases at some length.
The law in force in England on the above question is summarised in Halsbury 's Laws of England (Fourth Edition), Vol. 25, Para 579 thus : "579.
Position of third party, The policy money payable on the death of the assured may be expressed to be payable to a third party and the third party is then prima facie merely the agent for the time being of the legal owner and has his authority to receive the policy money and to give a good discharge; but he generally has no right to sue the insurers in his own name.
The question has been raised whether the third party 's authority to receive the policy money is terminated by the death of the assured; it seems, however, that unless and until they are otherwise directed by the assured 's personal representatives the insurers may pay the money to the third party and get a good discharge from him.
" We shall now proceed to analyse the provisions of section 39 of the Act.
The said section provides that a holder of a policy of life insurance on his own life may when effecting the policy or at any time before the policy matures for payment nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death.
If the nominee is a minor, the policy holder may appoint any person to receive the money in the event of his death during the minority of the nominee.
That means that if the policy holder is alive when the policy matures for payment he alone will receive payment of the money due under the policy and 998 not the nominee.
Any such nomination may at any time before the policy matures for payment be cancelled or changed, but before such cancellation or change is notified to the insurer if he makes the payment bon fide to the nominee already registered with him, the insurer gets a valid discharge.
Such power of cancellation of or effecting a change in the nomination implies that the nominee has no right to the amount during the lifetime of the assured.
If the policy is transferred or assigned under section 38 of the Act, the nomination automatically lapses.
If the nominee or where there are nominees more than one all the nominees die before the policy matures for payment the money due under the policy is payable to the heirs or legal representatives or the holder of a succession certificate.
It is not necessary to refer to sub section (7) of section 39 of the Act here.
But the summary of the relevant provisions of section 39 given above establishes clearly that the policy holder continues to hold interest in the policy during his lifetime and the nominee acquires no sort of interest in the policy during the lifetime of the policy holder.
If that is so, on the death of the policy holder the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him.
Such succession may be testamentary or intestate.
There is no warrant for the position that section 39 of the Act operates as a third kind of succession which is styled as a 'statutory testament ' in paragraph 16 of the decision of the Delhi High Court in Mrs. Uma Sehgal 's case (supra).
If section 39 of the Act is contrasted with section 38 of the Act which provides for transfer or assignment of the rights under a policy, the tenous character of the right of a nominee would become more pronounced.
It is difficult to hold that section 39 of the Act was intended to act as a third mode of succession provided by the statute.
The provision in sub section (6) of section 39 which says that the amount shall be payable to the nominee or nominees does not mean that the amount shall belong to the nominee or nominees.
We have to bear in mind here the special care which law and judicial precedents take in the matter of execution and proof of wills which have the effect of diverting the estate from the ordinary course of intestate succession and that the rigour of the rules governing the testamentary succession is not relaxed even where wills are registered.
As observed in the Full Bench decision of the Allahabad High Court in Raja Ram vs Mata Prasad & Anr.
which has interpreted 999 section 39 of the Act correctly, the judgment of that High Court in Kesari Devi 's case (supra) related to a different set of facts.
In Kesari Devi 's case (supra) the dispute arose regarding the person who was entitled to the succession certificate in respect of the amount payable under a life insurance policy which had been taken out by the assured between the widow of the assured and the widow of the nominee under section 39 of the Act.
On going through the judgment in Kesari Devi 's case (supra) we feel that the Court in that case paid little heed to the earlier judicial precedents of its own Court.
The decision of the Full Bench in Raja Ram 's case (supra) set at rest all doubts which might have been created by Kesari Devi 's case (supra) about the true import of section 39 of the Act in so far as the High Court of Allahabad was concerned.
In Fauja Singh 's case (supra) there is reference only two three cases Life Insurance Corporation of India vs United Bank of India Ltd. (supra), Matin vs Mahomed Matin and Kesari Devi 's case (supra).
The Court expressed its dissent from the Calcutta decision on the ground that decision had not considered sub section (6) of section 39 of the Act.
The Lahore case was one decided before the Act came into force.
The distinguishing features of Kesari Devi 's case (supra) are already mentioned.
Otherwise there is not much discussion in this case about the effect of section 39 of the Act.
We have carefully gone through the judgment of the Delhi High Court in Mrs. Uma Sehgal 's (case) supra.
In this case of the High Court of Delhi clearly came to the conclusion that the nominee had no right in the lifetime of the assured to the amount payable under the policy and that his rights would spring up only on the death of the assured.
The Delhi High Court having reached that conclusion did not proceed to examine the possibility of an existence of a conflict between the law of succession and the right of the nominee under section 39 of the Act arising on the death of the assured and in that event which would prevail.
We are of the view that the language of section 39 of the Act is not capable of altering the course of succession under law.
The second error committed by the Delhi High Court in this case is the reliance placed by it on the effect of the amendment of section 60(1) (kb) of the Code of Civil Procedure, 1908 providing that all moneys payable under a 1000 policy of insurance on the life of the judgment debtor shall be exempt from attachment by his creditors.
The High Court equated a nominee to the heirs and legatees of the assured and proceeded to hold that the nominee succeeded to the estate with all plus and minus points '.
We find it difficult to treat a nominee as being equivalent to an heir or legatee having regard to the clear provisions of section 39 of the Act.
The exemption of the moneys payable under a life insurance policy under the amended section 60 of the Code of Civil Procedure instead of 'devaluing ' the earlier decisions which upheld the right of a creditor of the estate of the assured to attach the amount payable under the life insurance policy recognises such a right in such creditor which he could have exercised but for the amendment.
It is because it was attachable the Code of Civil Procedure exempted it from attachment in furtherance of the policy of Parliament in making the amendment.
The Delhi High Court has committed another error in appreciating the two decisions of the Madras High Court in Karuppa Gounder & Ors.
vs Palaniammal & Ors.
and in B.M. Mundkur vs Life Insurance Corporation of India & Ors.
The relevant part of the decision of the Delhi High Court in Mrs. Uma Sehgal 's case (supra) reads thus: 10. "In Karuppa Gounder vs Palaniammal, AIR 1963 Mad. 245 (para 13), K had nominated his wife in the insurance policy.
K died.
It was held that in virtue of the nomination, the mother of K was not entitled to any portion of the insurance amount.
I am in respectful agreement with these views, because they accord with the law and reason.
They are supported by section 44 (2) of the Act.
It provides that the commission payable to an insurance agent shall after his death, continue to be payable to his heirs, but if the agent has nominated any person the commission shall be paid to the person so nominated.
It cannot be contended that the nominee u/s 44 will receive the money not as owner but as an agent on behalf of someone else vide B.M. Mundkur vs Life Insurance Corporation, AIR 1977 Mad. 72.
Thus, the nominee excludes the legal heirs.
" 1001 Two mistakes committed by the Delhi High Court in the above passage are these.
In Karuppa Gounder 's case (supra), the question was whether the amount payable under the insurance policy in question was joint family property or separate property of the assured.
In that connection, the High Court of Madras observed thus: "But where a coparcener has effected insurance upon his own life, though he might have received the premia from out of the funds which he might have received from the joint family, it does not follow that the joint family insured the life of the member or paid the premia in relation thereto.
It is undeniable that a member of a coparcenary may with the moneys which he might receive from the coparcenary effect an insurance upon his own life for the benefit of the members of his immediate family.
His intention to do so and to keep the property as his separate property would be manifested if he makes a nomination in favour of his wife or children as the case may be.
It would therefore appear that no general proposition can be advanced in the matter of the insurance policy of a member of a coparcenary and that each case must be dealt with in accordance with the circumstances surrounding it.
" It is obvious from the above passage that the above case has no bearing on the meaning of section 39 of the Act.
The fact of nomination was treated in that case as a piece of evidence in support of the finding that the policy was not a joint family asset but the separate property of the coparcener concerned.
No right based on the ground that one party was entitled to succeed to the estate of the deceased in preference to the other or along with the other under the provisions of the was asserted in that case.
The next error committed by the Delhi High Court is in drawing an analogy between section 39 and section 44(2) of the Act thinking that the Madras High Court had done so in B. M. Mundkur 's case (supra).
In B.M. Mundkur 's case (supra), the High Court of Madras instead of drawing an analogy between section 39 and section 44(2) of the Act actually contrasts them as can be seen from the following passage: 1002 "There are vital differences between the nomination contemplated under Section 39 of the Act and the nomination contemplated under the proviso to Section 44(2) of the Act.
In the first place, the sum assured, with which alone Sec.
39 was concerned, was to be paid in the event of the death of the assured under the terms of the contract entered into between the insurer and the assured and consequently it was the contractual right which remained vested in the insured with reference to which the nomination happened to be made.
It should be pointed out that the nomination as well as the liability on the part of the insurer to pay the sum assured become effective simultaneously, namely, at the moment of the death of the assured.
So long as he was alive, the money was not payable to him, in the case of a whole life policy, and equally, having regard to the language of Section 39(1) of the Act, the nominee 's right to receive the money arose only on the death of the assured, Section 39 itself did not deal with the title to the money assured, which was to be paid by the insurer to the nominee who was bound to give discharge to the insurer.
It was in this context that the Court took the view that the title remained with the estate of the deceased, and therefore, with the heirs of the deceased, that the nomination did not in any way affect the title and that it merely clothed the nominee with the right to receive the amount from the insurer.
On the other hand, the provisions and purport of Section 44 of the Act are different.
In the first place under Section 44(1) it was a statutory right conferred on the agent to receive the commission on the renewal premium notwithstanding the termination of the agreement between the agent and the insurer, which provided for the payment of such commission on the renewal premium.
The statute also prescribed the qualification which rendered the agent eligible to receive commission on such renewal premium.
Section 44(1) provides for the payment of the commission to the agent during his lifetime only and does not contemplate the contingency of his death and the commission being paid to anybody even after his death.
It is section 44(2) which deals with the 1003 payment of commission to the heirs of deceased for so long as such insurance agent been alive.
Thus it was not the general law of inheritance which conferred title on the heirs of the deceased insurance agent to receive the commission on the renewal premium, but it was only the particular statutory provision, namely, Section 44(2) which conferred the right on the heirs of the deceased agent to receive the commission on the renewal premium.
In other words, the right of the heirs to receive the commission on renewal premium does not arise under any law of succession and it is a right directly conferred on the heirs by Section 44(2) of the Act, even though who the heirs of the deceased insurance agent are will have to be ascertained under the law of succession applicable to him.
Thus the statute which conferred such a right on the heirs is certainly competent to provide for an exception in certain cases and take away such a right from the heirs; and the proviso which has been introduced by the Government of India notification 1962 has done exactly this in taking away the right of the heirs conferred under the main part of Section 44(2), in the event of the agent, during his lifetime, making a nomination in favour of a particular person and not cancelling or altering that nomination subsequently.
If the statute itself was competent to donfer such a right for the first time on the heirs of the deceased agent it is indisputable that the statute could take away that right under stated circumstances.
" The reasons given by the Delhi High Court in this case in support of its view are not tenable.
Moreover there is one other strong circumstance in this case which dissuades us from taking a view contrary to the decisions of all other High Courts and accepting the view expressed by the Delhi High Court in the two recent judgments delivered in the year 1978 and in the year 1982.
The Act has been in force from the year 1938 and all along almost all the High Courts in India have taken the view that a mere nomination effected under section 39 does not deprive the heirs of their rights in the amount payable under a life insurance policy.
Yet Parliament has not chosen to make any 1004 amendment to the Act.
In such a situation unless there are strong and compelling reasons to hold that all these decisions are wholly erroneous, the Court should be slow to take a different view.
The reasons given by the Delhi High Court are unconvincing.
We, therefore, hold that the judgments of the Delhi High Court in Fauja Singh 's case (supra) and in Mrs. Uma Sehgal 's case (supra) do not lay down the law correctly.
They are, therefore, overruled.
We approve the views expressed by the other High Courts on the meaning of section 39 of the Act and hold that a mere nomination made under section 39 of the Act does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured.
The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy, The amount; however, can be claimed by the heirs of the assured in accordance with the law of succession governing them.
In view of the above conclusion, the judgments and decrees of the High Court, the first appellate court and the trial court are liable to be set aside.
They are accordingly set aside.
Since it is not disputed that the plaintiffs are under the law of succession governing them each entitled to 1/3 share in the estate of the deceased, it is hereby declared that each of the plaintiffs is entitled to 1/3rd share in the amount received under the insurance policies in question and the interest which may have been earned by its investment.
The suit stands decreed accordingly.
Parties shall, however, bear their own costs throughout.
S.R. Appeal allowed.
|
The appellants being mother and son of one Jagmohan Swarup who was governed by the and who died intestate on June 15, 1967 filed Civil Suit No. 122 of 1970 on the file of the first Additional Civil Judge, Dehradun for a declaration to the effect that they were together entitled to 2/3rd share of the amount due and payable under the insurance policies though the deceased assured has nominated the respondent his widow as the person to whom the amounts were payable.
The respondent contested the suit claiming that she has the absolute right to the amounts to the exclusion of her son and her mother in law.
The suit was dismissed.
The First Appeal before the Dt.
Judge, Dehradun and the Second Appeal before the High Court were dismissed.
Hence the appeal after obtaining special leave of the Court.
Allowing the appeal, the Court, ^ HELD: 1.1 A mere nomination made under Section 39 of the does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the accused.
The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy.
The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them.
[1009G, 1004 B D] 1.2 An analysis of the provisions of Section 39 of the Act clearly established that the policy holder continues to hold interest in the policy during his life time and the nominee acquires no sort of interest in the policy during the life time of the holder.
If that is so, on the death of the policyholder the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him.
such succession may be testamentary or intestate.
The tenuous character of the right of a nominee becomes more pronounced when one contrasts the provisions of Section 39 with that of 993 Section 38.
Section 39 of the Act was not intended to act as a third mode of succession provided by the stature and incorrectly styled as "statutory testament" by the Delhi High Court.
[998 C E] 1.3 The language of Section 39 of the Act is neither capable of altering the course of succession under law nor can be said to have equated a nominee to an heir or legatee.
[999F] section Fauza Singh vs Kuldip Singh & Ors.
AIR 1978 Delhi 276; Mrs. Uma Sehgal & Anr.
vs Dwarka Dass Sehgal and Ors.
AIR 1982 Delhi 36; overruled.
Rama Bhallav Dhandhania vs Gangadhar Nathmall AIR 1966 Cal.
275; D. Mohananardu Mudaliar and Anr.
vs Indian Insurance and Banking Corporation Ltd., Salem and Anr. ; Sarojini Amma vs Neelakanta Pillai AIR 1961 Kerala 126, Life Insurance Corporation of India vs United Bank of India Ltd. & Anr. ; Raja Ram vs Mata Prasad and Anr.
AIR 1972 All. 167; Mallidei and Anr.
vs Kanchan Prana Dei AIR 1973 Orissa 83; Lakshmi Amma and Anr.
vs Saguna Bhagathi & Ors.
ILR 1973 Karnataka 827; Atmaram Mohanlal Panchal vs Gunavantiben and Ors.
AIR 1977 Gujarat 134 approved.
Karuppa Gounder & Ors.
vs Palaniammal & Ors.
AIR 1963 Madras 245; B. M. Mundkur vs Life Insurance Corporation of India and Ors.
AIR 1977 Mad. 72, discussed and distinguished.
|
N: Criminal Appeal No. 692 of 1983.
From the Judgment and order dated 29th November, 1983 of the Punjab & Haryana High Court at Chandigarh in Criminal Writ Petition No. 516 of 1983.
K. Parasaran, Attorney Genl.
of India, Bhagwant Singh, Advocate General (Punjab), Gurmukh Singh, Addl Adv.
of Punjab, D.S. Brar, Asstt Adv.
General, G.S. Mann.
Deputy Adv.
General, R.D. Aggarwal, Govt.
Advocate, Miss A. Subhashini and S.K. Bagga for the Appellants.
Hardev Singh, G.S. Grewal, N.S Das Behl, R.S. Sodhi and J.S. Sandhawalia, for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C. J.
This is an appeal by special leave against the judgment dated November, 29 1983 of a learned Single Judge of the High Court of Punjab and Haryana in Criminal Writ Petition No. 516 of 1983.
That Writ Petition was filed by the respondent.
Shri Jagdev Singh Talwandi, to challenge an order of detention passed by the District Magistrate, Ludhiana, on October 3, 53 1983 whereby the respondent was detained under section 3 (3) read with section 3 (2) of the .
The respondent was arrested in pursuance of the order of detention on the night between October 3 and 4, 1983.
He was first lodged in the Central Jail, Patiala and from there he was taken to Ambala, Baroda and Fathegarh (U.P.).
He filed a Writ Petition (No.463 of 1983) in the High Court to challenge his transfer and detention in a place far away from Ambala.
He withdrew that petition on an assurance by the Government that he will be sent back to Ambala, which the Government did on October 28.
The grounds of detention were served on the respondent on October 6, 1983.
Those grounds show that the petitioner was detained on the basis of two speeches allegedly made by him: one on July 8, 1983 at Nihang Chhowani, Baba Bakala, District Amritsar and the other on September 20, 1983 at Gurdwara Manji Sahib, Amertsar.
The grounds furnished to the petitioner read thus: "(1) That you in a Shaheedi Conference which was held from 11 a.m. to 4.45 p.m. on 8 7 1983 at a place known as 'Nihang Chhowani ' at Baba Bakala, District Amritsar, delivered a provocative speech to a Sikh gathering comprising about 2000/2200 Persons wherein you made a pointed reference to the incident dated 2 7 1983 of encounters between Nihangs and police at Baba Bakala and Taran Taran and stressed that in order to take revenge Sikhs would kill their (Police) four persons in lieu of the two Nihangs who had been killed in the said encounters.
(2) That while addressing a conference convened by the AISSF (All India Sikh Students Federation) on 20 9 1983 at Gurdwara Manji Sahib at Amritsar and attended by about 7000/8000 Sikh students, you made a provocative speech wherein you said that all efforts made for the success of the Akali Morcha having failed, it was still time to establish in Punjab a Government parallel to the Central Government and that you are in a position to form such a Government.
You further exhorted that the establishment of Khalsa Raaj was the only solution to the problems.
You also made a suggestion that the Government 54 will not accept any demand unless it was compelled by force to do so.
This statement was also published in the various newspapers.
A case F.I.R. No. 295 dated 27 9 1983 under section 124 A Indian Penal Code, and section 13 of the , was registered at Police Station 'E ' Division, Amritsar, which is under investigation.
" The detaining authority stated in the last paragraph of the detention order that the respondent was being supplied the grounds of detention in Punjabi (Gurmukhi script) together with an English translation thereof and the "supporting material forming the base of the grounds of detention".
The "supporting material", by which is meant particulars of the grounds of detention, was supplied to the respondent along with the grounds.
These particulars consist of what is alleged to be a report of the speeches made by the respondent, as recorded by the C.I.D. branch of the Punjab Police.
The particulars, of which an English translation was produced in the High Court at exhibit A1, read thus: "While speaking he said that on July 2 by bringing B.S.F., Punjab Police and other police the unarmed Nihangs were fired at.
There is no count as to how many of them were killed, because no rollcall is taken of the Sikhs; how many came and how many went.
Further said that in Punjab hundreds of innocent Sikhs have been made the target of bullets.
The Government has seen that the Sikhs go away after paying homage to the martyrs.
Now we will have to decide as to what steps should be taken.
The beloved army of Guru (Nihangs) have protected our dress and scriptures.
It is true that some of them do commit mistakes also.
They should be punished.
We should see that we should kill as many police man as they kill ours, otherwise they will slowly finish us.
The new Inspector General of Police Mr. Bhinder, has stated that there are no extremist in Darbar Sahib.
Further said that Congress wants to finish self respect among you.
The Morcha, which is launched by Akali Dal, is to save the Sikh appearance.
The awards have been given to police, have they won any war? Such a big attack upon the Nihangs was 55 on a pre planned programme.
I say if they have killed our two men, then you should kill four.
If they come to kill me like this, then I will die after killing them.
I will never go back.
Further said that if we get a judicial enquiry made, it becomes meaningless.
Nothing comes out of them.
Now the judicial power has been given to Executive Officers.
They may kill any body and they complete the enquiry and fill the file.
" One of the grounds on which the order of detention was challenged in the High Court was that the State Government had failed to discharge its obligation under Article 22 (5) of the Constitution by denying to the respondent an effective opportunity to make a representation to the Advisory Board against the order of detention.
On being asked by the learned Judge "to be more specific", counsel for the respondent stated in the High Court that the State Government had not supplied to the respondent the supporting material on which Ground No. 1 of the grounds of detention was based.
Shri Hardev Singh, who appears on behalf of the respondent, adopted that contention by clarifying that the case of the respondent is that the relevant facts stated in the 1st ground of detention are totally absent from the supporting material supplied to him and, therefore, no reasonable person could have possibly passed the detention order on the basis of that material.
The learned counsel urged that the order of detention was bad either because the detaining authority did not apply its mind to the material before it or, in the alternative, because there was some other material on the basis of which the detention order was passed and that material was not supplied to the respondent.
For the purpose of focussing attention on the true nature of the respondent 's contention and the prejudice said to have been caused to him, the learned Judge of the High Court resorted to an ingenious device.
He coined a conversation between the detaining authority and the detenu on the subject of their rival contentions in this case.
That imaginary conversation may be reproduced, at least for the merit of its novelty: "(The detaining authority and the detenu come face to face.) Detaining authority: (After reading out Ground No. 1 to the detenu) : You had made that objectionable speech.
56 Detenu: Sir, you seem to have been wrongly informed.
I did not deliver any speech, provocative or otherwise, in a Shaheedi Conference at any such time, date or place known as 'Nihang Chhowni ' at Baba Bakal, District Amritsar, before a Sikh gathering of 2000/2200, as read out by you from ground No. 1.
Detaining authority: (Being cock sure of its facts, takes out the C.I.D. report and puts it in the hands of the detenu.): Go through this C.I.D. report carefully, as ground No. 1 is based on that report.
Detenu: Sir, this report does not refer to any speech being made by me in a Shaheedi Conference at a given time, on a given date, at a given place, at Baba Bakala and before a Sikh gathering numbering 2000/2200.
Detaining authority: (Taking back the report from the detenu 's hand and subjecting it to a close scrutiny, says somewhat wryly): Yes, you are right.
The vital data which finds a mention in ground No. 1 is missing from the supporting materail.
(Regaining quickly his repose, the detaining authority continues): Never mind if the given vital facts are missing from the supporting material.
The supporting material at least reveals that you did utter the objectionable words somewhere, sometime, on some date and before some persons.
Detenu: Sir, but that was not the speech on which you were going to act.
You were going to take action against me on the basis of the speech mentioned in Ground No. 1.
Detaining authority: Very well.
(So saying, the detaining authority orders the detention of the detenu on two grounds by adding one more ground on the basis of another speech.
The detaining authority serves the order of detention upon the detenu, containing two grounds of detention.
Simultaneously, the detaining authority supplies the supporting material to the detenu.") 57 We must mention in order to put the record straight and in fairness to the learned Judge, that he has narrated this conversation in a manner which is slightly different in so far as the form, but not the substance; is concerned.
He has narrated the conversation in a running form.
We have reproduced it like a dialogue in a play, without adding anything of our own.
Indeed, we have taken care not to make any changes at all in the fictional conversation imagined by the learned Judge because, the questions and answers which suggested themselves to him are, in a sense, the heart of the matter and, in any case, constitute the essence of his judgment.
With respect to the learned Judge, the basic error of his judgment lies in an easy, unexamined assumption which he has made on a significant aspect of the matter.
The detenu reminded the detaining authority that the C.I.D. report did not refer to any speech made by him "in a Shaheedi Conference at a given time, on a given date, at a given place at Baba Bakala and before a Sikh gathering numbering 2000/2200".
The detaining authority could have not possibly replied to that question by saying merely that the detenu was right.
The detenu was right only formally or technically.
That is because, the C.I.D. report was supplied to him along with the grounds of detention with the express stipulation that it formed "the base of the grounds of detention".
The grounds mention every one of the details which need have been mentioned.
The C.I.D. report was furnished to the detenu as forming the source of information leading to the conclusion that he had made a speech which necessitated his detention in the interests of public order.
In the circumstances, the grounds and the material furnished to the detenu have to be read together as is the material in the form of the C.I.D. report was a continuation of the grounds of detention.
The unqualified reply given by the detaining authority to the detenu, as imagined by the learned Judge, betrays considerable unfamiliarity with the true legal position of the part on the detaining authority.
Not only that, but it shows that the detaining authority forgot that the particulars and the grounds were expressed to be interlinked, the former being the base of the latter.
The detaining authority should have explained to the detenu that though the particulars supplied to him did not mention those various details, the particulars were supplied to him along with the grounds, that it was expressly clarified contemporaneously that they related to the facts stated in the grounds, that the two had to be read together and that the grounds contained the necessary facts with full details.
The dialogue should 58 have ended there and the curtain rung down.
Indeed, the dialogue, though carefully improvised by the learned Judge, assumes what is to be decided, namely, whether the particulars furnished to the detenu suffer from the infirmity alleged.
Nevertheless, we will examine independently the argument of the respondent that he could not make an effective representation against the order of detention because the material supplied to him, that is to say, the C.I.D. report of the speech alleged to have been made by him at the Shaheedi Conference, did not contain the material particulars which formed an important constituent of the grounds served upon him.
His grievance is that the C.I.D. report of his speech does not mention that: (1) the Conference was held on July 8, 1983; (2) it was held at Nihang Chhowani; (3) it was held between the hours of 11.
A.M. and 4.45 P.M. (4) it was a "Shaheedi Conference"; (5) there was a gathering of 2000 to 2200 persons at the Conference; and that, (6) the speech made by him referred to an encounter at Baba Bakala and Tarn Taran.
Article 22 (5) of the Constitution, around which the argument or the respondent revolves, reads thus: "When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order." This Article has come up for consideration before this Court in a large number of cases.
One of the earliest judgments of this Court on the interpretation of this Article is reported in Dr. Ram krishna Bhardwaj vs The State of Delhi,(1) in which Patanjali Sastri, C.J. observed that under Article 22 (5) of the Constitution, the detenu has the right to be furnished with particulars of the grounds of his detention, "sufficient to enable him to make a representation which, on being considered, may give relief to him".
Khudiram Das vs The State of West Bengal, 2 is a judgment of a four Judge Bench of this Court in a case which arose under the Main 59 tenance of Internal Security Act, 1971.
One of us, Bhagwati, J., who spoke for the Court, surveyed the decisions bearing on the question of the obligation of the detaining authority and explained the nature of that obligation thus: "The basic facts and material particulars, therefore, which are the foundation of the order of detention, will also be covered by 'grounds ' within the contemplation of article 22 (5) and section 8 and are required to be communicated to the detenu unless their disclosure is considered by the authority to be against the public interest.
This has always been the view consistently taken by this Court in a series of decisions.
" In Mohammad Yousuf Rather vs The State of Jammu & Kashmir,(1) Chinnappa Raddy, J., in a concurring judgment, dealt with the implications of Article 22 (5) of the Constitution thus: "The extent and the content of Article 22 (5) have been the subject matter of repeated pronouncements by this Court (Vide State of Bombay vs Atmaram (2), Dr. Ramkrishna Bhardwaj vs State of Delhi (1) Shibbanlal Saxena vs State of Uttar Pradesh (3) Dwarkadas Bhatia vs State of Jammu & Kashmir (4).
The interpretation of Article 22, consistently adopted by this Court, is, perhaps, one of the outstanding contributions of the Court in the cause of Human Rights.
The law is now well settled that a detenu has two rights under Article 22 (5) of the Constitution .
(1) To be informed, as soon as may be, of the grounds on which the order of detention is based, that is, the grounds which led to the subjective satisfaction of the detaining authority and (2) to be afforded the earliest opportunity of making a representation against the order of detention, that is, to be furnished with sufficient particulars to enable him to make a representation which on being considered may obtain relief to him." In Khudiram Das vs The State of West Bengal,(2) it was observed that these two safeguards "are the barest minimum which must be 60 observed before an executive authority can be permitted to preventively detain a person and thereby drown his right of personal liberty in the name of public good and social security".
The question which we have to consider in the light of these decisions is whether sufficient particulars of the first ground of detention were furnished to the respondent so as to enable him to exercise effectively his constitutional right of making a representation against the order of detention.
The obligation which rests on the detaining authority in this behalf admits no exception and its rigour cannot be relaxed under any circumstances.
Having given our anxious consideration to this question, it seems to us impossible to accept the view of the High Court that sufficient particulars of the first ground of detention where not furnished to the detenu so as to enable him to make an effective representation to the detaining authority, that is to say, a representation which on being accepted may give relief to him.
This is not a case in which the ground of detention contains a bare or bald statement of the conclusion to which the detaining authority had come, namely, that it was necessary to pass the order of detention in order to prevent the detenu from acting in a manner prejudicial to the interests of public order.
The first ground of detention with which we are concerned in this appeal, mentions each and every one of the material particulars which the respondent was entitled to know in order to be able to make a full and effective representation against the order of detention.
That ground mentions the place, date and time of the alleged meeting.
describes the occasion on which the meeting was held, that is, the 'Shaheedi Conference '.
It mentions the approximate number of persons who were present at the meeting.
Finally, it mentions with particularity the various statements made by the respondent in his speech.
These particulars mentioned in the grounds of detention comprise the entire gamut of facts which it was necessary for the respondent to know in order to make a well informed representation.
The inadequacies from which the supplementary particulars furnished to the respondent along with ground No. 1 suffer, cannot affect that position because, they do not introduce any obscurity in the facts stated in that ground or detract from the substance of the allegations mentioned in that ground.
The argument of the respondent that he could not make an effective representation in behalf of ground No. 1 because of the inadequacy of data in the particulars supplied to him, has therefore to be rejected.
However, we are somewhat surprised that in a matter of this nature, 61 the detaining authority should have adopted a somewhat casual and unimaginative approach to his task.
We asked the learned Attorney General to produce before us the original version of the C.I.D. report of which an extract was supplied to the respondent by way of particulars.
The original version contains almost every one of the material details pertaining to the meeting which are mentioned in ground No. 1 The detaining authority needlessly applied his scissors excising the data which mentioned the date, the place, the time and the occasion of the meeting.
It is this lack of thoughtfulness on the part of the detaining authority which furnished to the respondent the semblance of an argument.
This Court has observed in numerous cases that, while passing orders of detention, great care must be brought to bear on their task by the detaining authorities.
Preventive detention is a necessary evil but essentially an evil.
Therefore, deprivation of personal liberty, if at all, has to be on the strict terms of the Constitution.
Nothing less.
We will utter the of given warning yet once more in the hope that the voice of reason will be heard.
Shri Hardev Singh contended, in the alternative, that the order of detention suffers from a total non application of mind because, that order could not have been passed on the basis of the C.I.D. report which does not refer to any of the facts which are mentioned in the order of detention.
It is undoubtedly true that the case of the appellants is that the order of detention is founded upon the report of the C.I.D., relating to the speech made by the respondent at the Shaheedi Conference.
But the argument of the learned counsel overlooks that what was furnished to the respondent was an extract from the C.I.D. report and not the whole of it.
However, that has not caused any prejudice to the respondent since the grounds and the particulars were served upon him simultaneously and ground No. 1 mentions every conceivable detail which it was necessary to mention in order to enable the respondent to make a proper representation against the order of detention.
Evidently, the detaining authority had before it the whole of the C.I.D. report on the basis of which it passed the order of detention.
What was omitted from the extract furnished to the respondent was incorporated in ground No. 1.
It is therefore not possible to accept the argument that the order of detention is bad because the detaining authority did not apply its mind to the question as to whether there was material on the basis of which the respondent could be detained.
It was further argued by the learned counsel that the detaining authority should have disclosed the evidence on the basis of which 62 the order of detention was passed because, in the absence of knowledge of such evidence, the respondent could not have made an effective representation against the order of detention.
There is no substance in this contention.
It is not the law that the evidence gathered by the detaining authority against the detenu must also be furnished to him.
In Beni Madhob Shaw vs The State of West Bengal,(1) it was argued on behalf of the detenu that the details of the activities attributed to him were not disclosed to him, as a result of which his right to make a representation to the Government was seriously prejudiced.
It was held by this Court that since the activities forming the grounds of detention were disclosed to the detenu in clear terms and since such disclosure furnished adequate information to the detenu to enable him to make an effective representation against his detention, the non disclosure of sources of information or the exact words of the information which formed the foundation of the order of detention could not be complained of.
In Her Jas Dev Singh vs State of Punjab,(2) it was held that the conclusions drawn from the available facts constitute 'the grounds ' and that the ground must be supplied to the detenu.
The Court observed that the detenu is not entitled to know the evidence nor the source of the information: What must be furnished to him are the grounds of detention and the particulars which would enable him to make out a case, if he can, for the consideration of the detaining authority.
In Vakil Singh vs State of Jammu and Kashmir, (3) it was held that since the basic facts, as distinguished from factual details were incorporated in the material which was supplied to the detenu, nothing more was required to be intimated to him in order to enable him to make an effective representation.
These cases show that the detenu is not entitled to be informed of the source of information received against him or the evidence which may have been collected against him as, for example, the evidence corroborating that the report of the C.I.D. is true and correct.
His right is to receive every material particular without which a full and 63 effective representation cannot be made.
If the order of detention refers to or relies upon any document, statement or other material, copies thereof have, of course, to be supplied to the detenu as held by this Court in Ichhu Devi Choraria vs Union of India.(1) That question does not arise here since no such thing is referred to or relied upon in the first ground of detention.
Indeed the furnishing of the C.I.D. report, of which a truncated extract was furnished to the respondent, was a superfluous exercise in the light of the facts of the instant case.
Shri Hardev Singh relied upon the following passage in the judgment in Khudiram in support of his contention that the entire material which was before the detaining authority, including the evidence gathered by him, must be furnished to the detenu: "But if the grounds of detention are not communicated to him how can he make an effective representation ? The opportunity of making a representation would be rendered illusory.
The communication of the grounds of detention is, therefore, also intended to sub serve the purpose of enabling the detenu to make an effective representation.
If this be the true reason for providing that the grounds on which the order of detention is made should be communicated to the detenu, it is obvious that the 'grounds ' mean all the basic facts and materials which have been taken into account by the detaining authority in making the order of detention and on which, therefore, the order of detention is based.
" These observations cannot be construed as meaning that the evidence which was collected by the detaining authority must also be furnished to the detenu.
As the very same paragraph of the judgment at page 839 of the report shows, what was meant was that the basic facts and the material particulars which form the foundation of the order of detention must be furnished to the detenu since, in the true sense, they form part of the grounds of detention and without being apprised of the same, the detenu cannot possibly make an effective representation.
Shri Hardev Singh found serious fault with the fact that in answer to the writ petition filed by the respondent in the High Court, the counter affidavit was sworn by Shri K.C. Mahajan, Deputy Secretary in the Home Department of the Government of Punjab, and 64 not by the District Magistrate, Ludhiana, who had passed the order of detention.
We are not prepared to dismiss this submission as of no relevance or importance.
In matters of a routine nature, if indeed there are any matters of a routine nature in the field of detention, a counter affidavit may be sworn by a person who derives his knowledge from the record of the case.
However, in sensitive matters of the present nature, the detaining authority ought to file his own affidavit in answer to the writ petition and place the relevant fats before the Court which the Court is legitimately entitled to know.
In Shaik Hanif vs State of West Bengal, the counter affidavit on behalf of the State of West Bengal was filed by the Deputy Secretary (Home), who verified the correctness of the averments in his affidavit on the basis of the facts contained in the official records.
The District Magistrate; who passed the order of detention, did not file his affidavit and the explanation which he gave for not doing so was found to be unsatisfactory.
Following an earlier judgment in Naranjan Singh vs State of Madhya Pradesh, it was held by this Court that, in answer to a Rule issued in a habeas corpus petition, it is incumbent upon the State to satisfy the Court that the detention of the petitioner is legal and is in conformity not only with the mandatory provisions of the Act under which the order of detention is passed but is also in accord with the requirements implicit in Article 22(5) of the Constitution.
Sarkaria, Jobserved on behalf of the Court: "Since the Court is precluded from testing the subjective satisfaction of the detaining authority by objective standards, it is all the more desirable that in response to the Rule Nisi, the counter affidavit on behalf of the State should be sworn to by the District Magistrate or the authority on whose subjective satisfaction the detention order under s.3 was passed.
If for sufficient reason shown to the satisfaction of the Court, the affidavit of the person who passed the order of detention under section 3 cannot be furnished, the counter affidavit should be sworn by some responsible officer who personally dealt with or processed the case in the Government Secretariat or submitted it to the Minister or other Officer duly authorised under the rules of business framed by the Governor under Article 166 of the Constitution to pass orders on behalf of the Government in such matters.
" 65 After reviewing certain other decisions, the Court held that the failure to furnish the counter affidavit of the District Magistrate who had passed the order of detention, was an impropriety though in most of the cases it may not be of much consequence, especially if there was no allegation of mala fides against the detaining authority.
In the result, the absence of the affidavit of the District Magistrate was held not to vitiate the order of detention.
In this case too, there are no allegations of mala fides against the District Magistrate and so, his failure to file a counter affidavit will not vitiate the order of detention.
We cannot, however, leave this subject without emphasising once again the importance of the detaining authority filing his own affidavit in cases of the present nature.
There are degrees of impropriety and the line which divides grave impropriety from illegality is too thin to draw and even more so to judge.
Conceivably, there can be cases in which such impropriety arising out of the failure of the detaining authority in filing his own affidavit may vitiate the order of detention.
Finally, Shri Hardev Singh has contended that the respondent was unable to give proper instructions to his counsel when the matter was heard by the Advisory Board.
Counsel says that the respondent was transferred from place to place and ultimately.
he was produced before the Advisory Board an hour or so before the commencement of proceedings before the Board.
That left no time for him to instruct his counsel.
We do not see any substance in this grievance.
The respondent was represented by an advocate before the Advisory Board.
The learned advocate argued the case of the respondent along with the cases of two other detenus.
It does not appear that any grievance was made by him that he was not able to obtain instructions from the respondent so as to be able to represent his case effectively before the Advisory Board.
For these reasons, we allow the appeal and set aside the judgment of the High Court.
As desired by counsel for the respondent, we remand the matter to the High Court for disposal of the remaining contentions raised by the respondent in his Writ Petition.
We would like to take this opportunity to point out that serious difficulties arise on account of the practice increasingly adopted by the High Courts, of pronouncing the final order without a reasoned judgment.
It is desirable that the final order which the High Court intends to pass should not be announced until a reasoned judgment 65 is ready for pronouncement.
Suppose, for example, that a final order without a reasoned judgment is announced by the High Court that a house shall be demolished, or that the custody of a child shall be handed over to one parent as against the order, or that a person accused of a serious charge is acquitted, or that a statute is unconstitutional or, as in the instant case, that a detenu be released from detention.
If the object of passing such orders is to ensure speedy compliance with them, that object is more often defeated by the aggrieved party filing a special leave petition in this Court against the order passed by the High Court.
That places this Court in a predicament because, without the benefit of the reasoning of the High Court, it is difficult for this Court to allow the bare order to be implemented.
The result inevitably is that the operation of the order passed by the High Court has to be stayed pending delivery of the reasoned judgment.
It may be thought that such orders are passed by this Court and therefore there is no reason why the High Courts should not do the same.
We would like to point out respectfully that the orders passed by this Court are final and no appeal lies against them.
The Supreme Court is the final Court in the hierarchy of our courts.
Besides, orders without a reasoned judgment are passed by this Court very rarely, under exceptional circumstances.
Orders passed by the High Court are subject to the appellate jurisdiction of this Court under Article 136 of the Constitution and other provisions of the concerned statutes.
We thought it necessary to make these observations in order that a practice which is not very desirable and which achieves no useful purpose may not grow out of its present infancy.
|
The respondent challenged the order of his detention passed by the District Magistrate, Ludhiana on October 3,1983 under section 3 (3) read with section 3 (2) of the , through Criminal Writ Petition No. 516 of 1983.
According to the petitioner respondent, the grounds of detention served on him on Oct. 6, 1983 showing that he was detained on the basis of two speeches made by him on 8.7.1983 and 20.9.1983 as recorded by the Crime Investigation Department of the Punjab Police contained certain particulars, which were totally absent from the supporting material and therefore no reasonable person could have possible passed the detention order on the basis of such material.
The High Court accepted the contention and made the rule absolute.
Hence the appeal by the State after obtaining special leave.
Allowing the appeal and remanding the matter to the High Court of Punjab, the Court ^ HELD: 1:1.
While passing orders of detaining great care must be brought to bear on their task by the detaining authorities.
Preventive detention is a 51 necessary evil but essentially an evil.
Therefore, deprivation of personal liberty, if at all, has to be on the strict terms of the Constitution.
Nothing less.
[61 B C] 1:2.
In the instant case, the detaining authority should not have adopted a somewhat casual and unimaginative approach to his task.
The original version contains almost every one of the material details pertaining to the meeting, which are mentioned in ground No.1.
The detaining authority needlessly applied his scissors excising the data which mentioned the date, place, the time and the occasion of the meeting.
It is this lack of thoughtfulness on the part of the detaining authority which furnished to the respondent the semblance of an arguments.
[61 A B] 2.
The contention of the respondent that he could not make an effective representation in behalf of ground No.1 because of the inadequacy of data in the supporting particulars supplied to him is incorrect.
The inadequacies from which the supplementary particulars furnished to the respondent along with ground No.1 suffer, cannot affect that position because, they do not introduce any obscurity in the facts stated in that ground or detract from the substance of the allegations mentioned in that ground.
The first ground of detention mentions that the detenu was right only formally or technically.
That is because, the C.I.D. Report was supplied to him along with the grounds of detention with the express stipulation that it formed "the base of the grounds of detention.
" The grounds mention every one of the details which need have been mentioned.
The C.I.D. report was furnished to the detenu as forming the source of information leading to the conclusion that he had made a speech which necessitated his detention in the interests of public order.
In the circumstances, the grounds and the material furnished to the detenu have to be read together as if the material in the form of the C.I.D. report was a continuation of the grounds of detention.
[57 C E, 60 F H] Dr. Ramakrishna Bhardwaj vs The State of Delhi, ; , Khudiram Das vs The State of West Bengal, ; , @ 838 & 840; Mohammed Yusuf Rowther vs The State of J & K, ; @ 268, 269; State of Bombay vs Atmaram, ; Shibbanlal Saxena vs State of Uttar Pradesh, ; ; Dwarkadas Bhatia vs State of Jammu & Kashmir, ; ; referred to.
The detenu is not entitled to be informed of the source of information received against him or the evidence which may have been collected against him as for example, the evidence corroborating that the report of the C.I.D. is true and correct.
His right is to receive every material particular without which a full and effective representation cannot be made.
If the order of the detention refers to or relies upon any document, statement or other material, copies thereof have, of course, to be supplied to the detenu.
It is not the law that evidence gathered by the detaining authority against the detenu must also be furnished to him.
[62 G H; 63 A B] Beni Madhob Shaw vs The State of West Bengal, A.I.R. Har Jas Dev Singh vs State of Punjab, ; @ 288; Vakil Vakil Singh vs State of Jammu & Kashmir, A.I.R. 1974 2337 @, 2341; Icchu Devi Choraria vs Union of India; , @ 650; referred to.
The failure to furnish the counter affidavit of the District Magistrate who had passed the order of detention, was an impropriety though in most of the cases 52 it may not be of much consequence, especially if there was no allegation of mala fides against the detaining authority.
There are no allegations of mala fides against the District Magistrate and so, his failure to file a counter affidavit will not vitiate the order of detention.
[65 A B] Shaik Hanif vs State of West Bengal, [1974]3 SCR 258; Naranjan Singh vs State of Madhya Pradesh, A.I.R. 1972 S.C. 2215, referred to.
[The Court emphasised the importance of the detaining authority filing his own affidavit in cases of the present nature and observed that "There are degrees of impropriety and the line which divides grave impropriety from illegality is too thin to draw and even more so to judge.
Conceivably, there can be cases in which such impropriety arising out of the failure of the detaining authority in filing his own affidavit may vitiate the order of detention.] [65 C D] 5.
It is desirable that the final order which the High Court intends to pass should not be announced until a reasoned judgment is ready for pronouncement.
If the object of passing such orders is to ensure speedy compliance with them, that object is more often defeated by the aggrieved party filing a special leave petition in this Court against the order passed by the High Court.
That places this Court in a predicament because, without the benefit of the reasoning of the High Court it is difficult for this Court to allow the bare order to be implemented.
The result inevitably is that the operation of the order passed by the High Court has to be stayed pending delivery of the reasoned judgment.
[65 H; 66 A C]
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Appeal No. 374 of 1956.
Appeal by special leave from the judgment and order dated December 19, 1955, of the Assam High Court in Revenue Appeal No. 33(M) of 1955.
Civil Rule No. 76 of 1955.
Fakhruddin Ali Ahmed and K. R. Chaudhry, for the appellant.
D. N. Mukherjee, for respondent No. 1.
section M. Lahiri, Advocate General of Assam, and Naunit Lal, for respondents Nos. 2 and 3, 62 480 1957.
January 29.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with special leave ' arises out of a judgment of the Assam High Court in Revenue Appeal No. 33 (M) of 1955 and Civil Rule No. 76 of 1955.
The State of Assam, respondent No. 3, had settled the Charduar Brahmaputra Fishery with the respondent No. I for a period of three years, viz., from April 1, 1954, to March 31, 1957, at an annual zama of Rs. 19,600 Under r. 12 of the Fishery Rules.
The Deputy Commissioner of Darrang, respondent No. 2, received some reports against the respondent No. 1 alleging violation of cl.
VI of the Fishery lease and also of certain other conditions of ' the lease.
He obtained reports from the Sub Deputy Collector and the Extra Assistant Commissioner in regard to these allegations and came to the conclusion that respondent No. 1 had created under lease in favour of certain persons and cancelled the settlement of the fishery.
It appears that after such cancellation, respondent No. 3, purporting to act again under r. 12, settled the said fishery with the appellant with effect from May 4, 1955, and respondent No. 1 was directed to give up possession thereof with effect from that date.
Respondent No. 1 thereupon obtained a Rule from the Assam High Court alleging that the said settlement was absolutely illegal and the fishery had to be settled pro perly according to the rules under which these settlements are usually made.
A Revenue Appeal was also filed against the order of respondent No. 2 under rule 11 of section 1 of the Fishery Rules and both the Rule and the Revenue Appeal were heard together by the Assam High Court.
The High Court had already on August 31, 1955, delivered a judgment in Civil Rule NO.
56 of 1955, Nuruddin Ahmed vs State of Assam (1), declaring r. 12 of the Fishery Rules "ultra vires the State Government" and therefore invalid and unenforceable.
It followed that judgment and held that the respondent No. 3 had no jurisdiction to make a settlement under (1) A.I.R. 1956 Assam 48.
481 r. 12 of the ' Fishery Rules with the respondent No. I and the order of cancellation should be upheld on that ground alone.
The appeal of respondent No. I was accordingly dismissed.
In regard to the appellant also the High Court came to the same conclusion and held that the settlement made by respondent No. 3 in his favour was entirely without jurisdiction.
The Rule obtained by respondent No. I was accordingly made absolute.
The result was that the settlements made by respondent No. 3 with respondent No. I and the appellant were both set aside and the authorities were directed to make a fresh settlement of the fishery ' in question according to the existing Fishery Rules.
The State of Assam had not obtained any leave to appeal against the decision of the High Court in Nuruddin Ahmed vs State of Assam (1), and was apparently content with the decision that r. 12 of the Fishery Rules was ultra vires.
The appellant, however, obtained special leave to appeal against the decision of the High Court which set aside the settlement of the Fishery made by respondent No. 3 along with him and impleaded the State of Assam as respondent No. 3 along with respondent No. 1.
The appellant was interested in establishing that r. 12 of the Fishery Rules was intra vires the State of Assam had acquiesced in the position that the rule was ultra vires but in so far as it was added as respondent No. 3 in this appeal it took up the position that r. 12 of the Fishery Rules was intra vires, a position which it had not so far chosen to sustain by appealing against the decision of the High Court in Nuruddin Ahmed vs State of Assam (1) or in the present case but which it tried to support as it were by the back door by appearing in this appeal and supporting the appellant.
Respondent No. 1 appears to have been in a similar quandary.
If the appellant gained his point and had it established that the rule was intra vires the settlement of the fishery by respondent No. 3 with respondent No. I would have been with jurisdiction and the cancellation by respondent No. 2 would have been void and inoperative.
This relief was, however, not (1) A. 1.
R. 482 available to respondent No. 1 inasmuch as it had not appealed against the judgment of the High Court.
Nor did it suit it to adopt that position because not more ,than 21 months were left for the lease to run and at the end of that period it would have found itself in the same invidious position in which it was when the allegations in regard to the breach of the conditions of the fishery lease had been made against it.
Respondent No. 1, therefore, at the hearing of the appeal adopted the peculiar attitude of supporting the judgment of the High Court and of contending that r. 12 of the Fishery Rules was ultra vires.
That was the only basis on which the settlement made by respondent No. 3 with the appellant could be set at naught and no further comment is needed on the obviously inconsistent attitude adopted by respondent No. 1.
The issue which was, therefore, contested between the appellant supported as he was by respondent No. 3, the State of Assam.
and respondent No. I was as to the intra vires character of 12 of the Fishery Rules.
It will be appropriate at this stage to set out the relevant provisions of the Assam Land and Revenue Regulation, 1886 (Regulation I of 1886), and the rules for the settlement of fisheries made by the State of Assam thereunder: "Section 16.
Right of fishery.
The Deputy Commissioner, with the previous sanction of the Provincial Government, may, by proclamation published in the prescribed manner, declare any collection of water, running or still,.
to be a, fishery ; and no right in any fishery so declared shall be deemed to have been acquired by the public or any person, either ' before or after the commencement of this Regulation, except as provided in the Rules made under section 155; Provided that nothing in this section shall affect any express grant of a right to fish made by or on behalf of the British Government, or any fishery rights acquired by a proprietor before the commencement of this Regulation, or the acquisition by a proprietor of such rights in any fishery forming after the commencement of this Regulation in this estate".
483 "Section 155.
Additional power to make rules.
The Provincial Government may, in addition to the other matters for which he (sic) is empowered by this Regulation to make rules, consistent with this regulation, relating to the following matters: (f) the granting of licences, or the farming of the right. . . to fish in fisheries proclaimed under section 16. . . . " "Rule 12 of the Fishery Rules: No fishery shall be settled otherwise than by sale except by the State Government.
The order of settlement passed by the State Government shall be final: Provided that the State Government may introduce the tender system of settlement of fisheries in place of sale by auction system whenever it is considered necessary.
" This rule occurs in chapter X of the Assam Land Revenue Manual, Vol.
I (6th ed.) headed " Rules for settlement of fisheries ".
This chapter is divided into four sections: Section I General and settlement of fisheries.
Section 11 Miscellaneous.
Section III Sanctuaries, and Section IV Rulesfor settlement of fisheries by tender system.
The normal procedure for settlement of fisheries prescribed in r. 3 of section I is by auction sales in regard to all registered fisheries held under leases expiring on the last day of the current year or which at the last previous auction were reserved for sale under r. 9.
After making provision for the place of sale, condition, , of sale, execution of leases and confirmation of sale, provision is made in r. 1 1 for appeal to the Assam High Court against all orders of a Deputy Commissioner or Sub Divisional Officer passed under the rules and it is provided that there shall be no appeal against an order of settlement passed by the State Government under r. 12.
Then follows r. 12 set out hereinabove which provides that no fishery shall be settled otherwise than by sale except by the State Government and a proviso is enacted to this rule enabling, the State Government 484 to introduce the tender system of settlement of fisheries in place of the auction system whenever it is considered necessary.
The rest of the provisions of section I and those of sections II and III are not necessary to be set out for the purpose of this appeal but reference may be made to the provisions of section IV which contains rules for settlement of fisheries by tender system.
Rule 42 provides that the Government may from time to time select any fishery or fisheries to be settled by tender system and instruct the Deputy Commissioner to lease them out for any specified period and the procedure to be adopted in the Settlement of fisheries by tender system is therein provided.
It will be seen from the above summary of the relevant rules that the normal procedure for settlement of fisheries is by holding auction sales.
Power is, however, given to the State Government to introduce the tender system of settlement of fisheries in place of the auction system whenever it is considered necessary and if the Government selects any fishery or fisheries to be settled by tender system and instructs the Deputy Commissioner to lease them out for any specified period acting in exercise of that power, section IV prescribes the procedure for settlement of fisheries by tender system.
The question, therefore, which arises for our determination is whether there is any power conferred on the State Government by these rules to settle fisheries otherwise than by sale, e.g., by individual settlements without a settlement thereof by auction system or by tender system.
We May here dispose of an argument which was urged oil behalf of Respondent No. I before us and which appears to have found favour with the High Court that r. 12 of the Fishery Rules which is the source of that power was ultra vires and repugnant to section 16 of the Assam Land Revenue Regulation I of 1886.
That section deals with the right of fishery and provides that the Deputy Commissioner, with 'the previous sanction of the State Government, may by a proclamation declare any collection of water to be fishery and no right in a fishery so declared shall be deemed to have been acquired by the public or by any person 485 except as provided in the rules made under section 155.
The instances before us are not covered by the proviso and we shall, therefore, make no mention of the same.
The only relevant enquiry is whether there was any, rule validly enacted under section 155 which enabled the State Government to settle the fishery otherwise than by sale by making an individual settlement thereof with Respondent No. I or the appellant in the manner in which it was done.
There is absolutely nothing in the provisions of section 16 which would go to show what are the principles on which such rules for the acquisition of fishery rights by the public or any person have to be made nor is there anything therein to indicate any policy which has to guide the State Government in the making of such rules.
The whole thing is left to the discretion of the State Government which is empowered by section 155, inter alia, to make rules relating to the granting of licences and the farming of the right to fish in fisheries proclaimed under section 16 consistent with the Regulation.
No doubt the State Government would also be bound by such rules and would not be entitled to make any settlement of fishery rights unless and until there was a rule made in that behalf under section 155.
It would not be open to the State Government to contend that it had absolute property in these fishery rights and it was, therefore, entitled to settle them in any manner whatever.
Unless, therefore, the action of the State Government could be justified by reference to any rule made under section 155 it would not avail the appellant.
Reliance is accordingly placed on the provisions of r. 12 of the Fishery Rules and it is submitted that under that rule specific power is given to the State Government to settle the fishery rights otherwise than by sale.
The State Government is thereby invested with the power to settle fishery rights even by individual settlements without following the auction system or the tender system.
Even though this power is not vested in the State Government by express provision made in that behalf, the context of rule 12 sufficiently indicates the intention of the rule making authority.
After having prescribed the procedure by way of auction sales in 486 rr.1 to 11 of section 1, a prohibition against the settlement of fishery rights otherwise than by sale is enacted in r. 12 except in the case of the State Government.
No fishery is to be settled otherwise than by sale and that prohibition is general in terms but an exception is carved out in favour of the State Government in terms which are only capable of the construction that the State Government shall have the power of settling fishery rights otherwise than by sale.
No limitation is placed on this power which is thus vested in the State Government and if the State Government is em powered to settle fishery rights otherwise than by sale it can do so by adopting the tender system if it thought it desirable to do so or even by entering into individual settlements if the circumstances of the case so warranted.
Apart from the adoption of the tender system in place of the auction system, circumstances may conceivably arise where either by reason of the cancellation or relinquishment of fishery lease before the expiration of the period thereof and having regard to the situation then obtaining, it may not be feasible or desirable to sell fishery rights for the unexpired portion of such a lease either by public auction or by inviting tenders and the State Government may, under those circumstances, consider it desirable to enter into individual settlement of the fishery rights so as to earn for the State as much of revenue as possible.
No fetter can be placed on the discretion of the State Government in this behalf and the State Government would be the best judge of the situation and would be in a position to determine what procedure to adopt in the matter of the settlement of fishery rights other.
wise than by sale.
There is nothing in the provisions of section IV containing rules for settlement of fisheries by tender system which militates against the above position.
We are, therefore, of opinion that r. 12 specifically empowers the State Government to settle the fishery rights otherwise than by sale and there is no conflict at all between the provisions of section 16 of the Assam Land and Revenue Regulation, I of 1886, and r. 12 of the Fishery Rules.
The decision of this appeal turns 487 on the construction of r. 12 and we fail to understand how the question of the intra vires or the ultra vires character of r. 12 at all arises.
The whole of the argument addressed before us on behalf of respondent,.
No. I is based on a misconception and can not be sustained.
The decision of this Court in State of Assam vs Keshab Prasad Singh (1), on which the learned judges of the Assam High Court apparently based their judgment in Nuruddin Ahmed vs State of Assam(1) did not touch the present controversy and it follows that that was clearly wrong and cannot be supported.
The result, therefore, is that this appeal will be allowed and the settlement of fishery rights by respondent No. 3 with the appellant declared valid and operative.
Logically enough respondent No. 1 also would have been entitled to a similar relief but there are various questions of fact involved in the determination of the question whether the fishery lease in his favour was validly cancelled by respondent No. 2.
Respondent No. I moreover has disclaimed such benefits by adopting the contention that r. 12 of the fishery rights was ultra vires.
We, therefore, do not think that respondent No. 1 is entitled to any relief on the basis of this judgment.
Respondent No. 3, the only person vitally interested in the decision of this issue will, in spite of its entry having been by the back door, be entitled to the benefit of this judgment, an un sought relief that it will get as a result of our decision on the main point in controversy.
Under the peculiar circumstances of the case we feel that the proper order for costs should be that each party will bear and pay its respective costs of this appeal and we do order accordingly.
Appeal allowed.
(1) ; (2) A.I.R. 1956 Assam 48.
|
Section 16 of the Assam Land Revenue Regulation, 1 of 1886 defines " right of fishery " and section 155(f) empowers the Provincial Government to make rules for " the granting of licences, or the farming of the right. . to fish in the fisheries".
The State Government accordingly framed the Fishery Rules and r. 12 thereof provides that no fishery shall be settled otherwise than by sale except by the State Government.
It was contended that r. 12 was ultra vires the Provincial Government and was repugnant to section 16 of the Regulation.
Held, that r. 12 is not ultra vires ' and is not repugnant to section 16 of the Regulation.
There is nothing in section 16 which indicates the principles or the policy on which the rules for the acquisition of fishery rights are to be framed.
The whole thing is left to the discretion of the State Government.
Held further, that r. 12 specifically empowers the State Government to settle the fishery rights otherwise than by sale, e.g., by individual settlements.
Nuruddin Ahmed vs State of Assam, A. I. R. overruled.
State of Assam vs Keshab Prasad Singh, ; not applicable.
|
Civil Appeal No. 3429 of 1982 Appeal by Special leave from the Judgment and order dated the 29th July, 1982 of the Madhya Pradesh High Court in Misc.
Petition No. 1169 of 1981.
G.L. Sanghi and Ashok Srivastava for the Appellant.
D. Y.S. Chitale, Mrs. A K. Verma, D.N. Misra, A.M. Dittia and A K. Sanghi for the Respondents The Judgment of the Court was delivered by VENKATRAMIAH J.
The appellant is a judicial officer of the State of Madhya Pradesh, who would have ordinarily retired on January 31, 1984 on attaining 58 years of are, He was appointed 468 as a Munsiff Magistrate in the erstwhile State of Bhopal in 1953.
On reorganisation of States on November 1, 1956, he became a member of the Judicial Service of the State of Madhya Pradesh.
He was promoted as an Additional District Sessions Judge on January .
8, 1974 and was confirmed in that post with effect from November 25, 1971.
Consequent upon the decision of the State Government to reorganise the Higher Judicial Service of the State of Madhya Pradesh in accordance with the advice of the High Court of Madhya Pradesh 101 posts Of the cadre of Additional District & Sessions Judges came to be abolished and the incumbents of those posts were to be absorbed as District & Sessions Judges as per Government Memorandum dated February 24, 1981.
In the . issue of the said Memorandum the High Court of Madhya Pradesh decided to screen the officers in the cadre of Additional District & Sessions Judges for the purpose of making recommendation to the State Government about the promotion of selected officers to the cadre of District & Sessions Judges.
For this purpose, Full Court Meetings of the Madhya Pradesh High Court were held on February 27 and 28, 1981 and March 1, 1981.
The case of the appellant was also considered in that connection It is stated that at those meetings, the High Court first resolved to scrutinise the cases of all the judicial officers who were to attain the age of 55 years in the year, 1981.
In the course of such scrutiny the High Court decided on February 27, 1981 to retire the appellant compulsorily on his attaining the age of SS years under Rule 56(3) of the Fundamental Rules.
On March l, 1981 it decided not to recommend him for promotion to the cadre of District & Sessions Judges.
Accordingly, the State Government was addressed by the High Court to retire the appellant compulsorily.
The appellant thereafter continued as an Additional District & Sessions Judge until he was served with the order of compulsory retirement dated August 28, 1981.
Aggrieved by that order, the appellant filed a writ petition before the High Court.
The petition was dismissed by a Division Bench of the High Court on July 29, 1982.
This appeal is preferred by special leave against the judgment of the High Court, Clause (a) of the Fundamental Rule 56(3) as amended in 1976 which governs the case of the appellant reads thus: "F.R.56(3)(a) A Government servant may, in the public interest, be retired at any time after he attains the age of fifty five years without assigning any reason by giving him a notice in writing 469 It is contended that the order of compulsory retirement is unsustainable on various grounds and the principal ground urged is that the High Court had made the recommendation to retire the, appellant compulsorily without applying its mind to the case as required by law that it was a decision based on collateral considerations and that it was arbitrary.
It is now firmly settled that the power to retire a Government servant compulsorily in public interest in terms of a service rule is absolute provided the authority concerned forms an opinion bona fide 'that it is necessary to pass such an order in public interest.
It is equally well settled that if such decision is based on collateral grounds or if the decision, is arbitrary, it is liable to be interfered with by courts.
(See Union of India vs Col. J.N. Sinha & Anr).
We have also gone through the following decisions, namely, Union of India vs M.E. Reddy & Anr., Swami Saran Saksena vs State of U.P., Baldev Raj Chadha vs Union of India of, Brij Bihari Lal Agawral vs High Court of Madhya Pradesh & Ors., and D. Ramaswami vs State of Tamil Nadu which have a bearing on the question before us.
We shall now proceed to deal with the facts, of the case in the light of the principles enunciated in the above decisions.
In Para 10 of the counter affidavit of Shri A.K. Pandey, Additional Registrar of the High Court of Madhya Pradesh filed before this Court, it is stated as follows .
"It is not disputed that Full Court Meeting was held on 27th/28th February, as well as Ist March, 1981 to consider the cases of Additional District & Sessions Judges for promotion in the Higher Judicial Service.
It is also not disputed that the petitioner stood at serial No. 10 in the seniority list of Additional District Sessions Judges, It is also not disputed that he was confirmed as Additional District & Sessions judge in August, 1976.
The personal confidential record of the petitioner is placed before this Hon 'ble Court and (it) speaks for itself (Annexure R XI to XXXVIII).
470 It is wrong to say that any extraneous consideration operated in the Full Court Meeting against the petitioner and it is wrong to say that the resolutions in the Court Meeting were unjust, arbitrary or mala fide.
As already pointed out, the decision was taken in Full Court Meeting after consideration of the entire record of the petitioner, The decision to retire the petitioner under Fundamental Rule 56(3) was after due consideration of the entire record of the petitioner.
(Confidential entries are Annexures R XT to XXXVIII).
" On going through the said counter affidavit we are satisfied that apart from the confidential records, nothing else appears to have been relied on by the High Court to reach the decision that the appellant should be compulsorily retired.
We shall now proceed to Examine the confidential rolls maintained in respect or the appellant.
The Confidential Reports in respect of the appellant are placed before us.
lt is stated by the Registrar of the High Court in Para 13 of the counter affidavit that the appellants performance for 28 years was taken into consideration for screening under Fundamental Rule 56(3), The High Court has relied on some adverse remarks relating to 1959 60 or thereabouts, lt is true that in the early part of his career, the entries made do not appear to be quite satisfactory.
They are of varied kinds.
Some are good, some are not good and some are of a mixed kind.
But being reports relating to a remote period, they are not quite relevant for the purpose of determining whether he should be retired compulsorily or not in the year ]981, as it would be an act bordering on perversity to dig out old files to find out some material to make an order against an officer.
We therefore, confined our scrutiny to the reports made in respect of the appellant for about ten years prior to the date on which action was taken against him to retire him compulsorily.
We find that all of them except for 1972 73 and 1973 74 are good and quite satisfactory.
Even in 1972 73 and 1973 74 it is stated that there was nothing to doubt his integrity and that he was punctual in attending it to his work.
It may be noted, that the appellant was promoted as an Additional District & Sessions Judge on January 8, 1974 and was also confirmed with effect from November 25, 1974 by an order passed in 1976.
Any adverse report in respect of an earlier period unless it had some connection with any event which took place subsequently cannot, therefore, reasonably form a basis for forming an opinion about the work of the appellant.
471 We give below a few relevant extracts from the Confidential Reports for the period subsequent to March 31, ]974 .
Year : 1975 On confidential enquiries from the members of the Bar and from other sources nothing was found against him in respect of his integrity.
During surprise check he was found on the board in time.
Enquiries from other sources also disclosed that he usually comes in time and does not rise early and engages himself in judicial work.
This impression was gathered from judicial diary also.
After scrutiny of the cases, the following impression was gathered.
Knowledge about rules and orders, law and procedure is adequate but the number of the interlocutory application is sometimes not entered in the margin of the connected order sheet in red ink.
Judgments are good with proper discussion of evidence.
Interlocutory matters are not kept unduly pending for long time.
Rules regarding pleadings, and evidence etc.
are followed.
Punishments were adequate.
Examination of accused is proper.
Charges framed are proper.
Record is legible Control and supervision over the staff is satisfactory.
Judicial diary calls for no particular comments.
His relations with the Bar are cordial, with no complaints of any misbehavior with any litigants His average disposal during the period in question was of very good category.
There is nothing else to comment in particular.
Year : 1976 Knowledge of law and judicial Good capacity: Remarks about his promptness in Promptness satisfactory the disposal of cases: Remarks about reputation of integ Nothing was found against rity and impartiality: his integrity or impartiality.
General Remarks: He was mostly punctual and 472 did not rise early.
Judgments were proper and contained the required discussion of evidence Charges and examination of accused and issues were proper.
Promptness in framing of issues was marked in recent months.
Control and super vision over the staff was satisfactory.
Settling dates should not normally be of more than two weeks as was notice in certain cases.
Interlocutory matters were generally not kept unduly pending.
Net Result: Good Year 1976 77 Knowledge of Law and Judicial Satisfactory capacity: Remarks about his promptness in Generally prompt the disposal of cases: Percentage of average monthly 148.
1/2,% disposal Behaviour towards members of the Cordial Bar and Public: General Remarks: Satisfactorily managing heavy and exclusive civil file.
Mostly punctual.
Net Result: Good Year 1977 78 Knowledge of Law and Judicial Good capacity: Entry against almost all the 473 columns in the Report Good General Remark : Has good grasp of facts and law.
Judgments in proper form and well written.
Net Results Good Year 1979 80 (a) Shri Shrivastava begins his judicial work punctually at 11.00 A.M. and works throughout the Court hours.
So far, it appears that he has arranged his Cause List judiciously fixing civil work for the day.
This Judge understands that there can be no subsequent pleadings except by way of amendment of pleadings.
In other words, he understands the purport of order 8 rule 9 and order 6 rule 7 of the Civil Procedure Code.
He also understands what is pleading i e. Order 6 rule 1 of the Civil Procedure Code as compared with oral statement.
He so far appears to be equally conversant with order 17 rule I of the Civil Procedure Code i.e. adjournment is only granted for sufficient cause.
He does No. find any difficulty in applying law relating to pleadings and interlocutory matters.
So far, his procedure conforms to rules or pleadings, filing of documents, framing of issues and recording of evidence.
(b) So far, on the criminal side, he frames charges with care, records evidence with such care and prepares examination of accused with equal care.
(c) So far, he makes a neat and legible record.
He generally supervises the work of ministerial staff.
(d) His judgments, both on civil and criminal, so far, appear to be well written.
He is prompt in his disposals including doing work therein.
His work, as a whole, so far, has been found to be of high quality.
He also takes up civil work.
His relations with the Bar, so far, appear to be cordial.
(e) The above remarks are subject to the D.O. No. 462/C. Rs/1979 Jabalpur dated 6.3.80 of the High Court.
474 (Note: The Memo.
sent to the appellant in March, 1980 Only informed him of two remarks (1) that the did not dispose of Sessions trials quickly and (2) that he did not follow the amended provisions under order 39 rule 3 of the Civil Procedure Code.
The Memo.
also disclosed that the appellant did not write judgments in civil appeals according to the pattern prescribed; that Sessions trials were not conducted quickly and that (he) granted unduly long adjournments of about a month or so for examination of accused and defence witnesses.
The appellant sent a prompt reply to it oil March 28, 1980 refuting the correctness of the above remarks.
We have gone through the said reply.
On going through the facts mentioned therein, we feel that the remarks against him appear to be totally uncharitable.
It shows that the appellant has disposed of more number of cases than what ordinarily could be disposed of during the relevant period.
We are not informed of what action was taken on his prayer for expunging the said remarks).
Year: 1980 81 His out turn during the year was about 200 percent.
The quality of work may be classed as good. 'B ' category.
No specific complaints were received against him about his behaviour or integrity.
" The above reports no doubt speak for themselves as stated in the counter affidavit of the additional Registrar.
But they all speak in favour of the appellant and not against him.
A persual of these reports shows that there was nothing against the appellant which necessitated the action which was taken against him.
In the state of the above record it was impossible to take the view that the appellant was liable to be compulsorily retired, unless there was any other circumstance which was adverse to him.
We have found it necessary to incorporate in this judgment the relevant confidential remarks in great detail only to show that the action of the High Court was not called for.
We may state here that the learned counsel for the High Court very fairly stated that there was no other circumstance against the appellant during the period subsequent to 1971 which would support the order of compulsory retirement.
From what has been stated we find that the decision taken by the High Court in respect of the appellant is arbitrary as it was mainly based on the entries that were made about 20 years before the date on which the decision was 475 taken Dependence on such stale entries cannot be placed for retiring a person compulsorily, particularly when the officer concerned has been promoted subsequent to such entries, as held by this Court in D. Ramaswami 's case (supra).
In that case one of us (Chinnappa Reddy, J.) observed thus at pages 79 80: "In the face of the promotion of the appellant just a few months earlier and nothing even mildly suggestive of ineptitude or inefficiency thereafter, it is impossible to sustain the order of the Government retiring the appellant from service.
The learned Counsel for the State of Tamil Nadu argued that the Government was entitled to take into consideration the entire history of the appellant including that part of it which was prior to his promotion.
We do not say that the previous history of a Government servant should be completely ignored, once he is promoted.
Sometimes past events may help to assess present conduct.
But when there is nothing in the present conduct casting any doubt on the wisdom of the promotion, we see no justification for needless digging into the past." In the result the judgment of the High Court is reversed and the resolution of the High Court recommending to the Government that the appellant should be compulsorily retired and the impugned order passed thereon under Fundamental Rule 56(3) are quashed.
The resolution of the High Court that the appellant was not fit for promotion to the cadre of District & Sessions Judges is also quashed.
The High Court should now consider in the light of this decision whether the appellant was entitled to be promoted as a District & Sessions Judge as on the date on which his immediate junior was promoted and make appropriate recommendation to the State Government.
The appellant is entitled to all consequential financial and other benefits as if the order of compulsory retirement had not been passed.
The appeal is accordingly allowed with costs.
N.V.K. Appeal allowed.
|
The appellant was a State Judicial Service officer in the grade of Additional District & Sessions Judge.
Consequent upon the decision of the State Government to reorganise the Higher Judicial Service it was decided that a number of posts of the cadre of Additional District & Sessions Judges be abolished and the incumbents of those posts be absorbed as District & Sessions Judges.
The High Court at one of the High Court meetings held to screen the officers in the cadre of Additional District & Sessions Judges, decided to retire the appellant compulsorily on his at tanning the age of SS years under Rule 56(3)(a) of the Fundamental Rules.
It was also decided not to recommend him for promotion to the cadre of District and Sessions Judges.
The appellant was served with an order of compulsory retirement dated August 28, 1981.
The Division Bench of the High Court dismissed the appellant 's writ petition impugning his compulsory retirement.
In the appeal to this Court, it was contended that the High Court had made the recommendation to retire the appellant compulsorily without applying its mind and that the decision was based on collateral considerations and was arbitrary.
On behalf of the High Court it was contended that the personal confidential records of the appellant were considered by the Full Court Meeting and the decision to retire the appellant under Fundamental Rule 56(3)(a) was taken after due consideration of the entire record.
Allowing the appeal: ^ HELD: 1.
It would be an act bordering on perversity to dig out old files to find out some material to make an order against an officer.
Dependence on entries about 20 years before the date on which the decision of compulsory retirement was taken cannot placed for retiring a person compulsorily, particularly when such person concerned has been promoted subsequent to such entries.
[474H; 475A] D.Ramaswami vs State of Tamil Nadu, [19811 2 S.C.R. 75 referred to. 2.
The power to retire a Government servant compulsorily in public interest in terms of a service rule is absolute provided the authority concerned forms 467 an opinion bona fide that it was necessary to pass such an order in public interest.
But if such decision was based on collateral grounds or if the decision was arbitrary, it is liable to be interfered with by Courts.
[469 B C] Union of India vs Col. J.N. Sinha Anr., [1971] 1 S.C.R. 791; Union of India vs M.E. Reddy & Anr., ; ; Swami Saran Saksena vs State of U.P., ; ; Baldev Raj Chadha Y. Union of India & ors ; ; and Brij Bihari Lal Agarwal vs High Court of Madhya Pradesh & Ors. ; referred to.
In the instant case the High Court relied on some adverse remarks relating to 1959 60 or thereabout.
It was true that in the early part of the appellant 's career the entries did not appear to be quite satisfactory.
Some were and some were not good and some were of a mixed kind.
But being reports relating to a remote period, they are not quite relevant or the purpose of determining whether he should by retired compulsorily or not in 1981.
The scrutiny should have been confined to the reports for about ten years prior to the date on which action was proposed to be taken.
All the reports except for 1972 73 and 1973 74 were good and quite satisfactory.
Even in the reports of the said years there was nothing to doubt his integrity.
He was punctual in attending to his work.
The reports for the years 1976 77 to 1980 81 speak in favour of the appellant and not against him.
A perusal of the said reports showed that there was nothing against him.
In these circumstances it was impossible to take the view that the appellant was liable to be compulsorily retired.
[470 E H] 3.
The resolution of the High Court recommending to the Government that the appellant should be compulsorily retired and the impugned order passed under Fundamental Rule 56(3)(a) are quashed.
The resolution of the High Court that the appellant was not fit for promotion to the cadre of District and Sessions Judges is also quashed.
[474 E]
|
N: Criminal Appeal No. 356 of 1983 From the judgment and order dated 25 7 83 of the Special judge, Bombay in Special Case No. 24 of 1983.
#AND Transferred Case No. 348 of 1983 AND Transferred Case No 348 of 1983 Ram Jethmalani P.R. Vakil, Ms. Rani Jethmalani, Mukesh Jethmalani, O.P. Malviya, Shailendra Bhardwaj and Harish Jagatlani for the appellant.
Dr. L.M. Singhvi, Dalveer Bhandari, A.M. Singhvi, S.S. Parkar, H. Bhardwaj, U.N. Bhandari, H.M. Singh, Ranbir Singh and S.G. Hasnain for the respondent Ashok Desai and Mrs. J. Wad for the petitioner in T.C. No. 348 of 1983.
M.N. Shroff for State of Maharashtra K. Parasaran, Attorney General, Ms. A. Subhashini, Gopal Subramanian, R.N. Poddar and C.V. Subba Rao for Union of India.
502 The Judgment of the Court was delivered DESAI, J.
Respondent Abdul Rehman Antulay (hereinafter referred to as the accused) was the Chief Minister of the State of Maharashtra from 1980 till he submitted his resignation on January 20, 1982, which became effective from January 20, 1982.
He thus ceased.
to hold the office of the Chief Minister from January 20, 1982 but continues to be a sitting member of the Maharashtra Legislative Assembly till today.
As the contentions canvassed before this Court are mainly questions of law, facts at this stage having a peripheral relevance in the course of discussion, it is unnecessary to set out the prosecution case as disclosed in the complaint filed by complainant Ramdas Shrinivas Nayak (complainant for short) in detail save and except few a pertinent and relevant allegations.
In the process the brief history or the litigation may also be traced.
The complainant moved the Governor cf Maharashtra by his application dated September 1, 1981 requesting him to grant sanction to prosecute the accused as required by Sec. 6 of the Prevention of Corruption Act, 1947 ( '1947 Act ' for short) for various offences alleged to have been committed by the accused and neatly set out in the application.
Complainant then filed the first complaint in the Court of Chief Metropolitan Magistrate, 28th Esplanade, Bombay on September 11, 1981 being Criminal Case No. 76 Misc.
of 1981 against the accused and others known and unknown collaborators alleging that the accused in his capacity as Chief Minister and thereby a public servant within the meaning of Sec.
21 of the Indian Penal Code (IPC) has committed offences under Secs.
161, 165 IPC and Sec.
5 of the 1947 Act, Sec. 384 and Sec.
420 IPC read with Secs.
109 and 120 B IPC.
The complaint runs into 31 closely typed pages and carried the list of 37 witnesses.
The learned Metropolitan magistrate invited the complainant to satisfy him as to how the complaint for offences under Secs.
161, 165 IPC and Sec.
5 of the 1947 Act is maintainable without a valid sanction as contemplated by Sec.
6 of 1971 Act and ultimately held that in the absence of a valid sanction from the Governor of Maharashtra, the complaint filed by the complainant for the aforementioned three offences was not maintainable.
The learned Metropolitan Magistrate accordingly held as per order dated October 6, 1981 that the complaint was maintainable only for offences alleged to have been committed by the accused under.
384 and 420 read with Secs.
109 and 120B of the IPC and directed that the case be fixed for 503 examining the complainant as required by Sec.
200 of the Cr.
P.C. The complainant questioned the correctness of this order in Special Criminal Application No. 1742 of 1981 filed in the High Court of Judicature at Bombay.
In the meantime, another development had taken place which may be briefly noticed.
One Shri P.B. Samant, who has also filed an identical complaint against the accused along with several others filed a Writ Petition No. 1165 of 1981 in the High Court of Judicature at Bombay challenging the method of distribution of ad hoc allotment of cement in the State of Maharashtra as being contrary to the rule of law and probity in public life.
The accused as the second respondent in this petition, the first and third respondents being the State of Maharashtra and Union of India respectively.
By an exhaustive speaking order dated September 23, 1981, a learned Single Judge of the High Court granted rule nisi and made it returnable on November 23, 1981.
The writ petition came up for hearing before another learned Single Judge who by his judgment dated January 12, 1982 made the rule absolute.
Probably as a sequel to this decision of the High Court, the accused tendered his resignation as Chief Minister on the same day and when the resignation was accepted he ceased to hold the office of the Chief Minister with effect from January 20, 1982.
Special Criminal Application ' No. 1942 of 1981 filed by the complainant against the order of the learned Chief Metropolitan Magistrate was dismissed by a Division Bench of the High Court on April 12, 1982.
Not the accused but the State of Maharashtra preferred an appeal by special leave under article 136 of the Constitution against the decision of the Division Bench of the High Court rejecting the special criminal application; This.
Court rejected the application for special leave at the threshold on July 28, 1982.
(See State of Maharashtra vs Ramdas Shrinivas Nayak and others) Promptly, on the heels of the judgment of this Court, the Governor of Maharashtra on the same day granted the sanction under Sec.
6 of the 1947 Act to prosecute the accused in respect of specific charges set out in the order according sanction.
Armed with this sanction, the complainant filed a fresh complaint in the Court of the Special Judge, Bombay registered as Criminal Case No. 24 of 1982 against the accused as Accused No. 1 and others known and unknown.
In this complaint it is broadly alleged that the accused who was the Chief Minister of the State of Maha 504 rashtra between the period August 1980 to September 1981 conceived scheme of aggrandisement involving obtaining of funds from the members of the public and putting them substantially under his own control for the disbursal of the funds so obtained.
The complaint proceeded to refer to the setting up of various trusts and alleged that the corner stone of the scheme involved receipt by the accused of illegal gratification other than legal remuneration as a motive or reward for doing or forbearing to do any official act, or for showing or forbearing to show in the exercise of his official functions, favour or disfavor to persons, or for rendering or attempting to render any service or disservice to such persons who dealt with the State Government in general and with public servants who formed part of the Government.
It was specifically alleged that the scheme devised by the accused was a flagrant abuse of his official position as Chief Minister for obtaining control over funds which would be used for purposes conducive to the interest of the accused himself.
The complainant proceeded to set out the abuse of office of Chief Minister by the accused citing various alleged instances such as distribution of adhoc cement contrary to law and the binding circulars, granting liquor Licences as and by way of distribution of Government largesse, issuing no objection certificates for letting out premises by obtaining a price for the same.
The running thread through various allegations is that the accused by abusing or misusing his office of Chief Minister obtained or attempted to obtain gratification other than legal remunerations a motive or reward for doing or forbearing to do any official act as Chief Minister or for showing or forbearing to show in the exercise of his official functions, favour or disfavour to persons etc.
To this complaint, the order granting sanction to prosecute the accused made by the Governor of Maharashtra was annexed and produced.
After recording the verification of the complaint, the learned Special Judge took cognizance of the offences and issued process by directing a bailable warrant to be issued in the sum of Rs. 10,000 with one surety and made it returnable on September 3, 1983.
On the process being served the accused appeared and sought exemption from personal appearance which was granted for a day and the case was adjourned to October 18, 1982 for recording the evidence of the complainant and his witnesses for the prosecution.
When the case was called out on October 18, 1982 an application was moved on behalf of the accused inter alia contending that the Court of the learned special Judge had no jurisdiction in view of the provision contained in Sec. 7 of the Criminal Law Amendment Act, 505 1952 ( '1952 Act ' for short) and that no cognizance can be taken of offences punishable under Secs.
161, 165 IPC and Sec.
5 of the 1947 Act on a private complaint.
The case was at that time pending in the Court of the special Judge presided over by one Shri P.S. Bhutta.
The learned special Judge by his order dated October 20, 1982 rejected both the contentions and set down the case for November 29, 1982 for recording evidence of the prosecution.
The learned special Judge made it abundantly clear that under no circumstance the case would be adjourned on the next occasion and if any revision or appeal is intended to be filed against the order, the learned counsel for the accused should give advance notice to the learned counsel for the complainant.
The accused filed Criminal Revision Application No. 510 of 1982 against the order of the learned special Judge dated October 20, 1982 rejecting his application.
On January 16, 1983, the Government of Maharashtra issued a notification in exercise of the powers conferred by sub sec.
(2) of Sec. 7 of 1952 Act and in modification of the earlier Government order dated April 12, 1982, directing that in Greater Bombay on and after the date of the notification the offences specified in sub sec.
(1) of sec.
6 of the 1947 Act which are investigated by the Anti Corruption Bureau of Police in Greater Bombay, except special cases No. 14, 15 and 16 of 1977 and Special Case No. 31 of 1979 to 37 of 1979 (both inclusive) shall continue to be tried by Shri R.B. Sule.
The net outcome of this notification was that Special Case No. 24 of 1982 pending in the Court of Special Judge Shri P.S. Bhutta would stand transferred to the Court of Shri R.B. Sule, Additional Special Judge for Greater Bombay.
On a reference by the learned Single Judge, a Division Bench of the Bombay High Court heard and dismissed on arch 7, 1983 Criminal Revision Application No. 510 of 1982 filed by the accused against the order of learned special Judge Shri P.S. Bhutta dated October 20, 1982.
The Division Bench in terms held that the private com plaint was maintainable and as the required notification has already been issued, Shri R.B. Sule will have jurisdiction to try Special Case No. 24 of 1982.
The learned trial Judge Shri R.B. Sue on receipt of the record of the case issued a notice on April 27, 1982 calling upon all parties to appear before him on April 21, 1983.
lt appears on July 8, 1783, two applications were moved on behalf of the accused urging the learned trial Judge; (i) to discharge the accused inter alia on the ground that the charge was groundless and that even though the accused 506 had ceased to be the Chief Minister, on the date of taking cognizance of the offences, he was a sitting member of the Maharashtra Legislative Assembly and as such a public servant and in that capacity a sanction to prosecute him would have to be given by the Maharashtra Legislative Assembly and the sanction granted by the Governor would not be valid in this behalf.
The second petition requested the learned Judge to postponed the case till the petition for special, leave field by the accused against the decision of the Division Bench cf the High Court holding that the private complaint was maintainable is disposed of Both these applications came up for hearing before Shri R.B. Sule, who by his order dated July 25, 1783 upheld the contention of the accused that M.L.A was a public servant within the meaning of the expression in Sec.
21 (12) (a) IPC and that unless a sanction to prosecute him by the authority competent to remove him from his office as M.L.A. was obtained which in the opinion of the learned Special Judge.
was Maharashtra Legislative Assembly the accused is entitled to be discharged.
So saying, the learned Judge discharged the accused.
The complainant filed a petition for special leave to appeal No. 1850 of 1983 and a Writ Petition (Crl.) No. 145 of 3983 against the decision.
Of the learned special Judge.
Both these matters came up before this Court on August 3, 1983 when the matters were adjourned to August 10, 1983 to enable the petitioner, original complainant to file a criminal revision application against the order of the learned special Judge in the High Court.
Accordingly, the complainant filed Criminal Revision Application No. 354 of 1983 in the High Court against the order of learned special Judge Shri R.B. Sule.
This Court ultimately granted special leave to appeal as also rule nisi in the writ petition.
By an order made by this Court, the criminal revision application filed by the petitioner stands transferred to this Court.
It may be mentioned that this Court has granted special leave to the accused against the decision of the Division Bench of the Bombay High Court holding that a private complaint is maintainable etc.
Criminal Appeal No. 247 of 1983 arising out of the said special leave petition is being heard along with this matter but that will be dealt with separately.
While discharging the accused, the learned special Judge held that the material date for deciding the applicability of Sec. 6 of the 1947 Act is the date on which the court is asked to take cognizance of the offence.
Proceeding further it was held that even though the accused had ceased to hold the office of the Chief Minister on the date 507 on which cognizance was taken by the learned special Judge, Shri Bhutta, yet on that date he was a sitting M.L.A. and was therefore a public servant within the meaning of the expression in Sec. 21 (12)(a) in as much as the M.L.A. is a person in the pay of the Government or at any rate he is remunerated by fees for performance of public duty by the Government and therefore, he is a public servant.
As a corollary, the learned Judge held that as on the date of taking cognizance of the offence the accused was a public servant, he could not be prosecuted without a valid sanction as contemplated by Sec. 6 of the 1947 Act.
The learned Judge further held that the M.L.A. holds an office and he can be removed from that office by the Legislative Assembly because the latter has the power to expel a member which would amount to removal from office.
The learned Judge further held that as there was no sanction by the Maharashtra Legislative Assembly to prosecute the accused and as the Governor had no power to sanction prosecution of the accused in his capacity as M.L.A. the accused is entitled to be discharged for the of offences under Secs.
161, 165, 120 B, 109 IPC and Sec.
5 of the 1947 Act for want of a valid sanction for prosecution, and in respect of the other offences, the accused is entitled to be discharged on the ground that the court of the special Judge had no jurisdiction to try the accused for those offences.
In respect of those other offences, the learned Judge directed the complaint to be returned to the, complainant for presenting it to the proper court.
It may be mentioned that by a common order in Special Case No. 3 of 1983 instituted upon the complaint of Mr. P.B. Samant, the accused was discharged.
21 IPC defines a 'Public Servant '.
The relevant clauses may be extracted as under: "21.
The words 'public servant ' denote a person falling under any of the descriptions hereinafter following, namely: Third Every Judge including any person empowered by law to discharge, whether by himself or as a member of any body of persons, any adjudicatory functions.
Seventh: Every person who holds any office by virtue of which he is empowered to place or keep any person in confinement Twelfth Every person (a) in the service or pay of the Government or remunerated 508 by fees or commission for the performance of any public duty by the Government; (b) in the service or Pay of a local authority, a corporation establishes by or under a Central, Provincial or State Act or a Government Company as defined in Section 617 of the .
Explanation 1: Persons falling under any of the above descriptions are public servants, whether appointed by the Government or not" Sec.
17 defines the expression 'Government to denote the Central Government or the Government of a State.
Sec 14 defines the expression 'servant of Government to denote any officer or servant continued, appointed or employed in India by or under the authority of Government.
19 defines the word 'Judge ' as under: "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 person, which body of persons is empowered by law to give such a judgment.". Sec. 7 provides that 'every expression which is explained in any part of the Code (IPC), is used in every part of this Code in conformity with the explanation. ' Sec.
5 of the 1947 Act defines the offence of criminal misconduct and a public servant who commits an offence of criminal misconduct is liable to be punished 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.
6 provides for a sanction as a pre condition for a valid prose 509 cution for offences punishable under Sec. 161, 164, 165 IPC and Sec.
5 of the 1947 Act.
It reads as under: "6(1) No court shall take cognizance of an offence punishable under Section 161 or Section 165 of the Indian Penal Code, or under sub section (2) of Section S of this Act, alleged to have been committee by a public servant, except with the previous sanction, (a) in the case of a person who is employed in connection with affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, (b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the State Government, (c) in the case of ally other person, of the authority competent to remove him from his office.
(2) Where for any reason whatsoever any doubt arises whether the previous sanction as required under sub section (1) should be given by the Central or State Government or any other authority, such sanction shall be given by that Government or authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed".
With a view to eradicating the evil of bribery and corruption, the Government of India set up a Committee to make recommendations for the improvement of the laws relating to bribery and corruption under the Chairmanship of Dr. Bakshi Tek Chand.
The recommendations of the Committee led to the enactment of the Criminal Law Amendment Act, 1952 By the 1952 Act, power was conferred on the State Government to appoint special offences as may be necessary for such area or areas as may be specified in the notification to try the following offences namely; offences punishable under Sections 161, 162, 163, 164, 165 and 165A IPC and Sec.
5 of the 1947 Act and any conspiracy to commit or any attempt to commit or any abetment of 510 any of the offences hereinabove mentioned; See. 7 conferred exclusive jurisdiction on the special Judges appointed under See.
Sub sec.
(2) of Sec. 7 provides for specific territorial jurisdiction of a special Judge.
Sub sec.
(3) conferred power on the special Judge also to try any offence other than an offence specified in.
Sec. 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial.
Sec. 8 prescribed the procedure to be followed by the special Judge in the trial of the offences.
The Court of special Judge was deemed to be a Court of Sessions trying cases without a jury within the local limits of the jurisdiction of the High Court for the purposes of Chapter XXXI and XXXII of the Code of Criminal Procedure as provided by Sec. 9.
The appellant, the original complainant, contends that the learned special Judge was in error in holding that M.L.A. is a public servant within the meaning of the expression under Sec.
21(12)(a).
The second submission was that if the first question is answered in the affirmative, it would be necessary to examine whether a sanction as contemplated by Sec.
6 is necessary.
If the answer to the second question is in the affirmative it would be necessary to identify the sanctioning authority.
The broad sweep of the argument was that the complainant in his complaint has alleged that the accused abused his office of Chief Minister and not his office, if any, as M.L.A. and therefore, even if on the date of taking cognizance of the offence the accused was M.L.A., nonetheless no sanction to prosecute him is necessary as envisaged by Sec. 6 of the 1947 Act.
lt was urged that as the allegation against the accused in the complaint is that he abused or misused his office as Chief Minister and as by the time the complaint was filed and cognizance was taken, he had ceased to hold the office of the Chief Minister no sanction under Sec.
6 was necessary to prosecute him for the offences alleged to have been committed by him when the accused was admittedly a public servant in his capacity as Chief Minister.
On behalf of the accused, it was contended that not only the accused would be a public servant as falling within the meaning of tile expression in Sec.
21(12)(a) but he would also be a public servant within the contemplation of clauses (3) and (7) of Sec. 21.
The next limb of the argument was that if an accused hold plurality of Offices, each of which confers on him the status of a public servant and even if it is alleged that he has abused or misused one office as a public servant notwithstanding, the fact that there no allegation of abuse or misuse of other office held as public servant, sanction of each authority com 511 petent to remove him from each of the offices would be a sine qua non under Sec. 6 before a valid prosecution can be launched against the accused.
On these rival contentions some vitat and some not so vital points arise for consideration, some easy of answer and some none tooeasy.
For their scientific and logical treatment they may be formulated.
(a) What is the relevant date with reference to which a valid sanction is a pre requisite for the prosecution of a public servant for offences enumerated in Sec.
6 of the 1947 Act? (b) If the accused holds plurally of offices occupying each of which makes him a public servant, is sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him necessary and if anyone of the competent authorities fails or declines to grant sanction, is the Court precluded or prohibited from taking cognizance of the offence with which the public servant is charged ? (c) Is it implicit in Sec.
6 of the 1947 Act that sanction of that competent authority alone is necessary, which is entitled to remove the public servant from the office which is alleged to have been abused for misused for corrupt motives ? (d) Is M.L.A. a public servant within the meaning of the expression in Sec.
21(12)(a) IPC ? (e) Is M.L.A. a public servant within the meaning of the expression in Sec.21(3) and Sec.
21(7) ICP ? (f) Is sanction as contemplated by Sec. 6 of the 1947 Act necessary for prosecution of M.L.A. ? (g) If the answer to (f) is in the affirmative, which is the Sanctioning Authority competent to remove M.L.A. from the office of Member of the Legislative Assembly? Re.
(a): The 1947 Act was enacted, as its long title shows, to make more effective provision for the prevention of bribery and corruption.
Indisputably, therefore, the provisions of the Act must receive 512 such construction at the hands of the court as would advancehte object and purpose underlying the Act and at any rate not defeat it.
If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provision.
The question of construction arises only in the event of an ambiguity or the plain meaning of the words used in the statute would be self defeating.
The court is entitled to ascertain the intention of the legislature to remove the ambiguity or the plain meaning of the words used in the statute would be self defeating.
The court is entitled to ascertain the intention of the legislature to remove the ambiguity by construing the provision of the statute as a whole keeping in view what was the mischief when the statute was enacted and to remove which the legislature enacted the statute.
This rule of construction is so universally accepted that it need not be supported by precedents.
Adopting this rule of construction, whenever a question of construction arises upon ambiguity or where two views are possible of a provision, it would be the duty of the court to adopt that construction which would advance the object underlying the Act namely, to make effective provision for the prevention of bribery and corruption and at any rate not defeat it.
Section 6 bars the court from taking cognizance of the offences therein enumerated allegel to have been committed by a public servant except with the previous sanction of the competent authority empowered to grant the requisite sanction.
Sec. 8 of 1952 Act prescribes procedure and powers of special Judge empowered to try offences set out in Sec.
6 of 1947 Act.
Construction of Sec. 8 has been a subject of vigorous debate in the cognate appeal.
In this appeal we will proceed on the assumption that a special Judge can take cognizance of offences he is competent to try on a private complaint.
6 creates a bar to the court from taking cognizance of offences therein enumerated except with the previous sanction of the authority set out in clause (a), (b) & (c) of sub Sec.
The object underlying such provision was to save the public servant from the harassment of frivolous or unsubstantiated allegations.
The policy underlying Sec. 6 and similar sections, is that there should not be unnecessary harassment of public servant.
(Sec C.R. Bansi vs State of Maharashtra(1)).
Existence thus of a valid sanction is a pre requisite to the taking of cognizance of the enumerated offences alleged to have been committed by a public servant.
The bar is to the taking of cognizance of offence by the court.
Therefore, when the court is called upon to take cognizances of such offences, it must enquire whether there is a valid sanction to prosecute the public servant for the offence alleged to have been committed by 513 him as public servant.
Undoubtedly, the accused must be a public servant when he is alleged to have committed the offence of which he is accused because Sections 161, 164, 165 IPC and Sec.
5(2) of the 1947 Act clearly spell out that the offences therein defined can be committed by a public servant.
If it is contemplated to prosecute public servant who has committed such offences, when the court is called upon to take cognizance of the offence, a sanction ought to be available otherwise the court would have no jurisdiction to take cognizance of the offence.
A trial without a valid sanction where one is necessary under Sec.
6 has been held to be a trial without jurisdiction by the court.
(See R.R. Chari vs State of U.P.(1) and S.N. Bose vs State of Bihar(2) In Mohd. Iqbal Ahmed v: State of A.P.(3), it was held that a trial without a sanction renders the proceedings ab initio void.
But the terminus a quo for a valid sanction is the time when the court is called upon to the cognizance of the offence.
If therefore, when the offence is alleged to have been committed, the accused was a public servant but by the time the court is called upon to take cognizance of the offence committed by him as public servant, he has ceased to be public servant, no sanction would be necessary for taking cognizance of the offence against him.
This approach is in accord with the policy underlying Sec. 6 in that a public servant is not to be exposed to harassment of a frivolous or speculative prosecution.
If he has ceased to be a public servant in the meantime, this vital consideration ceases to exist.
As a necessary corollary, if the accused has ceased to be a public servant at the time when the court is called upon to take cognizance of the offence alleged to have been committed by him as public servant, Sec. 6 is not attracted.
This aspect is not more res integra.
In S.A. Venkataraman vs The State(4) this Court held as under: "In or opinion, in giving effect to the ordinary meaning of the words used in section 6 of the Act, the conclusion is inevitable that at the time a court is asked to take cognizance not only the offence must have been committed by a public servant but the person accused is still a public servant removable from his office by a competent authority before the provisions of section 6 can apply.
In the present appeals, admittedly, the appellants had cease to be public servants alleged to have been committed by them as public servants.
Accordingly, the provisions of s.6 of the Act 514 did not apply and the prosecution against them was not vitiated by the lack of a previous sanction by a competent authority".
And this view has been consistently followed in C.R. Bansi 's case and K.S. Dharmadatan vs Central Government & Ors.(1) It therefore appears well settled that the relevant date with reference to which a valid sanction is sine qua non for taking cognizance of an offence committed by a public servant required by Sec. 6 is the date on which the court is called upon to take cognizance of the offence of which he is accused.
The accused tendered resignation of his office as Chief Minister and ceased to hold the office of Chief Minister with effect from January 20, 1982.
The complaint from which the present appeal arises and which was registered as Criminal Case No. 24/82 appears to have been filed on August 9, 1982 and the cognizance was taken by the learned Magistrate on the same day.
It unquestionably transpires that long before the date on which the cognizance was taken by the learned special Judge, the accused had ceased to hold the office of the Chief Minister and as such had ceased to be a public servant.
In other words, he was not public servant in his capacity as Chief Minister on August 9, 1982 when the court took cognizance of the offence against him.
A fortiori no sanction as contemplated by Sec. 6 was necessary before cognizance of the offence could be taken against the accused for offences alleged to have been committed in his former capacity as public servant.
Re: (b) and (c): It was strenuously contended that if the accused has held or holds a plurality of offices occupying each one of which makes him a public servant, sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him, would be necessary and if anyone of the competent authorities fails or declines to grant sanction, the court is precluded or prohibited fome taking cognizance of the offence with the public servant is charged.
This submission was sought to be repelled urging that it is implicit in Sec. 6 that sanction of that authority alone is necessary which is competent to remove the public servant from the office which he is alleged to have misused or abused for corrupt motives.
6(1)(c) is the only provision relied upon on behalf of the accused to contend that as M.L.A. he was a public servant on the date of taking cognizance of the offences, and therefore, sanction of that authority comepetent to remove him from that office is a since qua non for taking cognizance of offences.
6 (1)(c) bars taking cognizance of an 515 offence alleged to have been committed by public servant except with the previous snaction of the authority competent to remove him from his office.
In order to appreciate the rival contentions the fact situation relevant to the topic under discussion may be noticed.
At a general election held in 1980, accused was elected as Member of the Legislative Assembly of Maharashtra State fom Shrivardhan Assembly Constituency.
He was appointed as Chief Minister of Maharashtra State, and he was holding that office at the time he is alleged to have committed the offences set out in the complaint filed against him.
He tendered his resignation of the office of the Chief Minister and ceased to hold that office with effect from January 20, 1982.
However, he continued to retain his seat as M.L.A. The contention is that as M.L.A., he was a public servant, a submission seriously controverted, which we would presently examine and that he was such public servant even on the date on which the court took cognizance of the offences set out in the complaint without a valid sanction and therefore the court had no jurisdiction to take cognizance of the offences.
In support of the submission it was urged that if the policy underlying Sec. 6 and similar provisions like Sec.
197 Cr.
P.C. was to spare the harassment to the public servant consequent upon launching of frivolous or speculative prosecutions, the same would be defeated if it is held that the sanction to prosecute is necessary from an authority competent to remove the public servant from the office which he is alleged to have misused or abused.
Proceeding along this line it was urged that even if the accused has ceased to be a public servant in one capacity by ceasing to hold the office which he is alleged to have misused or abused yet if he continued to be a public servant in another capacity, the authority competent to remove him from the latter office would have to decide whether the prosecution is frivolous or speculative and in larger public interest to thwart it by declining to grant the sanction.
It was also urged that if a public servant has to discharge some public duty and perform some public functions and he is made to cool his heels in law courts, public interest would suffer by keeping him away from his public duty and therefore, to advance the object underlying Sec.
6, the court must hold that if the public servant who is being prosecuted holds more than one public office occupying each one of which makes him public servants, a sanction to prosecute of each competent authority entitled to remove him from each office is necessitous before taking cognizance of offences against him.
It was urged that this approach would advance and 516 buttress the policy underlying Sec.
6 and the contrary view would defeat the same.
Offences prescribed in Sec. 161, 164 and 165 IPC and Sec.
5 of the 1947 Act have an intimate and inseparable relation with the office of a public servant.
A public servant occupies office which renders him a public servant and occupying the office carries with it the powers conferred on the office.
Power generally is not conferred on an individual person.
In a society governed by rule of law power is conferred on office or acquired by statutory status and the individual occupying the office or on whom status is conferred enjoys the power of office or power flowing from the status.
The holder of the office alone would have opportunity to abuse or misuse the office.
These sections codify a well recognised truism that power has the tendency to corrupt.
It is the holding of the office which gives an opportunity to use it for corrupt motives.
Therefore, the corrupt conduct is directly attributable and flows from the power conferred on the office.
This interrelation and interdependence between individual and the office he holds is substantial and not serverable.
Each of the three clauses of sub section
(1) of Sec. 6 uses the expression `office ' and the power to grant sanction is conferred on the authority competent to remove the public servant from his office and Sec.
6 requires a sanction before taking cognizance of offences committed by public servant.
The offence could be committed by the public servant by misusing or abusing the power of office and it is from that office, the authority must be competent to remove him so as to be entitled to grant sanction.
The removal would bring about cessation of interrelation between the office and abuse by the holder of the office.
The link between power with opportunity to abuse and the holder of office would be severed by removal from office.
Therefore, when a public servant is accused of an offence of taking gratification other than local remuneration for doing or forbearing to do an official act (Sec.
161 IPC) or as a public servant abets offences punishable under Secs.
161 and 163 (Sec.
164 IPC) or as public servant obtains a valuable thing without consideration from person concerned in any proceeding or business transacted by such public servant (Sec. 165 IPC) or commits criminal misconduct as defined in Sec.
5 of the 1947 Act, it is implicit in the various offences that the public servant has misused or abused the power of office held by him public servant.
The expression `offices ' in the three sub clauses of Sec.
6(1) would clearly denote that office which the public servant misused or abused for corrupt motives for which he is to be prosecuted and in respect of which a sanction to prosecute him is necessary by the competent authority entitled to remove him from that office which he has abused.
517 This interrelation between to office and its abuse if serered would render Sec.
6 devoid of any meaning.
An this interrelation clearly provides a clue to the understanding of the provision in Sec.
6 providing for sanction by a competent authority who would be able to judge the action of the public servant before removing the bar, by granting sanction, to the taking of the cognizance of offences by the court against the public servant.
Therefore, it unquestionably follows that the sanction to prosecute can be given by an authority competent to remove the public servant from the office which he has misused or abused because that authority alone would be able to know whether there has been a misuse or abuse of the office by the public servant and not some rank outsider.
By a catena of decisions, it has been held that the authority entitled to grant sanction must apply its mind to the facts of the case, evidence collected and other incidental facts before according sanction.
A grant of sanction is not an idle formality but a solemn and sacrosanct act which removes the umbrella of protection of government servants against frivolous prosecutions and the aforesaid requirements must therefore, be strictly complied with before any prosecution could be launched against public servants.
(See Mohd. Iqbal Ahmad vs State of Andhra Pradesh).
The Legislature advisedly conferred power on the authority competent to remove the public servant from the office to grant sanction for the obvious reason that that authority alone would be able, when facts and evidence are placed before him, to judge whether a serious offence is committed or the prosecution is either frivolous or speculative.
That authority alone would be competent to judge whether on the facts alleged, there has been an abuse or misuse of office held by the public servant.
That authority would be in a position to know what was the power conferred on the office which the public servant hold, how that power could be abused for corrupt motive and whether prima facie it has been so done.
That competent authority alone would know the nature and functions discharged by the public servant holding the office and whether the same has been abused or misused.
It is the vertical hierarchy between the authority competent to remove the public servant from that office and the nature of the office hold by the public servant against whom sanction is sought which would indicate a hierarchy and which would therefore, permit inference of knowledge about the functions and duties of the office and its misuse or abuse by the public servant.
That is why the legislature clearly provided that that authority alone would be competent to grant sanction which is entitled to remove the public servant against whom sanction is sought from the office.
518 Now if the public servant holds two offices and he is accused of having abused one and from which he is removed but continues to hold the other which is neither alleged to have been used nor abused, is a sanction of the authority competent to remove him from the office which is neither alleged or shown to have been abused or misused necessary? The submission is that if the harassment of the public servant by a frivolous prosecution and criminal waste of his time in law courts keeping him away from discharging public duty, are the objects underlying Sec. 6, the same would be defeated if it is held that the sanction of the latter authority is not necessary.
The submission does not commend to use.
We fail to see how the competent authority entitled to remove the public servant from an office which is neither alleged to have been used or abused would be able to decide whether the prosecution is frivolous or tendentious.
An illustration was posed to the learned counsel that a Minister who is indisputably a public servant greased his palms by abusing his office as Minister, and then ceased to hold the office before the court was called upon to take cognizance of the offence against him and therefore, sanction as contemplated by Sec. 6 would not be necessary; but if after committing the offence and before the date of taking of cognizance of the offence, he was elected as a Municipal President in which capacity he was a public servant under the relevant Municipal law, and was holding that office on the date on which court proceeded to take cognizance of the offence committed by him as a Minister, would a sanction be necessary and that too of that authority competent to remove him from the office of the Municipal President.
The answer was in affirmative.
But the very illustration would show that such cannot be the law.
Such an interpretation of Sec. 6 would render it as a shield to an unscrupulous public servant.
Someone interested protecting may shift him from one office of public servant to another and thereby defeat the process of law.
One can legitimately envisage a situation wherein a person may hold a dozen different offices, each one clothing him with the status of a public servant under Sec.
21 IPC and even if he has abused only one office for which either there is a valid sanction to prosecute him or he has ceased to hold that office by the time court was called upon to take cognizance, yet on this assumption, sanction of 11 different competent authorities each of which was entitled to remove him from 11 different public offices would be necessary before the court can take cognizance of the offence committed by such public servant, while abusing one office which he may have ceased to hold.
Such an interpretation in contrary to all canons of construction and leads to an absurd and product which of necessity must be avoided.
Legislation 519 must at all costs be interpreted in such a way that it would not operate as a rougue 's charter.
(See Davis & Sons Ltd. vs Atkins) Support was sought to be drawn for the submission from the decision of the Andhra Pradesh High Court in Air Commodore Kailash Chand vs The State (S.P.E. Hyderabad)(2) and the affirmance of that decision by this Court in The State (S.P.E. Hyderabad) vs Air Commodore Kailash Chand.(3) In that case accused Kailash Chand was a member of the Indian Air Force having entered the service on 17th November 1941.
He retired from the service on 15th June, 1965, but was re employed for a period of 2 years with effect from 16th June, 1965.
On 7th September, 1966, the respondent was transferred to the Regular Air Force Reserve with effect from June 16, 1965 to June 15, 1970 i.e. for a period of 5 years.
On 13th March, 1968, the re employment given to the respondent ceased and his service was terminated with effect from April 1, 1968.
A charge sheet was submitted against him for having committed an offence under Sec.
5(2) of the Prevention of Corruption Act, 1947 during the period March 29, 1965 to March 16, 1967.
A contention was raised on behalf of the accused that the court could not take cognizance of the offence in the absence of a valid sanction of the authority competent to remove him from the office held by him as a public servant.
The learned special Judge negatived the contention.
In the revision petition filed by the accused in the High Court, the learned Single Judge held that on the date of taking cognizance of the offence, the accused was a member of the Regular Air Force Reserve set up under the Reserve and Auxiliary Air Force, 1952 and the rules made there under.
Accordingly, it was held that a sanction to prosecute him was necessary and in the absence of which the court could not that cognizance of the offences and the prosecution was quashed.
In the appeal by certificate, this Court upheld the decision of the High Court.
This Court held following the decision in S.A. Venkataraman 's case that if the public servant had ceased to be a public servant at the time of taking cognizance of the offence, Sec. 6 is not attracted.
Thereafter the court proceeded to examine whether the accused was a public servant on the date when the court took cognizance of the offence and concluded that once the accused was transferred to the Auxiliary Air Force, he retained his character as a public servant because he was required to undergo training and 520 to be called up for service as and when required.
The court further held that as such the accused was a public servant as an active member of the Indian Air Force and a sanction to prosecute him under Sec. 6 was necessary.
This decision is of no assistance for the obvious reason that nowhere it was contended before the court, which office was alleged to have been abused by the accused and whether the two offices were separate and distinct.
It is not made clear whether the accused continued to hold the office which was alleged to have been abused or misused even at the time of taking cognizance of the offence.
But that could not be so because the service of the accused was terminated on April 1, 1968 while the cognizance was sought to be taken in June, 1969.
Indisputably, the accused had ceased to hold that office as public servant which he was alleged to have misused or abused.
The court was however, not invited to consider the contention canvassed before us.
Nor was the court informed specifically whether the subsequent office held by the accused in that case was the same from which his service was terminated meaning thereby he was re employed to the same office.
The decision appears to proceed on the facts of the case.
We would however, like to make it abundantly clear that if the two decisions purport to lay down that even if a public servant has ceased to hold that office as public servant which he is alleged to have abused or misused for corrupt motives, but on the date of taking cognizance of an offence alleged to have been committed by him as a public servant which he ceased to be and holds an entirely different public office which he is neither alleged to have misused or abused for corrupt motives, yet the sanction of authority competent to remove him from such latter office would be necessary before taking cognizance of the offence alleged to have been committed by the public servant while holding an office which he is alleged to have abused or misused and which he has ceased to hold, the decisions in our opinion, do not lay down the correct law and cannot be accepted as making a correct interpretation of Sec. 6.
Therefore, upon a true construction of Sec. 6, it is implicit therein that sanction of that competent authority alone would be necessary which is competent to remove the public servant from the office which he is alleged to have misused or abused for corrupt motive and for which a prosecution is intended to be launched against him.
In the complaint filed against the accused it has been repeatedly alleged that the accused as Chief Minister of Maharashtra State accepted gratification other than legal remuneration from various sources 521 and thus committed various offences set out in the complaint.
No where, not even by a whisper, it is alleged that the accused has misused or abused for corrupt motives his office as M.L.A.
Therefore, it is crystal clear that the complaint filed against the accused charged him with criminal abuse or misuse of only his office as Chief Minister.
By the time, the court was called upon to take cognizance of the offences, so alleged in the complaint, the accused had ceased to hold the office of the Chief Minister.
On this short ground, it can be held that no sanction to prosecute him was necessary as former Chief Minister of Maharashtra State.
The appeal can succeed on this short ground.
However, as the real bone of contention between the parties was whether as M.L.A. the accused was a public servant and the contention was canvassed at some length, we propose to deal with the same.
The learned special Judge held that the accused as M.L.A. is a public servant because he is in the pay of the Government or he is remunerated by feces for the performance of public duty by the Government.
The learned special Judge simultaneously rejected the contention canvassed on behalf of the accused that the accused is a public servant because he is a person empowered by law to discharge as a member of a body of persons adjudicatory functions as contemplated by the Third clause of Sec. 21.
Re: (d): We would first examine the correctness or otherwise of the finding of the learned special Judge whether the accused as M.L.A. was in the pay of the Government or was remunerated by fees for the performance of any public duty by the Government so as to be clothed with the status of a public servant within the meaning of cl.
(12)(a) of Sec.
21 IPC.
(12)(a) provides that every person in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government would be a public servant.
The three limbs of cl.
(12)(a) according to the learned special Judge are: (i) Every person in the service of the Government; or (ii) Every person in the pay of the Government; or (iii) Every person remunerated by fees or commission for the performance of any public duty by the Government.
If any person falls in any of the three limbs according to the 522 learned special Judge, he would be a public servant within the meaning of the expression in Sec.
It was conceded before the learned special Judge and not retracted before us that the case of the accused does not fall in the first limb i.e. the accused as M.L.A. could not be said to be in the service of the Government.
The contention is that the accused while receiving his salary as M.L.A. under the Maharashtra Legislature Members ' Salaries and Allowances Act, 1956 was and is in the pay of the Government.
The second limb of the submission was that even if the pay which the accused received as M.L.A. under the relevant Act would not make the accused a person in the pay of the Government, nevertheless the pay received by him would be the remuneration which the accused would receive for performance of public duty from the Government.
It was contended on behalf of the complainant that the expression `in the pay of the Government ' would, in the context in which the expression is used in Sec.
21(12)(a), mean only one thing that the payment must be by a master to a servant and unless there is relationship of master and servant or relationship of command and obedience between the payer and the payee, mere payment even if styled as pay would not mean that the payee is in the pay of the payer.
Proceeding along it was submitted that M.L.A. could not be said to be subject to obedience of any command by the Government, and therefore the accused as M.L.A. could not be said to be `in the pay of the Government '.
And as regards the third limb, it was urged that the accused as M.L.A. was not performing any public duty for the performance of which he was remunerated by the Government.
Additionally, it was urged that the expression `Government ' in cl.
(12) (a) must receive the same meaning assigned to it in Sec.
17 IPC meaning thereby that it denotes the Central Government or the Government of a State as the context requires.
It was urged that in that sense the expression `Government ' in cl.
(12) (a) would mean `Executive Government ' and it would be adding insult to injury if it can ever be said that M.L.A. is in the pay of the Executive Government or State Government.
On behalf of the accused these submissions were repelled by urging that the use of word `or ' signifies a disjunctive and not conjuctive and that viewed from this angle the first part of cl.
(12) (a) `in the service of the Government ' would import the notion of master servant or command obedience relationship, but the expression `in the pay of the Government ' would signify someone other than that included in the first limb and as the legislature could not be accused of tautology or redundancy the expression `in the pay of the Government ' would exclude any notion of master servant or command obedience relationship.
It was submit 523 ted that conceivably there can be a person in the service of the Government though not paid by the Government and conversely there can be a person `in the pay of the Government ' without being in the service of the Government.
It was also submitted on behalf of the accused that it would be constitutional impertinence to say that M.L.A. does not perform any public duty.
His duty may be political or moral as urged on behalf of the complainant but it is nonetheless a constitutional duty which he is performing and that duty would be comprehended in the expression `public duty ' in cl.
(12) (a).
As a corollary it was submitted that the remuneration in the form of pay which the accused receives and has been receiving since he ceased to be the Chief Minister under the relevant Act is remuneration for the performance of the public duty by the Government.
The neat question that emerges on the rival contentions is one of construction of the expression `in the pay of ' and the expression `Government ' in cl.
(12) (a).
At the threshold learned counsel for the accused sounded a note of caution that the Court should steer clear of the impermissible attempt of the appellant to arrive at a true meaning of legislative provision by delving deep into the hoary past and tracing the historical evolution of the provision awaiting construction.
It was submitted with emphasis that this suggested external aid to construction falls in the exclusionary rule and cannot be availed of.
Therefore, it has become necessary to examine this preliminary objection to the court resorting to this external aid to construction.
21 (12) (a) acquired its present form in 1964.
Mr. Singhvi contended that even where the words in a statute are ambiguous and may be open to more than one meaning or sense, a reference to the debates in Parliament or the report of a Commission or a Committee which preceded the enactment of the statute under consideration is not a permissible aid to construction.
This is what is called the exclusionary rule.
In support of the submission, reliance was placed upon Assam Railways and Trading Co. Ltd. vs Inland Revenue Commissioners(1) in which the House of Lords declined to look into the Report of the Royal Commission on Income tax in order to ascertain the meaning of certain words in the Income Tax Act, 1920 on the ground that no such evidence for the purpose of showing the intention, that is the purpose or object, of an Act is admissible.
The intention of the legislature must be ascertained from the words of the 524 statute which such extraneous assistance as is legitimate.
This view appears to have been consistently followed in United Kingdom because in Katikiro of Buganda vs Attorney General(1), the Privy Council held in agreement with the Court of Appeal of Eastern Africa that the contents of the White Paper were not admissible in evidence for the purpose of construing the schedule.
Similarly in Central Asbestos Co. Ltd. vs Dodd the House of Lords declined to look at the Committee Report which preceded the drafting of the Act.
In the Administrator General of Bengal vs Premlal Mullick & Ors(3), the Privy Council disapproved the reference to the proceeding of the Legislature which resulted in the passing of the Act II of 1874 as legitimate aids to the construction of Sec. 31 by the Appeal Bench of Calcutta High Court.
Relying on these decisions, a valiant plea was made to persuade us not to depart from this well accepted proposition of law in England.
The trend of law manifested by these decisions broadly indicate that in the days gone by the courts in England were of the view that reference to the recommendations of a Commission or Committee appointed by the Government or statements in White Paper which shortly preceded the statute under consideration were not legitimate aids to construction of the statute even if the words in the statute were ambiguous.
The trend certainly seems to be in the reverse gear in that in order to ascertain the true meaning of ambiguous words in a statute, reference to the reports and recommendations of the Commission or Committee which preceded the enactment of the statute are held legitimate external aids to construction.
The modern approach has to considerable extent roded the exclusionary rule even in England.
Constitution Bench of this Court after specifically referring to Assam Railways and Trading Co. Ltd. vs I.R.C. in State of Mysore vs R.V. Bidap(4) observed as under: "The trend of academic opinion and the practice in the European system suggest that interpretation of a statute being exercise in the ascertainment of meaning, every thing which is logically relevant should be admissible. . .
There is a strong case for whittling.
down the Rule of Exclusion followed in the British courts and for less apologetic reference to legislative proceedings and like materials to read the meaning 525 of the words of a statute.
Where it is plain, the language prevails, but where there is obscurity or lack of harmony with other provisions and in other special circumstances, it may be legitimate to take external assistance such as the object of the provisions, the mischief sought to be remedied.
, the social context, the words of the authors and other allied matters.
" Approaching the matter from this angle, the Constitution Bench looked into the proceedings of the Constituent Assembly and "The Framing of India 's Constitution; A Study ' by B. Shiva Rao.
It was however urged that before affirmatively saying that in Bidap 's case this Court has finally laid to rest this controversy, the court may refer to Commissioner of Income Tax, Andhra Pradesh, Hyderabad vs Jaya lakshmi Rice and oil Mills Contractor Co.(1) At page 368 a bench of three Judges of this Court without so much as examining the principle underlying the exclusionary rule dissented from the view of the High Court that the report of the Special Committee appointed by the Government of India to examine the provisions of the Bill by which Sec.
26A was added to the Income tax Act, 1922 can be taken into consideration for the purpose of interpreting relevant provisions of the Partnership Act.
However it may be stated that the Court did not refer to exclusionary rule.
It dissented from the view of the High Court on the ground that the statement relied upon by the High Court was relating to clause 58 corresponding to Sec.
59 of the Partnership.
Act and that statement cannot be taken into consideration for the purpose of interpreting the relevant provisions of the Partnership Act.
This decision was not noticed in Bidap 's case but the decision in Assam Railways & Trading Co. Ltd relied upon by Mr. Singhvi was specifically referred to.
This decision cannot therefore be taken as an authority for the proposition canvassed by Mr. Singhvi.
Further even in the land of its birth, the exclusionary rule has received a serious jolt in Black Clawson International Ltd. vs Paperwork Waldhef Ascheffenburg AC(2) Lord Simon of Claisdale in his speech while examining the question of admissibility of Greer Report observed as under: "At the very least, ascertainment of the statutory objective can immediately eliminate many of the possible meanings that the language of the Act might bear and if 526 an ambiguity still remains, consideration of the statutory objective is one of the means of resolving it.
The statutory objective is primarily to be collected from the provisions of the statute itself.
In these days, when the long title can be amended in both Houses, I can see no reason for having recourse to it only in case of an ambiguity it is the plainest of all the guides to the general objectives of a statute.
But it will not always help as to particular provisions.
As to the statutory objective of these a report.
leading to the Act is likely to be the most potent aid and, in my judgment, it would be more obscurantism not to avail oneself of it.
here is, indeed clear and high authority that it is available for this purpose".
And in support of this statement of law, a number of cases were relied upon by the learned Law Lord.
It may also be mentioned that Per Curiam it was held that "where there is an ambiguity in a statute, the court may have regard to the Report of a Committee presented to Parliament containing proposals for legislation which resulted in the enactment of the statute, in order to determine the mischief which the statute was intended to remedy".
Though the unanimous view was that the report of a committee presented to Parliament preceding the statute could be seen for finding out the then state of the law and the mischief required to be remedied, it must be stated that the majority were of the opinion that report could not be looked at to ascertain the intention of Parliament.
The minority (per Lord Dilporne and Lord Simon) were of the opinion that when a draft bill was enacted in a statute without any alteration, Parliament clearly manifested its intention to accept committee 's recommendation which would imply that Parliament 's intention was to do what committee wanted to achieve by its recommendations.
A reference to Halsbury 's Laws of England, Fourth Edition, Vol.
44 paragraph 901, would leave no one in doubt that 'reports of commissions or committees preceding the enactment of a statute may be considered as showing the mischief aimed at and the state of the law as it was understood to be by the legislature when the statute was passed. ' In the footnote under the statement of law cases quoted amongst others are R. vs Ulugboja(1) R. vs Blexham(2) in which Eigth report of Criminal Law Revision Committee was admitted as an extrinsic aid to construction.
Therefore, it can be confidently said that the exclusionary rule is flickering in its 527 dying embers in its native land of birth and has been given a decent burial by this Court.
Even apart from precedents the basic purpose underlying all canons of construction is the ascertainment with reasonable certainty of the intention of Parliament in enacting the legislation.
Legislation is enacted to achieve a certain object.
The object may be to remedy a mischief or to create some rights, obligations or impose duties.
Before undertaking the exercise of enacting a statute, Parliament can be taken to be aware of the constitutional principle of judicial review meaning thereby the legislation would be dissected and subjected to microscopic examination.
More ' often an expert committee or a Joint Parliamentary committee examines the provisions of the proposed legislation.
But language being an inadequate vehicle of thought comprising intention, the eyes scanning the statute would be presented with varried meanings.
If the basic purpose underlying construction of a legislation is to ascertain the real intention of the Parliament, why should the aids which Parliament availed of such as report of a special committee preceding the enactment, existing state of law, the environment necessitating enactment of legislation, and the object sought to be achieved, be denied to court whose function is primarily to give effect to the real intention of the Parliament in enacting the legislation.
Such denial would deprive the court of a substantial and illuminating the to construction.
Therefore, departing from the earlier English decisions we are of the opinion that reports of the committee which preceded the enactment of a legislation, reports of Joint Parliamentary Committee, report of a commission set up for collecting.
information leading to the enactment are permissible external aids to construction.
In this connection, it would be advantageous to refer to a passage from Crawford on Statutory Construction (page 388).
It reads as under: "The judicial opinion on this point is certainly not quite uniform and there are American decisions to the effect that the general history of a statute and the various steps leading upto an enactment including amendments or modifications of the original bill and reports of Legislative Committees can be looked at for ascertaining the intention of the legislature where it is in doubt but they hold definitely that the legislative history is inadmissible when there is no obscurity in the meaning of the statute".
In United States vs St.
Paul M.M. Rly. Co.(1) it is observed that 528 the reports of a committee, including the bill as introduced, changes 'made in the frame of the bill in the course of its passage and the statement made by the committee chairman incharge of it, stand upon a different footing, and may be resorted to under proper qualifications '.
The objection therefore of Mr. Singhvi to our looking into the history of the evolution of the section with all its clauses, the Reports of Mudiman Committee and K Santhanam Committee and such other external aids to construction must be overruled.
Tracing the history of cl.
(2) of Sec.
21 IPC with a view to ascertaining whether M.L.A. would be comprehended in any of the clauses of Sec.
12 so as to be a public servant, it must be noticed at the outset that Indian Penal Code is a statute of the year 1860 when there were no elected legislatures and a fortiori there were no M.L.As.
Even if Moaulay is to be adjudged a visionary, who could look far beyond his times yet in 1860 it was inconceivable for him to foresee the constitutional development of India stages by stages and to envisage the setting up elected legislatures, the members of which would without anything more be comprehended as public servant in any of the subclauses of Sec. 21.
Undoubtedly, framing of a legislation is generally not of a transient nature but it is enacted and put on the statute book for reasonably long period until the society for which it is meant undergoes a revolutionary transformation so as to make the law irrelevant or otiose.
A visionary can fores possible changes which may be inter connected with the present situation one leading to the other.
But the East India a Company rule which had just ended in 1857 after the first war of independence, it was difficult to divine the possible revolutionary changes that may come in by 1919.
At any rate at the time when the Indian Penal Code was enacted.
there was no elected legislature and therefore, there was no M.L.A. In construing a statute more especially the ancient statute, the court may look at the surrounding circumstances when the statute was enacted.
In Halsbury 's Laws of England, Fourth Edition, Vol.
44 paragraph 898, it is observed that the construction of ancient statutes may be eludicated by what in the language of the courts is called contemporanea expositio, that is, by seeing how they were understood at the time when they were passed, Undoubtedly, this doctrine cannot be applied to modern statutes or indeed to any statute whose meaning appears to the court to be plain and unambiguous.
At any rate, one can justifiably say that M.L.A. could not be comprehended in any of the clauses of Sec. 21 to be a public servant when the Indian Penal Code was enacted in 1860.
529 The next stage in the historical evolution of the law with regard to corrupt actions of members of public bodies is the one to be found in a Bill introduced in 1925 called Legislative Bodies Corrupt Practices Act, 1925.
This Bill was introduced to give effect to the recommendations of the Reforms Enquiry Committee known as Mudiman Committee.
In the book 'Evolution of Parliamentary Privileges ' by Shri S.K. Nag, the author traced the steps which led to the introduction of the Bill.
In the statement of objects and reasons accompanying the Bill, it was stated that the corrupt influencing of votes of members of the legislature by bribery, intimidation and like should be made penal offences under the ordinary criminal law and para 124 indicates that this recommendation was a unanimous recommendation of the Committee as a whole.
Then comes the more important statement which may be extracted: "The tender of a bribe to, or the receiving of a bribe by, a member of a legislature in India as an inducement for him to act in a particular manner as a member of the legislature is not at present an offence.
" The Bill sought to fill in the lacuna.
It thus follows that till 1925, it was clearly understood that the M.L.A. as the holder of that office which must have come into existence by the time under the Government of India Act, 1919, was not a public servant falling in any of the clauses of Sec. 21 and this lacuna was sought to be remedied by introducing Chapter 9 B bearing the heading of offences by or relating to members of Legislature Bodies '.
The dictionary clause in the Bill would have included M.L.A. in the expression "Member of Legislative Bodies.
The object of the Bill was to provide for punishment of corrupt practice by or relating to members of Legislative Bodies constituted under the Government of India Act.
This was to be passed by the Central Legislature.
It was an abortive attempt by members themselves to be brought within the purview of the penal law.
One can write a finale by saying that the Bill was not enacted into law.
That is the second stage in the history of evolution.
Before we proceed further in the journey, it is necessary to take note of one intermediate stage to which our attention was not drawn during the arguments.
In Prevention of corruption Act, 1947 by Sethi and Anand at page 50, it is mentioned that till Criminal Law (Amendment) Act, 1958 (Act No. II of 1958) was put on the statute book, Sec.
21 of the IPC consisted only of eleven clauses.
Clause 12 530 was introduced by the aforementioned Act and it read 'Every officer in the service or pay of a local authority or of a Corporation engaged in any trade or industry which is established by a Central, Provincial or state Act or of a Government Company as defined in Sec.
617 of the '.
Obviously, as incorporated clause 12 would not comprehend M.L.A. and cl 9 as it stood till then, could not have comprehended him as would be presently pointed out.
12 introduced by Act II of 1958 is re enacted as cl.12 (b) and it is nobody 's case that M.L.A. is covered in cl.
12 (b).
The next stage of development ma/ now be noticed.
While participating in the debate on the demand.
for grants for the Ministry of Home affairs in June 1962, some members of the Lok Sabha specifically referred to the growing menace of corruption in administration.
In reply to the debate, the then Home Minister suggested that some Members of Parliament and if possible some other public men do sit with the officers in order to review the problem of corruption and make suggestions.
Pursuant to this announcement, a Committee chaired by Shri K.Santhanam, M.P. was appointed with nine specific terms of reference which inter alia included: "to suggest changes which would ensure speedy trial of cases of bribery, corruption and criminal misconduct and make the law otherwise more effective '.
This Committee submitted its report on March 31 1964.
While examining the fourth term of reference extracted hereinabove, the Committee in Section 7 of its report considered the question of proposed amendment to Indian Penal Code.
The Committee focussed its attention on the definition of 'public servant ' in Sec.
Paragraph 7.6 is most important for the present purpose.
It reads as under: "7.6 Section 21 defines "public servant ' Twelve categories of public servants have been mentioned but the present definition requires to be enlarged.
The ninth category describes a large variety of officers charged with the performance of different kinds, of duties relating to pecuniary interests of the State.
The last sentence of this category, namely, "every officer in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty" should be put as a general definition.
After the word "government", he towards "local authority", "public corporation", or "government company" should be added. ' The words "engaged in any trade or industry" may also be deleted from the twelfth clause of Section 21 as these words 531 have a restrictive.
effect.
It should also be made clear that all Ministers, Ministers of State Deputy Ministers, Parliamentary Secretaries and members of local authorities come under the definition of 'public servant ' A further category should be added to included all persons discharging adjudicatory functions under any Union or State Law for the time being in force.
We also consider it necessary to include the following categories within the definition of the term 'public servant ': President, Secretary and all members of Managing Committee of a registered Co operative Society; Office bearers and employees of educational, social, religious and other institutions, in whatever manner established, which receive aid in any form from the Central or State Government".
This recommendation led to three important amendments in cls.
3, 9 and 12 of Sec. 21.
The unamended clauses and the effect of the amendment in 1964 must be brought out in sharp contrast so as to appreciate the change made and its effect on the language employed.
Clause as they stood prior to Amended by the 1964 the 1964 Amendment Amendment.
Third: Every Judge.
Third: Every Judge in including any person empo wered by law to discharge, whether by himself or as a member of any body of per sons, any adjudicatory functions; Ninth:: Every officer whose duty Ninth: Every officer it is, as such officer to take, whose duty it is, as such receive keep or expend any officer to take, receive, property of the Government, keep, or expend any property or to make any survey, on behalf of the Government, assessment, or contract on or to make any survey, as behalf of the Government or to sessment or contract on be execute any revenue process, half of the Government or to or to report, on any matter affec 532 ting the pecuniary interest of execute any revenue process, the Government or to make or to investigate, or to authenticate or keep any docu report, on any matter affec ment relating to the pecuniary ting the pecuniary interest interest of the Government, of the Government or make or to prevent he infraction of authenticate or keep any any law for the protection of document relating to the of the pecuniary interests of pecuniary interests of the the Government, and every Government, or to prevent officer in the service or pay the infraction of any law of the Government or remunerat for the protection of the ed by fees or commission for pecuniary interest of the performance of any public Government.
(Underlining ours); Twelfth: Every officer in the Twelfth: Every person: service or pay of a local auth (a) in the service or pay of ority or of a corporation the Government or remune engaged in any trade or indust rated by fees or commission ry which is established by a for the performance of any Central, Provincial or State public duty by the Govern Act or of a Government Company ment; as defined in section 617 of the .
(b) in the service or pay of local authority, a corpora tion established by or under Central, Provincial or State Act or a Government Com pany as defined in section 617 of the .
A bare comparison of the two cls.
(9) and (12) would reveal the change brought by the Amending Act 40 of 1964.
The last part (underlined portion) in the unamended cl.
(9): 'every officer in the service or pay of the Government or remunerated by fees or commission for the performance of any 'public duty ' has been severed from the 9th clause and incorporated as an independent clause (12) (a).
The original clause (12) was deleted and has been re enacted, as cl.
(12) (b) with minor modifications.
This history of development is noteworthy for a very compelling reason to be presently mentioned.
533 discretionary power and this included Minister both Cabinet and State, Deputy Ministers and parliamentary Secretaries.
M.L.As were not considered holding political offices capable of abuse of power.
The Committee recommended amendment of the definition of the expression 'public servant in Sec.
21 IPC so as to include Ministers of all rank of Central and State level and Parliamentary Secretaries in the definition of 'public servant '.
The Committee did not recommend that the proposed amendment should comprehend M.L.A. The Committee separately dealt with the M.L.As in paragraph 11.4 in Sec.
11 of the Report '.
After stating that, 'next to the Minister, the integrity of Members of Parliament and of legislatures in the State will be a great factor in creating a favourable social climate against corruption.
It is desirable that a Code of Conduct for legislators embodying these and other principles should be framed by a special committee of representatives of Parliament and the legislatures nominated by the Speakers and Chairman.
This Code should be formally approved by resolutions of Parliament and the legislatures and any infringement of the Code should be treated as a breach of privilege to be inquired into by the Committee of privileges, and if a breach is established, action including termination of membership may be taken.
Necessary snactions for enforcing the Code of Conduct should also be brought into existence".
The Government minutely examined the Report.
The recommendations of the Committee which were accepted by the Government led to the introducing of The Anti Corruption Laws (Amendment) Bill 1964 (Bill No. 67 of 1964) in the Parliament.
The salient features of the Bill worth noticing are that cl.
(3) of Sec.
21 was proposed to be amended as recommended with minor structural change.
(9) of Sec 21 was dissected as recommended and its last part 'and every officer in the service are pay of the Government or remunerated by fees or commission for the performance of any public duty ' was detached and re enacted as cl.
(12) (a) and the original cl.
(12) was renumbered as Cl.
(12) (b) with slight modification.
This would imply that no attempt was made to bring in M.L.A. within the conspectus of clause in Sec.
so as to make him public servant.
The position of the Minister was slightly fluid but a clear picture emerged during the debate on the Bill in the Lok Sabha.
Mr. Hathi Minister incharge while piloting the Bill, on November 7, 1964 amongst others stated that the will not deal with those recommendations which had not been accepted by the Government, but would explain them later, if any point is raised in that behalf, (See Lok Sabha Debates (Third 534 that he will not deal with those recommendations which had not been accepted by the Government, but would explain them later, if any point is raised in that behalf.
(See Lok Sabha Debates (Third Series), Vol.
XXXV, Col. 245) While replying to the debate, Mr. Halhi stated that the code of conduct has already been evolved for Ministers because the recommendation of Santhanam Committee for including Ministers of all ranks and Parliamentary Secretaries in the definition of 'public servant ' was not accepted by the Government.
But there is an interesting caveat to this statement to which we would presently revert He further stated that the specific recommendations about the definition 'public servant ' to include Ministers has not been accepted and included in the Bill because Ministers are not merely public servants but they have a greater moral and social responsibility towards the people.
Later on in the debate it was conceded that the Minister is already included in the definition of 'public servant ' even before the proposed amendment in view of the decision of the Supreme Court in Shiv Bahadur Singh 's case in which Minister was held to be a public servant.
It was further stated that in view of this judgment, the Government was advised that the recommendation of the Santhanam Committee for inclusion specifically of Ministers of all rank and Parliamentary Secretaries was redundant.
(Sec Lok Sabha Debates (Third Series) Vol.
35 cols.
729 and 731).
Whatever that may be the conclusion is inescapable that till 1964 at any rate M.L.A. was not comprehended in the definition of 'public servant ' in Sec. 21.
And the Santhanam Committee did not recommend its inclusion in the definition of public servant, in Sec. 21.
Bill No. 47 of 1964 was enacted as Act 40 of 1964.
Now if prior to the enactment of Act 40 of 1964 M.L.A. was not comprehended as a public servant in Sec. 21, the next question is: did the amendment make any difference in his position.
The amendment keeps the law virtually unaltered.
Last part of cl.9 was enacted as cl. 12 (a).
If M.L.A. was not comprehended in clause 9 before its amendment and dissection, it would make no difference in the meaning of law if a portion of cl. 7 is re enacted as cl. 12 (a).
It must follow as a necessary corollary that the amendment of Cls.
(9) and (12) by Amending Act 40 of 1964 did not bring about any change in the interpretation of cl.
(9) and cl.
(12)(a) after the amendment of 1964.
In this connection, it would be advantageous to refer to G.A. Monterio vs The State of Ajmer(1) followed and approved in The State of Ajmer vs Shiji Lal(2) in both of 535 which cl.
(9) as it stood prior to its amendment came up for construction.
In the first mentioned case, the accused was a chaser in the Railway Carriage Workshop at Ajmer.
He was held to be an officer in the pay of the Government, comprehended in the last part of cl.
(9) of Sec. 21 as it then stood.
In the second case, accused was a teacher in a railway school at Phulera.
His contention had found favour with the learned Judicial Commissioner but in reaching the conclusion, he appeared to have ignored the last part of cl.(9) prior to its amendment in 1964.
In the appeal by the State, this Court held that the case of the accused would be covered by the last part of cl.
(9) because the accused fulfilled the twin conditions of either being in the service or pay of the Government and was entrusted with the performance of a public duty.
It may also be mentioned that the last three words 'by the Government ' found in cl.
(12) (a) after the amendment were not there in the last part of cl. 9 '.
The question was whether addition of words 'by the Government ' made any difference in the interpretation of last part of cl.
(9) which is substantially re enacted as cl.
(12)(a).
The Gujarat High Court in Manshanker Prabhashanker Dwivedi and Anr.
vs The State of Gujarat (1) trace the history of amendment that payment by the Government was implicit in cl.
(9) through the words 'by the Government ' were not there and were added to cl.
(12)(a) after re enacting the last part of cl.
(9) as (12)(a).
This becomes clear from the decision of this Court in the appeal against the judgment of the Gujarat High Court in the State of Gujarat vs Manshanker Prabhashnker Dwivedi.
(2) The accused in that case was charged for having committed offences under Sec.
161 IPC and Sec.
5 (2) of the 1947 Act.
The facts alleged were that the accused respondent before this Court was an examiner appointed by the University for the first year B.Sc.
examination.
He was alleged to have accepted gratification of Rs. 500 other than legal remuneration for showing favour to a candidate by giving him more marks than he deserved in the Physics practical examination.
The learned special Judge convicted him.
In the appeal, the High Court after taking note of cl. 9 and cl. 12 of Sec. 21 prior to their amendment by Act 40 of 1964 held that for cl. 9 to apply the person should be an officer 'in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty 'and that such pay or remuneration or commission must come from the Government '.
It was further held that the context of the whole of the Ninth Clause, as 536 remuneration or in respect of the performance of public duty. ' It was further held that the use of the word 'officer ' read in the context of the words immediately preceding the last part would indicate that the remuneration contemplated was remuneration by Government.
The High Court further held that the amendment made in 1964 and in particular the addition of the words 'by the Government ' in sub cl.(a) of clause Twelfth showed the legislative interpretation of the material portion of clause Ninth as it stood before the amendment under consideration, After extraction these reasons which appealed to the High Court, this Court observed than the reasoning of the High Court does not suffer fro many infirmity.
It would transpire that payment by the Government was implied without the use of the expression, by the Government in cl. 9.
The words 'by the Government ' are added in cl.
(12)(a) amended.
This apparently does not make any difference.
It would therefore necessarily follow that the amendment of cls (9) and (12) did not bring about any change in the coverage and construction of the two clauses prior to and since their amendment.
If that be so, it would follow as necessary corollary that if M.L.A. was not a public servant with in the meaning of the expression prior to Act 40 of 1964, since the Act, the law, legal effect and on average of expression public servant remains unaltered and hence, M.L.A. is not a 'public servant ' comprehended in cl.
(12)(a).
Thus looking to the history and evolution of Sec. 21 as traced, it is clear that till 1964 M.L.A. could not have been conceivably comprehended in expression 'public servant ' and the law did not undergo any change since the amendment.
On the contrary, the recommendation of the Santhanam Committee which recommended inclusion of Ministers and Parliamentary Secretaries but not of M.L.A. separately recommended a code of conduct for M.L.A for seving them from the spectre of corruption would clearly and unmistakably show that till 1964 M.L.A. was not comprehended in expression 'public servant ' in Sec.
21 IPC and the amendment by Amending Act 40 of 1964 did not bring about the slightest change in this behalf concerning the position of M.L.A. Therefor, apart from anything else, on historical evolution of Sec.
21 adopted as an external aid to construction, one can confidently say that M.L.A. was not and is not a 'public servant ' within the meaning of the expression in any of the clauses of Sec.
21 IPC.
Assuming that it would not be legally sound or correct according to well accepted canon of construction of a statute to construe Sec.
21 (12) (a) by mere historical evolution of the section and the constitutionally valid approach would be to look at the language em (12) (a) by mere historical evolution of the section and the constitutionally valid approach would be to look at the language employed in the section and upon its true construction, ascertain whether M.L.A. is a public servant within the meaning of the expression in that sub clause.
The learned special Judge held that M.L.A. is a public servant because he is either in the pay of the Government or is remunerated by fees for the performance of any public duty by the Government.
A person would be a public servant under cl.
(12) (a) if (i) he is in the service of the Government; or (ii) he is in the pay of the Government; or (iii) he is remunerated by fees or commission for the performance of any public duty by the Government.
On behalf of the complainant appellant, it was contended that in order to make a person a public servant on the ground that he is in the pay of the Government, there must exist a master servant relationship or a command obedience relationship, and if these elements are absent even if a person is in the pay of the Government, he would not be a public servant.
On behalf of the respondent, it was countered asserting that the concept of master servant relationship or command obedience relationship is comprehended in the first part of cl.
(12) (a) which provides that every person in the service of the Government would be a public servant.
It was urged that if even for being comprehended in the second part of the clause namely, a person would be a public servant if he is in the pay of the Government, their ought to be a master servant or command obedience relationship, the Legislature would be guilty of tautology and the disjunctive 'or ' would lose all significance.
The use of the expression 'or ' in the context in which it is found in cl.
(12)(a) does appear to be a disjunctive.
Read in this manner, there are three independent categories comprehended in cl.
(12) (a) and if a person falls in any one of them, he would be a public servant.
The three categories are as held by the learned special Judge; (i) a person in the service of the Government; (ii) a person in the pay of the Government; and (iii) a person remunerated by fees or commission for the performance of any public duty the Government.
One can be in the service of the Government and may be paid for the same.
One can be in the pay of the Government without being in the service of the Government in the sense of manifesting master servant or command obedience relationship.
The use of the expression 'or ' does appear to us to be a disjunctive as contended on behalf of the respondent.
Depending upon the context, 538 'or ' may be read 'and ' but the court would not do it unless it is so obliged because 'or ' does not generally mean 'and ' and 'and ' does not generally mean 'or '.
(See Green vs Premier Glyrhonwy State Company Ltd. '(1) Babu Manmohan Das & Ors.
vs Bishun Das, (2) Ramta Prasad Aggarwal etc.
Executive Engineer, Balladgarh & Anr.(3) and several other which we consider it unnecessary to enumerate here.
Once it is accepted that 'a person in the pay of the Government ' connotes a specific and independent category of public servant other than ' a person in the service of the Government ' does not inhere a master servant or command obedience relationship between the Government as the payer and the public servant as the payee, no part of the section is rendered superfluous.
Each part will receive its own construction.
We therefore consider it unnecessary to refer to those decisions, which were cited on behalf of the respondent that the correct canon of construction to be adopted in such a situation is that effect must be given, if possible, to the words used in the statute, for the Legislature is deemed not to waste its words or to say anything in vain.
What then is the true interpretation of the expression 'in the pay of the Government '.
In other words, is M.L.A. a person 'In the pay of the Government ' so as to be public servant within the meaning of the expression in Sec.
21 (12) (a).
The expressions that call for construction are (i) 'in the pay of ' and (ii) 'Government '.
article 195 of the Constitution provides that ' Members of the Legislative Assembly and the Legislative Council of a State shall be entitled to receive such salaries and allowances as may from time to time be determined by the Legislature of the State by law and, until provision in that respect is so made, salaries and allowances at such rates and upon such conditions as were immediately before the commencement of the Constitution applicable in the case of members of the Legislative Assembly of the corresponding Province. ' Armed with this power, the Maharashtra State Legislative Assembly has enacted 'The Maharashtra Legislature Members ' Salaries and Allowances Act, 1956 (Bombay Act XLIX of 1956) '.
Sec. 3 (1) provides that 'there shall be paid to each member during the whole of his term of office a salary at the 539 rate of Rs. 450/ per month and sub sec.
(2) provides that 'there shall be paid to each Member during the whole of his term of office per month a sum of Rs. 400/ as a consolidated allowance for all matters not specifically provided or by under the provision of the Act '.
Sec. 4 provides for daily allowances to be paid to Members.
5 provides for travelling allowance to be paid to Members.
5AC provides for a free travel by railway and steamer by a Member subject to the conditions therein prescribed.
Members are also eligible for some allowances as specified in various sections of the Act.
The Maharashtra Legislature Members Pensions Act, 1976 makes provision for payment of pension with effect from April 1, 1981 at the rate of Rs. 300 per month to every person who has served as a Member of the State Legislature for a term of 5 years subject to other conditions prescribed in the section.
There is a similar Act which makes provisions for salaries and allowances of the Ministers of Maharashtra State.
Undoubtedly, M.L.A. receives a salary and allowances in his capacity as M.L.A.
Does it make him a person 'in the pay of the Government '? Our attention has been drawn to the meaning of the word 'pay ' in different dictionaries and to the decision in M. Karunanidhi vs Union of India(1) where after ascertaining the meaning of the word 'pay ' given in different dictionaries, the Court observed that the expression 'in the pay of ' does not signify master servant relationship.
The word 'pay ' standing by itself in open to various shades of meaning and when the word is used in a phrase 'in the pay of '.
it is more likely to have a different connotation than when standing by itself.
Before referring to the various shades of meaning set out in the dictionaries, it would be advisable to caution ourselves against an unrestricted reference to dictionaries.
Standard dictionaries as a rule give in respect of each woad as meanings in which the word has either been used or it is likely to be used in different contexts and connections.
While it may be permissible to refer to dictionaries to find out the meaning in which a word is capable of being used or understood in common parlance, the well known canon of construction should not even for a minute be overlooked that the meaning of the words and expressions used in a statute ordinarily take their colour from the context in which they appear.
In Dy.
Chief Controller of Imports & Exports, New Delhi vs R.T. Kosalam & Ors.(2) this Court observed as under 540 "It is not always a safe way to construe a statute or a contract by dividing it by a process of etymological dissection and after separating words from their context to give each word some particular definition given by lexicographers and then to reconstruct the instruments upon the basis of those definitions.
What particular meaning should be attached to words and phrases in a given instrument is usually to be gathered from the context, the nature of the subject matter, the purpose of the intention of the author and the effect of giving to them one or the other permissible me aning on the object to be achieved.
Words are after all used merely as a vehicle to convey the idea of the speaker or the writer and the words have naturally, therefore, to be so construed as to fit in with the idea which emerges on a consideration of the entire context.
Each word is but a symbol which may stand for one or a number of objects.
The context, in which a word conveying different shades of meanings is used, is of importance in determining the precise sense which fits in with the context as intended to be conveyed by the author".
In State Bank of India vs N. Sundara Money, Krishna Iyer, J. speaking for the Court observed in his inimitable style that 'dictionaries are not dictators of statutory construction where the benignant mood of a law, may furnish a different denotation '.
With this caution, we may briefly refer to the meaning of the expression 'pay ' and 'in the pay of ' given by different dictionaries.
As far as the expression 'pay ' is concerned, a Constitution Bench of this Court in Karunanidhi 's case referred to various dictionaries and concluded that the word ordinarily means 'salary, compensation, wages or any amount of money paid to the person who is described as in the pay of the payer '.
Serious exception was taken on behalf of the appellant that no canon of construction would permit picking out shades of meaning of word 'pay ' and then read the phrase 'in the pay of ' as synonymous with the word 'pay '.
On the other hand, it was asserted that the point is concluded by the observation of the Constitution Bench that 'so far as the second limb of the clause, 'in the pay of the Government ' is concerned, that appears to be of a much wider amplitude so as to include within its ambit even a public servant who 541 pay of the other person and yet there may not be a master servant relationship between them.
The court did not ascertain the meaning ascribed to phrase 'in the pay of ' in different dictionaries.
The phrase 'in the pay of ' would ordinarily import the element of employment or paid employment or employed and paid by the employer.
In Concise Oxford Dictionary, 7th edition at page 753, the meaning assigned to the expression 'in the pay of ' is 'in the employment of '.
In New Collins Concise English Dictionary at page 831, 'in the pay of 'carries one meaning as 'one in paid employment '.
In Websters New World Dictionary, the phrase 'in the pay of ' carries the meaning 'employed and paid by '.
Relying on all these shades of meaning, it was urged that the phrase 'in the pay of ' does necessarily import the element of master servant relationship and its absence cannot be countenanced.
It was submitted even if A is paid by B a sum styled as pay unless B is servant of A, it cannot be said that B is in the pay of A.
We see force in this submission.
However, it is not implicit in the expression 'in the pay of ' that there ought to exist a master servant relationship between payer and payer.
One can be in the pay of another without being in employment or service of the other.
We are not inclined to accept the submission that 'in the pay of ' must in the context, imply master servant relationship for the obvious reason that the court has to construe the phrase 'in the pay of ' in its setting where it is preceded by the expression 'in the service of the Government ' and succeeded by the expression 'remunerated by fees or commission for the performance of any public duty by the Government '.
The setting and the context are very relevant for ascertaining the true meaning of the expression.
In order to avoid the charge of tautology, the phrase 'in the pay of the Government ' in cl.
(12) (a) may comprehend a situation that the person may be in the pay of the Government without being in the employment of the Government or without there being a master servant relationship between the person receiving the pay and the Government as payer.
It was however, contended that the question whether a person 'in the pay of the Government ' is ipso facto a public servant is no more res integra and concluded by the decision of the Constitution Bench in Karunanidhi 's case? In that case before adverting to the dictionary meaning of the expression 'pay ', the Constitution Bench speaking through Fazal Ali, J. observed as under at page 282: "We are of the opinion that so far as the second limb 'in the pay of the Governments ' is concerned, that appears to be of 542 "We are of the opinion that so far as the second limb 'in the pay of the Government ' is concerned, that appears to be of a much wider amplitude so as to include within its ambit even public servant who may not be a regular employee receiving salary from his master".
The Court further observed that "the expression 'in the pay of ' connote that a person is getting salary, compensation, wages or any amount of money.
This by itself however, does not lead to the inference that a relationship of master and servant must necessarily exist in all cases where a person is paid salary".
We are also of the opinion that the phrase 'in the pay of the Government ' does not import of necessity a master servant relationship.
It is perfectly possible to say that a person can be in the pay of the Government if he is paid in consideration of discharging an assignment entrusted to him by the Government without there necessarily being a master servant relationship between them.
It is not unusual in common parlance to speak of a person being in the pay of another if he is paid for acting at the behest or according to the desire of the other without the other being his master and he the servant, that is to say without the control over the manner of doing the work which a master servant relationship implies.
It is such a category in addition to the one 'in the service of the Government ' that is sought to be comprehended in cl.
(12)(a).
In respect of the extracted observation of the Constitution Bench, there is no attempt to distinguish the decision in Karunanidhi 's case and therefore, it is not necessity to consider the decisions cited in support of the submission that a judgment of the Supreme Court especially of the Constitution Bench cannot be distinguished lightly and is binding on us and unless questions of fundamental importance to national life are involved, need not be by us.
We must however point out that the ratio of the decision in Karunanidhi 's case is not what is extracted hereinbefore but the ratio is to be found at page 290 where the Constitution Bench held the Chief Minister to be a public servant as comprehended in cl.
(12)(s) of Sec. 21 on the finding: "1.
That a Minister is appointed or dismissed by the Governor and is, therefore, subordinate to him whatever be the nature and status of his constitutional functions.
That a Chief Minister or a Minister gets salary for the public work done or the public duty performed by him.
That the said salary is paid to the Chief Minister or the Minister from the Government funds".
543 It would appear at glance that no argument was advanced and none has been examined by the Constitution Bench bearing on the interpretation of the expression 'Government ' in cl.
(12)(a).
It was assumed that salary and allowances paid to the Chief Minister are by Government.
What does expression 'Government ' in the clause connote was not even examined.
And it is on the aforementioned finding that the Chief Minister was held to be a public servant but that does not conclude the matter.
This is not the end of the matter.
The question may be posed thus: 'Even if M.L.A. receives salary and allowances under the relevant statute, is he in the pay of the Government '? In other words, what does the expression 'Government ' connote? There is a short and a long answer to the problem.
17 IPC provides that 'the word Government ' denotes the Central Government or the Government of a State '.
7 IPC provides that 'ever expression which is explained in any part of the Code, is used in every part of the Code in conformity with the explanation '.
Let it be noted that unlike the modern statute Sec. 7 does not provide 'unless the context otherwise indicate ' a phrase that prefaces the dictionary clauses of a modern statute.
Therefore, the expression 'Government ' in Sec. 21 (12)(a) must either mean the Central Government or the Government of a State.
Substituting the explanation, the relevant portion of Sec. 21 (12) (a) would read thus: 'Every person in the pay of the Central Government or the Government of a State or remunerated by fees or commission for the performance of any public duty by the Central Government or the Government of a State '.
At any rate, the Central Government is out of consideration.
Therefore, the question boils down to this: whether M.L.A. is in the pay of the Government of a State or is remunerated by fees for the performance of any public duty by the Government of a State ? In the debate between the Presidential form and Parliamentary form of democracy, during the early days of the Constituent Assembly, the balance tilted in favour of Parliamentary form of Government.
Mr. K. M. Munshi, one of the members of the Drafting Committee spoke in this connection as under: "We must not forget a very important fact that, during the last hundred years, Indian public life has largely drawn upon the traditions of British Constitutional Law.
Most of us have 544 looked up to the British model as the best.
For the last thirty or forty years, some hind of responsibility has been introduced in the governance of the country.
Our constitutional traditions have become parliamentary and we have now all our Provinces functioning more or less on the British model.
" In Rai Sahib Ram Jawaya Kapur & Ors.
vs The State of Punjab a Constitution Bench of this Court observed as under: "Our Constitution, though federal in its structure, is modelled on the British Parliamentary system where the executive is deemed to have the primary responsibility for the formulation of governmental policy and its transmission into law though the condition precedent to the exercise of this responsibility is its retaining the confidence of the legislative branch of the State".
It was further observed that "in the Indian Constitution executive as in England and the Council of Ministers we have the same system of parliamentary consisting, as it does, of the members of the legislature is, like, the British Cabinet 'a hyphen which joins, a buckle which fastens the legislative part of the State to the executive part".
In Shamsher Singh & Anr.
vs State of Punjab, a seven Judges Bench unanimously overruled the decision in Sardari Lal vs Union of India and Ors.
and held that 'our Constitution embodies generally the Parliamentary or Cabinet system of Government of the British Model both for the Union and the States '.
This view has not been departed from.
Now in parliamentary form of Government modelled on British model, the executive, legislature and judicial powers are in the main entrusted to separate instruments of the State.
It is not for a moment suggested that there is strict or water fight division of powers, but the functions are certainly divided.
In Halsbury 's Laws of England, Fourth Edition, Vol. 8 para 813, separation of executive, legislative and judicial powers in the Westminster Model have been adverted to.
It reads as under: "It is clear that the powers of government are divided.
The executive, legislative and judicial powers are in the main 545 entrusted to separate instruments of the State; and local government is further administered separately.
Thus the original concentration of power in the Sovereign no longer exists; in the eighteenth century this division of the powers of government seemed to be such an essential characteristic of the English Constitution that it was made the basis for the doctrine of separation of powers.
This doctrine, which is to the effect that in a nation which has political liberty as the direct object of its constitution on one person or body of persons ought to be allowed to control the legislative, executive and judicial powers, or any two of them, has never in its strict form corresponded with the facts of English government mainly because, although the functions and powers of government are largely separated, the membership of the separate instruments of state overlap.
Only in one aspect of the constitution can it be said that the doctrine is strictly adhered to, namely, that by tradition, convention and law the judiciary is insulated from political matters".
Parliament that is the Legislature exercises control over the executive branch of the Government because it is a postulate of Parliamentary form of Government that Executive is responsible to the Legislature.
In other words the Government of the country is controlled by a ministry and Cabinet chosen by the electorate which while remaining responsible to the electorate is responsible directly to the Legislature and such effective means of exercising control is that any expense from.
Consolidated Fund of the State must have been earlier placed before the Legislature.
In Halsbury 's Laws of England, Fourth Edition, Vol.
34 para 1005, it is stated that Parliament exercises control over the actions of the executive government and the administration of the laws it has enacted in various ways, one such being by the doctrine of the constitution by which supply is granted annually by the House of Commons and must receive legislative sanction each year and the supply granted must be appropriated to the particular purposes for which it has been granted.
It may also be noticed that the staff of the House of Commons is appointed by the House of Commons Commission comprising the Speaker, the Leader of the House of the Commons, a member of the House nominated by the Leader of the opposition and three other members appointed by the House.
This Commission is charged with a duty to determine the number and remuneration and other terms and conditions of service.
This Commission is also responsible for laying before 546 the House an estimate of the expenses of the House departments and of any other expenses incurred for the service of the House of Commons.
(ibid para 1155).
Let us turn to relevant provisions of the Constitution.
Part VI of the Constitution provides that 'the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution. ' Chapter III in Part VI provides for State Legislature.
Every State is to have a Legislature which shall consist of the Governor and it can be unicameral or bicameral as the case may be Where the State has a unicameral legislature, the assembly is called Legislative Assembly.
article 170 provides for members of the Legislative Assembly being chosen by direct election from territorial constituencies in the State.
articles 178 to 186 provide for officers of the State Legislatures such as the Speaker and Deputy Speaker of the Legislative Assembly and Chairman and Deputy Chairman of Legislative Council as the case may be, their powers, functions and their either vacating the office or removal from the office.
article 187 (1) provides that 'the House or each House of the Legislature of a State shall have a separate secretarial staff '.
Marginal note of the article is 'Secretariat of State Legislature '.
Sub art.(2) of article 187 provides that 'the Legislature of a State may by law regulate the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the House or Houses of the Legislature of the State '.
article 266 obliges the State to set up its Consolidated Fund.
article 203 prescribes the procedure with respect to estimates.
The estimates as relate to expenditure charged upon the Consolidated Fund of a State shall not be submitted to the vote of the Legislative Assembly but the discussion in the Legislature is permissible thereon.
However, so much of the said.
estimates as relate to other expenditure shall be submitted in the form of demands for grants to the Legislative Assembly, and the Legislative Assembly shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.
In other words, Legislative Assembly has complete power of purse.
article 204 casts an obligation to introduce a Bill to provide for appropriation out of the Consolidated Fund of the State of all moneys required to meet (a) the grants so made by the Assembly; and (b) the expenditure charged on the Consolidated Fund of the State but not exceeding in any case the amount shown in the statement previously laid before the House or Houses.
A conspectus of these provisions clearly indicate that the Legislature enjoys the power of 547 purse.
Even with regard to expenses charged on the Consolidated Fund of the State to be set up under article 266, an appropriation bill has to be moved and adopted, undoubtedly, the same would be non votable.
And it is not disputed that salaries and allowances payable to M.L.A. are not charged on the Consolidated Fund of the State.
This probably is an emulation of the situation in England where salary and allowances of the members of the Parliament are not charged on the Consolidated Fund.
As a necessary corollary, it would be a votable item.
There thus is a broad division of functions such as executive, legislative and judicial in our Constitution.
The Legislature lays down the broad policy and has the power of purse.
The executive executes the policy and spends from the Consolidated Fund of the State what Legislature has sanctioned.
The Legislative Assembly enacted the Act enabling to pay to its members salary and allowances.
And the members vote the grant and pay themselves.
In this background even if there is an officer to disburse this payment or that a pay bill has to be drawn up are not such factors being decisive of the matter.
That is merely a mode of payment, but the M.L.As.
by a vote retained the fund earmarked for purposes of disbursal for pay and allowances payable to them under the relevant statute.
Therefore, even though M.L.A. receives pay and allowances, he is not in the pay of the State Government because Legislature of a State cannot be comprehended in the expression 'State Government '.
This becomes further clear from the provision contained in article 12 of the Constitution which provides that 'for purposes of Part III, 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 '.
The expression 'Government and Legislature ', two separate entities, are sought to be included in the expression 'State ' which would mean that otherwise they are distinct and separate entities.
This conclusion is further reinforced by the fact that the executive sets up its own secretariat, while article 187 provides for a secretarial staff of the Legislature under the control of the Speaker, whose terms and conditions of the service will be determined by the Legislature and not by the executive.
When all these aspects are pieced together, the expression 'Government ' in Sec.
21 (12)(a) clearly denotes the executive and not the Legislature.
M.L.A. is certainly not in the pay of the executive.
Therefore, 548 the conclusion is inescapable that even though M.L.A. receives pay and allowances, he can not be said to be in the pay of the Government i.e. the executive.
This conclusion would govern also the third part of cl. (12)(a) i.e. 'remunerated by fees for performance of any public duty by the Government '.
In other words, M.L.A. is not remunerated by fees paid by the Government i.e. the executive.
It was also contended that M.L.A. is not performing any public duty.
It is not necessary to examine this aspect because it would be rather difficult to accept an undly vide submission that M.L.A. is not performing any public duty.
However, it is unquestionable that he is not performing any public duty either directed by the Government or for the Government.
He no doubt performs public duties cast on him by the Constitutional and his electorate.
He thus discharges constitutional functions for which he is remunerated by fees under the Constitution and not by the Executive.
It was further contended that on the analogy of the decision in His Majesty the King vs Boston & Ors.,( ' M.L.A. would be a public servant.
In Boston 's case, the allegation was that Harrison and Mitchel more paid to defendant Boston in his official capacity as a Member of the Legislative Assembly of New South Wales and the latter corruptly accepted in that capacity as inducement to him in violation of his official duty to use his position as such member; (a) to secure the acquisition by the Government of the State of New South Wales of certain estates and the payment for such estates out of the public funds of the State; and (b) to put pressure upon the Minister for Lands and other officers of the Crown to acquire and pay for such estates.
The contention was that the agreement between the defendants might have been to pay money to Boston to induce him to use his position exclusively outside Parliament, and not by vote or speech in the Assembly, and that the transaction in connection with which he was to use his position to put pressure on the Minister might consistently with the information, be one which would never come before Parliament and which, in his opinion and in the opinion of those who paid him, was highly beneficial to the State; that such an agreement would not amount to a criminal offence, and that consequently the information is bad.
Negativing this contention, it was held that it is settled law that an agreement or combination to do an act which tends to produce a public mischief amounts to a criminal conspiracy.
It was further 549 held by the majority that the payment of money to, and the receipt of money by, a member of Parliament to induce him to use his official position, whether inside or outside Parliament, for the purpose of influencing or putting pressure on a Minister or other officer of the Crown to enter into or carry out a transaction involving payment of money out of the public funds, are acts tending to the public mischief, and an agreement or combination to do such acts amounts to a criminal offence.
The question has been examined in the light of the settled law that an agreement or combination to do an act which tends to produce a public mischief amounts to a criminal conspiracy.
Isaacs and Rich, JJ posited the question: how far a member of the Legislative Assembly of New South.
Wales can, without incurring any real personal responsibility that is other than political rejection, make his public position the subject of profitable traffic by engaging in departmental intervention on behalf of individuals in return for private pecuniary consideration to himself ? The concurring judgment examined the general position of a member of Parliament and then proceeded to examine the special provisions of the relevant clause.
On this point it was concluded that the fundamental obligation, which is the key to this case, is the duty to serve and, in serving, to act with fidelity and with a simplemindedness for the welfare of the community.
It was further observed that a member of Parliament is, therefore, in the highest sense, a servant of the State; his duties are those appertaining to the position he fills, a position of no transient or temporary existence, a position forming a recognized place in the constitutional machinery of government.
It was also held that he holds an office.
In the third concurring judgment of Higgins, J, while conceding that the member of Parliament has to discharge a duty in which the public is interested, but after examining provisions of the public Service Acts, it Was held that he is not public officer within the meaning of that Act because he is not required to obey the commands of the King or of the departmental heads.
It was however concluded that as a member of Parliament, he holds a fiduciary relation towards the public, and that is enough.
The minority judgment of Gavan Duffy and Starke, JJ.
clearly proceeds on their holding that a member of Legislative Assembly of New South Wales is not the holder of a public office within the meaning of the common law and even if he could be regarded as the holder of such an office, the acts charged as intended to be done by the defendant Boston, however improper they may be, would not be malversation in his office or acts done in his office or acts done in his office unless they were done in the discharge of his legislative functions.
As we are concerned with a legislative enactment Sec.
21(12)(a), this decision based on the 550 concept of common law and some of the statutes as prevailing in Australia would not be very helpful.
It may be mentioned while comparing M.L.A. and M.P. in India with M.P. in U.K. that the M.P. in U.K. is neither covered by the Prevention of Corruption Act, 1906 nor the Prevention of Corruption Act, 1916.
It may also be mentioned that The Public Bodies Corrupt Practices Act, 1889 does not cover M.P. in U.K. 'The acceptance by any member of either House of Parliament of a bribe to influence him in his conduct as such member or of any fees, compensation or reward in connection with the promotion of, or opposition to any bill, resolution, matter or thing submitted or intended to be submitted to the House or any committee thereof is a breach of privilege. '( ') Attempts to bring M. P. in U.K. either under the provisions of the Prevention of Corruption Act or the public Bodies Corrupt Practices Act have not met with success.
Even such modicum of decency in public life as disclosing relevant, pecuniary interest or benefit of whatever nature whether direct or indirect that he may have had or may be expecting to have while participating in a debate or proceeding in House by M.P. in U.K. was stoutly resisted in 1974.
But Paulson Affair stirred many and Royal Commission on Corruption in Public Life headed by Lord Justice Salmon was set up.
The Commission inter alia recommended in 1976 that M.Ps.
should be brought within the scope of the corruption laws regarding their actions inside as well outside Parliament.
No follow up legislative action appears to have been taken since then.
If M.L.A. is not in the pay of the Government in the sense of Executive government or is not remunerated by fees for performance of any public duty by the Executive Government, certainly he would not be comprehended in the expression 'public servant ' within the meaning of the expression in cl.
(12) (a).
He is thus not a public servant within the meaning of the expression in cl.(12) (a).
This conclusion reinforces the earlier conclusion reached by us after examining the historical evolution of cl.
(12) (a).
Mr. Singhvi, however, strenuously contended that M.L.A. would be comprehended in cl.
(3) or cl.
(7) of Sec.
21 IPC to be a public servant He went so far as to suggest that, his emphasis would have been more on cl.
(3) comparatively and not on cl.
(12) (a).
Therefore, it may now.
be examined whether M.L.A. is comprehended either in cl.
(3) or cl.
(7) of Sec.
21 IPC.
551 Re (e): Cl.(3) of Sec.
21, as it at present stands, takes within its purview every Judge including any person empowered by law to discharge whether by himself or as a member of any body of persons, any adjudicatory functions.
Prior to its amendment by Act 40 of 1964 the cl.
(3) read simply 'Every judge '.
(3) was amended to read, as it at present stands, pursuant to the recommendations of the Santhanam Committee.
In Para 7.6 of the Report, it was recommended that 'a ' further category should be added to include all persons discharging adjudicatory functions under any Union of State Law for the time being in force '.
With this end in view, the Committee recommended that cl.
(3) should read: 'Every Judge including any person entrusted with adjudicatory functions in the course of enforcement of any law for the time being in force '.
At the Bill stage, the clause was recast so as to give full effect to the recommendation of the Committee and this equally becomes clear from the Statement of objects and Reasons accompanying Bill No. 67 of 1964 which when adopted became Act 40 of 1964.
In para 2 (a) of the Statement of objects and Reasons it is stated that 'the definition of public servant in Sec.
21 of the Indian Penal Code is proposed to be amended so as to bring within its purview certain additional categories of persons such as persons performing adjudicatory functions under any law, liquidators, receivers, commissioners etc. ' If we recall the earlier discussion about the history of evolution of cl, (12) (a) and the entire range of recommendation of the Santhanem Committee, it can be confidently said the M.L.A. was never intended to be brought within the conspectus of clauses of Sec. 21 so as to clothe him with the status of a public servant.
Independent of this historical evolution and focussing attention on the language of cl.
(3) it is difficult to hold that M.L.A. as a member of a body of persons such as the Legislative Assembly performs any adjudicatory functions empowered by law to discharge that function.
In fact, Santhanam Committee contemplated covering such officers like liquidators, receivers, commissioners etc.
each of whom is empowered by different statutes to discharge such adjudicatory functions as prescribed by the concerned law.
It was however, contended that expression 'Judge ' has been defined in Sec.
19 IPC to denote '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, if confirmed by some other authority, would be definitive, 552 or who is one of a body of persons which body of persons is empowered by law to give such a judgment and in cl.
(3) this definition cannot be substituted because it is an inclusive definition which means it is extensive in character.
Accepting the position that inclusive definition extends the specific meaning of the expression which it would not otherwise bear, it is necessary to determine whether this extension of the expression 'Judge ' is so wide as to cover within its umbrella M.L.A. on the ground that while voting upon a motion for breach of privilege or for contempt of the House, he is discharging adjudicatory functions and that he is so empowered by law to do so.
When with the permission of the Speaker, a motion for breach of privilege is moved in the Legislative Assembly or a motion for taking action for contempt of the House is moved, undoubtedly, every member of the House has a right to participate and after the motion is debated upon, the majority vote is recorded as a decision of the House.
Does that make M.L.A. a person as a member of a body persons who discharges adjudicatory functions? The definition of expression 'Judge ' comprehends adjudication in any legal proceeding, civil or criminal and in which the person as a Judge is empowered to give a definitive judgment.
It is difficult to accept the submission that the proceedings before the House either upon a motion for breach of privilege or for contempt is a civil or criminal proceeding, as these terms ordinarily connote.
A motion for breach of privilege or for contempt of the House is brought before the House when the mover feels that the powers, privileges and immunities of the House have been violated.
The House has the power to punish for contempt ' and the penal jurisdiction of the House is not confined to their own Members nor to offences committed in their presence, but extends to all contempts of the Houses, whether committed by Members or by persons who are not Members, irrespective of whether the offence is committed within the House or beyond its walls '.
(See Earskine May Parliamentary Practice 20 ed.
p. 122).
This power of commitment is truly described as a key stone of Parliamentary Practice.
It was pointed out that 'the origin of the power which is judicial in its nature is to be found naturally in the medieval conception of Parliament as primarily a court of justice the High Court of Parliament ' (ibid page 124).
It is however, difficult to say that a State Legislature functioning under our Constitution can be described as High Court of Legislative Assembly.
In blindly tailoring our Constitutional Law to the Parliamentary Practice in U.K., one is apt to overlook the obvious fact that House of Lords always possessed the judicial power as any Court of Westminster Hall.
(ibid p. 124).
In this connection in Special 553 Ref.
No. 1 of 1964(1) it was clearly stated that the result of the provision contained in the latter part of article 194(3) was not intended to be confer on the State Legislatures in India the status of a superior Court of Record.
It was further observed that the House and indeed all Legislative Assemblies in India never discharged any judicial functions and their historical and constitutional back ground does not support the claim that they can be regarded as Court of Record in any sense Undoubtedly, the Legislative Assembly in view of the provisions contained in article 194(3) has the power to inflict punishment for breach of privilege and for contempt of the House And when a motion is moved complaining breach of privilege or for taking action for the contempt of the House, the members would participate in the debate analyse evidence and absence thereof in support of the motion and against the motion and ultimately decide as a body by a democratic process whether the motion is affirmed or rejected.
The question is whether this process can be styled as an adjudicatory process discharged by M.L.A. as empowered by law.
If the expression 'law ' were to include the Constitution, certainly this power is enjoyed by M.L.A. but expression 'law ' ordinarily does not include the Constitution.
Art 13(1) of the Constitution provides that all laws in force in the territory of India immediately before the commencement of the Constitution in so far as they are consistent with the provision of Part III shall to the extent of inconsistency be void.
Sub article
(2) imposes a restriction on the legislative power of the State to make any law which takes away or abridges the rights conferred by Part III and any law made in contravention of sub Art (2) shall to the extents of the contravention, be void 'Expression 'law ' as used here would be law other than Constitution.
in other words law enacted in exercise of the legislative power.
The majority view in I.C. Golaknath vs State of Punjab(1) that amendment of the Constitution is part of the legislative process does not survive as valid any longer because it was admitted that Constitution (Twenty Fourth) Amendment Act, 1971 in so far as it transfers the power to amend the Constitution from the residuary entry or Article 248 of the Constitution to Article 368 is valid.
After so saying the trend of discussion in various judgments in H.H. Keshvnand Bharathi Sripadanaga galavaru vs State of Kerala and another(2) shows that when the power amend the Constitution is exercise by Parliament it exercises Constituent power and this is independent of the ordinary 554 legislative process.
And this approach is borne out by a reference to the definition of expression Indian law in the General Clauses Act which does not include the Constitution.
A passing reference may also be made to the form of oath prescribed for a Judge of the Supreme Court and the Judge of the High Court in the Third Schedule which separately refer to the Constitution and the laws.
Participation in a debate on a motion of breach of privilege or for taking action for contempt of the House and voting thereon is a constitutional function discharged by the members and therefore, it cannot be said that such adjudicatory function if it can be so styled, constitutes adjudicatory function undertaken by M.L.A. as empowered by law.
Viewed from this angle it is not necessary to examine the contention that adjudication and a resultant judgment presupposes a lis between persons other than adjudicator, and M.L.A. has no lis before him as a body of persons when passing upon the motion for contempt or breach of privilege.
Accordingly the submission that the accused would be a public servant within the meaning of the expression in cl.
(3) of Sec.
21 IPC must be rejected.
The last limb of the submission was that at any rate, the accused would be a public servant within the meaning of cl.
(7) of Sec.
21 IPC, which takes within its ambit 'every person who holds any office by virtue of which he is empowered to place or keep any person in confinement '.
This limb of the submission was not placed for consideration of the learned trial Judge.
And it has merely to be stated to be rejected.
We, however, did not want to reject it on this narrow ground.
Expanding this contention, it was urged that M.L.A. is empowered to adjudge a person guilty of breach of privilege or contempt of the House and when prison sentence is imposed to keep him in confinement.
Assuming for the purpose of this argument that M.L.A. holds an office, is he a person empowered to place or keep any person in confinement.
Power to impose punishment is independent of the power to keep a person in confinement.
First is the power to impose a prison sentence.
but second is the power flowing from the execution of the sentence to place or keep any person in confinement meaning thereby, there is an execution of warrant Persons whose duty it is to deprive a person directed to be imprisoned to deprive him of his liberty to remain free and to keep or place him in confinement in due execution of the warrant would be comprehended in cl.
It is difficult to accept the submission that M.L.As.
as a body can keep or place any person in confinement.
Reference was, however, made to some of the passages 555 in Parliamentary Practice by Earskine May, 20th Edn.
as also to Practice and Procedure of Parliament, Third Edition by Kaul and Shakdher, p. 208.
The authors observed at page 208 that 'each House of the Legislature of State, has the power to secure the attendance of persons on matters of privilege and to punish for break of privilege or contempt of the House and commit the offender to custody or prison '.
At page 212, it is observed that 'each House has the power to enforce its orders including the power for its officers to break open the doors of a house for that purpose, when necessary, and execute its warrants in connection with contempt proceedings '.
We fail to see how these observations assist us in understanding the expression 'empowered to place or keep any person in confinement. ' Broadly stated, the expression comprehends Police and Prison Authorities or those under an obligation by law or by virtue of office to take into custody and keep in confinement any person.
In M P. Dwivedi 's case, this Court observed that Seventh and Eighth clauses of Sec.
21 deal with persons who perform mainly policing duties.
To say that M.L.A. by virtue of his office is performing policing or prison officers ' duties would be apart form doing violence to language lowering him in status.
Additionally, cl.
(7) does not speak of any adjudicatory function.
It appears to comprehend situations where as preliminary to or an end product of an adjudicatory function in a criminal case, which may lead to imposition of a prison sentence, and a person in exercise of the duty to be discharged by him by virtue of his office places or keeps any person in confinement.
The decisions in Homi D. Mistry vs Shree Nafisul Hussan & Ors.(1).
Harendra Nath Barua vs Dev Kanta Barua & Ors (2) and Edward Kelley vs William Carson, John Kent & Ors.(2) hardly shed any light on this aspect.
Therefore, the submission that M.L.A. would be comprehended in cl.
(7) of Sec.
21 so as to be a public servant must be rejected.
Having meticulously examined the submission from diverse angles as presented to us, it appears that M.L.A. is not a public servant within the meaning of the expression in cl.
(12)(a), cl.
(3) and cl.(7) of Sec.
21 IPC.
Re: (f) & (g): The learned Judge after recording a finding that M.L.A. is a public servant within the comprehension of cl.
(12)(a) and further recording the finding that as on the date on which the Court 556 was invited to take cognizance, the accused was thus a public servant proceeded to examine whether sanction under Sec.
6 of the 1947 Act is a pre requisite to taking cognizance of offences enumerated in Sec.
6 alleged to have been committed by him.
He reached the conclusion that a sanction is necessary before cognizance can be taken.
As a corollary he proceeded to investigate and identify, which is the sanctioning authority who would be able to give a valid sanction as required by Sec; 6 for the prosecution of the accused in his capacity as M.L.A.? We have expressed our conclusion that where offences as set out in Sec.
6 are alleged to have been committed by a public servant, sanction of only that authority would be necessary who would be entitled to remove him from that office which is alleged to have been misused or abused for corrupt motives.
If the accused has ceased to hold that office by the date, the court is called upon to take cognizance of the offences alleged to have been committed by such public servant, no sanction under Sec.
6 would be necessary despite the fact that he may be holding any other office on the relevant date which may make him a public servant as understood in Sec 21, if there is no allegation that office has been abused or misused for corrupt motives.
The allegations in the complaint are all to the effect that the accused misused or abused his office as Chief Minister for corrupt motives.
By the time the Court was called upon to take cognizance of those offences, the accused had ceased to hold the office of Chief Minister.
The sanction to prosecute him was granted by the Governor of Maharashtra but this aspect we consider irrelevant for concluding that no sanction was necessary to prosecute him under Sec. 6 on the date on which the court took cognizance of the offences alleged to have been committed by the accused.
Assuming that as M.L.A. that aspect becomes immaterial.
Further Sec.
6 postulates existence of a valid sanction for prosecution of a public servant for offences punishable under Secs.
161, 164, 165 IPC and Sec.
5 of the 1947 Act, if they are alleged to have been committed by a public servant.
In view of our further finding that M.L.A. is not a public servant within the meaning of the expression in Sec.
21 IPC no sanction is necessary to prosecute him for the offences alleged to have been committed by him.
In view of the conclusions reached by us, we consider it unnecessary to ascertain which would be the authority competent to sanction prosecution of M.L.A. as envisaged by Sec.
6 thought it must be frankly confessed that considerable time was spent in the deliberations 557 in search of competent sanctioning authority.
The vital question has become one of academic interest.
We propose to adhere to the accumulated wisdom which has ripened into a settled practice of this Court not to decide academic questions.
The question is left open.
Before we conclude let it be clarified that more often in the course of this judgment, we have used the words `office of M.L.A. ' It was debated whether the M.L.A. holds seat or office? Our use of the expression `office ' should not be construed to mean that we have accepted that the position of M.L.A. can be aptly described.
as one holding public office or for that matter.
To sum up, the learned special Judge was clearly in error in holding that M.L.A. is a public servant within the meaning of the expression in Sec.
12(a) and further erred in holding that a sanction of the Legislative Assembly of Maharashtra or majority of the members was a condition precedent to taking cognizance of offences committed by the accused.
For the reasons herein stated both the conclusions are wholly unsustainable and must be quashed and set aside.
This appeal accordingly succeeds and is allowed.
The order and decision of the learned Special Judge Shri R.B. Sule dated.
July 25, 1983 discharging the accused in Special Case No. 24 of 1982 and Special Case No.3/83 is hereby set aside and the trial shall proceed further from the stage where the accused was discharged.
The accused was the Chief Minister of a premier State the State of Maharashtra.
By a prosecution launched as early as on September 11, 1981, his character and integrity came under a cloud.
Nearly 2/1/2 years have rolled by and the case has not moved an inch further.
An expeditious trial is primarily in the interest of the accused and a mandate of article 21.
Expeditious disposal of a criminal case is in the interest of both, the prosecution and the accused.
There, fore, Special Case No. 24 of 1982 and Special Case.
No 3/83 pending in the Court of Special Judge, Greater Bombay Shri R.B. Sule are withdrawn and transferred to the High Court of Bombay with a request to the to the learned Chief Justice to assign these two cases to a sitting Judge of the High Court.
On being so assigned, the learned Judge may proceed to expeditiously dispose of the cases Preferably by holding the trial from day to day.
|
The appellant, R.S. Nayak, filed a complaint against the respondent, A.R. Antualy, a public servant being the Chief Minister of Maharashtra State under sections 161, 165 I.P.C. and section 5 of the Prevention of Corruption Act, 1947 (1947 Act) alleging abuse of office of Chief Minister.
The complaint was rejected on account of absence of necessary sanction of the Governor of Maharashtra State under section 6 of the 1947 Act to prosecute the respondent.
After the Governor issued necessary sanction, the appellant filed a fresh complaint in the Court of Special Judge against the respondent on the same grounds.
However, on the date of filing fresh complaint the respondent had already resigned as Chief Minister.
The respondent contended that the Special Judge had no jurisdiction to try him under section 7 of the Criminal Law Amendment Act, 1952 and that no cognizance could be taken on private complaint.
The Special Judge rejected both the contentions.
In the meantime the State Government issued a notification under section 7(2) of the Criminal Law Amendment Act, 1752 under which the case was transferred to another Special Judge.
In a criminal revision application filed by the respondent against the order of earlier 496 Special Judge, a Division Bench of the High Court held that the Social Judge had jurisdiction to try the respondent and that the private complaint was maintainable.
When the latter Special Judge proceeded with the case the respondent filed an application for his discharge on the grounds that the charge against him was baseless and that he being a Member of legislative Assembly (M.L.A) requisite sanction under section 6 of the 1947 Act was necessary.
The Special Judge discharged the respondent holding that the respondent being M.L.A was a public servant within section 21 (12)(a) of I.P.C. and hl the absence of the sanction of the Legislative Assembly he could not take cognizance of offence.
The Special Judge also held that.
the material date for deciding the applicability of section 6 of the 1947 Act was the date on which the Court was asked to take cognizance of the offence.
The appellant challenged the order of the Special Judge in this Appeal.
The questions which arose for consideration were: (a) That is the relevant date with reference to which a valid sanction is a pre requisite for the prosecution of a public servant for offences enumerated in section 6 of the 1947 Act ? (b) If the accuse holds several offices occupying each of which makes him a public servant, is sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him necessary and if anyone of the competent authorities fails or declines to grant sanction, is the Court precluded or prohibited from taking cognizance of the offence with which the public servant is charged, or is it implicit in section 6 of the 1947 Act that sanction of that competent authority alone is necessary which is entitled to remove the public servant from the office which is alleged to have been abused or misused for corrupt motives ? (c) Is M.L.A. a public.
servant within the meaning of the expression in clauses 12(a), 3 and 7 of section 21 I.P.C. ? (d) Is sanction as contemplated by section 6 of the 1947 Act necessary for prosecution of M.L.A. and if so, which is the sanctioning authority competent to remove M.L.A. from the office of Member or the Legislative Assembly ? Allowing the appeal.
^ HELD: The provisions of the Act must receive such construction at the hands of the court as would advance the object and purpose underlying the Act and at any rate not defeat it.
If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provisions.
In the event of an ambiguity of the plain meaning of the words used in the statute being self defeating, the court is entitled to ascertain the intention of the legislature to remove the ambiguity by construing the provision of the statute as a whole keeping in view what was the mischief when the statute was enacted and to remove which the legislature enacted the statute.
Whenever a question of construction arises upon ambiguity or where two views are possible of a Provision, it would be the duty of the court to adopt that construction which would advance the object underlying the Act.
[521 A C] The basic purpose underlying all canons of construction is the ascertainment 497 with reasonable certainty of the intention of Parliament in enacting the legislation.
A For this purpose why should the aids which Parliament availed of such as report of a special committee preceding the enactment, existing state of law, the environment necessitating enactment of legislation, and the object sought to be achieved, be denied to court whose function is primarily to give effect to the real intention of the Parliament in enacting the legislation.
Such denial would deprive the court of a substantial and illuminating aid to construction.
Therefore, departing from the earlier English decisions, the reports of the committee which preceded the enactment of a legislation, reports of Joint Parliamentary Committee report of a commission set up for collecting information leading to the enactment are permissible external aids to construction.
[527 A; D E] In construing a statute more especially the ancient statute, the court may look at the surrounding circumstances when the statute was enacted.
The construction of ancient statutes may be eludicated by what in the language of the courts is called contemporanea expositio, that is, by seeing how they were understood at the time when they were passed.
[528F G] Standard dictionaries as a rule give in respect of each word as many meanings in which the word has either been used or it is likely to be used in different contexts and connections.
While it may be permissible to refer to dictionaries to find out the meaning in which a word is capable of being used or understood in common parlance, the well known cannon of construction should not even for a minute be overlooked that the meaning to the words and expressions used in a statute ordinarily take their colour from the context in which they appear.
[539F G] Deputy Chief Controller of Imports & Exports New Delhi vs K.T. Kosalram Ors., ; at 517; and State Bank of India vs N. Sundara Money, ; , referred to.
Section 6 of the Prevention of Corruption Act, 1947 bars the courts from taking cognizance of the offences therein enumerated alleged to have been committed by a public servant except with the previous sanction of the competent authority empowered to grant the requisite sanction.
Therefore, when the court is called upon to take cognizance of such offences, it. must enquire whether there is a valid sanction to prosecute the public servant for the offence alleged to have been committed by him as public servant.
Undoubtedly the accused must be a public servant when he is alleged to have committed the offence of which he is accused because sections 161, 164, 165 I.P.C. and section 5(2) of.
the 1947 Act clearly spell out that the offences there in defined can be committed by a public servant.
A trial without a valid sanction where one is necessary under section 6 would be a trial without jurisdiction by the court.
It is well settled that the relevant date with reference to valid which a valid sanction is sine qua non for taking cognizance of an offence committed by a public servant as required by section 6 is the date when the court is called upon to take cognizance of the offence of which he is accused.
If, therefore, when the offence is alleged to have been committed, the accused was a public servant but by the time the court is called upon to take cognizance of the offence committed by him as public servant, he has cased to be a public servant, section 6 will not be attracted and no sanction would be necessary for taking cognizance of the offence against him.
This approach is in accord with the policy underlying s.6 in that a public servant is not to be exposed to harassment of a frivolous or speculative prosecution.
If he has ceased to be a public 498 servant in the meantime, this vital consideration ceases to exist.
[512D; H; 513 A E].
C.R. Bansi vs State of Maharashtra, [1971] 3 S.C.R. 236; R.R. Chari vs State of U.P., ; ; S.N. Bose vs State of Bihar, [1968] 3 S.C.R. Venkataraman vs The State. ; at 1052; K.S. Dharmaatan vs Central Government & Ors., ; , referred to.
In the instant case, long before the date on which the cognizance was taken by the Special Judge, the accused had ceased to hold the office of the Chief Minister and as such had ceased to be a public servant in his capacity as Chief Minister.
A fortiori no sanction as contemplated by section 6 was necessary before cognizance of the offence could be taken against the accused for offences alleged to have been committed in his former capacity as public servant.
[514 D E] The submission that if the accused has held or holds a plurality of offices occupying each one of which makes him a public servant, under section 6 sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him, would be necessary and if anyone of the competent authorities fails or declines to grant sanction, the court is precluded or prohibited from taking cognizance of the offence with which the public servant is charged is not acceptable.
Such an interpretation of s.6 would render it as a shield to an unscrupulous public servant.
Someone interested in protecting may shift him from one office of public servant to another and there by defeat the process of law.
Such an interpretation is contrary to all cannons of construction and leads to an absurd end product which of necessity must be avoided.
[520G; 518F C] The State (S.P.E. Hyderabad) vs Anr Commodore Kailash Chand, ; , referred to and partly dissented from.
The expression 'office ' in the three sub clauses of s 6(1) clearly denotes that office which the public servant misused or abused for corrupt motives for which he is to be prosecuted and in respect of which a sanction lo prosecute him is necessary by the competent authority entitled to remove him from that office which he has abused.
The sanction to prosecute a public servant can be given by an authority competent to remove him from the office which he has misused or abused because that authority alone would be able to know whether there has been a misuse or abuse of the office by the public servant and not some rank outsider.
The authority entitled to grant sanction must apply its mind to the facts of the case, evidence collected and other incidental facts before according sanction.
A grant of sanction is not an idle formality but a solemn and sacrosanct act which removes the umbrella of protection of government servants against frivolous prosecutions and the aforesaid requirements must therefore, be strictly complied with before any prosecution could be launched against public servants.
Therefore, it is implicit in s.6 that sanction of that competent authority alone would be necessary which is competent to remove the public servant from the office which he is alleged to have misused or abused for corrupt motive and for which a prosecution is intended to be launched against him.
[516H; 517A D] Mohd. Iqbal Ahmed vs State of A. P., [1979] 2 S.C.R. 1007, referred to.
499 The finding of the Special Judge that the respondent being M.L.A. was a public servant within clauses (12)(a) (3) and (7) of s.21 I.P.C. and sanction of the Legislative Assembly to prosecute him was necessary, is not correct.
A person would be a public servant under clause (12)(a) of section 21 I.P.C. if he falls under any of the following three categories: (i) if he is in the service of the Government; or (ii) if he is hl the pay of the Government; or (iii) if he is remunerated by fees or commission for the performance of any public duty, by the Government.
Looking into the history and evolution of s.21 I.P.C. as traced and adopted as an external aid to construction, it is clear that M.L.A. was not and is not a 'public servant ' within the meaning of expression in any of the clauses of section 21 I.P.C. Assuming that it would not be legally sound or correct according to well accepted cannon of construction of a statue of construe section 21(12)(a) by mere historical evolution of the section, the constitutionally valid approach would be to look at the language employed in the section to ascertain whether M.L.A. is a public servant within the meaning of the expression in that section.
Depending upon the context, 'or '.
The use of the expression 'or ' in the context in which it is used in cl.(12) (a) does appear to be a disjunctive.
Therefore, those would be a public servant.
The question is whether M.L.A. falls in under any of the above three categories? It was concerned that M.L.A. is not the service of the Government but it was contended that M.L.A. is in the pay of the Government.
Undoubtedly, M.L.A. receives a salary and allowances his capacity as M.L.A. under the relevant statute.
But does it make him a person 'in the pay of the Government '? The word 'pay ' standing by itself is open to various shades of meaning and when the word is used in a phrase in the pay of ' it is more likely to have a different connotation than when standing by itself.
The phrase "in the pay of ' would ordinarily import the element of employment or paid employment or employed and paid by the employer.
The phrase does not import of necessity a master servant relationship between the person receiving the pay and the Government as payer.
Next what does the expression 'Government ' in cl.
(12)(a) of section 21 I.P.C. connote ? Section 17 I.P.C. provides that the word "Government ' denotes the Central Government or the Government of a State.
71 I.P.C. provides that 'every expression which is explained in any part of the Code, is used in every part of the Code in conformity with the explanation '.
Let it be noted that unlike the modern statute s.7 does not provide unless the context otherwise indicate ', a phrase that prefaces the dictionary clauses of a modern statute.
Therefore, the expression "Government ' in section 21(12)(a) must either mean the Central Government or the Government of a State.
The Central Government being out of considering the question is whether M.L.A. is the pay of the Government of a State or is remunerated by fees for the performance of any public duty by the Government of a State.
Even though M.L.A. receives pay and allowances, he is not in the pay of he state Government because legislature of a State cannot be comprehended in the expression 'State Government '.
This conclusion would govern also the third part of c. (12)(a) i.e. 'remunerated by fees for performance of any public duty by the Government.
Therefore, if M.L.A. is not in the pay of the Government in the sense of executive government or is not remunerated by fees for performance of any public duty by the exe 500 cutive government, certainly, he would not be comprehended in the expression 'public servant ' within the meaning sf the expression in cl.
(12)(a).
He is thus not a public servant within the meaning of the expression in cl.
(12)(a).
This conclusion rein forces the earlier conclusion reached after examining the historical evolution of cl.
(12)(a): [537 A B; 536G; E; H; 537 H;E; 539 E; 541 A; D F; 543 E; 551 A B] Evolution of Parliamentary Privileges by section K. Nag ; Legislative Bodies Corrupt Practices Act, 1925; Prevention of Corruption Act 1947 by Sethi and Anand P.60; Santhanam Committee Report dt. 31 3 1964; Lok Sabha Debates (Third Series Vol. 35, Cls. 729 and 731; The Anti Corruption Laws (Amendment) Bill, 1964 (enacted as Act 40 of 1964); G.A. Monerop vs The State of Ajmer, ; The State of Ajmer vs Shivji Lal [1959] supp.
2 S.C.R. 739; Prabhashanker Dwivedi and Anr.
vs The State of Gujarat, AIR 1970 Gujart, AIR 1970 Gujarat 97; State of Gujart vs Manshanker Prabhashanker Dwivedi, ; Green vs Premier Glynrohonwy State Co. Ltd, at 568; Babi Manmohan Das Shah & Ors.
vs Bishnu Das, ; at 839; Kamta Prasad Aggarwal etc.
Executive Engineer, Ballabgarh & Anr., ; ; M. Karunanidhi vs Union of India, ; ; Costituent Assembly debates, Vol.
VII p. 984; Rai Shib Ram jawaya Kapur & Ors.
vs The State of Punjab [1975] 1 S.C.R. 225 at p. 236; Shamsher Singh & Anr.
vs State of Punjab, ; Sardari Lalv.
Union of India & Ors. ; ; His Majesty the King vs Boston 7 Ors., [1923 24] 33 Commonwealth Law Report 386. .82; Earskine May Parhamentary Practice 20 edition, p. 149, referred to The Submission that the accused would be a public servant within the meaning of the expression any person empowered by law to discharge any adjudicatory functions, in cl.
(3) of s.21 I.P.C. must be rejected.
Participation in a debate on a motion of breach of privilege or for taking action for contempt of the House and voting thereon in a constitutional function discharged by the members and therefore, it cannot be said that such adjudicatory functions if it can be so styled, constitutes adjudicatory function undertaken by M.L.A. as empowered by law.
[554 E F] Special Ref.
No. 1 of 1966; , at pages 490, 491 and 472; I.C. Golaknath vs State of Punajab, ; Sripadangalavaru vs State of Kerala and Anr.; [1973] Supp.
S.C.R 1 referred to.
The submission that M.L.A. would be a public servant within cl.
(7) of s.21 I.P.C. must be rejected.
(7) takes within its ambit 'every person who holds any office by virtue of which he is empowered to place or keep any person in confinement.
Broadly stated the expression comprehends police and prison authorities or those under an obligation by law or by virtue of office to take into custody and keep in confinement any person.
To say that M.L.A. by virtue of his office is performing 'policing or prison officers ' duties would be apart from doing violence to language lowering him in status.
Additionally cl.(7) does not speak of any adjudicatory function.
lt appears to comprehend situations where as preliminary to or an end product of an adjudicatory function in a criminal case, which may lead to imposition of a prison sentence, and a Person in exercise of the duty to be discharged by him by virtue of his office places or keeps any person in confinement.
[554G, 555 F H] In view of the finding that M.L.A. is not a public servant under clauses (12)(a), (3) and (7) of s.21 I.P.C. and no sanction under s.6 of the Prevention of Corruption is necessary to prosecute him.
it is not necessary to ascertain which would be the authority competent to sanction prosecution of M.L.A. [557 C] In the instant case, the allegations in the complaint are all to the effect that the accused misused or abused his office as Chief Minister for corrupt motives.
By the time the Court was called upon to take cognizance of those offences, the accused had ceased to hold the office of Chief Minister.
The sanction to prosecute him was granted by the Governor of Maharashtra but this aspect is irrelevant for concluding that no sanction was necessary to prosecute him under s.6 on the offences alleged to have been committed by the accused.
Assuming that as M.L.A. the accused would be a public servant under s.21, in the absence of any allegation that he misused or abused his office as M.L.A. that aspect becomes immaterial.
Further s.6 postulates existence of a valid sanction for prosecution of a public servant for offences punishable under section 161, 164, 165 I.P.C. and s.5 of the 1947 Act, if they are alleged to have been committed by a public servant.
In view of the finding that M.L.A. is not a public servant within the meaning of the expression in s.21 I.P.C., no sanction under s.6 is necessary to prosecute him for the offences alleged to have been committed by him.
[556 G; 557 A B]
|
minal Appeal No. 130 of 1955.
I Appeal under Article 134 (1) (C) of the Constitution of India from the judgment and order dated March 11, 1955, of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal Revision No. 60 of 1954 arising out of the judgment and order dated February 21, 1954, of the Sessions Judge at Gonda in Criminal Appeal No. 292 of 1953.
G.C. Mathur and C. P. Lal, for the appellant.
March 26.
The Judgment of the Court was delivered by IMAM J.
This is an appeal by the State of Uttar Pradesh against the decision of the Allahabad High Court on a certificate granted by that Court that the case was a fit one for appeal to this Court, 771 The undisputed facts are that one Mohammad Yasin was prosecuted under section 379, Indian Penal Code.
He was released on bail.
The respondent along with one Ram Narain stood surety for him, having executed surety bonds under section 499 of the Code of Criminal Procedure, undertaking to produce the accused Yasin before the Court to answer the charge and to forfeit Rs. 500 each to King Emperor Qaisar e Hind as a, penalty if they failed to do so.
Yasin absconded; All attempts to secure his presence before the Court were of no avail.
Consequently notices were issued under section 514 of the Code of Criminal Procedure to the sureties to show cause why their bonds should not be forfeited.
The Magistrate ' after giving the matter his consideration, ordered their bonds to be forfeited to the extent of Rs. 300 each.
The respondent appealed to the Sessions Judge of Gonda who dismissed his appeal.
Dissatisfied with the orders of the Magistrate and the Sessions Judge, the respondent filed a criminal revision in the High I Court and Mulla J. allowed his application and set aside the order of the Magistrate forfeiting the bond executed by him.
At the request of the Government Advocate the learned Judge granted the requisite certificate by virtue of which the present appeal is before us.
The only question for consideration is whether the bond executed by the respondent was one under the Code of Criminal Procedure and therefore capable of being forfeited in accordance with the provisions of section 514, Criminal Procedure Code.
Section 499 of the Code, requires that 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 person 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.
In Schedule V of the Code of Criminal Procedure various forms are set out and a. 555 of the Code provides that ,subject to the power conferred by section 554 and by 772 article 227 of the Constitution, the forms set forth in that Schedule, with such variation as the circumstances of each case require, may be used for the respective purposes therein mentioned, and if used shall be sufficient.
Form XLII of that Schedule sets forth the contents of a bond to be executed by an accused and his surety.
The bond is in two parts one part to be signed by the accused and the other part to be signed by his surety or sureties.
Both the accused and the sureties in executing such a bond guarantee the attendance of the accused in Court whenever called upon to answer the charge against him and in case of default also bind themselves to forfeit to Government the specified sum of money mentioned therein.
This is what the bond should state since the Adaptation of Laws Order, 1950, dated January 26, 1950. 'Previous to that Order the word Government did not appear in the bond.
By virtue of cl. 4 of the said Order, whenever an expression mentioned in column 1 of the Table thereunder occurred (otherwise than in a title or preamble or in a citation or description of an enactment) in an existing Central or Provincial Law whether an Act, Ordinance or Regulation mentioned in the Schedules to the Order, then unless that expression was by the Order expressly directed to be otherwise adapted or modified, or to stand unmodified, or to be omitted, there shall be substituted therefor the expression set opposite to it in column, 2 of the said Table.
In column 1 of the Table the words " Crown " " Her Majesty " and " His Majesty " appear and against them in column 2 the word 'Government" appears.
The plain reading of this clause is that wherever the words " Crown ", "Her Majesty " or " His Majesty " appear, for them, the word " Government " shall be substituted in the existing Central or Provincial Laws mentioned in the First Schedule to the Order.
The Code of Criminal Procedure is one of the Central Laws mentioned in the said Schedule wherein Schedule V of the Code of Criminal Procedure is mentioned and the Order directs that throughout Schedule V of the Criminal Procedure Code, except where otherwise provided, for the words " Her Majesty The Queen 773 and "His Majesty The King" the word "Government" shall be substituted.
Previous to the Adaptation of Laws Order, 1950, there was the Adaptation of Laws Order, 1948 and the words "Empress of India" appearing in the bond were repealed and in place thereof the, words " Her Majesty the Queen " were substituted.
India attained Dominion status in 1947 and became a Republic in 1950.
The Adaptation of Laws Order, 1948 and that of 1950 were consequential upon the change of status of India into a Dominion and then into a Sovereign Republic.
Since January 26, 1950, therefore, no bond executed in favour of the Empress of India could be said to be a bond executed under the Code of Criminal Procedure.
The bond which the respondent had executed was to forfeit to the King Emperor a certain sum of money if he made default in procuring the attendance of the accused before the court.
He did not execute a bond by which he bound himself to forfeit the said sum either to the Government of the Union of India or that of the State of Uttar Pradesh.
The bond executed: by him in 1953 was a bond unknown to the law of the Republic of India under the Code of Criminal Procedure at the time of its execution.
Section 514 of the Criminal Procedure Code empowers a court to forfeit a bond which has been executed under the provisions of that Code and since the bond executed by the respondent is not one under the Code of Criminal Procedure, resort could not be had to the provisions of section 514 of the Code to forfeit the same.
It was, however, urged on behalf of the State that under cl. 4 of the Adaptation of Laws Order, 1950, the form of the bond stood amended by the substitution of the word "Government" therein in place and stead of the words "Her Majesty The Queen" and the bond should be read accordingly.
The words King Emperor Qaisar e Hind must be deemed as no longer existing in the forfeited bond.
Clause 4 of the Order, however, directs that the word "Government" shall be substituted for the words " Crown ", " Her Majesty " and " His Majesty ".
There is no mention therein of the words King Emperor or Emperor of India, Queen Empress or Empress of India or Qaisar e Hind as being so 774 substituted.
The words King Emperor Qaisar e Hind in the bond executed by the respondent cannot therefore be read, by virtue of cl. 4 of the Order, to mean Government.
There has undoubtedly been some error, carelessness or negligence on the part of those on whom a duty lay to make the necessary changes in the phraseology of the bond set out in Schedule V of the Code of Criminal Procedure to be executed under section 499.
The fact, however, remains that the respondent had not bound himself either to the Government of the Union of India or that of the State of Uttar Pradesh to have his bond forfeited on his failure to produce the accused before the court and he is entitled to say that no order of forfeiture could be passed against him with respect to a bond which was not one under the Code and which was one unknown to the law, as contained in the Code, at the, time of its execution.
The objection raised by the respondent to the order forfeiting the bond executed by him is a substantial one and the said order was made under a, misapprehension that it could be made under section 514 of the Code of Criminal Procedure.
The appeal is accordingly dismissed.
Appeal dismissed.
|
In 1953 the respondent executed a surety bond undertaking to produce, the accused before the Magistrate and to forfeit Rs. 500 to King Emperor, Qaisar e Hind as penalty if he failed to do so.
Upon his failure to produce the accused, the Magistrate forfeited the bond to the extent of Rs. 300.
The contention of the respondent was that the bond not being in favour of the Government, could not be forfeited.
Held, that the bond was a bond unknown to the law of the Republic of India under the Code of Criminal Procedure at the time of its execution and could not be forfeited.
The respondent did not execute a bond by which he bound himself to forfeit the said sum either to the Government of the Union of India or that of the State of Uttar Pradesh.
To ' be a valid bond, the undertaking should have been to forfeit to the Government and not to the King Emperor.
The words King Emperor Qaisar e Hind in the bond executed by the respondent could not be read, by virtue Of cl. 4 of the Adaptation of Laws Order, 1950, to mean Government.
|
Petition No. 1740 of 1984.
(For Directions) IN (Criminal Appeal No. 356 of 1983) 413 And (Criminal Misc.
Petition No. 2217 of 1984) (For Directions) IN (Criminal Appeal No. 356 of 1983) Ram Jethmalani, Ms. Rani Jethmalani, Naresh Jethmalani and J. Wad for the Petitioner.
A.K. Sen, M. N. Shroff and Dalveer Bhandari for the Respondent.
The Order of the Court was delivered by DESAI, J. Consequent upon the order made by a Constitution Bench of this Court on February 16, 1984 in the Judgment rendered in Criminal Appeal No. 356 of 1983 and Transferred Case No. 347 of 1983 alongwith Transferred Case No. 3/48 of 1983, Special Case No. 24 of 1982 and Special Case No. 3/83 pending in the Court of the Special Judge, Greater Bombay (Shri R.B. Sule) were withdrawn and stood transferred to the High Court of Bombay.
In compliance with the direction given in the same judgment, the learned Chief Justice of the High Court of Bombay assigned both the cases to Mr. Justice S.N. Khatri, a sitting Judge of the High Court.
The learned Judge called upon the parties to appear before him on March 12, 1984.
When the cases were taken up for hearing, certain preliminary objections were raised on behalf of the accused which we were told have been dealt with by the learned Judge in his order dated March 16, 1984.
In respect of two issues further consideration was postponed.
These issues turn upon the question of procedure to be adopted by the learned Judge in the trial of the two cases and who should be in charge of the prosecution.
In our opinion, if the judgment of this Court was read with care and precision, these two questions would have hardly arisen.
However, two misc.
petitions were moved in this Court for clarification of the judgment so as to thwart avoidable delay in the trial of cases.
The operative portion of the judgment which has a bearing on the question raised reads as under: "Therefore, Special Case No. 24 of 1982 and Special Case No. 3/83 pending in the Court of Special Judge, 414 Greater Bombay Shri R.B. Sule are withdrawn and transferred to the High Court of Bombay with a request to the learned Chief Justice to assign these two cases to a sitting Judge of the High Court".
In the penultimate paragraph of the judgment while allowing the appeal this Court directed as under: "This appeal accordingly succeeds and is allowed.
The order and decision of the learned Special Judge Shri R.B. Sule dated July 25, 1983 discharging the accused in Special Case No. 24 of 1982 and Special Case No. 3/83 is hereby set aside and the trial shall proceed further from the stage where the accused was discharged.
" Reading two directions together, it clearly emerges that the learned Judge has to hold trial according to the procedure prescribed in Chapter XIX B i.e. the procedure prescribed in Secs.
244 to 247 of the Code of Criminal Procedure, 1973.
To be precise, the learned Judge has to try the case according to the procedure prescribed for cases instituted otherwise than on police report by Magistrate.
This position is clear and unambiguous in view of the fact that this Court while allowing the appeal was hearing amongst others Transferred Case No. 347 of 1983 being the Criminal Revision Application No. 354 of 1983 on the file of the High Court of the Judicature at Bombay against the order of the learned Special Judge Shri R.B. Sule discharging the accused.
If the criminal revision application was not with drawn to this Court, the High Court while hearing criminal revision application could have under Sec.
407 Code of Criminal Procedure, 1973 transferred the Special case from which criminal revision application arose to itself for trial and in such a situation the High Court under Sec.
407 (8), Code of Criminal Procedure, 1973 would have to follow the same procedure which the Court of Special Judge would have followed if the case would not have been so transferred.
It is not in dispute that the learned Special Judge while holding the trial was required to follow the procedure prescribed by the Code of Criminal Procedure, 1973 for trial of warrant cases by Magistrates and in the facts of this case the procedure would be in respect of cases instituted otherwise than on police report.
The trial was to proceed further from the stage when the accused was discharged.
This in our opinion is obvious and needs no further clarification.
8(1) of the Criminal Law (Amendment) Act, 1952 as interpreted by this Court in Criminal 415 Appeal No. 247 of 1983 decided on February 16, 1984 makes this position unambiguous and abundantly clear.
The clarification in respect of the first point read with the judgment rendered in Criminal Appeal No. 247 of 1983 in which Sec. 8 (3) of the Criminal Law (Amendment) Act, 1952 had come in for interpretation, it follows as a corollary that if the cognizance of an offence is taken under Sec.
8(1) of the Criminal Law (Amendment) Act, 1952 and the trial has to be held according to the procedure prescribed therein, under Sec. 8 (3) the learned advocate engaged by the complainant to conduct the prosecution will be deemed to be a public prosecutor.
In such a situation, there is no question of the State appointed public prosecutor to conduct the prosecution.
It is, therefore, clarified which to some extent may appear tautologous in view of the aforementioned judgment, that it would be for the complainant to decide who would be the learned advocate incharge of the prosecution and the advocate so appointed would be deemed to be a public prosecutor.
Dr. Singhvi who appeared for the respondent accused submitted that in the guise of a petition for clarification, it is a covert attempt to forestall or foreclose the decision on the aforementioned two points which are pending before the learned Judge before whom both the cases are pending.
There was no question of deciding the aforementioned two points afresh because the answers to them are implicit in the judgments referred to above.
Dr. Singhvi had nothing to say when invited by the Court about the clarification which the Court my offer in respect of the aforementioned two questions.
He left us in no doubt that he does not wish to make any submission on the question of clarification in respect of the aforementioned two questions.
We note that the Government of Maharashtra has entered appearance before us through Shri A.K. Sen and Shri M.N. Shroff but no submission were made by them.
Mr. Jethmalani, learned counsel for the complainant wanted this Court to consider prayers Nos.
(c) and (d) in the misc.
petition which we consider for the disposal of the misc.
petitions as irrelevant and we do not propose to deal with the same in these petitions.
In sum the clarification is that the learned Judge in the trial 416 of the two cases pending before him has to follow the procedure prescribed in Secs.
244 to 247 (both inclusive) included in Chapter XIX B of the Code of Criminal Procedure, 1973.
It is for the complainant to decide who should be his learned advocate incharge of the prosecution and there is no question of entrusting the trial of the two cases to a State appointed public prosecutor.
|
In compliance with directions given by the Constitution Bench of the Supreme Court, the Bombay High Court withdrew to itself Special Case No. 24 of 1982 and Special Case No. 5/83 pending in the Court of the Special Judge, Greater Bombay and assigned the said two cases to Mr. Justice S.N. Khatri a sitting Judge of the said court.
When the cases were taken up for hearing, two preliminary contentions were raised as to whether State should appoint a Public Prosecutor to conduct the trial and what should be the procedure to be followed and from what stage of the trial.
Hence the two applications for classification.
The Court; ^ HELD: 1.
The learned Judge has to hold the trial according to the procedure prescribed in chapter XIX B i.e., the procedure prescribed in section 244 to 247 (both inclusive) of the Code of Criminal Procedure.
To be precise, the learned Judge has to try the case according to the procedure prescribed.
for cases instituted otherwise than on police report by Magistrate.
The trial was to proceed from the stage when the accused was discharged.
[414D E] 2.
If the cognizance of an offence is taken under section 8( ') of the criminal law (Amendment) Act, 1952, and the trial has to be held according to the procedure prescribed therein, under section 8(3), the learned advocate engaged by the complainant to conduct the prosecution will be deemed to be a public prosecutor.
In such a situation, there is no question of the State appointed Public Prosecutor to conduct, the prosecution.
It is for the complainant to decide who should be his learned advocate in charge of the Prosecution.
[415B C]
|
Civil Appeals Nos. 1 1970 1 1972 of 1983 Appeals by Special leave from the] judgment and order dated the 27th July, 1983 of the Madras High Court in W. A. Nos.
523, 531 & 528 of 1983.
K.K. Venugopal and C. section Vaidyanathan for the Appellants in CA Nos. 1 1970 71183.
Sahnti Bhushan, A. T. M. Sampath and Mr. K. Subramaniam for the Respondents in CA.
Nos. 1 1970 71/83. 194 A.K. Sen and A.V. Rangam for the Appellant in CA.
No. 1 1972 of 1983.
Soli J. Sorabjee A.T.M. Sampath and K. Subranmaniam for the Respondent in CA.
11972/83.
The Judgment of the Court was delivered by SEN, J.
These appeals by special leave directed against a judgment of a Division Bench of the Madras High Court dated July 7, 1983 upholding the judgment and order of a learned Single Judge dated June 13, 1983 relate to the grant of a licence for the manufacturing and supplying of bottled arrack to the wholesale and retail licensees for the Chingleput district under r. 7 of the Tamil Nadu Arrack (Manufacture) Rules, 1981 ( 'Rules ', for short) framed under the Tamil Nadu Prohibition Act, 1937 ( 'Act ' for short).
These appeals raise separate and distinct questions and must therefore receive separate consideration.
Put very shortly, the essential facts are these.
On May 28, 1982 one O.H. Kumar carrying on business under the name and style of Messrs Three Star Bottling Company surrendered his licence for the manufacture and supply of bottled arrack for the Chingleput district for the financial year 1 982.83.
The Commissioner of Prohibition & Excise, Madras called for applications from intending persons for the grant of the licence.
In response to the notice issued by the Commissioner under r. 3(2) of the Rules, there were two applications filed under r. 5 in Form 1, namely, by J. Balaji.
managing partner of Messrs Majestic Bottling Company on June 9, 1982 and by V. Ramabadran, managing partner of Messrs Chingleput Bottlers on June 14, 1982.
The Commissioner issued a questionnaire and directed the Collector, Chingleput to have an inquiry held as regards the suitability of the applicants for the grant of a licence.
Pursuant thereto, the Collector had an inquiry held by the Assistant Commissioner (Excise) which lasted for four days i.e. from June 21 to June 24, 1982.
After the preliminary inquiry and field inspection made by the Assistant Commissioner (Excise), the Collector forwarded his report dated July 2, 1982 to the Commissioner who fixed July S, 1982 for oral hearing of the parties.
On July 5, 1982, the Commissioner separately heard both J. Balaji and V. Ramabadran.
At the hearing, the Commissioner recorded the statements of both J. Balaji and vs Ramabadran in 195 support of their respective claims.
On July 31,1982 the Commissioner passed an order rejecting both the applications.
As regards Messrs Majestic Bottling Company, the Commissioner held that their application was in order but that they did not satisfy the requirements of r. S (a), and (e) of the Rules.
As to their suitability under r. S (a), he found that though the partnership had been formed prior to the date of the application i.e. On June 9, 1982 the firm actually got registered subsequent thereto on June 23, 1982 and therefore there was no valid partnership in existence on June 14, 1982 i. e.
On the date of the filing of the application.
As regards r. 5(e), he held that there was no water facility in the lands owned by the partnership firm.
As regards Messrs Chingleput Bottlers, the Commissioner held that the application made by them was not in order because it was not accompanied by a solvency certificate and that there was no potable water available at the proposed site.
He further held that there was only one and a half feet water in the well at the site and D it was of poor quality.
He also came to the conclusion that the application had not been made bona fide on behalf of the partnership firm but as benami for others.
The Commissioner accordingly held that Messrs Chingleput Bottlers did not fulfil the requirement of r. 5(a), (c) and (e) of the Rules.
The finding of the Commissioner that Messrs Chingleput Bottlers were mere benamidars of O.H. Kumar, the previous licensee, was based on the report of the Collector and the other material gathered by him during the course cf the inquiry.
Both Messrs Majestic Bottling Company and Messrs Chingleput Bottlers filed separate petitions under article 226 of the Constitution before the High Court questioning the validity of the order passed by the Commissioner.
By his judgment dated June 13, 1983 a learned Single Judge held that the Commissioner was not justified in rejecting the application of Messrs Majestic Bottling Company on a wrongful assumption that they did not satisfy the requirement of r. 5(a) and (e) of the Rules.
He held that the order was vitiated by an error apparent on the face of the record inasmuch as J. Balaji, managing partner of Messrs Majestic Bottling Company had produced record with regard to the availability of water.
The Learned Single Judge however set aside the finding of the Commissioner that the application made by Messrs Chingleput 196 Bottlers was not in order because it was not accompanied by a solvency certificate holding that non production of a solvency certificate would not entail a dismissal of the application on that ground alone, as also the finding with regard to non availability of water at the proposed site since the blending unit of Messrs Three Star Bottling Company was already functioning there.
The learned single Judge rejected the contention of Messrs Chingleput Bottlers that the Commissioner had acted in breach of the rules of natural justice by his failure to furnish the report of the Collector observing that nothing precluded them from seeking perusal of the records; nor did they make a demand for it.
By his judgment, the learned Single Judge by the issue of a writ of certiorari quashed the impugned order of the Commissioner insofar as he rejected the application made by Messrs Majestic Bottling Company on the ground that there was an error apparent on the face of the record but instead of remitting the matter back to the Commissioner to re consider the question of grant of such privilege, issued a writ of mandamus ordaining the Commissioner to grant the licence to Messrs Majestic Bottling Company.
He further upheld the order of the Commissioner rejecting the application of Messrs Chingleput Bottlers for the grant of privilege on the ground that they were mere benamidars of the previous licensee.
Aggrieved by the judgment of the learned Single Judge, both the State Government and Messrs Chingleput Bottlers preferred appeals under cl.
1 S of the Letters Patent.
Upholding the judgment of the learned Single Judge the learned Judge of the Division Bench held that learned Single Judge was justified not only in quashing the same but in issuing a writ of mandamus directing the Commissioner to grant the licence in favour of Messrs Majestic Bottling Company without the prior approval the State Government under r. 7 of the Rules.
Before proceeding further, we would like to mention that the State Government did not file a separate counter.
There was a counter affidavit filed by R. Lakshmanan, Joint Commissioner (IV), Department of Prohibition & Excise, Madras on behalf of both the State Government as well as the Commissioner of Prohibition & .
Excise seeking to support the impugned order passed by the Commissioner.
In addition to the grounds mentioned by the Commissioner for the refusal of the applications for grant of privilege, there was an additional ground taken in paragraph 11 and it was alleged that J. Balaji, managing partner of Messrs Majestic Bottling Company and his other partner Smt.
Shanthi, who incidentally is also his 197 mother were the two erstwhile directors of Messrs Dhanalakshmi Chemical Industries Private Limited, Ranipet upto November 26, 1980 and there was prima facie evidence that the company had misused the large quantity of rectified spirit by diverting alcohol from industries to arrack production and therefore they were persons not likely to abide by the provisions of the Act and the Rules farmed thereunder within the meaning of r. 5(b), and this would have been a relevant point to be taken into consideration by the State Government in the matter of grant or refusal of prior approval under r. 7(1).
It was alleged that these two persons were directors during the aforesaid period of misuse.
At the conclusion of the hearing of the appeals before the High Court, the State Government filed a supplementary affidavit of section Ranganathan, Deputy Secretary to the State Government of Tamil Nadu, Department of Prohibition & Excise furnishing further and better particulars of the alleged misuse of rectified spirit by Messrs Dhanalakshmi Chemical Industries Private Limited which had put the State Government to a loss of revenue to the tune of Rs. 2 crores.
It was averred that investigation into the case was almost complete and a prosecution was about to be launched against the Company and its directors, including J. Balaji and Smt.
Shanthi, the two partners of Messrs Majestic Bottling Company.
Inasmuch as no such objection was taken before the learned Single Judge, the learned Judges felt that it was not necessary for them to deal with the facts brought out in the two counter affidavits.
It appears that the learned Advocate General also did not press the ground at the hearing of the appeals.
The learned Judges held that the validity of the impugned order passed by the Commissioner must be adjudged by the reasons stated by him and cannot be supplemented by fresh reasons by the State Government in the shape of affidavit or otherwise .
There are really two questions that fall for determination.
The first is as to the jurisdiction of the High Court to issue a writ of mandamus.
It is said that the grant of licence under r. 7 is subject to the prior approval of the State Government and is in the discretion of the State Government.
The High Court is not the granting authority and therefore had no power to issue a writ of mandamus directing the Commissioner to grant a licence to Messrs Majestic Bottling Company.
The second question is whether the Commissioner acted in breach of the rules natural justice in not furnishing 198 to Messrs Chingleput Bottlers a copy of the report submitted by the Collector and other material gathered by him during the course of the inquiry tending to show that they were benamidars of one O.H. Kumar, the previous licensee.
It is said that Messrs Majestic Bottling Company had at the separate hearing before the Commissioner submitted a brief styled as a representation containing several documents in opposition to the application made by Messrs Chingleput Bottlers on the ground that their application was benami without furnishing a copy of the same to them and this must have influenced the mind of the Commissioner.
Even if the Commissioner was not acting in a judicial Or quasi judicial capacity, he was required to act fairly.
The rules of natural justice therefore required that Messrs Chingleput Bottlers should not be deprived of this business without knowing the case they had to meet.
Both the questions that arise will have to be dealt with separately.
The first issue, as already indicated, raises a question of prime importance and of some difficulty.
It would therefore be convenient, in the first instance, to deal with the appeal preferred by the State Government.
It is urged that the High Court had no jurisdiction to issue a writ of mandamus ordaining the Commissioner to grant a licence to Messrs Chingleput Bottlers under r. 7 of the Rules without the prior approval of the State Government.
It is said that although a writ of mandamus may be a necessary adjunct to a writ of certiorari the proper course for the High Court to have adopted was, if it was satisfied that the impugned order of the Commissioner was liable to be quashed insofar as he rejected the application made by Messrs Majestic Bottling Company on the ground that there was an error apparent on the face of the record, to have issued a writ of mandamus Commissioner to redetermine the question as to the grant of such privilege.
Reliance is placed on de Smith 's Judicial Review of Administrative Action, 4th edn.
at pp.341 and 544.
The contention must, in our opinion.
prevail.
In order that a writ of mandamus may issue to compel the Commissioner to grant the licence, it must be shown that under the Act and the Rules framed thereunder there was a legal duty imposed on the Commissioner to issue a licence under r. 7 of the Rules without the prior approval of the State Government and that Messrs Majestic Bottling Company had a corresponding legal right for its enforcement.
No mandamus will lie where the duty sought to be enforced is of a discretionary nature nor will a mandamus 199 issue to compel the performance by such public body or authority of an act contrary to law.
The Commissioner of Prohibition & Excise was under no legal duty to grant a licence to Messrs Majestic Bottling Company till he received the prior approval of the State Government under r. 7.
Even assuming that the Commissioner recommended the grant of a licence, to them under r. 7, the State Government were under no compulsion to grant such prior approval.
The grant or refusal of such licence was entirely in the discretion of the State Government.
The High Court had no jurisdiction to issue a writ of Mandamus to the Commissioner to grant a licence to Messrs Majestic Bottling Company contrary to the provisions of r. 7 of the Rules.
The learned Judges observed that in normal circumstances they would have upheld the objection of the learned Advocate General as to the jurisdiction of the High Court to issue a writ of mandamus, but in view of the fact that the State Government had chosen not to file a separate return taking a specific plea that in the event of a writ of certiorari being granted, the Court should not issue a writ of mandamus for the grant of licence since the grant or refusal of licence was subject to the prior approval of the State Government under r. 7 of the Rules.
The learned Judges accordingly held that the learned Single Judge was justified in issuing a writ in the nature of mandamus directing the Commissioner to issue a licence in favour of Messrs Majestic Bottling Company in view of the fact that there were only two applicants in the field and the application of Messrs Chingleput Bottlers having been rejected, the State Government had no other option but to make the grant in favour of Messrs Majestic Bottling Company.
Further, the learned Judges observed that to sustain the objection would be tantamount to allowing the State Government to sit in appeal over the judgment of the High Court.
In substance, the learned Judges were of the view that failure of the State Government to take a specific plea as to jurisdiction precluded them from raising a question as to the jurisdiction of the High Court to issue a writ of mandamus.
We are afraid, we cannot accept this line of reasoning.
It is true that sometimes it is prudent to couple a writ of certiorari with a writ of mandamus to control the exercise of discretionary power.
The following illuminating passages from de Smith 's Judicial Review of Administrative Action; 4th edn.
at pp.341 and 544 pithily sum up the function of a writ of mandamus; 200 "It is now open to a court when granting certiorari to remit the matter to the authority with a direction to reconsider and to decide in accordance with the findings of the court.
Apart from this, the role of the courts is limited to ensuring that direction has been exercised according to law.
If, therefore, a party aggrieved by the exercise of discretionary power seeks an order of mandamus to compel the authority to determine the matter on the basis legally relevant considerations, the proper form of the mandamus will be one to hear and determine according to law; though by holding inadmissible the considerations on which the original decision was based the court may indirectly indicate the particular manner in which the discretion ought to be exercised.
In practice the frontier between control of legality and control of the actual exercise of discretion remains indeterminate, for the courts are sometimes observed to cross the boundaries that they have set to their own jurisdiction." ** ** ** ** "The duty to observe these basic principles of legality in exercising a discretion is unlike the "duty" to apply the law correctly to findings of fact, prima facie enforceable by mandamus.
Hence where an authority has misconceived or misapplied its discretionary powers by exercising them for an improper purpose, or capriciously, or on the basis of irrelevant considerations or without regard to relevant considerations it will be deemed to have failed to exercise its discretion or jurisdiction at all or to have failed to hear and determine according to law, and mandamus may issue to compel it to act in accordance with the law " Professor H.W.R. Wade in his Administrative Law, 5th edn.
at p. 638 also defines the purpose of a writ of mandamus in these words: "Mandamus is often used as an adjunct to certiorari.
If a tribunal or authority acts in a matter where it has no power to act at all, certiorari will quash the decision and prohibition will prevent further unlawful proceedings.
If there is power to act, but the power is abused (as by breach of natural justice or error on the face of the record), certiorari will quash and mandamus may issue simultaneously to require a proper rehearing.
An example is Board of Education vs Rice cited elsewhere; the Board 's 201 decision was ultra vires since they had addressed their minds to the wrong question, consequently it was quashed by certiorari and the Board were commanded by mandamus to determine the matter according to law, i.e. within the limits indicated by the House of Lords.
" In our judgment, the High Court exceeded its jurisdiction in issuing a writ of mandamus directing the Commissioner to grant a licence to Messrs Majestic Bottling Company without the prior .
approval of the State Government as enjoined by r. 7 of the Rules.
The High Court was unduly technical in applying the rules of pleadings.
Absence of a specific plea in nature of demurrer would not invest the High Court with jurisdiction to issue a writ of mandamus ordaining the Commissioner to grant a licence to Messrs Majestic Bottling Company under r. 7 of the Rules without the prior approval of the State Government which was a condition pre requisite for the grant of such privilege.
It is regrettable that the High Court should have short circuited the whole procedure upon a wrongful assumption of its own powers.
The view taken by the High Court is manifestly erroneous.
Otherwise, the statutory requirement of such prior approval of the State Government under r. 7 would be rendered wholly otiose.
We should not be understood as laying down an inflexible rule that the High Courts cannot, under any circumstances, regulate or control the manner of grant of a liquor licence by the issue of a writ of mandamus.
It would all depend upon the facts and circumstances as to whether the High Court should issue a writ of mandamus or not.
The grant of a liquor licence is a matter of privilege.
In the very nature of things, the grant of refusal of licence is in the discretion of the State Government.
Normally, where the statute vests a discretionary power upon an administrative authority, the Court would not interfere with the exercise of such discretion unless it is made with oblique motives or extraneous purposes or upon extraneous considerations.
The present case does not fall within the rule laid down in K. N. Guruswamy vs The State of Mysore & or and P. Bhooma Reddy vs State of Mysore & ors.
The decisions in Guruswamy 's and Bhooma Reddy 's cases are both in consonance with the well settled principle that the High Court can always issue a 202 writ of mandamus under article 226 of the Constitution against a public authority to compel the performance of a public duty where such authority acts in violation of the law.
It is urged on behalf of Messrs Majestic Bottling Company placing reliance on the decision of the House of Lords in Padfield vs Minister of Agriculture, Fisheries & Food and that of this Court in Messrs Hochtief Gammon vs State of Orissa & ors.
following the same that, no doubt where the reasons given are bad and the authority had not taken into consideration the relevant matters or real grounds on which the order could have been passed, the Court can direct the authority to reconsider the matter in the light of such relevant matters.
But it was urged that no useful purpose would be served in remitting the matter to the authority for reconsideration where all the reasons that can be given for upholding the validity of the order have been found by the Court to be bad and unsustainable.
The submission] is that in such a case the Courts will not direct the authority to reconsider the matter for, then there is nothing to reconsider but the Court will direct the authority to carry out what it has by the impugned order refused to do.
In Hochtief Gammon 's case, this Court deduced the following principles from the decision of House of Lords in Padfield 's case: "The Executive have to reach their decisions by taking into account relevant considerations.
They should not refuse to consider relevant matter nor should they take into account wholly irrelevant or extraneous consideration.
They should not misdirect themselves on a point of law.
Only such a decision will be lawful.
The Courts have power to see that the Executive acts lawfully.
It is no answer to the exercise of that power to say that the Executive acted bonafide nor that they have bestowed painstaking consideration.
They cannot avoid scrutiny by courts by failing to give reasons.
If they give reasons and they are not good reasons, the court can direct them to reconsider the matter in the light of relevant matters though the propriety, adequacy or satisfactory character of these reasons may not be open to judicial scrutiny.
Even if the Executive considers it inexpedient to exercise their powers they should state their reasons and there must be. material to show that they have considered all the relevant facts.
203 This was not a case where it could be said that there was nothing for the State Government to consider as to whether should accord or refuse prior approval to the grant of a licence to Messrs Majestic Bottling Company under r. 7 of the Rules.
The Commissioner by the impugned order rejected the applications for grant of a licence made by both Messrs Chingleput Bottlers and Messrs Majestic Bottling Company and therefore the stage was not reached.
The stage for the State Government to reconsider the matter of grant of privilege under r. 7 would only arise when the commissioner makes a recommendation for the grant of a licence to Messrs Majestic Bottling Company.
At that stage, the State Government would have to consider whether they should accord prior approval for the grant of such privilege to Messrs Majestic Bottling Company having regard to the matters specified in r. 5 of the Rules and the conditions set out in r. 6(c), in view of the further facts brought out in the supplementary counter affidavit of Deputy Secretary to the State Government, Department of Prohibition & Excise in support of the objection raised in para 11 of the counter affidavit.
One of the relevant factors that the State Government must, as they should, take into consideration is the suitability of Messrs Majestic Bottling Company for the grant of licence as required under r. S(a) and the other is whether J. Balaji, the managing partner and Smt.
Shanthi the other partner, were persons who would abide by the provisions of the Act and the Rules made thereunder as enjoined by r. 5(b).
The facts lay a serious charge that Balaji, managing partner of Messrs Majestic Bottling Company and his other partner Smt.
Shanthi were directors of Messrs Dhanalakshmi Chemical Industries Private Limited, Ranipet upto November 26, 1980 and that there was prima facie evidence showing that the company had misused the rectified spirit issued to it causing a loss of revenue to the State Government to the tune of Rupees two crores or thereabout.
lt would be permissible for the State Government to take these facts as justification for refusal to grant prior approval under r. 7 of the Rules.
In coming to the conclusion they did, the learned Judges have drawn sustenance from the decision of this Court in Gujarat State Financial Corporation vs Messrs Lotus Hotels Private Limited and of the High Court in the State of Tamil Nadu & Anr.
vs C. Vadiappan in support of the view that the High Court had jurisdiction to issue a writ of mandamus directing the State of Tamil Nadu and 204 the Commissioner of Prohibition & Excise to grant the privilege for the manufacture and supply of bottled arrack to Messrs Majestic Bottling Company for the Chingleput district under r. 7 of the Rules.
The decision in Gujarat State Financial Corporation 's case (supra) is clearly distinguishable and is not an authority for any such proposition.
No such question arose in that case at all.
There, the Court was dealing with a contract entered into by the Gujarat State Financial Corporation with Messrs Lotus Hotels Private Limited for the purpose of setting up a 4 star hotel.
The Company approached the Corporation for a loan of rupees 30 lakhs and tile Corporation sanctioned a loan of Rs. 29.93 lakhs on certain terms and conditions which the Company accepted.
The Corporation however finally resolved not to disburse the loan to the Company whereupon the Company moved Gujarat High Court by a petition under Act.
226 for the issue of a writ of mandamus to direct the Corporation to disburse the loan.
A learned Single Judge of the High Court issued the writ as prayed for and it was confirmed by a Division Bench.
on appeal by the Corporation, this writ Court held that the High Court was justified in issuing the writ of mandamus.
The decision in Gujarat State Financial Corporation 's case, (supra) turned on the doctrine of promissory estoppel and it does not justify the conclusion reached by the learned Judges in the present case for the issue of a writ of mandamus.
It is needless to stress that if the requirement of law was that the advance of loan to be sanctioned by the Gujarat State Financial Corporation was to be subject to the prior approval of the Reserve Bank of India, the decision of the Court would have been otherwise: It is difficult to subscribe to the doctrine evolved by the High Court in Vadiappan 's case, (supra) that the Commissioner is the 'sole arbiter ' under r. 7 of the Rules.
It relied upon the earlier decision of the High Court in K. Ramaswamy vs Government of Tamil Nadu & ors laying down that the proviso to r. 6 of the Tamil Nadu Arrack (Supply by Wholesale) Rules, 1981 had to be understood strictly in a negative sense.
According to the High Court, at best it confers on the Government a power to veto.
By itself, the High Court observed, 'it does not make the Government a final arbiter between the competing claims.
The High Court further observed in Ramaswamy 's case, supra, that 'the weighing of the pros and cons and the consideration of the merits and demerits of the rival clai 205 ments remained, from first to last with the Commissioner as his sole responsibility, and that the requirement of the Government 's proper approval under the proviso to r. 6 of the Tamil Nadu Arrack (Supply by Wholesale) Rules 1981 was no doubt a necessary part of the validity of every licence, but 'the enabling power cannot be employed as a machinery for a review in every case but only as a check upon a possible abuse of its power by the Commissioner '.
That approach of the High Court seems to run counter to the scheme of the Act and the Rules framed thereunder.
The grant of a liquor licence under r. 7 is a matter of privilege of the State Government.
The Commissioner merely exercises the delegated powers of the State Government.
The ultimate responsibility for the grant of such privilege is with the State Government under r. 7 of the Rules.
Nor can we subscribe to the contention that the Commissioner had to act under the directions and control of the State Government under sub section
(2) of section 25A of the act while exercising his powers delegated under sub s (1) of section 17C read with section 25A (1) in the matter or grant of a liquor licence under r. 7 of the Rules.
It would not justify the High Court to issue a writ of mandamus to the Commissioner to grant a licence to Messrs Majestic Bottling Company under r. 7 of the Rules without the prior approval of the State Government.
Obviously, the State Government and the Commissioner cannot act de hors the scheme of the Act and the Rules framed thereunder.
Further, the contention that the State Government had already made up their mind against the grant of such privilege to Messrs Majestic Bottling Company and that there was no occasion for the High Court to send back the case to the Commissioner as it would have amounted to the State Government being asked to sit in appeal over the judgment of the High Court, cannot be accepted.
We regret to say, the High Court has tried to circumvent the whole procedure by issuing a writ of mandamus directing the Commissioner to grant a licence under r. 7 without the prior approval of the State Government.
As already stated, the grant of a licence under r. 7 of the Rules is a privilege.
There are no charges of mala fides on the part of the State Government.
There is no suggestion that the State Government had already made up their mind.
This is also not a case where the rules of necessity require recourse to a writ of mandamus to command the issue of a licence without conforming to the procedure prescribed under r. 7.
In the premises, it was not a proper exercise of jurisdiction for the High Court to have issued a writ of mandamus under article 226 206 of the Constitution ordaining the Commissioner to grant a licence to Messrs Majestic Bottling Company under r. 7 of the rules without the prior approval of the State Government.
In our opinion, the proper course for the High Court to adopt was to issue a writ of mandamus directing the Commissioner to redetermine the question after following the procedure of r. 7 and in case he came to a decision to grant the licence in favour of Messrs Majestic Bottling Company, to refer the matter to the State Government for its prior approval.
Otherwise r. 7 of the Rules would be rendered.
completely otiose.
Turning to the appeal preferred by M/s Chingleput Bottlers, learned counsel for them has mainly advanced a three fold submission: (1) The Commissioner had acted in flagrant violation of the rules of natural justice in.
not furnishing to Messrs Chingleput Bottlers a copy of the report of the Collector and other extraneous material comprising of a representation received from Messrs Majestic Bottling Company along with various other documents.
Nor had he disclosed to them the substance of the report of the Collector or other information gathered by him irrespective of the source.
(2) The impugned order passed by the Commissioner was vitiated by errors apparent on the face of the record.
There was no factual basis for the assumption that the three persons from whom Messrs Chingleput Bottlers had taken the lease of the land on which the blending unit is located.
viz, K.J. George, M/s. Visvambaran and E.K. Chandrasekaran, were real partners of Messrs Three Star Bottling Company.
There was also no warrant for the suspicion cast by the Collector in his report that Messrs Chingleput Bottlers were mere benamidars of one O.H. Kumar, proprietor of Messrs Three Star Bottling Company, the existing licensee, on the ground that they had entered into an agreement to purchase the blending unit from him.
The function of the Commissioner in making the grant of privilege under r. 7 of the Rules of being a quasi judicial nature, the Commissioner could not act on unwarranted conjectures and mere surmises.
(3) The Commissioner had rot acted fairly inasmuch as he adopted a double standard.
For a secret inquiry was conducted against Messrs Chingleput Bottlers for adjudging their suitability for the grant of privilege while no such inquiry was made against Messrs Majestic Bottling Company.
The Commissioner had thus treated Messrs Chingleput Bottlers and Messrs Majestic Bottling Company on an unequal footing and thus the procedure adopted was violative of article 14.
The observation made by the Commissioner that the deposit of Rs. 10,01,001 made by Messrs Chingleput Bottlers with 207 the Indian overseas Bank had not come from bona fide sources and that obviously there was some secret understanding between O.H. Kumar and Messrs Chingleput Bottlers was not based on any material at all.
The Commissioner knew that O.H. Kumar, the previous licensee, was not in a position to advance rupees 10 lakhs and odd to Messrs Chingleput Bottlers.
Again, no such inquiry was made as to the financial capacity of Messrs Majestic Bottling Company.
Further, the Commissioner had wrongly assumed that Messrs Chingleput Bottlers and given their address as 'Ramabadran, c/o Messrs Three Star Bottling Company, Iyanchery ' when no such address was ever furnished and therefore the impugned order is vitiated by an error apparent on the face of the record.
In support of the contention that the Commissioner acted in violation of the rules of natural justice, the learned counsel contends that Messrs Chingleput Bottlers had a right to be heard.
It is urged that there was clear breach of the principle of audi alteram partem in as much as neither a copy of the report of the Collector was furnished to Messrs Chingleput Bottlers nor a copy of the representation submitted by Messrs Majestic Bottling Company against the grant of licence to them.
The argument is that a hearing where a party does not know the case he has to meet is no hearing at all, while the learned counsel concedes that the right to know the case to be met does not necessarily involve any right to know the sources of adverse inference or to confront informants, for in many cases it will be quite proper for the authority to employ confidential sources, the rules of natural justice require that the information itself hold he disclosed so that there is a fair opportunity of meeting the case.
In the file relating to Messrs Majestic Bottling Company there is a representation filed by J. Balaji, managing partner of Messrs Majestic Bottling Company, consisting of 131 pages and was apparently handed over by J. Balaji at the time of hearing before the Commissioner on July 5, 1982.
The representation dated July 5, 1982 is in the form of a petition in continuation of the application for grant made on June 9, 1982.
Regarding Messrs Chingleput Bottlers, certain objections are raised to the grant of licence.
The objections are formulated in a document marked Annexure 'A '.
It is alleged that the existing licensee O.H. Kumar is ruling the show under the name and style of Messrs Three Star Bottling Company which is under the control of three persons, namely, K.J. George, M.S. Visvambaran and E.K. Chandrasekaran.
It recites that now find 208 ing that O.H. Kumar could not get the present licence, they have set up Ramabadran who has himself shown his address as care of Messrs Three Star Bottling Company.
This itself clearly shows that the applicant Ramabadran is a benamidar of Messrs Three Star Bottling Company.
In support of the assertion that Ramabadran is a benamidar of o.
H. Kumar, there is a copy of the judgment of the High Court of Madras in Writ Petition No. 1239 of 1961 filed along with other papers.
In the file relating to Messrs Chingleput Bottlers there is a two page note which formulates certain objections to the grant of privilege to Messrs Chingleput Bottlers.
It was obviously handed over by J. Balaji, managing partner of Messrs Majestic Bottling Company to the Assistant Commissioner (Excise) during his inspection of the blending unit or before the Collector before the submission of his report.
We do not think that the Commissioner was under an obligation to furnish Messrs Chingleput Bottlers with a copy of the report submitted by the Collector or of the representation made by Messrs Majestic Bottling Company.
This equally applies to the two page note appearing in the file of Messrs Chingleput Bottlers.
It was quite proper for the Commissioner to make secret and discreet inquiries from confidential sources.
There was no duty cast on him to disclose to Messrs Chingleput Bottlers the sources of adverse information or to give them an opportunity to confront the informants.
Rules of fairplay only 'enjoin that Messrs Chingleput Bottlers should know the case against them.
This apparently they did from the questionnaire issued by the Commissioner and the questions put by the Commissioner on July S, 1982 on the basis of the information gathered by him.
p The Commissioner has relied upon the report of the Collector and the conclusions reached by the Collector are based on the statement of Ramabadran recorded by the Assistant Commissioner(Excise).
Further, at the hearing on July 5, 1982, the Commissioner recorded the statement of Ramabadran, managing partner of Messrs Chingleput Bottlers.
There was no occasion for the Commissioner to have recorded the statement of Ramabadran over again unless this was to give him an opportunity to explain the substance of the report of the Collector or other information gathered by him irrespective of the source.
The learned Judges repelled the contention of Messrs Chingleput Bottlers that the Commissioner acted in breach of the rules of natural justice by his failure to furnish them with a copy of the 209 report of Collector on the ground that there is no fundamental right in a citizen to carry on any trade in liquor.
According to them, the Commissioner under the Rules performs an administrative function and having regard to the requirements of r. 5 of the Rules, and in view of the fact that Messrs Chingleput Bottlers had neither a legal right nor a legal expectation that they would be granted the privilege all that was required was that the Commissioner should act fairly in dealing with the application and not in a capricious or arbitrary manner.
On the material an record, the Learned Judges held that they were satisfied that the Commissioner acted fairly and reasonably and not arbitrarily or capriciously in coming to the conclusion that Messrs Chingleput Bottlers had not made the application on their own behalf, but benami for others and in rejecting their application for the privilege for setting up a blending unit for arrack Incidentally, they pointed out that Messrs Chingleput Bottlers did not specifically make a grievance of the fact in the writ petition that principles of natural justice had not been complied with.
It is a fundamental rule of law that no decision must be taken which will affect the rights of any person without first giving him an opportunity of putting forward his case.
There has ever since the judgment of Lord Reid in Ridge v Baldwin, supra, been considerable fluctuation of judicial opinion in England as to the degree of strictness with which the rules of natural justice should be extended, and there is growing awareness of the problems created by the extended application of principles of natural justice, or the duty to act fairly, which tends to sacrifice the administrative efficiency and despatch, or frustrates the object of the law in question.
Since this Court had held that Lord Reid 's judgment in Ridge vs Baldwin would be of assistance in deciding questions relating to natural justice, there is always "the duty to act judicially" whenever the rules of natural justice are applicable.
There is therefore the insistence upon the requirement of a "fair hearing".
In the light of the settled principles, we have to see whether the Commissioner acted in breach of the rules of natural justice or fairplay in passing the impugned order.
There is authority for the proposition that an authority or body need not observe the rules of natural justice where its decision, although final, relates not to a 'right ' but to a 'privilege or licence ' In a number of recent decisions, the Courts have, while extending 210 the protection of natural justice in the former category of claims, denied such protection to the latter category.
All that is emphasized in such cases is that the applications must be considered fairly.
In R.V. Gaming Board for Great Britain ex parte Bneaim & Khaida the Court of Appeal held that in refusing a certificate for reasons concerning the character and suitability of the applicants, the Board must act fairly and obey the broad principles of natural justice.
In fact, it was held that they had done so since they had given the applicants full opportunity to know and contest the case against them, even though they had not revealed the sources of their information or given their reasons.
It follows that the right to know the case to be met does not necessarily involve any right to know the source of adverse information or to confront the informants, for in some cases it would be quite proper for the authority to employ confidential sources.
The Master of Rolls referred to the contention advanced by counsel appearing for the applicants that they ought not to be deprived of the chance to get licence for the gaming business without knowing the case they had to meet.
The counsel criticized especially the way in which the Board proposed to keep that confidential information and relied on some words of his in R. Surinder Singh Kanda vs Government of the Federation of Malayaa where he had said: "That the Judge or whoever has to adjudicate must not hear evidence or receive representation from one side behind the back of the other." Lord Denning rejected the contention by observing that 'the counsel had put his case too high '.
The learned Master of Rolls then observed: "It is an error to regard Crockford 's as having any right of which they are being deprived.
They have not had in the past, and they have not now, any right to play these games of chance roulette, cheminde fer, baccarat and the like for their own profit.
What they are really seeking is a privilege almost, I might say, a franchise to carry on gaming 211 for profit, a thing never hitherto allowed in this country.
It is for them to show that they are fit to be trusted with it." In Brren vs Amalgameted Engineering Union.
Lord Denning said: "If a man seeks a privilege to which he has no particular claim such as an appointment to some post or other then he can be turned away without a word." The Master of Rolls went on to say that nonetheless statutory and in some cases domestic bodies must act fairly and this may involve a hearing.
although it is not clear from the judgment whether the duty applies where an initial application is being considered or only where an existing privilege is being terminated.
In Mcinnes vs Onslow Fane & Anr.2 Megarry, V.C. has drawn a distinction between initial applications for grant of licence and the revocation, suspension or refusal to renew licences already granted.
The learned Vice Chancellor says that there is a substantial distinction between 'application cases ' and 'forfeiture cases '.
He observes that while an applicant for grant of licence has neither a right to such a grant nor a reasonable expectation that such grant would be made in his favour, but cancellation or forfeiture of an existing licence or refusal to renew a licences, involves a right to a hearing as the applicant has what may be called 'reasonable expectation '.
Megarry, V.C. dealt with the question whether the grant or refusal of licence by the Board of Control is subject to any requirement of natural justice or fairness which would be enforced by the courts.
In dealing with the nature of the right to claim a licence, he said that it was nothing but a privilege.
The three distinct categories can best be discerned in his own words: "First, there are what may be called the forfeiture cases.
In these, there is a decision which takes away some existing right or position, as where a member of an organization is expelled or a licence is revoked.
Second, at the other extreme there are what may be called the application cases.
There are cases where the decision merely refuses to grant the applicant the right or position that he seeks, such as membership 212 of the organization, or a licence to do certain acts.
Third, there is an intermediate category, which may be called the expectation cases, which differ from the application cases only in that the applicant has some legitimate expectation from what has already happened that his application will be granted.
This head includes cases where an existing licence holder applies for a renewal of his licence, or a person already elected or appointed to some position seeks confirmation from some confirming authority.
The learned Vice Chancellor went on to say that there was a substantial distinction between forfeiture cases and application cases.
In forfeiture cases, there is a threat to take something away for some reason.
In such cases, the right to an unbiased tribunal, the right to notice of the charges and the right to be heard in answer to the charges which were the three features of natural justice are plainly apt.
In application cases, on the other land, nothing is being taken away, and in all normal circumstances there are no charges, and so no requirement of an opportunity of being heard in answer to the charges.
Indeed, there is the far wider and less defined questions of the general suitability of the applicant for membership or a licence.
The distinction is well recognized, for in general it is clear that the Courts will require natural justice to be observed for expulsion from a social club, built not on an application for admission to it.
The intermediate category i.e. Of the expectation cases, may at least in some respects be regarded as being more akin to forfeiture cases than application cases; for although in form there is no forfeiture but merely an attempt at acquisition that fails, the legitimate expectation of a renewal of the licence or con formation of the membership is one which raises the question of what it is that has happened to make the applicant unsuitable for the membership or licence for which he was previously thought suitable.
In such cases, Megarry, V.C. felt that much help cannot be had from discussing whether 'natural justice ' or 'fairness ' was the more appropriate term.
He observes that if one expects that natural justice is a flexible term which impose, different requirement in different cases, it is capable of applying appropriately to the whole range of situations indicated by the terms such as 'judicial, ' 'quasi , judicial ' and 'administrative '.
The content of the "duty to act fairly ' did not impose on the Board to give either oral hearing to the 213 applicant or to disclose the case against him nor was .
it under any obligation to give reasons for a decision.
The learned Judge then went on to say that there was no obligation for the Board to give the applicant even the gist of the reasons while they refused his application, or proposed to do so, and added.
The concepts of natural justice and the duty to be fair must not be allowed to discredit themselves while ranking unreasonable requirements and imposing undue burdens.
" In such cases; the right to hearing has been denied on the ground that the claim or interest or legitimate expectation is a more 'privilege or 'licence '.
This is in consonance with the decision of a Constitution Bench of this Court in Kishan Chand Arora vs Commissioner of Police, Calcutta following the judgment of the Privy Council in Nakkuda Ali vs M.F.De section Jayaratne 's case.
It is beyond the scope of the present judgment to enter into a discussion on the apparent conflict between the decision .
Of the Privy Council in Nakkuda Ali 's case and the observation of Lord Reid in Baldwin 's case.
It would appear that the long line of cases beginning with Baldwin 's case and ending with D 'arcy Ryan 's case are cases dealing with interference with property rights, deprivation of membership of professional or other non statutory bodies, dismissal from office, imposition of penalties and deprivation of advantages etc.
Both the Privy Council as well as this Court have required strict adherence to the rules of natural justice where a public authority or body has to deal with rights.
But the principle that there was a duly to observe the audi alteram partem rule may not apply to cases which relate not to rights or legal expectations but to mere privilege or licence.
lt is now well settled that while considering the question of breach of the principles of natural justice, the Court should not proceed as if there are inflexible rules of natural justice of universal application.
Each case depends on its own circumstances.
Rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the legislature under which they have to act.
214 There is nothing in the language of r.7 of the Rules to suggest that in refusing to grant the privilege, the Commissioner is obliged to act 'judicially '.
The order refusing a licence under r.7 is purely an administrative or executive order and is not open to appeal or revision.
There is no lis between the Commissioner and the person who is refused such privilege.
The power of refusal of licence unlike the power to grant is not subject to any pre condition.
It must follow that the grant of a liquor licence under r.7 of the Rules does not involve any right or expectation but it is a matter of privilege.
The Commissioner was therefore under no obligation either to disclose the sources of information or the gist of the information that he had.
All that was required was that he should act fairly, and deal with the applications without any bias, and not in an .
arbitrary or capricious manner.
There is no suggestion of any mala fides on the part of the Commissioner or the State Government.
The Commissioner heard both the parties after he had an inquiry made through the collector to adjudge their suitability for the grant of the licence.
The Commissioner had issued a questionnaire and had the material collected by the Collector.
The Commissioner was entitled to act on the report of the Collector and also on other material gathered by him during the course of the inquiry.
There is no requirement under the Act for a confronted hearing like the hearing contemplated between rival claimants for the grant of a stage carriage permit under the into their respective merits and demerits.
The Commissioner separately heard both the parties and had their statements recorded with respect to all the relevant aspects It cannot be said that the Commissioner in dealing with the applications did not act fairly in not furnishing a copy of the report of the Collector or in taking a representation from Messrs Majestic Bottling Company., The High Court could not have in proceedings under article 226 of the Constitution interfered with the impugned order of the Commissioner merely because on a reappraisal of the evidence it might have come to a contrary conclusion.
There was no error of jurisdiction on the part of the Commissioner nor was the impugned order vitiated by any error apparent on the face of the record.
The finding reached by the Commissioner that the application made by Messrs Chingleput Bottlers was not made bona fide on their own 215 account but as benanmi for others is a finding based on appreciation A of evidence.
The Commissioner was entitled to rely upon the facts found by the Collector.
It may be pointed out that the Collector 's report is entirely based on the statement of V. Ramabadran, managing partner of Messrs Chingleput Bottlers.
The High Court was therefore justified in dismissing the appeal preferred by Messrs Chingleput Bottlers.
In the result, the appeal preferred by the State Government must succeed and is allowed.
The judgment and order passed by the High Court for the issue of a writ or mandamus directing the Commissioner of Prohibition & Excise, Madras is set aside and the case is demanded to the Commissioner for a decision afresh according to law.
For the reasons stated, the appeal filed by Messrs Chingleput Bottlers must fail and is dismissed.
There shall be no order as to costs.
|
On the surrender of the licence for the manufacture and supply of bottled arrack for the Chingleput District for the financial year ]982 83 by the then existing licensee, the Commissioner of Prohibition and Excise called for fresh applications from intending persons for the grant of licence under the Tamil Nadu Arrack (Manufacture) Rules, 1981 framed under the Tamil Nadu Prohibition Act, 1937.
Two firms, namely, Majestic Bottling Company and Chingleput Bottlers, filed there applications and an enquiry with regard to them was held by the Assistant Commissioner.
The Commissioner considered the report of enquiry, gave separate oral hearing to the two applicants and passed an order rejecting both the applications.
As regards Majestic Bottling Company the Commissioner held that they did not satisfy the requirements of rr. 5(a) and 5(e).
In the case of Chingleput Bottlers, he held that they did not satisfy the requirements of rr. 5(a), 5(c) and 5(e).
While recording the finding in respect of Chingleput Bottlers, the Commissioner relied on a report of the Collector and other material gathered by him during the course of the enquiry, which included a representation from.
Majestic Bottling Company against the application of Chingleput Bottlers.
Both the applicants filed petitions under Article 226 of the Constitution questioning the orders passed by the Commissioner.
A Single Judge of the High Court issued a writ of certiorari quashing the order of the Commissioner insofar as he rejected the application of Majestic Bottling Company and also issued a writ of mandamus ordaining the Commissioner to grant the licence to Majestic Bottling Company.
As regards Chingleput Bottlers, the Single Judge rejected their contention that the Commissioner had acted in breach of rules of natural justice by his failure to furnish them the report of the Collector and observed that nothing precluded them from seeking perusal of the records or from making a demand for a copy of the same.
191 Both the applicants preferred appeals to the Division Bench.
The State Government which was in possession of material adverse to the two partners of Majestic Bottling Company did not initially file a separate counter affidavit but only did so at the conclusion of the hearing.
The Division Bench ruled that the order passed by the Commissioner must be adjudged by the reasons stated by him and those reasons cannot be supplemented by fresh reasons provided by the State Government in its belated affidavit and upheld the judgment of the Single Judge.
The State Government and Chingleput Traders filed appeals against the judgment of the Division Bench.
It was contended on behalf of the State Government that the grant of licence under r. 7 was subject to the prior approval of the State Government, that if the High Court was satisfied that the impugned order of the Commissioner was liable to be quashed on the ground that there was an error apparent on the face of the record, the proper course for it to adopt was to issue a writ of mandamus to the Commissioner to re determine the question of grant of such privilege and that the High Court had no power to issue a writ of mandamus directing the Commissioner to grant the licence in favour of Majestic Bottling Company.
It was contended on behalf of Chingleput Bottlers that the Commissioner had acted in breach of rules of natural justice in not furnishing them a copy of the report submitted by the Collector and other material gathered by him during the course of the enquiry.
Allowing the appeal of the State Government and dismissing the appeal of Chingleput Bottlers.
^ HELD: 1.
No mandamus will lie where the duty sought to be enforced is of a discretionary nature nor will a mandamus issue to compel the performance by a public body or authority of an act contrary to law.
[198H 199A] (a) In the instant case the Commissioner was under no legal duty to grant a licence to Majestic Bottling Company till he received the prior approval of the State Government under r. 7.
Even assuming that the Commissioner recommended the grant of a licence to them under r. 7, tho State Government were under no compulsion to grant such prior approval.
The grant or refusal of such licence was entirely in the discretion of the State Government.
The High Court had no jurisdiction to issue a writ of mandamus to the Commissioner to grant a licence to Majestic Bottling Company contrary to the provisions of r. 7.
[199 A C] de Smith: Judicial Review of Administrative Action, 4th Ed.
341 and 544: H.W.R. Wade: Administrative Law.
5th ed.
p. 638; referred to.
(b) Absence of a specific plea in the nature of demurrer would not invest the High Court with jurisdiction to issue a writ of mandamus ordaining the Commissioner to grant a licence under r. 7 without the prior approval of the 192 State Government which is a condition pre requisite for the grant of such privilege.
The High Court was unduly technical in applying the rules of pleading and short circuited the whole procedure upon a wrongful assumption of its own powers.
The view taken by it is manifestly erroneous; otherwise, the statutory requirements of such prior approval of the State Government under r. 7 would be rendered wholly otiose.
[201 C E] K.N. Guruswamy vs Stare of Mysore,[1955] 1 S.C.R. 305; and P. Bhooma Reddy vs State of Mysore, ; ; distinguished.
(c) It is not possible to accept the contention that no useful purpose would have been served by the High Court remitting the matter for the reconsideration of the Commissioner since it had already found that all the reasons that could be given for upholding the validity of the Commissioner 's order were bad and unsustainable.
This was not a case where it could be said that there was nothing for the State Government to consider while examining the question whether it should accord or refuse prior approval to the grant of licence to Majestic Bottling Company under r. 7.
One of the relevant factors that the State Government had to take into consideration was whether the partners of that Company were persons who would abide by the provisions of the Act and the rules.
The facts disclosed in the counter affidavit of the State Government lay a serious charge against the partners of that Company and it was permissible for the State Government to take those facts as justification for refusal to grant prior approval under r. 7.
[202C, 203A B, E F] (d) The proper course for the High Court to adopt was to issue a writ of mandamus directing the Commissioner to redetermine the question after following the procedure of r. 7 and in case he came to a decision to grant the licence in favour of Majestic Bottling Company, to refer the matter to the State Government for its prior approval.
[206A B] M/s Hochtief Gammon vs State of Orissa, [1976] 1 S.C.R. 667; Padfield vs Minister of Agriculture, Fisheries and Food; , referred to.
Gujarat State Financial Corpn.
vs M/s. Lotus Hotels Pvt. Ltd., ; distinguished.
State of Tamil Nadu vs C. Vadiappan, [1982] 2 Mad.
L.J. 30; and K. Ramaswamy vs Government of Tamil Nadu (Writ Appeal No. 368 of 1981); overruled.
It is a fundamental rule of law that no decision must be taken which will affect the rights of any person without first giving him an opportunity of putting forward his case.
Strict adherence to the rules of natural justice is required where a public authority or body has to deal with rights.
The audi alteram partem rule may not apply to cases which relate not to rights or legal expectation but to mere privilege or licence.
An authority or body need not observe the rules of natural justice where its decision, although final, relates not to a 'right ' but to a 'privilege ' or 'licence '.
All that is emphasised in such 193 cases is that the applications for grant of privilege or licence must be considered fairly.
There are no inflexible rules of natural justice of universal application.
Each case depends on its own circumstances.
Rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the legislature under which they have to act.
[209C D G, 213D E G] The right to know the case to be met does not necessarily involve any right to know the source of adverse information or to confront the informants, for, in some cases it would be quite proper for the authority to employ confidential sources.
[210B C] Ridge vs Baldwin: ; ; R. vs Gaming Board for Great Britain, ; ; R. Surinder Singh Kanda vs Government of the Federation of Malaya, L R. ; ; Breen vs Amalgamated, Engineering Union, ; Mac Innes vs Onslow Fane & Anr., Kishan Chand Arora vs Commissioner of Police, ; ; and Nakkuda Ali vs M.F. De section Jayaratne referred to.
In the instant case there is nothing in the language of r. 7 to suggest that in refusing to grant the privilege, the Commissioner is obliged to act 'judicially '.
The order refusing a licence under r. 7 is purely an administrative or executive order and is not open to appeal or revision.
There is no lis between the Commissioner and the person who is refused such privilege.
The power of refusal of licence unlike the power to grant is not subject to any pre condition.
The grant of a liquor licence under r. 7 does not involve any right or expectation but it is a matter of privilege.
The Commissioner was under no obligation either to disclose the sources of information or the gist of the information that he had.
All that was required was that he should act fairly and deal with the applications without any bias, and not in an arbitrary or capricious manner.
The Commissioner was entitled to act on the report of the Collector and also on other material gathered by him during the course of the enquiry.
It cannot be said that the Commissioner in dealing with the applications did not act fairly in not furnishing a copy of the report of the Collector or in taking a representation from Majestic Bottling Company.
There is also no suggestion of any mala fides on the part of the Commissioner or the State Government.
[213G H, 214A B, C E, G H]
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Civil Appeal No. 5313 of 1983.
Appeal by Special leave from the Judgment and Order dated the 17th January, 1983 in CMWP.
No. 8397 of 1982.
Shanti Bhushan and section Markandeya for the Appellant.
Gopal Subramaniam and Mrs. section Dikshit for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
About 45 plots of land of Kheragarh village and about 15 adjoining plots of land of Nagala Udaiya village situated in the district of Agra were notified under section 4 (1) of the Land Acquisition Act, 1894 (Act No. 1 of 1894) (hereinafter referred to as 'the Act ') for acquisition for a public purpose, namely, for the construction of the Market Yard of the Krishi Utpadan Mandi Samiti, Kheragarh under a notification dated January 8, 1980 issued by the Government of the State of Uttar Pradesh.
As the plots of land in question which 419 were agricultural lands were urgently required for the aforesaid purpose and the Government was of the view that it was necessary to direct that section 5 A of the Act should not apply to the said acquisition proceedings, it simultaneously made an order under section 17 (4) of the Act directing that section 5 A would not apply to the said proceedings and incorporated the said order also in the notification issued.
under section 4 (1) of the Act.
The notification was published in the Official Gazette dated January 9, 1980.
This was followed by a notification dated January 9, 1980 under section 6 of the Act published in the Official Gazette dated January 10, 1980.
That notification contained an order made under section 17 (1) of the Act authorising the Collector to take possession of the plots on the expiration of fifteen days from the publication of the notice under section 9 (1) of the Act though no award under section 11 of the Act had been made.
The above said plots of land which were in all about 60 in number belonged to a number of persons.
The total extent of land proposed to be acquired was about 41.46 acres.
The possession of all the plots of land was also taken in the course of the said acquisition proceedings.
In or about June 1982, notices were issued by the Collector to various persons having interest in the said plots under section 9 (3) of the Act for the purpose of determining the compensation payable to them.
After the issue of the said notices, three persons Hari Singh (appellant No. 1), Pooran Chand (appellant No. 2) and Munna Lal (appellant No. 3) filed a writ petition in Civil Misc.
Writ Petition No. 8397 of 1982 on the file of the High Court of Allahabad questioning the validity of the acquisition proceedings as regards 6 plots of land in Kheragarh village out of the total of about 60 plots of land which had been acquired by the State Government in the above said proceedings.
Appellant No. 1 claimed to be the owner of plots Nos 249, 250 and 252.
Appellant No 2 claimed to be the owner of plot No. 261 and appellant No 3 claimed to be the owner of plots Nos. 133 and 134.
Appellant No. 1 pleaded that there was a house situated on plot No. 249 and that he had also installed a flour mill on it.
They all pleaded that they had no knowledge of the acquisition proceedings and were prejudiced by the order made under section 17 (4) of the Act exempting the operation of section 5 A of the Act in the case of these proceedings.
They further pleaded that there was no urgency sufficient in law to sustain the order made under section 17 (4) of the Act as nothing had been done on the lands for nearly two years.
Appellant No. 1 also pleaded that 420 section 17 (4) of the Act would not be applicable because on a part of his land there was a house.
They also applied for an interim order restraining the Collector from dispossessing them from the plots in question.
On September 9, 1982 the High Court made an interim order restraining the respondents from dispossessing the appellants from the plots until further orders, unless they had already been dispossessed.
But on January 17, 1983, the High Court rejected the writ petition at the stage of admission after hearing the advocates for both the parties.
This appeal by special leave is filed by the appellants under Article 136 of the Constitution on against the order of the High Court.
The High Court has not given any reasons for its order dismissing the writ petition.
The order reads: 'Rejected '.
We have been taken through the writ petition, counter affidavits and other papers filed in the High Court and in this Court.
At the out set we are of the view that the writ petition filed in July, 1982 questioning the notification issued in January, 1980 after a delay of nearly two and a half years is liable to be dismissed on the ground of laches only.
It is no doubt true that the appellant have pleaded that they did not know anything about the notifications which had been published in the Gazette till they came to know of the notices issued under section 9 (3) of the Act but they have not pleaded that there was no publication in the locality of the public notice of the substance of the notification as required by section 4 (1) of the Act.
It should be presumed that official acts would have been performed duly as required by law.
It is significant that a large number of persons who own the remaining plots have not challenged the acquisition proceedings.
The only other petition in which these proceedings.
are challenged is Civil Misc.
Writ Petition No. 11476 of 1982 on the file of the High Court filed subsequently by Amar Singh and four others.
Moreover in a small place like Kheragarh where these plots are situate, the acquisition of these lands would be the talk of the town in a shortwhile and it is difficult to believe that the appellant who are residents of that place would not have known till July, 1982 that the impugned notification had been published in 1980.
Any interference in this case filed after two and a half years with the acquisition proceedings is likely to cause serious public prejudice.
This appeal should, therefore, fail on the ground of delay alone.
421 Now even on merits there appears to be no substance in the case of the appellants.
At the hearing of this appeal, the appellants have confined their case to plots Nos. 249, 261 and 133 and have given up their case in regard to plots Nos. 250, 252 and 134.
Appellant No. 1 claims to be the owner of plot No. 249.
On behalf of the respondents it is urged that appellant No. 1 is recorded only as a co tenure holder alongwith five others and they have not impeached the notifications.
With regard to the allegation about the existence of a house on this plot, it is seen that the said fact is denied.
The respondents rely upon some statements recorded by the revenue authorities suggesting that there was no house on this plot on the date of the notification.
This is a disputed question of fact.
Appellant No. 2 who claims to be the owner of plot No. 261 is stated to have purchased it on November 17, 1980 after the impugned notifications were published.
The title of appellant No. 3 to plot No. 133 is denied by R. K Kannaujia, Secretary, Krishi Utpadan Mandi Samiti, Kheragarh.
In this state of affairs where there are disputed questions of fact it cannot be said that the appellants have made out any case for interference under Article 226 of the Constitution.
On behalf of the appellants reliance is, however, placed on a decision of this Court in State of Punjab vs Gurdial Singh & Ors.(I) In that decision the main point made out was that the acquisition proceedings had been engineered mala fide by a State Minister.
We do not have any such allegation in the present case.
In the circumstances of this case we do not find that there is any ground to hold that the order made under section 17 (4) of the Act exempting the operation of section 5 A of the Act is bad in law even though there appears to be some administrative delay in commencing the construction of the Market Yard.
Some photographs of the land produced before us, however, show that the work of construction has already been commenced.
We do not, therefore, find that there is any ground to interfere with the order of the High Court dismissing the writ petition.
The appeal fails and it is dismissed with costs.
H.S.K. Appeal dismissed.
|
On January 8, 1980 the respondent State issued a notification under Sec. 4 (1) of the Land Acquisition Act of 1894 for acquisition of 60 adjoining plots of land of two small villages for construction of a market yard.
The notification also contained an order of the Government made under Sec.
17(4) of the Act directing that Sec.
5A would not apply to the said proceedings.
The notification was published in the Official Gazette dated January 9, 1980.
That notification was followed by another notification dated January 9, 1980 issued under Sec. 6 of the Act.
This notification contained an order made under Sec.
17 (1) of the Act authorising the Collector to take possession of the plots.
The notification was published in the official Gazette dated January 10, 1980.
The possession of the plots was taken in course of the acquisition proceedings.
In or about June 1982 notices were issued by the Collector to the interested persons for determining the compensation payable to them.
By filing a writ petition in the High Court the appellants questioned the validity of the acquisition proceedings in regard to certain plots on the grounds that: (1) they had no knowledge of the acquisition proceedings and were prejudiced by the order made under sec.
17 (4); (2) there was no urgency sufficient in law to sustain the order made under Sec.
17 (4); and (3) Sec.
17 (4) would not be applicable because on a part of a plot of land there was a house.
The High Court dismissed the writ petition.
Hence this appeal.
Dismissing the appeal, ^ HELD: In a small place where these plots are situate, the acquisition of these lands would be the talk of the town in a shortwhile and it is difficult to believe that the appellants who are residents of that place would not have known till July 1982 that the impugned notification had 418 been published in 1980.
Any interference in this case filed after two and a half years with the acquisition proceedings is likely to cause serious public prejudice.
This appeal should, therefore, fail on the ground of delay alone.
[420G H] Appellant No. 1 claims to be the owner of plot No. 249.
On behalf of the respondents it is urged that appellant No. 1 is recorded only as a co tenure holder alongwith five others and they have not impeached the notifications.
With regard to the allegations about the existence of a house on this plot, it is seen that the said fact is denied.
The respondents rely upon some statements recorded by the revenue authorities suggesting that there was no house on this plot on the date of the notification.
This is a disputed question of fact.
Appellant No. 2 who claims to be the owner of plot No. 261 is stated to have purchased it on November 17, 1980 after the impugned notifications were published.
The title of appellant No. 3 to plot No. 133 is denied by R.K. Kannaujia, Secretary, Krishi Utpadan Mandi Samiti, Kheragarh.
In this State of affairs where there are disputed questions of facts it cannot be said that the appellants have made out any case for interference under Article 226 of the Constitution.
[421B D] There is no ground to held that the order made under section 17 (4) of the Act exempting the operation of section 5 A of the Act is bad in law even though there appears to be some administrative delay in commencing the construction of the Market Yard.
[421F G] State of Punjab vs Gurdial Singh & Ors., ; , referred to.
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